Should a BYOD program save the company money, or make it more productive?

There are a lot of forces at work in the Bring Your Own Device movement, and its easy to mistake productivity with cost cutting. I believe that some companies are using BYOD as a means to cut costs: specifically, to put business-related expenses on the backs of employees.

VMware’s Mark Egan seems to be treading just a hair past the middle ground: flexibility but liabilities for employees, but aggressive savings for the business.

Thor Olavsrud, How BYOD Saved VMware $2 Million

VMware went “all-in” on BYOD in the fourth quarter of 2011.

“Although I had a fairly liberal approach [to BYOD], it just wasn’t enough,” Egan explains. “I wasn’t getting the new device immediately available to my business partners. We were spending a lot. That’s when we decided let’s give everybody choice. What we did is we moved all of the employees to personal liability and expense reimbursement. We were spending approximately $172 a month per user in the U.S. My savings are about $2 million that I’m going to save this year in the U.S.”

So, a VMware employee buys a phone from AT&T or Verizon, and gets the discounted rate for the new phone by signing up for a 2 year program. This costs VMware nothing. Note that the employee takes on the burden of the two years, but that’s a relatively small liability, considering VMware is going to be paying the monthly fees.

It seems simple, but if that’s all VMware had done, Egan might have found that his organization’s costs were spiraling out of control like that of some other organizations that have adopted the BYOD approach. Egan stresses that one of the first key steps VMware undertook was to perform a company-wide assessment of who had corporate-owned mobile devices and whether they actually needed a mobile device to do their job.

“Are you eligible for a phone?” he asks. “We added a lot more oversight over whether they needed a phone for work.”

“We had more phones out there than was deemed by management to be appropriate,” Egan says. “It hit the IT cost center. We eliminated several hundred phones, which came up to the tune of $500,000 for the first year.”

Once the list of those eligible for mobile devices was stripped to only those personnel who the company determined required them for their work, VMware introduced two reimbursement programs-one for employees in customer-facing roles and one for employees in noncustomer-facing roles. Neither program includes a stipend for buying devices. Egan says he learned that lesson early on.

“The new iPhone shipped and we suddenly had a lot of broken and lost phones,” he says. “I’m sure it was a coincidence, but we don’t have that anymore.”

Instead, employees in customer-facing roles are reimbursed up to $250 a month for their legitimate mobile-related expenses. Non-customer-facing employees are reimbursed up to $70 a month for their legitimate mobile-related expenses.

I have a hard time buying the idea that people working at nearly any job at VMware don’t ‘need’ a cell phone. This looks to me like the case where employees who are ineligible for the phone plan will simply absorb the costs of the phone, but the $70 deal might be fair for a lot of people.

Egan is going to get a bonus for saving all that money, but I bet there are a lot of pissed off VMware staffers.

Saving money on tech support makes sense though:

Another way Egan spares VMware costs associated with BYOD is that the company does not provide technical support for employee-owned mobile devices beyond helping them get squared away with security and management technologies like its Horizon device management solution. But when it comes to repairs and similar issues, that’s between the employee and the carrier/device manufacturer, though Egan does have a small number of cheap loaner phones on hand for emergencies.

But what about collaboration on the phones? They have Socialcast deployed — indeed, Socialcast is owned by VMware — and there are mobile clients for iOS, Android, and BlackBerry:

“Use a collaboration tool so employees can support each other. We use Socialcast, which is kind of like a Facebook for the enterprise. We just have a stream going and everybody kind of pitches in. It’s amazing how you can get the employee base to resolve issues. It was just amazing the amount of collaboration that I got from the employees.”

I think this undercuts the whole argument about staff not ‘needing’ smartphones. Yes, they have PCs and laptops, but remaining connected to the network via mobile is worth an awful lot. I think Egan is penny wise and pound foolish.

Relevant Analyst
Stowe Boyd

Stowe Boyd

Lead analyst, future of work Gigaom Research and stoweboyd.com

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