December 14, 2012

BYOD without Breaking the Bank: The business case and ROI of BYOD

Organizations and institutions that in the past restricted Bring Your Own Device (BYOD) due to security and support concerns are today allowing it because they realize that it gives them a competitive advantage.  In some cases it actually keeps them in business.

When looking at the business case or return on investment (ROI) for deploying a BYOD solution, businesses and non-profit organizations need to look at four factors.  Before getting into these, let us be clear that we are referring to a BYOD solution that secures, monitors and controls the corporate network. To avoid the confusion on the various types of BYOD solutions – see my blog on BYOD Management is beyond just Mobile Device Management (MDM)

 Now, let’s examine the four factors that must be considered in the business case of a BYOD solution:

  1. User experience and loyalty. There is an old saying: “If you don’t take care of your customers, someone else will.” This statement also applies to allowing your customers to use their devices of choice.  The primary driver for BYOD comes from employees, students, customers and other users who are demanding choice and flexibility to use their tablets, smartphones, laptops and eReaders anywhere/anytime. They’re not just using them for high-performance internet access but also to access corporate and institutional resources such as email, eLearning and CRM Apps as well as hardware devices such as printers. The demand by end-users to use their personal devices in the enterprise is so strong that the more technical users will find a way to do it one way or another, while other users may go somewhere else. Therefore, it is in the best interests of the organization to implement BYOD in order to monitor and control network access in a safe and efficient way rather than deal with security breaches by technical users determined to use their devices. BYOD is also beneficial for enterprises whether they directly charge for it (like in a hotel), provide it for free to promote more purchases (like distributing promotional coupons at a mall) or simply improve the user experience in order to encourage patrons to attend a venue (like getting sports fans to go to a game rather than watch it at home on their big screen TVs). By providing free WiFi, businesses can offer services for their users which can be differentiated based on the type of user, their location, the time of the day or their loyalty status, thus enabling premium users to be treated differently. The payoff: implementing BYOD not only keeps users from leaving, it can also incent their participation in your enterprise.
  2. Increased productivity. Businesses are learning that employees become more productive when they use the tools they prefer.  The WSJ recently reported that S&P 500 companies made an average of  $420K in revenue per employee. Let’s conservatively assume that for non S&P 500 it is an average of  $210K in revenue per employee. Now let’s look at productivity gain – recent studies show 10-25% in productivity improvements because of BYOD. This is caused by the use of high ROI Apps provided for smart devices, and also by the fact that employees will do more if they use their personal devices for work. This is because they are more familiar with these devices and tend to do more work during periods when employees traditionally didn’t work. For example, employees that use personal smartphones for work will tend to read and respond to emails at home, during their lunch hour or even while standing in line somewhere.  Let’s conservativly assume that BYOD increases productivity by 10% – the low end of the range. This means thatfor a 1000 employee organization generating an average revenue of $210K per employee, BYOD can increase revenue by $21M if all the employees take advantage of BYOD. The payoff: voluntary increased productivity without costly incentives.
  3. Cost savings. Some businesses have reported that BYOD helps them save money by no longer requiring the purchase of company devices. This point is a bit controversial as some might argue that the savings gained by no longer purchasing employee devices is not as significant as the additional cost of deploying and supporting BYOD.  However, with the right BYOD solution considerable savings can be achieved. The Enterasys BYOD solution costs $8/device. Assuming an organization pays $200 CAPEX per device with 2-yr commitment, this translates to a savings of $192 per device (that is a 2400% ROI just on CAPEX). For a 1000-person organization (with 1 device per user), that is a savings of about $192,000 over 2 years or $96,000 per year just for CAPEX. Now let’s look at OPEX. A typical device requires a $100/yr maintenance contract. Since the organization no longer needs to pay this amount, we get another $100,000 per year savings (for a 1000 person company). Let’s also conservatively assume it will cost $40,000 for part of an IT person’s time to support these BYOD devices. In reality an Enterasys solution will cost considerably less because it’s simplier to support (we have customers with tens of thousands of BYO Devices supported by only 2 people). Therefore, the net savings for OPEX comes out to just $60,000. The payoff: total cost savings for a 1000-person enterprise is at least $156,000 or $156 per person per year.
  4. The network is an asset for intelligent IT. Today’s networks are no longer just a medium for communication but assets that can be used flexibly and intelligently. They’re not just used as discussed above to increase productivity, reduce costs and increase the brand awareness and revenue of an organization, but also to collect network, user and application usage information in order to intelligently and strategically drive the business. With the right BYOD solution, a business can easily learn about the types of devices and users on their network, the applications they use, when and how they use them, bandwidth used, location, time and potential buying patterns – all without infringing on user privacy. This kind of intelligence is incredibly valuable and provides a significant competitive advantage. Businesses can not only make intelligent changes that will substantially improve the user experience and grow their business, but can also gain insight into adjacent areas of business expansion. The payoff: better understanding of how your business works and how to make it grow.

Do you agree with these points on the ROI of BYOD?  What else would you add? Please share your thoughts in the comments section below.

If you would like to share and collaborate on topics that include BYOD, Wi-Fi and Enterprise Mobility, please follow @akafel and I will follow you back.


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Extreme Marketing Team

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