The Financial Impact of Consumerization – Does BYOD make business sense?
March 11, 2013 1 Comment
One of the less understood aspects of Consumerization is its financial impact on the business. Is your BYOD program in the money?
Studies* show that an increasing number of organizations allow their employees to use personal devices to connect to corporate networks and data for work related activities – the so called Bring Your Own Device phenomenon. However, a recent study conducted by Forrester Reserach reveals that only a few companies measure the actual financial impact of this new IT model and that even fewer have a clear sense of whether Consumerization actually makes good business sense.
To help C-level executives articulate the business case for Consumerization, Trend Micro has partnered with Forrester Research to develop the first industry study on the financial impact of consumer technology in the enterprise. The research was conducted in January 2012 in the U.S. and Europe and includes 200 organizations that offer formal BYOD programs to their employees. Respondents include CXOs and senior IT managers with an understanding of the impact of the program on their business unit or organization.
According to the study, the key factors driving the majority of the firms to define BYOD programs are increased worker productivity (70%) and providing access to corporate information for employees who are away from the office (63%). Contrary to common misconception, only a minority of companies look at device (40%), voice (20%) and data (23%) costs reduction when considering BYOD.
Most enterprises measure the impact of a wide variety of BYOD related items. However, approximately only half of them measure the specific impact achieved by BYOD separately from other types of business processes. Among the most scrutinized items are bottom line revenues (59%), software license costs (60%), corporate reimbursements for employee devices (53%), voice (58%), data (52%) and device replacement costs (51%).
In terms of overall business impact, respondents point out that BYOD mainly benefits worker productivity (66%) and flexible work environment (66%) while negatively affects mobile device management cost (41%), helpdesk support calls (36%) and helpdesk costs (33%).
The actual financial impact of BYOD varies widely across the sample. For the first time however, this study offers an aggregate estimate of the most relevant items quantified in terms of weighted averages***.
Here are some revealing pros and cons:
12% increase in worker productivity (n=27)
15% decrease in device replacement costs (n=17)
8% decrease in reimbursement for employee data expenses (n=21)
5% decrease in training and education costs (n=11)
3% increase in bottom line revenues (n=22)
8% increase in the number of help desk calls (n=20)
7% increase in mobile device management costs (n=17)
3% increase in corporate liable data costs (n=20)
3% increase in server costs (n=15)
2% increase in regulatory compliance expenses (n=14)
To answer the key question whether BYOD is in fact saving or costing money to a specific organization, the cost benefit analysis above needs to be applied to the specific business model of the company. Generally speaking, service oriented verticals with higher administrative personnel costs are poised to gain most from BYOD – due the sizable increase in worker productivity – while manufacturing and capital intensive verticals may see less of an impact on the bottom line.
Organizations may therefore look at BYOD as an opportunity to gain competitive advantage or as mere cost of doing business. Regardless from any financial consideration however, one thing is certain: Consumerization is real and here to stay. The lack of a strategic approach to Consumerization creates security risks, financial exposure and a management nightmare for IT. Rather than resist it, organizations should embrace Consumerization to unlock its business potential. This requires a strategic approach, flexible policies and appropriate security and management tools.
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* “IT Executive and CEO Survey”, Decisive Analytics for Trend Micro, January 2012
** “The Value Of Consumerization”, Forrester Research for Trend Micro, March 2012
*** Conservative estimates, range capped at ± 50%, details available upon request