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The hidden costs of remote and mobile workers

Eye on the Carriers By and Johna Till Johnson, Network World
March 29, 2004 12:06 AM ET
Johnson

Network World - The dramatic increase in bandwidth to remote and mobile users is big news for IT executives who manage WANs and telecom. Recent research findings from Nemertes highlight these trends: Not only are 87% of workers now remote (defined as being in branch or remote offices rather than headquarters), but remote-access voice and data services are consuming an ever-growing percentage of the telecom budget - 30% and more.

If that sounds like a lot, consider: A typical firm might spend $50 per month, per employee, for cellular services, plus another $50 per month for remote data access (via VPN over home DSL or cable modem, or via virtual remote services such as those from iPass and Fiberlink). Management of the remote data services might run another $14 to $20 per month, depending on the size of the organization and sophistication of end users. Finally, employees might use enhanced mobile data services at another $50 per month.

Individually, these numbers don't sound like much, but add them up: That's $214 to $220 per employee, per month, or approximately $2,600 per year. A company with 1,000 mobile workers could therefore easily spend upwards of $2 million annually on remote and mobile services. Because the typical WAN budget is on the order of $4.9 million, remote voice and data would make up 40% to 50% of such budgets.

The catch is that companies often don't count these costs. Often, RIM and cellular services are expensed to business lines, which hides the cost in general travel and entertainment figures. This is particularly true when employees are paid a stipend for cellular services, rather than being part of a company-wide contract. Moreover, although many companies ask employees to pay for their own Internet access, most companies don't recognize the cost of managing Internet VPN services (the $14 to $20 per month mentioned earlier). Often this cost is unbudgeted: The IT department works yet longer hours or postpones important projects to answer help desk calls from frustrated users.

But hidden costs still matter. How can an IT executive get a handle on these costs and reduce them as much as possible?

The first step is to recognize they exist. Conduct a company-wide audit to uncover hidden telecom expenditures. Who's using them, and why?

Consider consolidating. Could one company provide cellular and mobile data services? Could your current data providers also offer remote Internet access? Over time, mobile and cellular rates are expected to drop as technology improves and local number portability lets users "price hop" for better rates, so consolidation could make sense. But keep in mind that even when such consolidated services exist on paper, the telco provider might not be able to offer consolidated billing, pricing or account management yet - typically the wireless, Internet and mobile data services are separate lines of business within the provider.

Above all, keep track of these "hidden" costs, because disciplined effort can reduce them.

Read more about lans & wans in Network World's LANs & WANs section.

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