Some people don't do windows. Mark Egan, CIO at VMware, no longer does the corporate phone.
Choosing to ride rather than duck the wave of bring-your-own-device (BYOD) adoption currently flooding corporate America, Egan last fall instituted a mandatory, 90-day window for employees at the virtualization software company to trade in their corporate-issued phones for their own personal devices and mobile phone plans -- leaving some workers unhappy at first.
The decision to aggressively phase out the corporate phone -- once viewed as both a status symbol and a perk -- came pretty easily to Egan, who says he was fighting a losing battle with VMware employees despite the fact the firm offered them an array of choices, including multiple models of BlackBerries, iPhones and Androids.
VMware was spending more than the average firm on supporting phones, but users still weren't happy, he recounts. "The CFO was telling me we were spending too much, but the community at large said we weren't offering enough. That's when we decided to go 'all in' in supporting users' personal devices."
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While VMware's all-in approach to the BYOD movement may still be the exception rather than the rule, IT organizations worldwide are scrambling to come up with effective plans to accommodate users' increasing desire to use their phone of choice on the job.
Many companies are simply allowing employee-owned (and funded) phones to access corporate assets like email and calendar systems, albeit with some protocols in place to ensure security and compliance. Others give select users a choice between opting for a company-issued phone and paid data plan or using their own device, subsidized wholly or in part by a monthly stipend.
Death of a corporate perk
It was only a short time ago that a company-issued BlackBerry and data plan was a sure sign you had achieved career status. Today, the BlackBerry's future is uncertain, and most business users have their own personal smartphones and have little enthusiasm for juggling a second device and even less for being saddled with what they view as outdated technology.
According to a Nielsen report released in May, more than half of American mobile customers own a smartphone, up from 37% a year ago. And those mobile phones are near and dear to their hearts: A recent Google study (download) showed that 26% of U.S. smartphone owners would rather give up their computer than their smartphone.
"The majority of employees today who don't get a company-provided cellphone still have a smartphone and want to use that phone as a center to better manage their own work/personal life balance," notes Christian Kane, an analyst at Forrester Research Inc.
The BYOD trend makes sense not just for employees. IT shops can also benefit by offloading the onerous task of supporting what's rapidly becoming a smorgasbord of phone choices and shifting their focus to value-added activities that can help differentiate the business.
"What we're finding is that it's not really strategic to do break/fix and full-on lifecycle management, including procurement and contract management, on devices like smartphones," Kane says. "Ultimately, if you have to support everything, then support is unsustainable."
IT departments are definitely starting to get the message. A Cisco-sponsored survey of 600 IT and business leaders found that 95% of companies allow employee-owned devices on the corporate network in some manner, with 36% saying they provide full support of those employee devices.
Of stipends and subsidies
Arinc, a global communications, engineering and integration provider -- and a long-time BlackBerry shop -- put the BYOD wheels in motion a year or so ago when users began pushing back on the company-issued BlackBerry.
The BlackBerry became viewed as a negative status symbol as opposed to a positive one. Rick Napolitano, Arinc
"People in the organization began apologizing for it, and executive-level people started questioning whether they should be carrying it," notes Rick Napolitano, Arinc's CIO. "It became viewed as a negative status symbol as opposed to a positive one."
Instead of ditching the BlackBerry, which Napolitano believes is still superior to other platforms in terms of security, the company now offers a choice: Employees eligible for phones are either issued a corporate BlackBerry and pay nothing on their own, or they can choose their own personal device and plan and get reimbursed via a monthly stipend.
The stipend ranges from $55 a month for a cellphone to between $105 and $110 a month for a smartphone. Users can choose their own plan and telecommunications provider, or they can participate in Arinc's corporate program, which enables them to take advantage of the firm's volume discounts.
Instead of reimbursement via expense reports, which Napolitano believes would create a significant administrative burden, employees receive a stipend as part of their paycheck. If they do opt for the BYOD route, employees have to agree to policies that specify that IT can wipe the phone, including personal data like photos and music, in the event that it's lost or stolen.
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For now, Napolitano has opted to keep the program optional as opposed to mandating a move to BYOD. "We found that when we made it voluntary, it keeps its attractiveness," he explains. "People are not feeling slighted, and there's little resistance because they don't feel like we're forcing them over."
About one quarter of Arinc users eligible for a phone have signed up for the firm's BYOD program, and Napolitano fully expects those numbers to grow. Most employees are choosing to make the transition when their contract is up, Napolitano says, so they don't incur fees related to switching or stopping service mid-stream, which they are responsible for even on company-issued phones and data plans.
The transition has freed up Napolitano's 100-person IT group, which supports 2,400 U.S. workers, from taking on a costly support burden. While IT does provide a modicum of support for non-corporate phones, mostly related to email setup, it does so without any adherence to the formal Service Level Agreements (SLAs) that were in place for BlackBerry users.
"Our support costs would have shot through the ceiling if we had to have people on staff specializing in Apple and Android," Napolitano says. "A big portion of the decision was for cost avoidance related to having to support [multiple devices] while still enabling our customer base to get what they want."
BYOP: Buy your own phone
The Reinvestment Fund, another organization that has long supplied key employees with a corporate phone, is also now offering its users a choice, but with a slightly different approach.
Users who qualify for a phone based on job description (mostly salespeople, executives and other managers) can either stick with the corporate-standard BlackBerry and not pay anything out of pocket, or they can purchase their device of choice on their own.
There's little to no expectation that we should buy users a phone -- everyone already has that. Barry Porozni, The Reinvestment Fund
Once they pay the one-time fee for the phone, employees can be added to the company's corporate service plan with Verizon, at the company's expense. If they want to use another carrier, such as AT&T, then they are completely on their own.
"There's little to no expectation that we should buy users a phone -- everyone already has that," says Barry Porozni, CIO for the 80-person financial services firm. "The expectation is covering the service fee because when you think about it, the investment in the phone is small compared to the monthly fee. Still, we don't want to process additional connectivity fees and reimbursements simply because a user wants a different carrier."
Because he considers most phones mainstream devices, Porozni is still happy to have his four-person IT team field support calls for problems with email, calendars and contacts, but for anything beyond that, he says, folks are left to fend for themselves.
Except of course, for the C-level suite. For them, Porozni says his team will make an exception. "If you're a C-level exec and you can't figure out how to send a picture to someone, we'll make an effort to show you how to do that," he concedes. "But generally these are things they know how to do before they get to us."
Since launching the BYOD program, The Reinvestment Group's BlackBerry numbers have dwindled to around 10 or less, and there are data-plan requests for 50 non-BlackBerry devices, including both smartphones and tablets.
Corporate perks: Always popular
Other long-time BlackBerry shops like MOM Brands (a cereal company formally known as Malt-O-Meal) are eyeing BYOD more cautiously, intrigued by the idea of offering choice and potentially sexier technology to its user base, but not willing to give up the robust security and other enterprise features that are synonymous with the BlackBerry brand.
What MOM Brands' 500 BlackBerry users also don't want to give up is the perk of having the company foot the bill for the phone and service plan, despite the fact they may not get hands on their ideal phone, according to Tim Wood, a technical support analyst.
"Users [still] want a corporate-sanctioned phone, they just want the corporate-sanctioned phone of their choice," says Wood. "They're used to not paying for the monthly plan and device and there are no restrictions with the BlackBerry. We don't push [enterprise] software out to the phones -- they are used only for email, phone calls and texting -- so they can use them for personal use."
That said, things could change at MOM Brands, and soon: Wood is working with his peers to evaluate BYOD and make some sort of proposal to IT management.
Ripping off the bandage
At VMware, its 6,000 U.S. employees no longer have a corporate option. Under Egan's BYOD transition program, launched in September of 2011 and wrapped up in December, there are no more corporate-issued phones and service plans -- only a program that reimburses eligible employees for their smartphone expenses.
Once the decision was made to do away with the corporate phone, Egan's team segmented its user base, with input from line-of-business managers, to determine which employees legitimately needed a phone for business reasons and what was reasonable for reimbursement based on their usage.
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Sales representatives, for example, are awarded $250 a month because they tend to be more reliant on the phone out in the field, including, for some, international travel. Most users outside of sales get a stipend of $70 monthly, Egan says, though overages can be negotiated.
"If there's a legitimate business reason for why the phone bill is higher, that's okay," Egan says. "We didn't want to affect business as a result of all this." And some workers get only the privilege of using their own smartphone to access office apps -- no stipend at all.
To get the transition rolling, users were coached through the process of converting their corporate phone into a personal phone and initiating a plan with their preferred carrier. Those who wanted a different phone than the one they had been issued by VMware had to pay any differences out of pocket and ensure their phone of choice supported BlackBerry Enterprise Server (BES) or Microsoft ActiveSync.
As can be imagined, not every employee was happy with the changes. Some who'd had unlimited company-paid plans in the past didn't want to have to start thinking about costs, Egan says. Others questioned the reimbursement rates, disliked the process of filling out expense reports, or simply said it was time-consuming to work with carriers.
Egan said his team did everything possible to make the experience less of a headache for users, including training, inviting carriers in to make presentations to users, and what Egan claimed was his ace in the hole: The company's internal SocialCast collaboration platform, which served as a central place for disseminating information and for users to help and support each other through the transition.
I don't add a lot of value [just] being 'the phone guy.' Mark Egan, VMware
While Egan's rip-off-the-bandage approach to BYOD might be somewhat controversial, he said it would have been far more difficult to manage a phased approach and the decision fit with what he says is VMware's "all-in" culture, which eschews phase-ins in general in favor of sweeping moves and quick decisions.
In the months since the program's been in place, the company has already achieved significant cost savings -- about a third of what it was spending on cell phone fees in the United States, which Egan says is easily in the seven figures. Savings came primarily from more stringently monitoring which employees needed a corporate phone at all and from directing managers to keep a closer eye on their employees' monthly usage reports.
Now that he no longer does phones, Egan is happily shifting his focus to more strategic endeavors. "I didn't know how to add a lot of value [just] being 'the phone guy,'" Egan says. "Now we can roll out programs and services that increase revenue and help VMware build better products."
Checklist: How to phase out the corporate phone