Smartphones and tablets have taken a front seat as one the fastest growing mobility segments in the Asia Pacific region. According to research firm Transparency Market Research:
- Globally, smartphone adoption reached 469.9 million units in 2011, representing 66.7% growth over 2010.By 2015, smartphone sales are expected to top 1 billion units, with Asia Pacific accounting for the largest market share at 39.5%
- Tablet sales reached 67 million units in 2011 and are expected to quadruple by 2015, when Asia Pacific is projected to have the largest share of the pie, at 36.1%
With the exponential growth of enterprise mobility in the region, CFOs are increasingly under pressure to find new ways to control the burgeoning cost. Companies are finding that the two traditional approaches to managing enterprise mobility expenditures – picking up the entire tab or setting limits to spending – are not working.
They also wonder about the prevalence of ‘free’ services such as Skype and Viber and whether these are robust enough for enterprise use.
The first approach is what we call the ‘laissez-faire’ approach. This involves the enterprise providing 100% coverage of the mobile user’s monthly expenditures. We see virtually no benefit to the company with this approach, which we think perpetuates a ‘Bury Your Head in the Sand’ mentality.
Since there is no spend control, mobile expenditures will not be scrutinised in detail for abnormal spend patterns. Billing errors may be overlooked. This approach will typically result in significant amounts of spend wastage, which will negatively impact the bottom line.
The second approach is known as the ‘stipend’ or ‘spend cap’ approach, which is perhaps the most common in Asia Pacific. The company grants the mobile user with a monthly fixed allowance (i.e. stipend) or sets a monthly spend cap as a way to control enterprise mobility expenditures.
The stipend/spend cap approach is popular amongst CFOs because it is simple and convenient to deploy. CFOs are able to treat enterprise mobility cost almost like a fixed operational cost, since it has become a predictable expense that changes very little from month to month.