What’s Wrong With The Mobile ‘Tech Fund’?
Mobile networks, devices and budgets have always been challenging for businesses to control and support. Mobile devices are with their users all the time, they support both business and personal life through applications and the internet; and commonly they sit outside of secure, corporate IT networks. To compound matters further, they’re more prone to loss and damage than all other forms of IT hardware and they’re easy to resell.
Unlike most IT expenditure, mobile costs are also highly sensitive to end user behaviour. Controlling that behaviour whilst also ensuring employees remain productive is both difficult to achieve and resource intensive. The way we use our mobile phones also varies dramatically from user to user, and it’s extremely difficult to draw clear boundaries between personal and business use.
About the Tech Fund
Tech funds are a virtual pot of money that allows you to purchase products and services at any time without the need to make additional capital investment. The fund itself is created when mobile networks add “extra” costs on top of your underlying mobile network charges, then refund an element of this extra cost in the form of the “tech fund”.
The tech fund allows businesses to pay for mobile devices out of a pre-agreed pool of money. Until a few years ago, most IT teams just about balanced their mobile device budget by sweating mobile assets. This was done by introducing ‘BYOD’ and avoiding large scale smartphone roll outs. However, for most IT decision makers those days are over and the impact of increasing mobile data consumption, more expensive smartphones and implementing effective device security is now a growing, visible change.
The Four Significant Mobile Challenges
Increasing Mobile Device Costs
That can no longer be subsidised by network 'tech funds'
Increasing Mobile Data Consumption
Driving greater management challenges & increased airtime costs with more frequent 'bill shock'
BYOD Programs Failing To Deliver Expected Savings
Driven by higher IT support costs coupled with lower BYOD adoption rates & device purchase savings
Increasing Mobile Security, Data Leakage & Compliance Risks
Leading to increased pressure to issue corporate devices, as well as increased security and support costs
If you’re struggling with mobile budgets, then you need a plan
These challenges are rapidly driving up mobile costs and can no longer be hidden as part of mobile network charges. To address this challenge Finance and IT teams are going to need to work together with a strategic plan for mobile management and procurement.
As the real challenges of administrating and securing personal devices for business use continue to grow, and the forecasted cost benefits associated with ‘BYOD’ fail to materialise. More and more large regulated businesses need to expand their UK corporate device programs.
Mobile Tech Funds Prevent Effective Mobile Management & Lead To Overspending
Mobile networks have a vested interest in maintaining the tech fund as they can generate significant hidden profits over the term of your agreement. Tech funds often offer little value to large businesses and the sooner you remove them, the better your chances of controlling your mobile device and network expenditure will be.
Tech Funds Tie Customers Into Purchasing Locked Devices From Their Mobile Provider
A “tech fund” ties your business into purchasing devices from the mobile network for the contract length. Few businesses consider the long-term issues and fail to add terms to protect themselves. Tech Funds are presented as device subsidies but are in fact designed to remove competition, allowing the network to charge higher than market prices.
Tech Funds Tie Customers Into Flexible Contracts With Unnecessary Spend & Term Commitments
Tech funds are simply ‘off balance sheet loans’ that can only be used to buy devices through one supplier. Unlike loans, businesses have no clear insight into how much of their monthly mobile spend relates to the fund and how much is for airtime. This then creates an ideal environment for networks to be to obscure large hidden profits.
Tech Funds Encourage Hidden IT Spending And Remove Governance And Accountability
Device costs have significantly increased and there is rarely enough tech fund to go around. IT teams are forced to be selective about which budget holders receive new devices. The temptation of a hidden budget often leads to businesses making the wrong device and airtime investment decisions, tying them into unsuitable long-term mobile contracts. Businesses lump device purchases in with their year operating costs and fail to recognise the overspending that occurs over the term of the mobile agreement. This model benefits only the networks.
Tech Funds Distort Business Technology Investments And Remove Much Needed Flexibility
Tech funds automatically tie you to a network for a fixed term. However, business requirements change rapidly, so fixing your device refresh strategy to a contract renewal is going to have a negative impact on your business. Being Tech Fund led leads to spending on vanity upgrades. Businesses would be better off removing tech funds and instead electing to take immediate tariff reductions on their network agreements, reducing operating costs. IT teams need to deliver secure and flexible services that deliver value for money, tech funds destroy this flexibility and skew rational business decisions.
Will you carry on overpaying for mobile services and devices, locking your business into inflexible and outdated mobile contracts and commitments, in the hope of hiding a growing mobile device expenditure challenge? Or, will you face up to this device funding challenge, restructure your mobile contracts and put in place a clear strategy for mobile device and airtime purchasing and investment?
Click the button below to watch Mobliciti’s ‘It’s Time to Ditch the Tech Fund & Embrace an Alternative Model‘ Webinar
Mobliciti can help you
Traditionally carriers bundle devices & airtime into one contract, meaning you have a bill that covers device cost, call minutes, texts and data. This allows carriers to hide costs and provide you with additional items you may not require.
Our airtime agreements allow you to un-bundle devices & airtime whilst simplifying costs & contracts. We can also provide multi-network contracts ensuring your staff have the best coverage for their location.
Get in touch today to find out more.