Overspending Even Though Most Employees Spend Less Than $40 a Month
Company A is a fairly typical, mid-sized US corporation. It has a $2 M annual mobile spend for about 2’200 employees with company handsets. More than 700 employees have monthly bills lower than $20; more than 1’200 employees are below $40.
These really low spending levels for majority of employees may seem surprising for most people. The average consumer monthly bill for an iPhone tends to be close to $100. Yet for corporations, there is usually a 50-70% “frugal majority” – a group of employees whose usage is minimal.
This group of employees keeps the overall company phone bill average low – for Company A, the average monthly bill is about $80. Compared to private phone bills topping $100, the number seems tame. Which is why companies can get lulled into a sense of complacency about their spending.
In the case of Company A, the annual spending could be cut by about $270’000. This optimization can be achieved via a combination of different steps. Like many other firms, Company A is splurging on lavish, unlimited texting plans for dozens of employees, even though the 12-month billing profile of these people demonstrates that most never use more than 100 texts a month. Close inspection of the past billing shows that there are dozens of “phantom accounts” – mobile phone lines that nobody has used for a long time, each of them still costing the company $300 – $600 a year.
As often is the case, the biggest single source of savings comes from ineffective pooling. As counterintuitive as it may seem, finding the best way to pool large numbers of mobile plans typically involves creating clusters of really cheap plans and really expensive plans and utilizing them in various pooling stratagems.
The end result of eking out savings from three different sources means that Company A can lower the annual mobile spend by more than $270’000 – even though most of its employees already squeak by on a monthly spending level below $40.
