For 2023, the global average expected inflation rate is 7 percent, well above the Federal Reserve’s 2% target.
That’s not surprising after COVID limitations and shutdowns created unprecedented effects on our universal spending, employment and supply chains. Nonetheless, it has created new challenges for business as we enter the post-pandemic era.
The 40-year-high inflation rate can mean a lot for businesses of all sizes, including higher borrowing costs, reduced purchasing power, reduced ability to hire staff and increased importance on asset management. And, of course, enterprise mobility expenses are not immune – particularly as we continue to embrace a work from anywhere (WFA) culture, placing even more importance on our wireless assets and spend.
With many of our personal and professional costs on the rise, here are a few areas of mobile management that might be affected by inflation and things you should look for in order to optimize cost and operations.
Examine Your Carrier Contracts
The tiny print in your telecom carrier contract might contain some surprising info when it comes to inflation. Many carriers invoke clauses enabling them to change pricing mid-contract when inflation soars. That’s because providers will look to the Consumer Price Index (CPI) for guidance on setting their rates. Rapid inflation puts tariff price pressures on the carriers, and that cost gets passed to consumers.
How can you prepare?
Check your corporate mobile phone contracts to see if clauses allow the carrier to increase prices in line with inflation during the contract term.
If you are out of contract with a provider (or on a rolling, month-to-month agreement), shop around to find the best rates before renewing. With prices in flux, the landscape might look different from the last time you shopped.
You also could enlist a partner like vMOX to help you find the best deals and broker the best contracts for your business needs.
Assess Your Mobile Usage
A well-negotiated contract tailored to your business’s usage can reduce costs, on average, by 30-40 percent. Therefore, especially in times of rising rates, it’s vital to understand your company’s mobile plan usage.
Where should you look?
Pay close attention to consistent overages and upgrade plans to reduce your per-minute or per-GB costs.
Proactively assess and manage your data pools to ensure you only buy what you need.
Remove unused tariff bolt-ons for international connectivity or short-term data augmentations.
Deploy user education to highlight best practices for mobile device usage (important for everyday business, but vital during rising inflation).
Proactively manage zero-usage devices to ensure you’re not paying for lines you don’t need. This is especially true when the cost per line is going up!
Review your employee offboarding program to ensure lines are disconnected or reused when employees leave.
Optimize Hardware Inventory
Hardware and device prices also are increasing due to inflationary pressures. Supply chain bottlenecks, chip shortages and semi-conductor shortages are driving up the cost of mobile equipment, putting a lot of pressure on IT departments to stay vigilant about wireless inventory management.
What’s the best approach?
Look at your device policies and set clear expectations with employees regarding eligible handsets and device refresh cycles. Many companies are moving from a 24-month to 36-month device refresh cycle to become more cost-conscious and environmentally conscious.
Recover hardware that’s no longer needed and either reuse it or recycle it. You might even uncover residual value by recycling your devices. (Due to supply chain issues, second-hand devices have significantly increased in value.)
Look into refurbishing devices. This reduces cost and gives employees a wider choice of hardware. Many suppliers of refurbished devices can offer high-quality units that are 30 percent cheaper than new devices and nearly indistinguishable in quality.
If you support a “Bring Your Own Device” program, consider the impact of inflation on users. Will you need to increase stipend payments or expense-claiming rules to support increases in consumer mobile tariffs for employees?
Recalculate Total Cost of Ownership
Rising inflation has the potential to cause a ripple effect through your entire enterprise mobility landscape. Total cost of ownership (TCO) should be considered when looking at inflationary pressures. Most organizations analyze airtime and hardware costs when assessing the cost of managing mobile devices, but consideration also should be given to support costs such as:
What’s the moral of this story? As you adapt to unpredictability caused by inflation, supply chain woes, wage wars, and other factors, be sure to examine your enterprise mobility costs. If there ever was a time to focus on analyzing and future-proofing your mobile contracts, usage and hardware, it’s now.
Need help analyzing and optimizing your enterprise mobility in light of rising inflation? Connect with a vMOX expert today.