Sourcing Connectivity: Managing Wireless Spend

Connectivity is at the core of the modern business. Whether your organization is comprised of one small office with 10 people or a large multinational employing thousands, it is key to find the correct connectivity mix to support your business needs. 

Author: Wes Bodenhamer, former SourceOne Project Analyst

Editor’s note: This article is part of the MyPurchasingCenter content archive. It was originally published in 2015 and appears here without revision.

What confuses many organizations, though, is what options exist to adequately support their daily business activities at the best price and functionality available, which often leads to the discussion of wireless versus wireline. As the capabilities of wireless networks in the U.S. have continued to improve over the last decade, companies have a choice as to how they connect their workforce and machines to the rest of the world that previously didn’t exist.  

Connectivity spend, whether wireless or wireline, accounts for an ever-growing segment of company expenses as organizations cobble together multiple connectivity suppliers to serve their local needs. This opens the door to several possible issues.

First, there is no single choke point for change due to the diaspora of service providers across the many locations in which a company may operate. 

Second, companies lose purchase and negotiating power because, although their total connectivity spend may be increasingly large, it is separated among many smaller accounts thereby lessening their negotiating leverage. 

Third, there are likely to be differing standards of service from different providers that can lead to communication and job functionality issues. 

It is important to recognize the possibility of these issues occurring in any organization as they no longer just affect the IT team or purchasing, but in fact can cause major disruptions that can shake a business to its core.  While I still do believe in the viability of wireline services and their place in the market, I feel that many organizations should explore wireless opportunities for alternate solutions.  As such, one of the largest segments for wireline replacement is for remote offices.

In many cases the common solution for setting up connectivity for remote offices is very much the same as it would be for the head organizational office, just on a smaller level. The procurement process is common as the organization doesn’t have enough leverage to negotiate better prices and generally pays the book purchasing price for data connections at an office that might house just a couple employees.  As the organization continues to grow, this solution is replicated in multiple locations building a complicated network of providers and along with them separate pricing structures, bills, contacts and service levels among other items. In situations like these, the major carriers can provide great cost efficiency compared to their wireline competitors and can produce impressive economies of scale dependent on your service levels with them.  

This immediately brings up objections usually on two fronts: data caps and throttling. Capping data usage is why I recommend looking at this as an opportunity on smaller usage projects versus your whole infrastructure, among many other reasons.  The cost of a project using such a strategy on a large scale could quickly become prohibitive and would also have extremely negative effects on the wireless carriers network infrastructure – so caps are put in place. 

Throttling, or as I was once so eloquently told to describe as “limiting the throughput,” is another issue that arises concerning wireless data. Data packages are specifically built for certain levels of usage at certain prices therefore having the proper data levels for your need eliminates the threat of throttling.  In my experience, the large data usages that in turn cause the threat of throttling are not normal business activities but non-business related activities such as watching movies or playing video games. 

Solutions such as this are not limited to the remote office example. Many organizations have developed ways to utilize wireless solutions to reduce connectivity spend across a broad range of implementations. From ATMs to remote monitoring and POS systems to civic utilities, virtually any wireline installation can be converted to wireless and in the process save organizations thousands of dollars a year. Opportunities for savings when organizations limit supplier possibilities to traditional wireline suppliers decrease because you are effectively cutting out half of the market and limiting the avenues to savings. Proper spend management and evaluation thoroughness can benefit organizations greatly when it comes to connectivity spend, but the first step is for companies to be willing to try something new and cut the wireline.