Best Practice Guide – Mobile Device Lifecycle Management (MDLM)
Mobile devices are getting more complex and costly to support…
The rapid growth of smartphone and tablet adoption within business has brought with it a whole range of new challenges for IT teams to manage. This Utelize Best Practice Guide looks at the various elements of managing the ‘lifecycle’ associated with mobile devices and reviews how organisations can reduce the total cost of ownership (TCO) when it comes to supporting devices.
Most organisations are already very familiar with the ongoing challenges of managing device security policies using mobile device management (MDM) and enterprise mobility management (EMM) software. The requirement to protect both devices and confidential data from a growing range of security threats has never been greater, and the introduction of new EU General Data Protection Regulations (GDPR) in May ’18 will only serve to drive further controls in this area. However, security is just one of the challenges facing many IT teams, who are being asked to support a growing number of business, and, in some cases, BYOD
tablets and smartphones.
The fact is, mobile devices are no longer disposable items, used for a couple of years and then passed on to others without scrutiny, or simply left in the top drawer. Smartphones today can be more expensive than laptops, and often contain similar – or greater – levels of confidential personal and business data. And, of course, they are resalable, portable, and prone to screen and water damage – so loss, damage, and theft risks are high.
As a result, organisations of all sizes are starting to consider the management of these devices as a ‘lifecycle’ process, in the same way that they do with other mobile computing. This lifecycle covers many different stages – from sourcing and funding the device, configuring for business use (also known as staging), through to ‘in life’ warranty and damage repairs, and ultimately disposal and recycling of end-of-life devices to ensure data security and EU GDPR compliance. In short, these areas are already placing a significant challenge and drain on IT resources and that problem is only set to increase. However, managed strategically, it’s
possible to keep costs under control and, in the process, provide a high level of quality support to business users.
The key elements of mobile device lifecycle management (MDLM)
Whilst each organisation will adopt a different approach to managing its mobile devices, the lifecycle is common, and support will normally cover four to six different stages.
- Device Sourcing – which devices to deploy, and where to source them from
- Device Finance – how to pay for devices, and whether to own or lease them
- Device Security – applying the right balance of mobile device management and threat prevention
- Device Staging – preparation of devices for end users
- Device Repairs – in-life support and management of repair processes
- Device Recycling – ensuring end-of-life device wiping, and securing the residual value of the device
In this document, we review each of these core lifecycle elements in more detail and explore a range of measures that organisations can take to streamline support and reduce long term device ownership costs.
Mobile Device Sourcing
Traditionally, most businesses have purchased their mobile devices as part of their mobile network contract, typically using some form of ‘tech fund’, or device subsidy. A growing number of businesses are, however, looking to bypass this model and purchase devices independently as a means to improve security and reduce costs.
Mobile tech funds are a clever way for mobile networks to encourage their customers to buy mobile devices directly from them, rather than explore the marketplace. This model had some merit when the cost of the device represented a small fraction of the cost of the airtime over the contract term. Today, however, when smartphones are often significantly more expensive than the airtime over a 24-month period, trying to partially subsidise or fund the device with airtime makes little sense.
Whilst it may be obvious when pointed out, it is worth stating the following – in order for a mobile network to provide a tech fund in the first instance, they must first increase the real cost of the airtime to create this fund. If, for example, your mobile contract contains £100,000 of inclusive tech fund, then it is highly likely that the network artificially increased your airtime costs by a value that exceeds this £100,000, or they expect to recover this amount in hidden overspending and overage margins (like roaming). To protect themselves, the network will also often place minimum spend or connection commitments in the contract that guarantee their return – but in most cases, they won’t provide additional subsidy if the minimum commitments are exceeded. So, tech funds as a source of funding are prone to diminishing value for businesses.
Once you have been provided with a tech fund, the mobile network has you as a captive audience, and they are almost certainly guaranteed the orders for your mobile devices. However, as few organisations know in advance what devices they will need, or which new devices may come to the market, then few negotiate detailed terms around device purchases from their network. As a result, it is of no surprise that the cost of devices purchased using a tech fund can be up to 10% more expensive than purchasing these devices from the market, and it is rare that the networks will negotiate on the cost of devices when a tech fund is used for payment. So, it’s not uncommon to find that the mobile network is making significant additional margin at your expense on both the airtime and devices. Considering devices are now commonly more expensive than airtime, this could be materially impacting upon your telecoms budget.
Mobile networks are trying to address the growing challenge of funding more expensive devices by offering longer contract terms of 30 or 36 months, or even sometimes more. Whilst on paper this generates more tech fund, it creates greater problems. Corporate devices are unlikely to last three or more years, warranties only last 24 months, and it simply locks in airtime pricing on terms that will drift further out from the market. Most organisations taking a three-year contract end up re-signing mid-term when their tech fund runs out, leaving them with little room to negotiate market competitive terms.
Cost, however, is not the only consideration when purchasing devices in today’s security-driven world. Mobile software security patches are frequently updated by manufacturers/OS providers to address the latest risks and security threats. Part of your mobile device security ‘best practice’ will no doubt already be to ensure that these patches are updated upon release to minimise risks. When you purchase a device through a network, however, the network – not your IT team – determines whether and when the update will be released. So, if you want full control of your mobile device security, sourcing ‘factory open’ and unlocked devices will mean that you will have access to updates as soon as they are available. Unlocking a network-provided mobile device does not change the OS updates process, which is why ideally you should consider factory open devices.
Finally, the sourcing of open and unlocked devices has two main secondary advantages. First, it allows your users or organisation to change network in the future without having to unlock the device from your existing network. This simplifies the process of changing network, and removes an obvious barrier to change. Secondly, unlocked devices retain a greater residual value than network-locked devices. We explore residual value (RV) in greater detail in the next section. It may be obvious – but if it costs £20 to unlock a device, then the RV of a locked device will typically be £20 less than an unlocked one when you come to recycle it.
For organisations looking to gain the maximum value for money, there is also the opportunity to significantly reduce device purchase costs by investing in premium used equipment. These devices are wiped of all user data, are very high quality, come with a 24 month extended warranty and are professionally packaged in your corporate branding. Most users would be hard-pressed to ever know their device was not brand new and off-the-shelf.
In summary, the key take away points for mobile device sourcing are:
Buying mobile devices from a mobile network using a tech fund is easy – but you will probably be overpaying for both the mobile airtime and the device itself
Mobile devices when appropriately sourced from the market will be factory open and unlocked – this makes it easier to change network in the future (either at a user or company level)
Unlocked devices typically retain a greater residual value than network locked devices
Factory open devices allow you to update security patches quicker than network locked devices
Premium used devices can help to significantly reduce the cost of purchasing mobile devices
Mobile Device Financing
Most mobile device purchases are normally either purchased outright as a capex (capital expenditure) investment (especially for bulk device purchases), or as a one-off opex (operating expense) transaction. Opex transactions are common where the devices are purchased individually or in low volume, and the transaction value falls below accounting thresholds for capitalising purchases, (this is known as the ‘de minimis’ value).
Recently, however, the emergence of different finance options has transformed this model. Organisations can now choose to spread purchase costs over 24–36 months, or even lease (rent) the device as an alternative to an outright purchase. This not only breaks the traditional tie to purchasing devices through the mobile networks, and the hidden costs of buying devices through tech funds, but it also creates opportunities to more cost-effectively upgrade technology for your users. In short, you can choose to either reduce device purchasing costs, or use the same budget to secure access to improved technology for your employees.
The cost of leasing devices is driven by three main factors: the finance cost – this is based on the credit-worthiness of your organisation; secondly, the anticipated residual value (RV) left in the device at the end of the term; and finally, the term that you wish to use the device for. Investing in devices which have the highest levels of RV means that the cost of finance can be reduced, because the finance company will get some cash back on the original device, so in effect they only need to finance a percentage of the actual device cost.
As a guideline, Apple iPhone and iPad devices typically retain the greatest RV after 24 months, often above 20%, whereas some other devices can be almost worthless (even when in good condition). This leads to a scenario where it can be less expensive to fund a more expensive Apple device than it is to fund a lower cost device. If your organisation is aiming to use a device for more than 24 months, then you may find that purchasing the device (the value of which is depreciating over the term) is a more cost-effective solution than leasing.
As a result, including your Finance department in mobile device purchasing and funding discussions is now a critical component to consider when investing in mobile devices, regardless of whether you are planning to purchase from the market or via a tech fund. If the Finance team does not realise that there are material differences in the RV, and they don’t understand that GDPR and WEEE regulations mean that you will have an obligation to collect, wipe and recycle the device at the end of its life, then you’ll probably end up overspending and creating budget issues down the line.
So rather than simply looking at the one-off cost of the device, look at the cost of ownership, and be sure to review residual values, and end-of-life recycling costs, and you may find that leasing can be one option to reduce the overall cost of devices by 10-15% – or even more. Whether you purchase or lease devices, by decoupling mobile devices from airtime contracts your organisation will be able to have much better transparency of costs and potentially negotiate more flexible and lower cost airtime contracts on a SIM-only basis. It may also be possible to use multiple networks to secure the best coverage options for your users.
Mobile networks like to bundle devices and network over 24–36 months because these terms lock you in as a captive customer, and allow them to maximise profits. The networks know that with rising device costs, many organisations on a three-year term will have to upgrade after two years to secure more tech fund, which creates a new contract extension and term, and often it’s achieved with little or no competition. Separating network from device costs (even if you still buy both from the network) makes the whole process more transparent and will not only allow you to negotiate much shorter lock-in terms, it will also reduce the total cost of ownership for mobile devices and airtime.
In summary, the key take away points for mobile device financing are:
Renting/leasing allows organisations to treat mobile devices as an operating (opex) cost
Renting/leasing costs are impacted upon by creditworthiness, the contract term, and the residual value of the device
Not all mobile devices have the same residual value (in percentage terms) – currently, Apple devices achieve the greatest RV after 24 months, so can be more cost-effective to lease than other devices of the same value
Leasing works best on an 18-24 month term – if your organisation is looking to ‘sweat’ the assets for 3-4 years, then capitalising the purchase may offer the better value
Leasing arrangements can be combined with wider device lifecycle services – for example: end-of-term device wipe; break/fix support; extended warranty; and insurance. If you are looking for a full support service, leasing can be an effective way to secure this as a single monthly payment per device
With leasing, you will not own the device at the end of the term, and any unreturned or damaged devices will need to be paid for – normally this is capped at the residual value of the device and not the cost of a replacement
Mobile Device Security
Mobile device and data security is one of the leading challenges for businesses and public-sector organisations, and these challenges are covered in detail in other Utelize Insight Reviews. For the purposes of this Utelize guide, this piece simply summarises the key elements of mobile security, looking at the role of mobile device management (MDM) software, enterprise mobility management (EMM), and mobile threat prevention (MTP). We also review the role of Apple DEP and OS patches and upgrades, and the importance of sourcing mobile devices from the right vendors.
As a quick summary:
Mobile device management (MDM) – this software controls the policies around your organisation’s mobile device management. So, for example, it controls whether personal and business data are separated (known as containerisation), whether specific phone functions can be used (e.g. camera or tethering), and it maintains an inventory of devices. When devices are in breach of the policies that have been set, alerting and reporting can highlight exceptions, or force updates, or even remove applications. When devices are lost or stolen it allows tracking of the phone, and can support locking and wiping where necessary.
Enterprise mobility management (EMM) – as MDM software and smartphones evolved the role of MDM also evolved to cover the wider process of managing mobile devices, people and processes in the workplace. These solutions can also provide greater levels of control over the applications used on the device (mobile application management (MAM)), as well as access to content through mobile content management (MCM).
Mobile application management (MAM) – these tools allow the business to manage application updates, and control or bar access to specific applications. They can also integrate with corporate application stores, and Apple’s VPP (Volume Purchase Program), which allow organisations to purchase applications, and manage their distribution across their entire organisation (mobile content management (MCM)).
Mobile threat prevention (MTP) – these applications allow organisations to implement more sophisticated protection from advanced malware and device security threats, providing even greater levels of protection from risk and data loss. When combined with MCM they also allow policies to be set that limit access to specific types of data and content, and also allow different policies to be set dependent on whether the user is connected to Wi-Fi or is roaming.
Organisations deploy these and other tools in varying degrees depending on the type of user and device, and the level of sensitive data that is involved. For some, simply being able to lock and wipe a device is sufficient to meet the IT security policies, while for others there will be quite restrictive policies, and a separation of business and personal data combined with full MTP services. In all cases there is a balance to be found – restricting devices and imposing high levels of control are great for security, but they often involve removing the very functions that deliver a great user experience and productivity gains.
Mobile Device Security & Sourcing
Whilst cost is always an important consideration when purchasing devices, it is important to understand that there are significant differences between purchasing ‘factory open & unlocked’ devices, and devices provided by your mobile network. Mobile software security patches are frequently updated by manufacturers/OS providers to address the latest risks and security threats. Part of your mobile device management & security ‘best practice’ will no doubt already be to ensure that these patches are updated upon release to minimise risks.
When you purchase a device through a network, however, the network – not your IT team – determines whether and when these updates will be released. So, if you want full control of your mobile device security, sourcing ‘factory open & unlocked’ devices will mean that you will have access to updates as soon as they are available. Unlocking a network-provided mobile device does not change the OS updates process, which is why ideally you should consider factory open devices.
Mobile Device Staging
Staging and kitting is the process of pre-configuring your mobile devices for users prior to deployment. ‘Staging’ typically covers the configuration of the device software, and ‘kitting’ is the preparation of the physical device. However, for simplicity we’ll simply use the term staging as they are quite interchangeable.
Examples of basic device staging can include:
- Charging the device
- Inserting and testing the SIM card and network connection
- Adding ‘asset tagging’
- Testing the device’s basic operation
- Applying screen protectors/cases
- Including accessories in the package
- Including user guides and information in the package
More complex staging can include:
- Updating operating system software (O/S)
- Configuring device settings
- MDM enrolment
- Apple DEP enrolment (see below)
- Device encryption
- Configuring email and corporate applications
- Installing business application containers
- Configuring mobile threat protection
As most IT service desks will know from experience, configuring mobile devices can be a time-consuming process and often detracts from other, higher priority activities. When the configuration of devices is managed centrally, each device reaches the end user fully operational and tested. This significantly cuts down user support and issues, and removes the need for users to set up (often inefficiently) their own devices.
Depending on how mobile devices are sourced in a single order or project, it is possible to add staging services to the fulfilment process. With staging services, a third party (either the distributor or service provider) will set up the device to an agreed specification. The specification (also known as a build) will be tailored to your own organisation, and typically will be charged based on fixed cost per device.
To establish the fixed cost, the staging provider will normally work with the customer to create a fully-documented process, and once the process (or build) is agreed, the service provider will typically complete two individually timed device builds, measuring the actual time spent (touch time) to complete each build. The average of these two times will then be taken to create the cost per build.
Apple’s ‘Device Enrolment Program’ (DEP) is gaining greater adoption within larger organisations who are looking to simplify the configuration of iOS and macOS devices. DEP allows organisations to apply true corporate ownership and supervision of the device, and to automate enrolment to the organisation’s mobile device management (MDM) platform, without having to take the device out of the box. To simplify the process further, it’s possible to skip certain Setup Assistant screens so users can start using their devices right out of the box. (From iOS 11 it will also be possible to register devices purchased outside of Apple’s authorised reseller program.)
DEP key features:
- MDM enrolment – iOS devices can be preconfigured to require automatic enrolment into MDM – and devices can be locked into the MDM – so it reinstalls even if a factory reset is performed.
- Wireless supervision – supervision enables enhanced corporate control and ownership of the device – for instance turning off iMessage, AirDrop, or Game Center – and it provides additional device configurations and features, such as web content filtering.
- Zero-touch configuration for IT – with DEP, once users activate their devices, account settings, apps, and access to IT services can be auto-configured over the air. You don’t need to use staging services or physically to access each device to complete the setup.
- Streamlined Setup Assistant – DEP also makes it easier for users to set up their own iOS devices and Mac computers. Using an MDM solution to configure devices, users are guided through the activation process with the built-in Setup Assistant, and IT can specify that certain set-up screens are skipped.
- Availability – DEP is available in the following countries or regions: Australia, Austria, Belgium, Brazil, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Turkey, United Arab Emirates, United Kingdom, and United States.
Things to consider with device staging:
Staging is often a hidden IT cost that can consume significant IT resources, especially on larger device refresh programmes
Staging services can reduce this impact on IT, and should be based on documented ‘build specifications’ and a timed set-up
Staging devices minimises user time spend on setting up devices, and ensures a consistent configuration
Apple’s DEP program enables organisations to simplify and reduce the cost of configuration and MDM enrolment without touching the device, so devices can be sent directly to users and be configured remotely
Mobile Device Repairs & Insurance
One of the downsides to smartphone ownership is the significant increase in damage and loss that you are likely to experience vs. feature phones and Blackberrys. That, coupled with the higher cost for smartphone screens and repairs, is likely to mean that your mobile device repairs and supports costs are set to increase in the future.
Market estimates vary significantly, and typically indicate that over a two-year period between 20% and 40% of smartphone devices will develop some form of user-impacting fault or problem, and most likely this will be caused by user damage. Accidental damage is responsible for over 90% of smartphone failures, with damage from drops and liquid damage being the main causes. For larger corporate estates, this number is likely to be lower than the average, and our customer feedback indicates that repairs and losses run at about 10-15% in the corporate market. This figure may, however, hide repairs completed by users, or losses masked by ‘upgrades’, that are also more common with corporate mobile estates.
Whilst cases and screen protectors are a low-cost consideration, significant numbers of business users still don’t protect their phones. Increasingly, manufacturers are making their devices water resistant, and that should go some way towards reducing the estimated 100,000 smartphones that get damaged by water or other liquids every day in Western Europe. IDC research estimates that the cost of liquid damage is over $10.7 billion a year in the region.
According to insurance company ‘Protect Your Bubble’, 446,000 people in the UK had their phones stolen last year (2016), although these figures are down considerably from their peak of 897,000 from April 2008 to March 2009. Of greater concern to those organisations that don’t yet use mobile device management tools and policies, is that only 53% of users have a pin code protecting their devices, and only 21% use a tracking app. Currently, 32% take no security measures at all.
Planning for these inevitable losses is an important element of mobile device lifecycle management, and spans a wide range of areas:
- Device inventory – at the heart of your MDLM processes should be a device inventory. This needs to track who owns/uses the device, where the device was purchased from and when, and device details including the IMEI. Most MDM software will provide some form of device inventory, although extending this to capture purchase and support details is recommended.
- In warranty’ repairs – manufacturer faults are becoming less common, and typically ‘in warranty’ repairs will represent only a very small percentage of an organisation’s device faults and repairs. Most manufacturers offer a 24-month standard manufacturer warranty, although for Apple the warranty is 12 months. Establishing processes for ‘in warranty’ repairs is key to reducing downtime for users and IT teams. Some vendors will offer a next day swap-out, where the faulty device is replaced with another device (typically a fully refurbished device), although others may only support this for a limited time, after which you will need to send the device back to the manufacturer directly. For Apple devices, it is possible to extend the warranty using an Apple Care policy; however, for larger estates this is an expensive route. Instead, most authorised Apple repair partners also offer some form of in-house extended warranty.
- ‘Out of warranty’ repairs – the cost of mobile phone repairs can be very expensive, and often significant damage means that the phone can even be beyond economic repair (‘BER’). Despite this, it is still important to establish repair or swap-out processes for damaged devices, to reduce user downtime and the impact on IT resources. Most authorised repairers will offer an initial estimate of repair based on a description of the damage, followed by a formal quotation when they receive the device. As part of your repair processes it is important to establish the logistics/delivery process, and associated costs.
- Insurance – protecting against these risks is itself a complex issue. At an individual user level for a personally-owned device, applying insurance to a smartphone device makes sense, as the cost of a single claim for damage, loss or repairs will typically outweigh the cost of insurance. Policies from specialists or your mobile network can be ok, although the quality of service and costs can vary significantly.
For organisations that wish to insure devices, we would recommend that you also consider talking to your existing commercial insurance company. Often, commercial insurance policies will assess mobile device estates on a different risk basis from individual mobile phones, which can substantially reduce the costs. For larger mobile estates, or where the repair statistics are not yet understood, however, it may be more cost-effective to create a pool of devices to cover replacements.
- Alternatively, purchasing premium used devices as replacements will provide an immediate stock of devices to exchange with users’ devices whilst their device is being repaired, and will typically cost about 10-20% less than new devices. Whilst premium used devices often look and feel like new, the replacement of existing devices with the same devices can help to reduce claims by employees who are simply looking for upgrades.
- Out-of-hours support – whilst it is possible to put in place 24/7 support that can manage the device swap-out process and repairs at all times of the day or even weekend, it is an expensive support model, and so most organisations don’t support it. This leaves businesses exposed to security risks when devices are lost or stolen outside normal business hours. The sooner lost and stolen devices are reported, the sooner the network can lock down the SIM, (and prevent unauthorised usage and business costs) – and the sooner MDM lock, locate, and wipe policies can be invoked. If users can’t report these losses to IT support until Monday morning, this poses a significant risk – especially with new EU GDPR regulations that require data losses to be reported within 72 hours. Having a basic support service, or self-service functionality to enable devices and SIMs to be locked down in the event of out-of-hours losses, is highly recommended for all organisations.
Things to consider with device repairs and insurance:
Over 24 months, expect between 10% and 20% of your smartphone estate to suffer some significant damage or loss
Alternatives to traditional mobile insurance policies may substantially reduce costs – talk to your existing commercial insurance company first to get a clear cost and terms
Well-defined repairs and replacement processes can remove significant hidden IT support costs, and get users back up and running more efficiently
Consider using premium used devices as replacements to reduce costs
Evaluate out-of-hours processes – do users know who to call, and when? Are current processes suitable to lock down devices and SIMs quickly enough in the event of a lost or stolen device?
Mobile Device Disposal and Recycling
Whilst consumers have long understood that their smartphone devices have a residual value, organisations and businesses have been slower to adopt formal recycling and resale processes. The fear of their data and information getting into the wrong hands probably outweighed the financial benefits of resale for most. However, in practice, for many organisations these devices either remain in top drawers, or are passed on to friends and family with no accountability or tracking. With existing WEEE directives, and the upcoming EU GDPR regulations from May 2018, this is no longer going to be an acceptable practice. So, when it comes to the end of the lifecycle for your mobile device, the options really depend on the residual value of the device and your internal processes and inventory. In the section ‘Mobile Device Finance’ above, we reviewed the impact of differing residual values across different device models and manufacturers. For devices that retain a solid residual value, the disposal of the device to a suitable IT asset recycling and disposal business should be considered.
The process with a security accredited or ISO27001 provider should include a certified professional device wipe (normally triple wipe), and as part of the process the value should be pre-agreed (subject to the device meeting the agreed quality). When recycling a sizeable mobile device estate, it is also possible to work on a ‘share of resale’ model. In this model, the asset disposal firm will refurbish the equipment on your behalf, and then share the achieved resale value or margin with the business. For organisations looking to refresh devices, it may be worth considering using the residual value to achieve an improved price for the new devices, and to ensure certified disposal or resale in the process.
For devices with a very low or non-existent residual value, the priority is to ensure a secure WEEE certified recycling or destruction process, where nothing goes to landfill. Whilst the devices may have limited resale appeal, most devices do contain some base material value, including some precious metals, and it may still be possible to negotiate a ‘nil net cost’ recycling process that ensures that the devices are professionally recycled.
Develop your mobile device lifecycle management strategy with Utelize
Mobile device lifecycle management is a rapidly-evolving and complex business challenge. However, approached strategically, it is possible to reduce the impact on your IT team, and to optimise long-term expenditure in the process – approach without a suitable strategy and you’ll inadvertently end up with significant hidden IT resource costs, and overspending on mobile devices. To arrange a discovery meeting, please contact by clicking the ‘get in touch’ button.
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