The Impact of Politics, Customs, OEMs, and Multinational Structure on an Enterprise Mobility Program

On the one hand, the world is an interconnected economy with goods flowing relatively friction-free between countries. However, it may seem like multinational business is under assault from many different directions. The barrier to the free flow of goods and services is increasing and complicated both by politics and by the corporations themselves. Corporate structures have a legacy of enterprise mobility programs being centralized at the country level for management, regulatory, financial, and cultural reasons. This creates a managerial impediment to global scale both through local pushback but also a senior executive mentality of “why should I care” and or lack of sponsorship. 

One major global OEM went so far as to launch an RFP and subsequent pilot for global telecommunications expense management (TEM) without executive sponsorship. Imagine the vendor’s surprise when they learned it would be a country by country opt-in process versus a global rollout. The internal team didn’t have global decision-making authority, and the omission of executive sponsorship went undiscovered for too long.

Customs unions (blocs) strive to eliminate internal barriers to the movement of goods by creating a single regulatory regime for goods entering the customs union. The most important example is the European Union, which covers 28 countries plus four additional bilateral countries including Turkey. 

In theory, a single operation inside of the European Union can achieve similar results as to a single operation in the United States. In practice, the EU is still hamstrung by multiple currencies (11) plus the Turkish Lira. With the United Kingdom’s exit, that will fall to 10 currencies. The presence of multiple currencies, even if there was only the USD and Euro, introduces currency exchange risk and overhead into the financial flows and local apportionment of costs. A partner’s ability to natively invoice in Euros and US Dollars, as well as additional currencies, eliminates one long term financial risk for the enterprise. 

While the EU is a customs union, many of the distribution agreements for the OEMs pre-date the EU and the single currency — meaning that rarely is purchasing in the EU a single transaction activity. This is complicated by country by country mobile operator licensing as well as OEM authorizations for resale and individual SKU practices on a country-by-country basis. 

Also, OEMs historically have had different warranty terms and/or requirements based on individual countries. Granted, the EU has a 24-month mandatory warranty period; however, there are still local restrictions and/or caveats. Don’t forget there is the power plug issue between the UK and most of Europe let alone across the other regions. TRG’s Amsterdam location within the EU provides our clients with a stable platform for their EU operations during the Brexit uncertainty and into the future.

The risk of politics to the enterprise mobility program and cross border trade should be self evident today. The risk at the individual country level is greatly mitigated when there are structural protections like a customs union. 

There is no intention of omission regarding the MERCOSUR customs union in South America. For the bulk of North American and European Union domiciled multi-nationals, LATAM does not represent a material portion of their mobile fleet and therefore the operational and financial burden is minimal and/or too dispersed.

Regulatory requirements in India and China largely require local in-country operations, which well-established partners will be able to provide through a global partner network. This is also true of much of the Middle East, Africa, and Southeast Asia. 

The Effect of Mobile Operators on Enterprise Mobility Programs

The TEM companies have done an excellent job of optimizing the spend across countries and mobile operators in the major markets for enterprise mobility program customers. Their ability to execute is directly proportional to the country-by-country mobile population served, e.g., benefits of optimizing and managing the expenses of 10 mobile devices in Poland or Czech Republic doesn’t outweigh the cost of the program versus 1,000 in Italy. 

The mobile operators historically have provided procurement and support services in many countries and/or partnered with device distributors. This has been done on a country-by-country basis versus a single EU-wide service mandate. Imagine 50 Verizon contracts versus one in the US? This is a direct result of legacy legal structures that hold the operating companies of the mobile carriers under the regulatory structure of the individual countries. 

Vodafone, Orange, and Telefonica in Europe created enterprise organizations to synthesize a pan-European mobile operator through VGE, OBS, and TBS respectively. These organizations work well for the larger multi-nationals yet require a significant commitment that limits regional flexibility for the enterprise mobility program customer. 

There is no excuse for backhauling devices from the EU to the U.S. for repair/replacement or vice versa let alone the inherent costs and risks of doing so. Make no mistake — these poor practices and habits are more prevalent than one would think within Fortune 500 companies. Often, these poor practices go unnoticed through the lack of scrutiny internally or are buried in vendor processes. 

Enterprise mobile applications and line of business tools are permeating the enterprise and are being deployed across markets. In order to scale efficiently, senior management must alter the paradigm of how mobility programs are managed and take a look holistically at their global footprint. Once core USA/Canada/EU regions are optimized, the long tail of the enterprise fleet (fragmented and consisting of minimal concentrations of devices) can be assessed and optimized on an opportunistic basis.

Take Your Enterprise Mobility Program to the Next Level

Nobody “does” enterprise mobility across 195 countries; however, the combined USA, Canadian and EU footprint of TRG represents $40+ trillion of economic activity and the immediate opportunity for enterprises to optimize and scale their mobility program. 

While many organizations provide pieces to the most critical element of maintenance and support, only TRG provides a managed asset partnership along with procurement, deployment, depot managed logistics, and lifecycle support services. And TRG’s Amsterdam location within the EU provides our clients with a stable platform for their EU operations during the Brexit uncertainty and into the future.

If your organization has been experiencing difficulty with a global-scale mobility program, or if you’re unsure where to begin, the team at TRG is here to help. There are a number of factors that must be considered with such a program — both operational and political. We can help you navigate the complexities of these challenges and develop a solution to achieve your goals. Stay tuned for more on global and regional enterprise mobility services, best practices, and hard lessons learned. If you’d like to learn more about TRG and our services, fill out the form below.

Tags: