Are cell-phone cuts pound-foolish?

California's move will reduce costs, but could take productivity with it

Staying mobile

As employees have become used to the constant contact afforded by mobile phones, they’re not likely to give up communication easily. They are likely to use workarounds, including:

  • Voice over IP.
  • Highway hot spots.
  • Personal cell phone use.

If California's reputation as a predictor of nationwide trends holds true, the move toward mobility and flexibility in state and local government operations is now at a crossroads.

That’s what several analysts say in the wake of California Gov. Jerry Brown’s first executive order, which instructed agencies to dial back their number of state-funded cell phones by at least 50 percent.

As of the end of January, 40 percent of state employees have cell phones. The directive would eliminate approximately 48,000 cell phones, bringing the percentage of employees outfitted with the devices down to 20 percent. Most importantly, Brown said in a statement, with each cell phone costing an average of $36 a month, according to the state's Department of Finance, the mandate would save the state about $20 million.

“General technological trends point toward more mobility and flexibility in government operations, and smart phones are crucial tools for this trend,” said Andrew Brandt, manager of state and local programs at FedSources. “On the surface, this move may seem to put California at odds with that trend.”

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Dialing up savings

California is grappling with a $24.5 billion budget deficit, and Brown, who was elected governor in November, has not hesitated to propose budget austerity that would slash state spending by $12.5 billion, including an 8 to 10 percent cut in take-home pay for most state employees.

“In the face of a multibillion-dollar budget deficit, a cell phone may not seem like a big thing,” Brown said in a statement announcing his order. “But spending $20 million, and perhaps more than that, on cell phones can’t be justified.”


Industry analysts say they understand Brown’s move, but they worry whether the decision is a knee-jerk reaction that could ultimately end up being penny-wise and pound-foolish.

“It’s fair to say that there are government employees out there who have cell phones who probably don't need them,” said Shawn McCarthy, director of research at IDC Government Insights. “If the end-user is not on the road a lot or does not need to be in close contact with a home office at random times, then cutting that person's cell phone is probably a good thing. But this is a case-by case situation. Taking a blanket approach to all or most employees is not the best way to make this complex decision.”

Analysts contend that Brown also runs the risk of incurring a decrease in the efficiency of government operations, a drop in employee morale and unintended costs.

Cell phones are “certainly fair game as an area to look for savings,” said Alan Shark, executive director of the Public Technology Institute, a nonprofit organization that focuses on using IT to improve government services. “However, this is about more than finance, and it’s about more than technology. Mobile phones have become the tool of choice for communications, and that is being severely restricted.”

Brandt said Brown is sending a clear message that he is out to tackle frivolous expenses, and by reducing the number of state-owned cell phones, he “will surely be able to limit some of the unnecessary expenses that have grown out of this program.” However, Brandt added that “he is also potentially handicapping 48,000 employees to their desktops.”

Brandt said mobility, social media and networking are among the top 10 priorities for states, according to the National Association of State CIOs, and many state and local organizations have started to consider social media a part of a larger communications plan.

That push is fostering “an expanding network of inexpensive yet useful phone applications for advanced devices,” Brandt said. “By reducing the mobility and instant connectivity among state workers, a perception of an out-of-touch administration, especially amongst tech-savvy Californians, is not beyond the pale.”

Moreover, Shark said, California risks losing the productivity perks that cellular devices offer. They not only provide voice communications but also e-mail, text and applications. “If you start disconnecting state and local employees from that communication path, you are definitely going to see inefficiencies in workload,” he said.

“That’s especially true if employees have to go out of the office on business occasionally but then have to travel back to the office to make calls or view e-mail," Shark added. "That’s a hard cost that needs to be considered.”

And there are other costs that need to be considered in any return-on-investment analysis. “If it means more people are working in the office, it could mean installing more phones and possibly more switches, depending on the numbers,” Shark said, noting that many organizations scaled back their land lines in years past to save money because their employees had access to cell phones.

Elizabeth Ashford, a spokesperson for Brown’s office, is quick to point out that the new executive order directs agency heads not to arbitrarily eliminate cell phones but to make a careful assessment to determine who really needs one.

“Gov. Brown is asking state agencies to identify what their core business needs are and how cell phones are being distributed to align with them — and then look for savings within that,” she said. “There’s no attempt to stymie any sort of progress in mobility and technology. It’s really just an issue of what a tough and devastating budget situation we’re in.”

She added that agencies are also being asked to focus first on eliminating contracts that don’t require an early termination fee, which could be anywhere between $175 to $350 per phone, depending on the complexity of the device.
Finding a workaround

After agency officials and employees start losing access to cell phones, they’re likely to seek out and find workarounds — some beneficial and some fraught with risks. “The growth of mobility will not be slowed by this change,” McCarthy said.

Shark said he’s already seeing some agencies in California begin to start looking for those solutions. “I think we’re going to find some very ingenious workarounds,” he said. “That way they can communicate and be mobile and still be able to let the governor say, ‘We saved $20 million in cell phone use.’” 

Those solutions could be increased reliance on voice-over-IP solutions via a wireless laptop or tablet PC or a cellular air card that an employee already carries. Or employees could use highway hot spots, where users can get Internet connectivity.

McCarthy warned that if California employees start switching immediately to VOIP solutions, the state would need to determine quickly “whether its networks can handle the extra traffic. “                           

State employees who don’t need a dedicated cell phone could also use their own personal cell phone — something private-sector and some public-sector organizations already encourage — and receive reimbursement for any minutes used for government business, which, McCarthy said, “might still be cheaper than providing them with a dedicated phone.”

That was one of the solutions put in place in Corpus Christi, Texas, which cut its number of cell phones for city employees by 50 percent in May 2010. Those without a city-issued cell phone are allowed to use their personal phones when necessary for official city business and must submit expense reports to get reimbursed.

However, Shark said he worries that allowing employees to use their personal phones will introduce more security risks to an organization, especially if the cellular device is also used for e-mail or data applications.

“What happens if that device gets stolen or lost?" he asked. "These employees could end up being unwilling conduits for malware getting into the agency system. These devices are not going to have the same level of security as government-issued devices because they’re not being supported by an IT department. They’re being supported by someone who may or may not be very tech-savvy."

"And that means they’re not likely to have the encryption in place or the authentication protections or the know-how to use the kill-switch if it does disappear," he added. "Letting everyone do their own thing without basic security policies in place could open a Pandora’s box of trouble.”

Most analysts agree that other government agencies will be inspired by California’s lead on this issue. “California has historically set technology trends in all levels of government,” Brandt said. “If California successfully implements this without substantial backlash from state employee unions, both the federal government and state governments will be using California as a test case for proving — or disproving — the criticality of mobile phones to the operation of government.”

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Reader Comments

Mon, Feb 7, 2011

Interesting responses. I'm a local worker and we've already cut back on issued cell phones. Instead, we rotate a single cell to those rotating call for the 24/7 support. Savings was about $3,000/yr. Minor; but, multiply this by 300 and we're down $1 mil. In addition, we've discovered that all too often, individuals cut messages; where, historically they would have thought twice before cutting a traditional memorandum. Results, lower delegation of assigned work; make for more efficient use of time. Otherwise, I as a manager have also given back the company phone and consolidated services on my own. I figure, it's also my efficiency (and sanity) being facilitated here as well.

Mon, Feb 7, 2011 John Oram Sacramento

REF: Are cell-phone cuts pound-foolish? A bit about my background: I have been using computers since 1966 and cell phones since the late 1970s. For over twenty years I was a self-employed manufacturers rep selling to 9-1-1 dispatching agencies in California, Nevada, and Arizona. All during that time we provided ourselves and our employees their tools on an "as needed basis", when we could build a business case those expensive tools were needed.. For the past seven years, I have been writing for Internet technology publishers about all types of things including computers and cell phones. While your author makes many good points, there is a failure to point out the taxpayers side of the issues. The lack of any business case to prove needs. I have had to cut back on my cell phone bill, I have had to restrict my travel, I too have done all the things Governor Brown is doing and proposes. Many of my friends - taxpayers who pay the wages and pay for the equipment used by agencies - have closed their businesses, lost their homes, moved in with family or out-of-state because of the recession/depression - name it what you want, the closer it comes to your family the worse it is. During my over thirty years in the communication industry, I have watched far too many government employees use their agency provided transportation for personal uses. I have installed software that tracks both computer and cell phone usage. Again there is a lot of personal use of both on agency provided services. When times are great and taxpayers have money - that is acceptable. Today is different. Time for all agencies to tighten their belts and prove their worthy of the taxpayers providing them those extra tools. Maybe the public needs a good dose of cut-backs in agency services. That might prove that the lack of cell phones will reduce efficiency. Have any of the agencies proven the lack of agency provided transportation actually reduces efficiency? There never has been a "free lunch" ... Government has to build a real business case on facts proving the claimed loss of efficiency due to the proposed cut backs. Not more of the 'chicken little the sky is falling' hearsay that has been sent out as press releases by government agencies and government employee unions..

Mon, Feb 7, 2011

Clearly there are justifiable government needs for 24x7 communication. These are genuine workhorses that improve productivity for a segment of the workforce. There is also an artificial urgency created by this tech where everything revolves around being able to reach out and direct staff at all hours with no real business need and this idiotic expectation that you must check your email every 30 seconds. I would be interested in an analysis of lost productivity that results from useless meetings in which everyone stares at their cellphone instead of dealing with the agenda before them. Before the damage is done, good managers create business rules that screen requests for technology based upon demonstrable need, instead of prestige or rank.

Fri, Feb 4, 2011

If something's taken away and there is legitimate business need, chances are it will be reallocated. I work for Federal Gov and dispute the automaticatic allocation of personal electronics based on paygrade in my service area. Didn't make me popular but I made budget and proved improved productivity. Took away netbooks, tablets, media-phones that were gathering dust or being used as "esteem" items. Reallocated them to the grunt-operators who used them for actual toil - hey, it's measurable. We found somebody downloading movies or calling Timbutu was measurable too. Lowered costs and the real sweat was supported.

Fri, Feb 4, 2011 Walnut Creek, CA

"As a state employee I have a state cell phone and a personal cell phone. If the agency determines their need for instantaneous 24x7 access to my time no longer warrants the state provided phone I will not be providing my personal number" Apparently you're one of the extraneous equipment holders who doesn't need a business cell. Call Jerry - we found one! Oh, and maybe get him a desk audit, maybe his position is redundant too, he's obviously not "working" in service to the community.

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