The ongoing COVID-19 pandemic has accelerated the adoption of mobile devices for a range of industries. Given the urgency with which companies had to adapt, many were unable to carefully evaluate the range of deployment options and the associated costs. A mobile-first workstyle is here to stay—for a number of very good reasons—so it’s critical to calculate the true costs.
When evaluating the true value of investments in mobile technology and support for frontline workers, perhaps the single most important consideration is total cost of ownership (TCO). As organizations shift their resources in response to pandemic disruption, it’s paramount that these investments in mobile technology enable better operational flexibility, increase productivity and lay the foundation for 1:1 device deployment for a decentralized workforce.
Doing and investing more means allowing for flexibility when it comes to technology, processes and resources. This article will walk through these considerations and how enterprises can best set themselves up for success.
More Than Getting A Handle on Handsets: Uncovering True TCO
When a company commits to mobile enablement for all their front line personnel, decision-makers may only consider the hardware commitment. But that hardware investment is just the tip of the iceberg.
- Hard Costs (hardware, software and maintenance contract purchase costs)
- Support Costs (lifecycle support services, spare pool and help desk)
- Soft Costs (lost productivity or excessive IT management time)
According to a recent report commissioned by Stratix from VDC, as much as 43% of mobile TCO goes toward support costs, with at least another 8% going to soft costs. But even those numbers may underestimate the total costs of ownership since soft costs can easily be buried throughout a company’s operations. What’s more, such a significant portion of the TCO needs to be taken into consideration for every use case.
While the term “ownership” suggests purchase, options are available that handle hardware acquisition via subscription, reducing upfront costs. Likewise, maintaining support staff with mobile expertise is a recurring cost that can be reduced via outsourcing, only paying for what’s needed. The needs and prospective savings will vary by use case.
Hard Facts About Soft Costs
In a 1:1 deployment, you need to factor in the hidden “soft” costs such as the lost employee productivity when they have down time, or the time and resources needed to manage multiple mobile device types and accessories and MDM platforms for security, updates and upgrades. In a 1 to Many deployment, you need to think about workflow processes, repair, single sign on, and lifecycle management, as well as the costs of routine disinfection.
Soft costs can come in one of two flavors – those that impact IT, like regulations and the number of vendors managed, and those that impact end-users, like training time and loss of productivity during the transition. The VDC study showed that soft costs are very/significant regardless of industry:
- The Retail sector rated user-based soft costs such as time/effort spent on related employee training as their top soft cost (27.8%). For Retail, the impact of changes, updates and upgrades to mobile can dramatically increase employee training hours – a potentially large burden to their soft costs.
- For Healthcare, Manufacturing and Transportation, the soft costs impact IT:
– In Healthcare, asset management/reporting and regulatory compliance were both rated as the most impactful by 30.8% of respondents.
– For Manufacturing, the greatest soft cost was around the time and effort required to implement new technology and infrastructure.
– For Transportation and Logisitics, the greatest challenges were managing the assets themselves.
As daunting as these cost variables might appear, straightforward solutions are readily available.
Managed Mobile Services – Outsourcing From The Inside
To address these cost drivers, you must have enterprise-grade lifecycle management for maintaining your business-critical mobile devices. In-house IT Support teams tend to lack the agility to rapidly provision, repair, return and decommission these devices both effectively and in a predictable, cost-effective fashion.
The VDC study reveals that enterprises that engage Managed Mobile Services (MMS) were more flexible than those without, which proved especially beneficial during the COVID-19 disruption. There were a number of reasons for this:
- Plain and simple – MMS providers allow the flexibility to scale up and down, with certified technical resources and volume capabilities.
- There are fewer vendors to manage with an MMS – and companies are able to dramatically reduce the impact of those soft costs through a single point of contact.
- MMS providers have the experience and know-how to solve for specific industry challenges, but you should look for one with extensive partnerships and integration ability.
- MMS providers’ asset management capabilities along with their expertise free up in-house resources from the burden of time and effort of managing mobile technology.
There are other, longer term advantages to engaging MMS. Because MMS support is mobile-specific, it tends to deliver quicker ticket resolution for mobile devices resulting in less downtime and greater productivity. MMS also tends to keep mobile devices in service longer, resulting in better ROI.
According to the survey, those companies who used an MMS provider were more than two times as likely to be extremely satisfied with their TCO. The survey results show that innovators in mobile deployments are more aware and knowledgeable about TCO structure. They rate soft costs as a more significant consideration and understand true soft costs. Larger “laggard” organizations can learn from the innovators.
Bridging the Enterprise Digital Divide
The different paces at which enteprises implement comprehensive mobile enablement has produced a digital divide. Those that started early (long before the pandemic) were better prepared to deal with the operational challenges when COVID-19 hit. For this group, the pandemic simply motivated further refinements which allowed them to better leverage their investment to gain ground on their less far-sighted competitors.
On the other hand, organizations that had been slow to to adapt before the pandemic were rushed into less deliberate, strategy-driven enablement. The results were necessarily costlier than they needed to be, and many may now feel compelled to fully amortize those costs. This would be an unforced error.
The survey revealed that a hybrid approach to funding mobile initiatives—factoring launch costs as Capex and management as Opex—yields the most satisfying results. In fact, 83% of respondents with hybrid models were moderately or extremely satisfied with their arrangement (as opposed to a high of 34% for Capex only and only 32.5% for Opex.) This approach will allow the laggers in “mobilizing” their workforce to make up for lost time and cross the divide.
The new workstyle is mobile-centric, if not mobile-first. Strong, flexible mobile IT infrastructure will be the foundation for enterprise success. To execute, organizations will be best served to underpin their mobile investment with a sustainable and predictable approach to the soft costs. MMS is the preferred approach of those who have done the best during this period.
Podcast: The True Cost of Mobile Technology - How Fully Understanding Your Total Cost of Ownership Can Improve ROI
Ross Homans, Vice President of Operational Programs at Stratix, explains how when you have full visibility of your total costs, you can make better strategic decisions that'll bring you a higher return on your mobile technology investment.Listen to Episode