If your organization has invested substantially in smartphones running on the BlackBerry or ActiveSync mobile platforms, you're likely under pressure to achieve economies of scale while maintaining a high quality of service. But before you can wring costs out of your mobile platform, you must understand its actual ROI and TCO. This handbook is designed to help senior IT management calculate their organization's mobile ROI and TCO -- using an enterprise environment of 2,000 mobile users to demonstrate the approach -- and includes a 5-step analytical approach for reducing that TCO by as much as 15-20 percent.
Calculating Mobility ROI & TCO: A Manager's Handbook
How to Calculate The
ROI & TCO of Your Mobile Users A Mobility Cost-Reduction Best Practice
A Manager's Handbook
October 2009
1 Calculating Mobility ROI & TCO: A Manager's Handbook
Why You Need To Read This Handbook Now If your organization has invested substantially in smartphones running on the BlackBerry or ActiveSync mobile platforms, you're likely under pressure to achieve economies of scale while maintaining a high quality of service. But before you can wring costs out of your mobile platform, you must calculate its actual Return on Investment (ROI) and Total Cost of Ownership (TCO). This Handbook shows you how.
Introduction The benefits of a smartphone platform are well documented. For example, the seminal Ipsos Reid report "Analyzing the Return On Investment (ROI) of a BlackBerry Deployment" finds organizations: ? see mobile users recover 60 minutes of new work time daily ? enjoy a 38% increase in team-member efficiency ? receive an annual productivity value of $15,000 per user ? experience a 10x ROI - generating payback in under 5 months But with these productivity gains has come the realization that mobile devices (the new desktop) are much more complex and costly to manage, largely due to the complex mix of new technology beyond IT's traditional reach and the lack of internal mobility expertise. Mobile device annual growth rates in the 20-30% range - plus a greater dependency on mobile applications and an increase in security and regulatory requirements - are only adding to the platform's TCO. This document is designed to help senior IT management calculate their organization's mobile ROI and TCO in advance of instituting cost savings strategies. For this discussion, we will focus on an environment with 2,000 smartphone users, although the lessons learned can be extrapolated to fit deployments of any size and type.
2 Calculating Mobility ROI & TCO: A Manager's Handbook
Section 1: How to Calculate Mobility ROI Productivity is the primary reason organizations choose to deploy smartphones such as the BlackBerry or iPhone to their mobile and executive workforce. As noted above, the Ipsos Reid Report demonstrates that the average BlackBerry user gains 60 minutes of additional working productivity per business day (approx. 260 hours per year). Measured as a proportion of an end user's salary, the value of this productivity gain averages $15,000 per BlackBerry user per year. Note that the calculation below is based on compensation and productivity of a senior line-of-business and IT management, field sales of field support mobile user.
Figure 1: Calculate BlackBerry ROI
Using the approach in Figure 1, a simple equation can be applied for the entire mobility environment. For example, a company with 2,000 BlackBerry devices should experience an impressive $30 million dollars of annual productivity gains per year. But productivity gains - no matter how impressive - must come at a reasonable Cost to Serve. Over time, every new technology that is widely deployed must achieve internal economies of scale. Industry analysts, including those at Gartner and Ipsos Reid, have sought to calculate how much it costs to support a mobile user for one year, ultimately identifying an average cost range of $1,100 to $2,200 per mobile user per year. For this document, a conservative annual cost of $1,500 per user per year has been selected, as detailed below in Section 2: How to Calculate TCO.
3 Calculating Mobility ROI & TCO: A Manager's Handbook
Section 2: How to Calculate Mobility TCO Mobility TCO can be very difficult to calculate. In fact, as shown in figure 2, surveys show that most organizations do not have a good handle (or guess incorrectly) on TCO. Here we see a very wide distribution range of "guesstimates."
Figure 2: Survey of 145 Mobile IT Professionals
Why does this happen? In practice, most organizations dramatically underestimate the TCO of their mobile platform, focusing only on device costs and data & roaming plans. A few more may include the support and maintenance fees charged by the device manufacturer or carriers. These External costs tell only half the story, totaling $800 per user per year. What are missing are the I... [download for more]
