The ROI of enterprise mobility

Most companies have yet to realize the significant advantages that wireless-enabled companies with formalized capabilities have over the competition. This article explains.

Mobility adoption is heating up -- far outpacing the growth of most technology investments as organizations accelerate the migration from desktops to notebooks. Enterprise-class access point shipments are predicted to increase by 75% in 2004, with an average annual growth rate of 47% through 2008. Next year alone is expected to see a 20% spike in wireless LAN product sales, to $2.1 billion.

Today, nearly 50% of organizations with more than $200 million in revenue are wireless-enabled. Of those 50%, only half have formal wireless network initiatives in place. Most companies have yet to fully realize the significant advantages that wireless-enabled companies with formalized capabilities have over the competition, including increased productivity (to the tune of $300,000 or more in annual benefits for a typical company with 100 employees), reduced costs and improved worker flexibility.

Freedom to roam
As with any IT purchase, a sophisticated analysis of costs and benefits needs to occur in the early stages to assure that the investment is worthwhile, to garner approval from the CEO and CFO, and to assure that the project reaps the predicted benefits post-deployment. The business case for mobility initiatives should include the following benefits:

1. Improved productivity and extended capabilities. Alinean estimates that in most organizations, many desktop knowledge workers can be migrated to mobility and immediately be more productive. Candidates include road warriors, office warriors (those employees who jump from meeting to meeting or work in ad-hoc workgroups), day-extenders employees who (take their work home during the evening), home workers, executives and managers. Tangible benefits include:

  • Flexibility in work hours and day extension. Globally, increased efficiency gives laptop users a 13% higher hourly work output each week over their desktop counterparts.
  • Flexibility in work location while in the office, such as in meetings, in other offices and in ad-hoc workgroups.
  • Access to information and network applications while not at a desk – traveling, client site, on-road via a hotspot. In fact, more than 50% of wireless employees use their notebooks at home, and nearly 40% also use them at hotspots.

Employees benefit, too; 70% of notebook users cite flexibility in work locations and hours as a highly desirable impact of mobility. Enterprises providing employees with notebook computers gain an average of six hours per week of useful work per employee compared to employees at a desktop.

2. Fewer Mistakes. When employees transfer hand written notes or have to transcribe orders from clients, mistakes are often made. These mistakes can often be eliminated by providing a mobile solution that can allow users to take notes electronically, check e-mails and documents, run applications such as sales tools for stock checking and configurators, take and place orders, and more. The mobility solution can help eliminate the labor needed to respond to and correct the error, any credits or refunds, and lost order costs.

Mobile employees eliminate many errors by verifying information, accepting orders, entering data, taking notes electronically, checking on stock conditions and configuring solutions, saving the typical 100-user company an average of $129,600 each year.

3. Empowering business collaboration and improving customer communication, interactions and transactions. Mobile computers improve communications and collaboration, enable dynamic stock checking and configurations, and allow remote order taking. Users specifically noted productivity gains in:

  • Flexibility for group activities and work -- 19% improvement.
  • Timeliness of communication via e-mail -- 19% improvement.
  • Ability to conduct remote meetings -- 16% improvement.

Alinean estimates a .25% improvement in revenue for companies with mobility-empowered employees who use this capability to enhance business and customer relations. For a company with $25 million in revenue, that potentially means $6.25 million in additional revenue.

4. Reduced moves, addition and change (MAC) costs to the network and offices. Wireless capabilities generate workspace flexibility improvements and reduced reconfiguration costs. On average, if 20 out of 100 employees in a company move or change offices during a given year, and the average office reconfiguration costs $500 in physical networking changes, this can cost the company $10,000 per year in move, add and change costs. With wireless technologies, the infrastructure supports complete office flexibility, eliminating most network MAC costs, while improving the flexibility of workspace for organization around projects, task teams and other business initiatives.

In addition to the benefits, costs also need to be counted.

1. One-time costs. Migrating to wireless capabilities brings a range of start-up costs. These costs will vary on a number of factors: office set-up, number of access points required, number of offices, and more. Ensure that the vendor accounts not only for the company's current size, but also planned growth, to eliminate these steps from being repeated in the near future.

Typical costs include:

  • Notebook replacements of desktops. On average, companies pay an incremental cost of $500 per new mobile user versus the cost of a new desktop at list price. For those migrating from desktops to notebooks, this cost increment needs to be tallied, but this cost may not be required for all users, as several may already have mobile computers and only need an upgrade to wireless.
  • Wireless access cards per notebook to access the wireless LAN.
  • Wireless access points and other network equipment to create the wireless LAN and assure proper coverage in the office and in meeting/conference rooms.
  • Setup and installation of notebooks, cards, access points and network improvements.
  • User training (optional, but even basic training can help to reduce support calls).
  • Initial support calls. On average, one in three users will call the support desk within the first three months with a connectivity issue or configuration question, particularly if they hadn't received training.

For a typical 100-person organization, all of these costs add up to $24,533, or $245.33 per user.

2. Ongoing annual costs. A new infrastructure must be maintained for the end user and for the IT department:

  • Annual support and maintenance on mobility hardware and software.
  • On-going incremental support.
  • On-going incremental network and security administration costs. Businesses should account for network administrator costs for managing the access points, routers, configuration and performance, and for increased security configuration and concerns associated with the new access points.
  • Annual hotspot subscription fees.

In the typical 100-person organization, the annual ongoing costs are $9,330 annually, or $93.00 per user, per year. Higher costs can be driven by the organizations lack of capability and maturity in being able to implement, manage and support the notebook and wireless solutions, level of warranty and support coverage on the devices, level of security requirements and issues, and related support for handling user incidents.

The Bottom Line
The majority of enterprises see payback in end-user productivity, business efficiency, and overall effectiveness in as little as 6-12 months. Almost immediately, users achieve from 27 to 30% improvement in productivity, operating expenses are reduced via lower MAC and reduced mistake resolution costs, and the business achieves higher improved customer satisfaction, enhanced business capability, and improved flexibility and agility.


 

This was first published in August 2004

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