Mobile access: can you justify the expense?

Study gains in staff productivity and returns before buying mobile equipment

Study gains in staff productivity and returns before buying mobile equipment

Although corporate spending on mobile access to business applications remains a tiny fraction of what firms spend on mobile voice services, companies are beginning to implement it to improve productivity and gain competitive advantage.

However, the business case remains unclear to many large organisations, which are uncertain as to which employee functions and applications would deliver most benefit and which devices and networks can deliver such access most effectively.

IT leaders are still cautious about investing in new technology without a clear understanding of how it delivers better employee productivity and a return on investment.

Even where there is clear potential return, budget pressures still prevent opportunities from being exploited. But businesses considering using mobile access to applications can gain quantitative and qualitative benefits.

Quantitative benefits rely either on the business achieving increased revenues or on cutting costs by raising employee productivity. These are dependent on the level of productivity improvement achieved and the salary and overhead costs.

Qualitative benefits include improving levels of customer satisfaction and customer perception of the business. Against these benefits, corporates must weigh up the costs of hardware, user training and support. These costs will occur both as a one-off at deployment and over time as replacements, software, connectivity, application integration and device configuration become necessary.

A major consideration for most companies is the cost of providing devices such as PDAs and laptops. Where employees already own these devices, the cost of implementing mobile access is reduced.

There are significant economies of scale for deployments of 250 users or more, as fixed implementation costs are spread out. However, most mobile access deployments have tended to trial services with about 50 users, which is unlikely to provide a full picture of the cost per employee of a large-scale implementation.

Suppliers are developing pro-ducts to support mobile app-lication access. For example, Hewlett-Packard and Symbol can support a wide range of protocols, including GPRS, Bluetooth and 802.11b on a single device.

Oracle, PeopleSoft, Siebel and SAP have "mobile-enabled" their software, and niche suppliers such as Commtag, RIM, Smartner and Sybase have developed specialist applications.

Most major mobile service providers are trying to cross-sell basic mobile applications such as e-mail, and all promote the potential of their products to improve employee productivity.

However, the bottom line remains that for a business to gain a return on investment from a mobile application, employee productivity must be sufficiently increased to cover the cost of deployment.

A study on the return on investment carried out by Analysys Research indicated that, where appropriate access equipment already exists, an improvement of employee productivity of between 0.6% and 1.4% (14 to 32 minutes per week) is required to achieve a break-even return, depending on the scope and scale of the deployment.

However, where equipment must be purchased, a substantially higher improvement is needed - between 1.7% and 3.4% (38 minutes to one hour 17 minutes per week).

Jonathan Tee is senior analyst at Analysys Research

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