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The Visible Value Blog

How to calculate the Total Cost of Ownership of your mobile device

Posted by David Stain

May 29, 2015 at 5:22 AM

TCO_blog

Consumer smartphones increase Total Cost of Ownership (TCO) by up to 50 percent compared to enterprise grade devices, according to our research, so it’s vital that you are able to calculate an accurate TCO when selecting a mobile device. This blog offers our expert advice on how you can ensure your TCO calculations accurately reflect your costs over time so that your field devices will deliver the return on investment that you need.

In order to gain an accurate understanding of the real cost of mobile field devices, organisations need to look at the TCO of their chosen device in the operating environment that they are to be deployed in. According to research consultants VDC[1], TCO comprises the hard costs of deployment (hardware, accessories, software, implementation and training) and the softer operational costs (productivity loss, opportunity loss and IT support costs). It is vitally important that organisations consider both the hard and soft costs in order to ensure that their ultimate decision will deliver the greatest value to their business in the long term.

VDC estimates that hard costs may only account for 10% or less of TCO over five years. That means soft costs like IT support and productivity loss can account for 90% of your TCO, and this is where your choice of mobile device can make all the difference. Consumer mobile devices can look like the more cost-effective option compared with enterprise devices due to their low initial purchase price. However, as we have just explored, when the potential costs of worker downtime, accelerated replacement cycles and the support needed for a successful implementation are taken into account, it’s clear to see that the true costs of deploying mobility to support your line-of-business applications go far beyond the initial purchase price of the device itself.

Consumer-grade mobile devices can introduce unforeseen complexities and hidden costs once the initial purchase has been made. Companies often have to purchase additional peripheral software or services in order to modify their devices to their business requirements. Consumer mobile technology providers often make repair a complicated, lengthy process, so companies investing in consumer devices have to fork out for the high expense of replacements instead of repairs. Rapid device and technology obsolescence leads to high device churn rates; combine that with your replacements, and ultimately you may be forced to manage a mixed fleet of devices and software which will have a huge impact on your soft operational costs.

Enterprise-grade mobile devices on the other hand are purpose built for the harsh business environment and tailored to your requirements, making them rich in benefits that provide long lasting value to your organisation and bottom line. Enterprise devices offer varied and diverse functionality, from nonstop durability and airtight security to comprehensive coverage and simplified device management. All in all, although your initial purchase price may be higher, the softer operational costs will be much lower with an application-rich, purpose-built device, thus making your TCO significantly lower and guaranteeing an ROI that will deliver far more business value.

 

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For further insights into the true costs of ownership and more information on the hidden costs of consumer mobile technology, download our free white paper The Hidden Costs of Consumer Grade Devices here

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[1] “Mobility in manufacturing and logistics: investment acumen for next generation mobile solutions” VDC Research, August 2013.

Topics: Supply Chain, Mobility, Manufacturing, EMEA, T&L, Field Mobility