In some cases enterprises will provide employees with mobile devices, network connectivity, and corporate applications without the need for a business plan, financial analysis, or mobile strategy. However, most organizations considering broadly implemented mobility solutions for traveling workers will have to justify the initial capital and ongoing operational costs. Some of the potential cost savings and/or benefit figures used to calculate ROI in a financial analysis will be soft, qualitative estimates, but some of the figures should be based on hard, quantitative benefits.
Where to Find the Soft Benefits
Enterprises building a business case for mobile infrastructure will find that most of the potential cost savings and benefits come from items that are difficult to quantify. Examples include:
- Time savings. Possibly the most common benefit of a mobile workforce is time that can be saved. For instance, technicians, drivers, or sales people can be directed to the next task without having to return to the office. Additionally, they can update information and status on-the-fly as opposed to spending time doing paperwork or updating information at the end of the day. Further, decision-makers and content experts can provide critical input, even when offsite. This metric is easy to estimate and quantify but it does not necessarily translate into direct cost savings or monetary benefit.
- Improved communications and responsiveness. Combining mobility with Unified Communications (UC) provides traveling employees constant presence information for mobile workers and keeps them in touch virtually all the time. While the boss may find it valuable to be able to contact employees at any time, a monetary value for morale is different to establish.
- Current data. Traveling workers can use mobile technology to keep client data and sales information more timely. More current data means more accurate information and reporting for management to make decisions.
- Employee morale. Providing employees with cool smartphones or notebooks can have a positive impact on employee morale. They also allow employees to work from home or outside of the office on occasion. However, employee morale is impossible to quantify, and attempting to do so will result in fictional numbers.
Use Realistic Numbers
Qualitative benefits can be used in a financial analysis, but the ROI calculation should include hard dollar savings or revenue increases that can be quantified and tracked over time. Some of the soft measures outlined above can be translated into hard dollars, but it is necessary to identify exactly where the dollar savings or monetary benefits will be realized. For example:
- Improved productivity. It is important to take the qualitative factors that lead to improved productivity and translate them into hard dollar cost savings. For instance, rather than saying that time savings and improved communications lead to an additional one hour per day of productivity for mobile employees, it is more compelling to say that a number of salaries can be eliminated or avoided, saving the company $X per year.
- Increased revenue. If a mobile sales force is expected to be more productive, then assign a hard dollar number to the increased revenue that will result. If mobility will directly lead to a 2% increase in revenue, then account for that and track it over time to identify the accuracy of the forecast used in the ROI calculation.
- Other hard savings. Improved efficiencies gained from mobility can directly lead to hard dollar savings. For example, routing technicians from job to job via the shortest route and the closest technician can save a significant sum of money on vehicle gas, maintenance, and wear and tear. Another example could be a building inspector that can visit more locations in a day while driving shorter distances, saving money and increasing revenue at the same time.
Always use hard dollar figures that can be substantiated before, and over the course of, the ROI calculation.
Recommendations
Both qualitative and quantitative measures can be used in a financial analysis of mobility. However, only hard dollar savings and benefits should be included in the actual ROI calculation. Info-Tech recommends the following:
- Define a mobility strategy prior to financial analysis. It is important to have a mobility strategy to refer to when conducting a financial analysis. The ROI calculation will use the strategy as the foundation of calculations.
- Don't ignore qualitative benefits but do not try to make up hard dollar numbers based on soft benefits. Discuss potential qualitative benefits in a financial analysis document that accompanies the strictly quantitative ROI calculations.
- Use only defensible hard dollar figures. When calculating ROI, it is important to make it defensible to senior management from the outset. This practice also makes it possible to substantiate the ROI one, two, or three years after making the investment.
Bottom Line
Enterprises are increasingly looking to mobility to improve employee productivity, customer service, and communications. The challenge for IT leaders is justifying the cost to equip employees with the necessary mobile tools and connectivity. In many cases, ROI calculations will be based on qualitative measures but there are hard quantitative measures that must be included in calculations.
