calculating roi of your enterprise app
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Calculating ROI of your enterprise appProcess, approaches and considerations
the need for calculating ROI
• As per a recent survey by Zenprise, 74.7% of decision-makers said they have or will deploy line-of-business apps in the next 12 months.
• Deploying apps requires high amount of upfront investments and substantial recurring expenses every year.
• As the global economy continues to stagnate, decision makers are taking a hard look at their mobility expenditure and are asking questions like-
“How much these mobile apps are benefiting the company?”
Or
“How to calculate the ROI of mobile apps to justify the expenses?”
what’s coming up
As per a recent survey by Zenprise
of decision-makers said they have or will deploy line-of-business apps in the next 12 months
74.7%
barriers
Cost is a major barrier to enterprise mobility.Deployment, adoption, policy, security and infrastructure are some of the other hurdles in its way too.
Deployment
Adoption
Policy
Infrastructure
Security
Costs
concerns raised
“How much these mobile apps are benefiting the company?”
or“How to calculate the ROI of mobile apps to justify the expenses?”
process of calculating ROI
To calculate the ROI of a mobile app we will first need to ascertain two components :
CostsBenefits
benefits
Quantitative benefits - Those benefits that can be put in numbers such as percentage increase in cost savings, percentage increase in revenue /profits etc.
Qualitative benefits - Those benefits that are intangibles like increase in customer satisfaction, boost in customer loyalty and brand perception etc.
benefits
step-wise approach to measuring benefits
1Make a list of functionalities envisaged in the app according to your mobile strategy.
2 Identify the benefits that the listed functionalities will bring to your organization.
3 Identify the immediate quantitive and qualitative benefits.
4 Consolidate the quantitative benefits to see the big picture.
5 Make sure that each quantitative benefit is derived using a credible method and if possible supported by data and case studies.
sample benefit analysis
A mobile app for field service technicians providing real-time information on customer complaints, tickets raised/solved etc., can offer benefits in-
Quantitative Qualitative
Reducing response time
Travel savings
Improved resource efficiency
Improved customer service
Higher customer loyalty
Boost in brand perception
calculating productivity gain
Assumption(in a mobilized manufacturing unit) –
Productivity gain per worker/day: 30 mins
Wage of worker: $50/hr
Productivity gain per day = ($50/2) $25 per day per worker. Productivity gain per month (22 working days) per worker = $25*22 = $550
Or for a year = $550*12=$6600
For 100 workers in the unit = $550*100 = $55000 per month
costs
Cost breakdown
for a mobile user IT training &
administration
App developmen
t costs
Device Procureme
ntData Plans
LicensingMaintenanc
e & Upgrading
costs of BlackBerry solution deployment
Cost CategoryReactive
deployment stageProactive
deployment stage
Integrative deployment
stageBlackberry Enterprise
Server$ 48 $ 100 $ 45
BlackBerry smartphones
$ 639 $ 739 $ 741
User support $66-$73 $71-$75 $171-$206
End user training $52-$77 $231-$254 $240-$289
Voice and data plans $ 2,363 $ 2,459 $ 2,079
Mobility applications $ 0 $ 72 $ 193
Total three-year cost per BlackBerry
smartphone$3,168-$3,200 $3,672-$3,699 $3,470-$3,552
Average annual cost Per BlackBerry
smartphone$1,056-$1,067 $1,224-$1,233 $1,156-$1,184
Source: Forrester Research, Inc.
Captured In The TEI Analysis
calculating ROI
So average cost per year per Blackberry user ranges from: $1,056 to $1,184 (based on the previous slide)
Average of the range: ($1056 + $1184) /2= $1120
Productivity gain per day per user per year :
$6600 (as calculated earlier) So we know,
ROI = Productivity gains/costsROI = $6600/ ($1120)
ROI = 5.8 approx
key considerations
• Not all benefits can be measured. Also all benefits can be accrued in the first phase or year of deployment. Also, a few benefits of mobile app may end after a few years of deployment.
• The costs of owning an enterprise app goes significantly lower after a few years of deployment.
• There are significant investments upfront but as the scale of adoption increases, the cost to serve per user starts coming down.
• Another way to increase the ROI by bringing down the costs of developing an app is to consider outsourcing it.
• User-centricity should be key focus while developing an app.
• Sufficient motivation and encouragement should be provided for its large scale adoption. The bigger the scale of adoption, the more ROI you can gain.
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