When evaluating the true value of investments in mobile technology and support for frontline workers, perhaps the single most important consideration is total cost of ownership (TCO). As organizations shift their resources in response to pandemic disruption, it’s paramount that investments in mobile technology enable better operational flexibility, increased productivity and a foundation for 1:1 device deployment for a decentralized workforce.
To examine this, respondents were asked to break down the proportion of their costs for mobile technology into buckets of hardware, software, support services, maintenance/repair and other. Almost half of total costs are for the hardware (28%) and software (21%) investment, followed by IT support services including deployment, provisioning, technical support and MDM (26%), hardware repair/break-fix (17%) and other (8%).
Figure 10: MMS Partners Enable Lower Device Spend & Higher Asset Utilization
We see an interesting divergence separating those respondents who use a Managed Mobile Services (MMS) provider and those who do not. As shown in Figure 10, we attribute the differences to a set of factors reducing the overall cost of ownership for mobile. Turning our focus to total cost of ownership (TCO), we can see that MMS providers leveraging extensive partnerships will ultimately provide the best purchase price for hardware devices and accessories. Looking at the spend on software licenses and hardware maintenance, you will see a proportionately higher cost for those with MMS because it is a third-party purchase (from the software provider or OEM). It is offset, however, by the fact that MMS providers can offer scalable and highly-specialized mobile tech support services that inherently provide economies of scale for their clients.
As all organizations know, the costs of managing mobile goes far beyond out-of-pocket expense and consideration has to be given to the total effort, or the “hidden costs” of time and resources expended on managing mobile tech. We asked respondents to rate the significance of time/effort expended on supporting their frontline mobile infrastructure. In Figure 11, we show the breakdown for different industries and their rating of “extremely significant” impact on costs.
Figure 11: Soft Cost Drivers are Unique to Each Industry
The relevant differences across the industries are representative of the very particular business headwinds that each industry must navigate when deciding how to invest in their frontline workers:
All told, the implications of the soft costs on organizations point to the need to partner with MMS providers that have the experience and expertise to solve for specific industry challenges and are able to dramatically reduce the impact of those soft costs through a single point of contact. Their asset management capabilities and overlay of expertise intrinsically free up in-house resources from the burden of time and effort on managing mobile technology. Moreover, they are able to bring industry best practices to bear across industries.
There has been a move in recent years to shift mobile spend, primarily due to the short refresh cycles from Opex to Capex. To better understand where the baseline is, we asked our respondents to identify their preferred model – Capex, Opex or Hybrid. Our hypothesis was that Opex would be preferred, with Device as a Service being the primary consumption model. That was not the case, as shown in Figure 12. The data indicates that the preference is clearly still a Hybrid model (Capex for hardware and software, Opex for services and support).
Figure 12: Hybrid Models Take Prominence
The data also spotlights some interesting industry differences, largely relative to how they deploy devices and finance their mobile ecosystem. For example, as Retail was typified by mobile assets typically deployed to the store level and shared 1:Many among associates, the Capex model applies best. Transportation & Logistics organizations, however, have an even more decentralized workforce that requires a larger number of devices used in a 1:1 model. Thus, it makes sense to have more of an Opex model to capture expense per-employee.
As more infrastructure moves to recurring service models and disruptive events prove the need for significant investments for technological flexibility, organizations may favor more flexible financing models that free cash up for investments and other revenue-generating projects.
We also wanted to know how organizations in general were feeling about their total cost of ownership. Specifically, how they felt about the value they received for the money spent. The results were fascinating, so we analyzed them from a couple of different perspectives.
Figure 13: Readiness for COVID-19 response
Overall, 83% of respondents were moderately or extremely satisfied – which is an encouraging number. That figure jumps significantly for respondents who claimed a high degree of disruption readiness. Moreover, those who used an MMS provider were more than 2x as likely to be extremely satisfied with their TCO.
No matter the in-house IT capabilities your organization possesses, it’s clear from our responders that you can drive improved TCO and overall satisfaction by engaging with well-aligned vendors and technology partners such as MMS providers.
