5 Strategies to Lower Your Costs & Improve Service
While mobile deployments are becoming increasingly ubiquitous in today's retail market, the hard truth is that over 70 percent of the cost of owning a mobility solution can come after the initial purchase, according to a recent study conducted by the VDC Research Group, a research company that specializes in providing technology executives with the market intelligence they need to make critical business decisions with confidence. Although there are many benefits to implementing a mobile solutions infrastructure--including the ability to speed up efficiency and improve customer service--most companies find that the large scale investments are in the "soft" costs, which can be anything from maintenance expenses to productivity losses due to worker downtime and device failure. "Some of the most difficult to track, yet potentially some of the most significant costs, relate to soft costs associated with device failure. This is especially true for non-rugged devices being deployed in environments that are more suitable for rugged solutions." However, the irony is that in today's challenging economy an astounding 68.4 percent of these companies are more likely to make a mobile investment based on upfront "hard" costs instead of looking down the road at the long-term total cost of ownership (TCO), according to a July 2007 report published by VDC entitled, TCO Models For Mobile Computing and Communications Platforms. These facts illustrate why it is more important than ever for mobile users to be armed with the proper knowledge of all costs associated with a mobile solutions infrastructure before making an informed business investment. By exploring innovative ways to extend the life of their equipment, evaluating their workforce environment, improving service levels, aligning with a mobile services provider, and taking a prudent approach to battery management, this white paper will illustrate 5 ways mobile users can improve their ROI 1.Extend the Life of Your Equipment Industry standards show that the average retailer gets 5-7 years out of their initial purchase of mobile deployments, which, over the lifetime of the device, will eventually represent only 1/3 of the TCO. More specifically, for rugged handheld devices used in retail environments, the average lifespan is approximately 5-6 years, according to David Krebs, Director of Mobile and Wireless Practice at VDC Research Group. "This has trended up recently as organizations have extended the life cycle [or their equipment] in response to the weak economy," he adds. A statistic that many industry experts feel highlights the importance of aligning with an independent service provider (ISP) whose main focus is extending the life cycle of mobile equipment. In a recent study conducted by The Aberdeen Group, 129 mobile users were surveyed between July and August 2009 to reveal Best-in-Class methods and techniques to ensure maximum longevity of a mobility infrastructure in 21st century retail. For 52 percent of Best-in-Class mobile users, the larger issue is the need to ensure timely application upgrades to their mobility solutions. To that end, industry analysts stress the importance of considering broadband wireless functionality, security, ongoing serviceability, and future application needs when upgrading your current mobile infrastructure, in order to avoid needless upgrades. "I think it is important for [mobile users] to let the application drive the product selection," says Krebs. "In addition, as many rugged devices will be used for 5 years or more, it is important to also anticipate some of the future application requirements. This could impact integrated wireless options, I/O options (such as imaging, RFID, bar code scanning, voice, etc.), display size, etc." 2. Evaluate the Workplace Environment According to VDC, it is not uncommon for the annual mobile computer failure rates to exceed 30 percent these days. "Some of the most difficult to track, yet potentially some of the most significant costs, relate to soft costs associated with device failure," He adds. Statistics show that approximately 35 percent of consumer-grade devices are replaced within the first two years of implementation when used in an industrial environment, so the importance of considering where the mobile deployments will be getting the most mileage should not be underestimated. Having this knowledge can provide mobile users with insight into the degree of wear-and-tear the equipment could potentially endure, ultimately giving them an idea as to what types of failure rates they might experience and how often they will occur. "Companies [should] review how the equipment is being used every day to determine if there are ways the equipment can be better protected against damage," advises David Marin of BCS Solutions, a data collections and mobility solutions provider that helps transform enterprises into streamlined, efficient and productive businesses. Marin also suggests some ways to extend the life of your equipment by evaluating the workplace environment. "If the terminals are not in holders/holsters they should be as holsters or other cases that will protect a terminal in the event 3 s A Retail TouchPoints White Paper 2010 Another key to extending the life cycle of mobile deployments is to understand the life of your battery. VDC's research indicates that accessories represent approximately 15-20 percent of the hardware costs of a mobile solution of a drop. It is also wise to assign a terminal to an individual, as that person is more likely to take care of it rather than just letting it be common property." 3. Improve Battery Management Another key to extending the life cycle of mobile deployments is to understand the life of your battery. VDC's research indicates that accessories represent approximately 15-20 percent of the hardware costs of a mobile solution. "One of the most significant contributors is the battery," emphasizes Krebs. "Beyond the actual performance of the batteries, end users also want an effective way to manage their battery inventory (i.e. easily identifying which batteries are charged/need charging; understanding when to replace a battery, and also the ability to share batteries among different devices)," he adds. One way to do this is by writing the installation date on them, suggests Mark Kling, Senior Product Manager at Scan Again Inc. Kling is also quick to stress the importance of understanding that 1 battery life cycle = 1 charge of the battery, whether it's depleted or not. "The average mobile computer battery is only good for 500 life cycles [or 500 charges], which is equal to about 2 years," says Kling. Without having a good understanding of the battery life cycle, he explains, " . . . equipment could wind up with ‘failures' that aren't actual ‘failures' -- leading to more time and resources spent on processing and repair." What's more, according to VDC's 2007 research, mobile device end users lost an average of 75 minutes of productivity each time a device failed. "Being diligent in battery management can provide real cost savings," adds Kling. 4. Improve Service Levels For many organizations, having a managed services vendor provides deployment flexibility and pricing variability over today's largely fixed cost capital investment models, according to VDC research. Additional benefits include low upfront costs and outsourced IT services and infrastructure, which can take the pressure off of the initial investment. Furthermore, according to an August 2009 study conducted by The Aberdeen Group entitled, Mobile Field Workforce in Retail: Strategies to Reduce Total Cost of Ownership, "the services component [for Laggard mobile users intent on extending the life of their current equipment] is vital to the overall deployment of mobility devices to ensure adequate maintenance and prompt replacement of devices in case ‘lost or broken' issues crop up." Industry experts add that original equipment manufacturers (OEM) may push to obsolete equipment in order to keep moving new products, so it's extremely important to be leery of having your equipment deemed non-repairable right off the cuff. One option that could increase ROI is to deal with and ISP, which will help ensure the longevity of the original device. 5. Find a Partner Obviously, multiple service vendors = multiple service costs, so having one vendor to meet all of your mobile needs has benefits. But how else can having a partner affect the TCO of a mobile solutions infrastructure? "In our case, the operating cost is budgeted through a yearly contract. Repairs and shipping to and from the stores is included so there are no surprises," explains one executive from a large software company. However, other experts point to the following guidelines to keep in mind when evaluating service vendors: * Self-service web portals -- According to a recent report by the Aberdeen Group, 45 percent of Best-in-Class companies lowered their support costs with self-service web portals. Self-service web portals can provide 24-7 support while freeing up the help desk staff for more critical support. An Internet service portal also allows a way for companies to track the progress of repairs and manage service activities. * Experts in the field -- Aligning with a vendor that has the in-house capability to handle all mobile repairs down to the component level is crucial when it comes to eliminating downtime. * Fast repair turnaround -- Fast turnaround time has the potential to provide companies with substantial cost savings by eliminating the need to stock up on spare equipment. "Repair time varies quite a bit depending on the expertise and parts inventory of the service providers," explains Marin. "The goal would be to get repairs done in three days;" -- a turnaround which typically out performs most OEM's. Additionally, vendors who maintain cross-border facilities can aid mobile users in reducing cross-border shipment costs, as well as any downtime incurred when shipments are tied up in customs. * Customized service programs -- Customized service programs like "hot swaps" are key in reducing significant costs that can be lost in the event of downtime by effortlessly replacing broken equipment without shutting down the system. "When [a] client has a breakdown, either he or the client help desk (after vetting) will request a unit(s) be sent out immediately from the pool. When the broken units are returned, they are repaired and placed [back into] the pool," explains James Luck, EVP, Scan Again Inc. Along with the hot swap repair service, clients can also track the progress of their defective equipment by utilizing Scan Again's self service web portal, adds Kling. "Customer's can simply log in [to the web site] enter a serial number, failure description and contact info, and just ship [the defective equipment] and we'll be able to service and return it within 3-5 days," he says. Conclusion Mobile devices can help make workforces more productive and helpful to customers, but rolling out these devices across a large enterprise can add up to a significant investment. Especially in today's challenging economic environment, it is essential for mobile users to better manage their ROI and reduce the TCO of their mobile equipment. By taking into account all of the costs associated with a mobile infrastructure -- hard (direct) costs, as well as soft (indirect) costs -- companies can enable themselves to make better business investments and extend the life of their existing equipment. Additionally, aligning with experts in the mobility space, such as an ISP, can help avoid unnecessary upgrades. Furthermore, ISP's can aid mobile users by providing guidance on matching the right product for the right environment, ultimately reducing ongoing expenses tied to maintenance, worker downtime or device failure, and significantly extend the life of your equipment.
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