Calculating ROI of your enterprise App

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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