In this cover story, we take a look at the process of calculating ROI for enterprise mobile apps by looking at various approaches to measure benefits and costs incurred in deploying mobile apps.

1. Calculating ROI of your enterprise app
Process, approaches and considerations

2. Mobility has emerged as the most disruptive technology in the enterprises today. Businesses are deploying
enterprise mobile apps in earnest resulting in a unique interaction between people, process and products.
As per a recent survey by Zenprise, 74.7% of decision-makers said they have or will deploy mobile apps
to support their line-of-business activities in the next 12 months. However, deploying line-of-business
or customer-facing applications requires high amount of upfront investments and substantial recurring
expenses every year. As the global economy continues to stagnate, thereby exerting financial pressure on
businesses, 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?” and so on.
In our cover story, this month, we take a look at the process of calculating ROI for enterprise mobile apps
by looking at various approaches to measure benefits and costs incurred in deploying mobile apps.
Mobile ROI
To calculate the ROI of a mobile app we will first need to ascertain two components : benefits and costs.
Benefits
The benefits arising out of deploying enterprise level apps in an organization can be classified into
qualitative and quantitative benefits.
• Quantitative benefits are those that can be put in numbers such as percentage increase in cost
savings, reduction in time to perform specific activity, percentage increase in revenue /profits etc
• Qualitative benefits, on the other hand, are intangibles like increase in customer satisfaction,
boost in customer loyalty and brand perception etc.
The qualitative benefits may be impossible to measure but form an important consideration in getting
the bigger picture of deploying an app. To measure quantifiable benefits, a step-wise approach could be
illustrated by the following example -
Sample Benefit Analysis
The benefits arising out of deploying enterprise level apps in an organization can be classified into
qualitative and quantitative benefits.
• Reducing response time- As technicians are getting real-time information on tickets raised
they can quickly respond to the client needs. The time spent on handling each ticket after app
deployment can be compared with the previous scenarios to ascertain the improvement.
• Travel savings: Real-time information on devices will also help technicians in reducing their travel
time. They don’t need to make needless trips to central office and can plan their schedule so as
to minimize their travel. Reduction in travel time not only increases work-time of technicians but
also saves on fuel costs.
• Resource management- Your existing staff has more work-time now and also can now handle
Calculating ROI of your enterprise app: Process, approaches and considerations / 2

3. more tickets with the same resources.
In addition to that, the field service app provides many intangible benefits like quicker and improved
customer service leading to higher customer loyalty, boost in brand perception etc.
Step-wise approach to measuring benefits
5
Make sure that each
4
quantitative benefit is
derived using a
credible method and if
possible supported by
3 Consolidate the
quantitative benefits to
see the big picture.
data and case studies.
2
Identify the
immediate
quantitative and
qualitative benefits.
Identify the
1
benefits that the
listed
functionalities
will bring to your
organization.
Make a list of
functionalities
envisaged in the app
according to your
mobile strategy.
Increase in productivity of the work force has emerged as a major benefit arising from deploying enterprise
apps. Various studies suggest that workers have been able to gain additional work time by using mobile
apps. Let’s assume that a technician in a manufacturing unit gains 30 minutes of additional productivity
per day owing to mobilized environment in his workplace.
So, if the pay per hour of a technician is $50 then the productivity gain for the organization would be
Productivity gain per day = ($50/2) $25 per day per worker.
Productivity gain per month (22 working days) per worker = $25*22 = $550
If there are 100 technicians operating in the unit;
the cumulative productivity gain per month = $550*100 = $55000
Using this approach, the equation can be extrapolated to the entire organization.
Calculating ROI of your enterprise app: Process, approaches and considerations / 3

4. Benefits, no matter how high, must be weighed against the expenses incurred in deriving it. And therefore
it is also equally important to look at the costs involved in deploying a mobile app / enterprise mobility
strategy and to see whether the benefits-costs equation is profitable.
Costs
The total cost of ownership for an app can be classified into: upfront costs like licensing, app development,
hardware procurement etc., and recurring costs involving data plans, maintenance, up-gradation, training
for new users and IT administration.
Cost breakdown for a mobile user
Maintanance
Licensing
& Upgradation
Device
Data Plans
Procurement
App
Cost breakdown IT training &
development
for a mobile user administration
costs
• Licensing- Deployment strategies drive the costs incurred in licensing of servers and other
software for your mobile app.
• App Development- The costs of app development depend on many factors including
the functionalities, complexity and the technology used in the app. Also the costs may vary
depending on whether it is developed in-house or outsourced. If development isn’t your core
functionality, it is always economical to outsource to specialized companies.
• Device Procurement- Increasingly BYOD is becoming popular in enterprises, relieving
organizations of device procurement cost. However, if you have a policy of providing
company-owned devices to employees then the costs will vary depending on the model and
manufacturer of the device.
• Voice & Data Plans- Every app and mobile device will need voice and data plans to function.
These are the costs incurred every year and form a substantial part of overall expenses.
Calculating ROI of your enterprise app: Process, approaches and considerations / 4

5. • Maintenance & Up gradation- Every application needs periodic maintenance depending on a
number of factors like frequency of new version releases, addition/changes in functionalities etc.
• IT Training & Administration- The end-user training costs are largely driven by the number of
users and the number of apps available to users.
The upfront costs in owning a mobile can be significantly higher while recurring costs will be lesser but will
spread over the years. Also, the total costs involved in deploying an app will vary significantly depending
on the scale, scope and functionality of the app. However, calculations (provided in the table below)
based on a study by Forester for a BlackBerry solution deployment provides us with some indications on
the type and the range of costs involved across various deployment stages.
Costs Category Comparisons Across Blackberry Maturity Stages
Integrative
Reactive deployment Proactive
Cost category deployment Cost drivers
stage deployment stage
stage
Empowers learners to $48 $100 $45 Variances are driven by
control activities. the number of BlackBerry
Enterprise Servers, whether
the organization has separate
testing,production or back-
upservers, the cost of each
server, and the maintenance
fees.
BlackBerry smartphones $639 $739 $741 Costs vary due to the number
of BlackBerry smartphones
supported and corporate liable
device policy.
User support $66-$73 $71-$75 $171-$206 User support costs increase
along with the number of
mobile applications deployed.
End user training $52-$77 $231-$254 $240-$289 Costs driven by the number of
users and the number of mobile
applications available to users.
Voice and data plans $2,363 $2,459 $2,079 Voice and data plans are the
key driver of costs across all
deployment stages.
Mobility applications $0 $72 $193 Costs driven by the number of
mobile applications beyond
email
Total three-year cost per $3,168-$3,200 $3,672-$3,699 $3,470-$3,552
BlackBerry smartphone
Average annual cost Per $1,056-$1,067 $1,224-$1,233 $1,156-$1,184
BlackBerry smartphone
Source: Forrester Research, Inc.
Calculating ROI of your enterprise app: Process, approaches and considerations / 5

6. Calculating mobility TCO can be a challenge in the absence of a standard model or a popular formula.
Moreover, a major part of the costs vary depending on the functionalities of the app created, platforms
to be supported, scale of users and the mobility strategy adopted by the organizations. The study by
Forrester Research Inc. puts the average annual cost per BlackBerry user to be in the range of $1,056 to
$1,184 per user per year in all deployment stages. So continuing the scenario used for calculating benefits
where we saw a productivity gain of $25 per day per user or $6500 per user per year and assuming costs
to be the average of the range provided above i.e.
($1056 + $1184) /2= $1120, we find that the
ROI= Productivity gains/costs
= $6500/ ($1120)
ROI= 5.8X.
As discussed above, upfront costs like licensing, app development and device procurements etc., will not
form part of expenses in the following years and only recurring expenses like data plans, user training
(depending on new users added) and app maintenance costs etc., will be incurred leading to lowering of
cost per user and further increase in the ROI of the app.
Key considerations
• It is important to note while calculating ROI for an enterprise app that not all benefits can be
measured. Moreover, not all benefits can be accrued in the first phase or year of deployment.
This could be because of the functionality used, scale of coverage or adaptability levels among
the users. Similarly, 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. In-house app development requires significant investments in
technology and manpower which pushes the cost.
• To gain the most from your mobile app, it is important that user-centricity is kept in mind while
developing it and sufficient motivation and encouragement is provided for its large scale
adoption. The bigger the scale of adoption, the more ROI you can gain.
Conclusion
Quantifying ROI for an enterprise app is challenging but is something that can be very useful in decision-
making and can play a large part in developing mobile strategy for future deployments. Although a good
part of the benefits derived from an enterprise app remains intangible and hence difficult to quantify, but
various case studies, precedents and data available can help decision-makers to judge and justify their
investments in deploying an enterprise app.
Calculating ROI of your enterprise app: Process, approaches and considerations / 6

7. About [x]cube LABS
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[x]cube the perfect mobile consultant of choice.
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