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How to Calculate the TCO of Your Mobile Deployments

moneyjarAt a high level, there are essentially two ways to think about the business value derived from an enterprise mobility management (EMM) suite, or from any technology for that matter. The first is the value derived in terms of business benefits: improved productivity, better operational efficiencies, enhanced resource utilization, reduced risk of data breaches and similar other tangible or strategic benefits. The second is the cost of delivering that value – i.e., the total cost of ownership (TCO), which is an examination of the cost-effectiveness of using a particular technology. At BlackBerry, we encourage our customers to evaluate both aspects thoroughly when doing a value analysis for EMM.

[Reprinted from The BlackBerry Guide to Mobile Healthcare. Click the link to get your free copy of this e-book.]

Multi-faceted, Multi-dimensional

When you look at TCO, there are multiple elements that need to go into the model beyond the technology licensing costs. What you pay to buy and deploy an EMM technology has significant bearing on the overall TCO. But there are also the costs involved in maintaining the technology on an ongoing basis and what you would need to pay to ensure an adequate level of support for all your users.

We think of TCO as having four distinct components to it: the hardware cost, the software license fees that you pay the vendors, the support services costs, and maintenance and upgrade fees for the hardware and software as needed. Any TCO analysis that does not include all four components is incomplete at best.

Making Apples-to-Apples Comparisons

When comparing TCO across multiple vendors and technology platforms, resist the temptation to look just at the hardware and software license costs. While they are often the easiest to compare, you must make sure that you do an apples-to-apples comparison across feature sets and technology capabilities. An EMM suite that comes in with a lower initial price tag may not have all the features offered by a seemingly pricier product. Your cost analysis should compare similar products, or as close to similar feature sets as vendor differences permit.

Service, support and maintenance costs have a big impact on TCO. These costs can vary significantly from vendor to vendor based on factors like pricing tiers, number of users, number of devices supported and the desired level of EMM functionality. Making these comparisons can be tricky. Vendors can have different pricing structures for on-premises implementations versus cloud deployments. Some vendors might have an annual subscription model, while others may price their technology on a perpetual, quarterly or monthly basis. Some, like BlackBerry, include maintenance and support costs in the annual subscription fee. Other vendors break these costs down separately.

Understanding the Differences

Vendor tiers that categorize different service levels are not always directly comparable. What one vendor might offer as part of its basic support package is something that might only be available in a premium support and service package with another vendor. Sometimes it’s worth paying a higher upfront price for an EMM suite because it is more easily integrated and interoperable with multiple technology platforms, instead of a product where you would need to pay separately for software and services to implement that integration. Volume discounts and special pricing based on existing relationships can also have an impact on TCO.

It is a good idea to examine each component of the TCO model and not get fixated on technology costs alone but rather the cost of owning that technology over a specific period of time. It’s important to note that contract duration plays a role in TCO as the annual components could add up.

priv-hcEstimating Business Value

In terms of business value, the benefits that an organization might derive from a technology depend on a variety of factors. Benefits realized can vary based on process maturity, staff resource availability, existing technology infrastructure, successful change management and willingness to invest in necessary upgrades and enhancements.

For example, a healthcare organization with an ancient technology infrastructure will likely have a harder time realizing the full benefits of enterprise mobility than an organization that is better prepared to take advantage of it in terms of interoperability with existing systems. Similarly, a business that has employees with advanced technology skills might access mobility benefits more quickly – and more of them – than an organization whose staff is still only coming up to speed in those areas. These nuances must be taken into consideration when creating a business case. What worked in other companies or in your prior experience may not deliver the same value due to a new set of variables that must be accounted for.

The Constant Factors

Even so, there are ways to derive relatively accurate estimates of business benefits from a technology implementation by looking at some of the factors that do not change. Within healthcare, the hourly rate for a nurse or the cost associated with staff training is roughly the same across organizations. Similarly, the recurring cost savings that might result from reducing staff turnover, or by improving nurse scheduling and dispatching is unlikely to vary much across organizations.

The key point here is that, while the magnitude of the business benefit itself might vary from organization to organization based on factors and nuances mentioned above, the areas of value remain consistent for the industry. Regardless of where your organization might be in terms of its readiness to exploit a technology, there are ways to make a reasonably accurate prediction of the business value you will most likely derive from it.

To help our customers predict this business value, BlackBerry has developed a set of TCO calculators and business value calculators for some very specific mobility use cases within the healthcare sector. Get your free copy of The BlackBerry Guide to Mobile Healthcare to learn how to use these calculators within your specific environment to generate both conservative and reasonable estimates of your ownership costs and the recurring benefits from your enterprise mobility investments.

Mobility gives healthcare organizations a way to efficiently deliver the best quality patient care. However, with so many issues to consider, how do decision makers create a solid game plan for adopting secure mobile healthcareThe BlackBerry Guide to Mobile Healthcare is a great start. Get your free copy of this e-book just by filling out the form on this page.

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