ROI Of M-Commerce (1)

Corporations Remain Cautious About Mobile Business Applications ROI
06/12th/2003



Many corporations remain unclear as to how providing employees with mobile access to business applications will generate a ROI, according to a new report released this week by Analysys.




However, a break-even ROI can be achieved if employee productivity is improved by just 0.6% - a time saving of 14 minutes per week per employee, in some sectors.

Study Highlights

Corporates remain confused as to which employees would most benefit from being provided with mobile access to business applications

A break-even ROI can be reached if employee productivity is improved by between 0.6% and 3.4% in different industry sectors

Significant economies of scale are available from deployments of up to 250 employees

The report, Return on Investment from Mobile Business Data Applications: lessons from corporate customers, argues that there is a clear rationale for providing certain types of employees with mobile access to business applications - assuming employee productivity can be sufficiently increased. But more complex and costly implementations require much higher productivity improvements. In the examples modelled in the report the most expensive implementation required a 3.4% productivity improvement, a time saving of 1 hour 17 minutes per employee per week, in order to generate a break-even ROI.

"The level of productivity improvement required for a break-even ROI varies widely between types of implementation," says Jonathan Tee, lead author of the report. "If employees must be first equipped with PDAs or laptops, substantially higher productivity improvements are required."

Analysys argues that corporates considering the relevance of mobile business applications must consider how employee functions vary in their requirement to have mobile - or WLAN - access to specific applications across industry sectors. While most deployments to date have focused on email, sales force and field service applications for sales and service employees, there is a potential ROI to be gained from broader scope implementations across a wider range of employee functions: for example, providing manual workers with mobile and WLAN access to inventory and order management applications, and middle management with access to intranet and time and expense management applications.

"Most corporates that have deployed mobile application access to date have tended to implement solutions with under 50 employees," added Tee. "While these offer a valuable learning experience, they do not enable companies to gain the economies of scale available in most - though not all - sectors, when larger numbers of employees are provided with mobile application access."

Analysys expects corporate spend on data networking and person-to-person messaging services to increase rapidly, from EUR186 million in 2002 to EUR308 million in 2003 within Western Europe.

ROI from Mobile Business Data Applications:

Lessons from corporate customers analyses the drivers for corporate adoption of mobile and WLAN access to business applications, and illustrates how potential demand from corporates across a range of sectors breaks down by type of employee and application. Seven example mobile application deployments at companies across industry sectors are modelled: a distributor, hospital, insurance company, manufacturer, professional services firm, utility company and wholesaler. The report breaks down costs between applications and implementation, connectivity and equipment and indicates the required break-even productivity improvement in each case.