Putting the “Total” Back in Total Cost of Ownership – Part 1
3 reasons why you should evaluate TCO for your field operations technology every time
Total Cost of Ownership (TCO) isn’t just about statistics.
Field service organizations responsible for everything from home repair to utility services and insurance claims or construction equipment rentals are seeing their workers quickly transform into “information workers”. Workers who need real-time, digitally-delivered data about work orders, customer history, inventory availability and other logistical details at their fingertips all day long in order to be effective. And public safety agencies, manufacturers, energy producers and transportation leaders, whose operational tempo can fluctuate from one minute to the next, are finding the new necessity of fully mobilized “information workers” hard to ignore. The level of situational awareness and constant connectivity required between crew members creates an undeniable reliance on real-time data – and, thus, a reliance on high-performance mobile computers – whether coordinating emergency response actions, responding to rising oil demands, or tracking the delivery of millions of dollars of freight.
In other words, mobility is no longer a question of “if” but “when,” “how,” and – ultimately – “how much”.
Well there are analyst-backed statistics that address each question directly, and I will get to them. But I’ve heard some customers ask if TCO figures somehow become self-serving stats for rugged, enterprise-grade mobile computer manufacturers who want to justify their device pricing. For example, one might wonder if a discount 7” tablet will suffice, or if a purpose-built rugged tablet with a larger screen and more professional-grade capabilities is worth a higher sticker price.
In my opinion, TCO stats can’t be manipulated in such a manner by original equipment manufacturers (OEM). The top industry analyst firms conduct cost analysis studies for mobile technologies independently, and the OEMs and end customers only learn of the studies – and the analysts’ conclusions – once published. These unbiased third-party analysts make a concerted effort to consider both the real costs to an organization as well as mobility’s associated costs. That is how they are able to come up with TCO formulas that help buyers successfully assess how many cheaper, consumer-grade tablets they can deploy and ultimately replace before their total device ownership costs (purchase, deployment, repairs, management, etc.) equate to that of one rugged tablet. In other words, sticker price is just one line item to consider – and analysts know that when developing their TCO formulas.
For example, VDC Research first thoroughly examined the factors that impact TCO in 2013 and revisited the subject again in 2016. In this instance, they were looking at the TCO of rugged versus non-rugged tablets specifically, as you can see in the below table.
Take a look at the bottom of the stacks, in light green. A non-rugged tablet is about a third the initial purchase price of a rugged tablet. Your workers may be hard on mobile devices, but they may not break them that often, so maybe the consumer devices would be the cheaper route. That would be true if the only costs were device costs. However, IT support costs alone are more expensive than the cost of the tablets. And, TCO analysis is something that should be conducted for any kind of deployment, rugged or not.
Better performance in 2019 and beyond requires re-evaluating your field technology
With consumer demands rising and the speed of data and communication increasing, you need to make sure you have the right technology solutions for your field operations in place to keep pace. For example, as the use of 4G and 5G networks continue to rise, telecommunications carriers will be phasing out slower 2G and 3G networks. The implications of a 5G network for mobile field operations will bring many companies into the 21st century—requiring field organizations to have enterprise mobile devices that are 4G- and 5G-compatible. As a result, many mobile-first field operations are preparing for 5G by evaluating the TCO of enterprise mobile technology ranging from handheld to tablet and 2-in-1 devices.
In fact, in Zebra’s latest Future of Field Operations Vision Study, 79 percent of respondents said they conduct a TCO analysis of enterprise devices most of the time, with their focus primarily on three areas:
- Financial costs - The industry leaders who participated in our study are looking for affordable solutions. They want to ensure that they’re making a good investment, which is why they conduct a TCO analysis to determine devices' overall cost, understanding that it extends beyond the initial acquisition. When evaluating TCO, they consider replacement, application development, programming, IT and monthly service and carrier costs.
- Vendor support - A separate part of evaluating a device’s TCO is how simple it is to deploy and manage. Leading organizations look at device management and support, device lifecycle and warranty when analyzing their next investment. Interconnected devices ensure those in the field are efficient and effective. Seamless device management gives visibility into every device across the entire enterprise, assisting in managing, tracking, securing and sustaining devices.
- Operational support continuity – When frequent repairs are needed, operations are affected. That’s why industry leaders inspect the quality and field reliability of a device when analyzing TCO.
However, I would challenge organizations with field-based workforces to first define these “big 4” requirements before shortlisting any mobile computers or conducting a TCO analysis of options:
- What software do you need to run?
- How connected do the workers need to be?
- What environmental conditions do they work in?
- Do you have enough IT resources to support all of this? (Remember: IT has a lot of work to do to make any mobile deployment a success. They have to introduce devices to the field, support issues and repairs, maintain the information systems that run everything, and align device life cycles with those information systems.)
Once you’ve made these decisions, then you can start to build in the additional line items that will help you calculate a more accurate TCO.
Editor’s Note: Stay tuned to Your Edge for part 2 of this discussion. It will include more insight into why these “big 4 requirements” are pre-requisites to any mobile technology selection. Bob will also provide expert guidance on how to conduct a proper TCO analysis.
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