ChannelLife NZ - Consumer vs rugged: Which is really cheaper?

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Consumer vs rugged: Which is really cheaper?

Over the last three to four years, enterprise mobility as a product category has been expanding rapidly, with a proliferation of smart phones and tablets adding to the already large range of rugged mobile devices which have been in the market for many years.
This is good for the reseller, in that more customers are now seriously looking at mobile devices for their workers and are more educated in the benefits of giving mobile workers access to line of business applications and information at the point of interaction. The downside, however, is that end users now have a massive range of consumer-grade devices at their fingertips for a matter of a few hundred dollars. 
The challenge for resellers is shifting from selling the concept of mobility to selling the right device for the customers’ requirements. This is even further complicated by the fact that software vendors are being forced to support consumer operating systems due to demand from newly mobile end users. Many of these new mobility customers do not have any experience maintaining a fleet of mobile devices and need educating in the realities of the cost involved in going mobile, and the ongoing costs that your device selection can have, over and above the initial purchase cost.
Doing the math
To truly understand the cost implications of choosing to deploy a consumer device into a business environment, it is important to help your customers consider all of the different costs associated with this deployment.
Hard, or deployment, costs include the device itself, accessories, software, implementation and training, and most end users are comfortable with all of the hard costs of a deployment, but often fail to consider these in a long term view. Soft, or operational costs - which include productivity loss from hardware or wireless failure and IT support for troubleshooting/maintenance and hardware replacement costs, are often not considered at all.
Unless an end user is planning on being bankrupt within a few years, it is important to realise that a project today is not an isolated event. When this set of equipment ultimately reaches the end of its usable life, it will need to be replaced.  In simple math – if a consumer device is going to last two years, and a rugged device is going to last five years, then over a five year period, the consumer device needs to be replaced 2.5x all of which are additional costs that should be considered – increasing the overall cost to deploy a consumer device.
Every time a field user has a problem with a device, you have two sets of costs. The productivity loss because the user is unable to work efficiently, or at all, without the equipment, and the costs associated with fixing the problem. 
If a field technician has a device failure, this directly affects his operational efficiency, as well as much of the rest of the business. Job dispatch now has to manually phone him to give job details, which he has to write down on a piece of paper, requiring more time, and increasing the risk of errors. Accounts are now unable to invoice a job until after he has returned to the depot at the end of the day, hoping that he hasn’t lost or damaged any paperwork in the meantime. The spares warehouse can’t pick replenishment parts for his van until he gets back, because they have no real time record of his parts usage. All of this adds up to additional costs to a business in lost revenue, and increased costs. In addition to this, IT incurs additional costs in time and materials to bring the device back to operational status – troubleshooting, repair costs, re-staging costs.
More than here and now
In addition to the costs per event, you also need to consider the different failure rates between devices. In the handheld space, non-rugged devices typically have an 18% failure rate in year one, compared to a 3% failure rate for rugged devices – higher per event costs, compounded with more failure events, starts adding up to very high support costs.
This is usually something instinctively understood by specialist mobility resellers; however it is often difficult to quantify this information to a customer who is often only thinking of the here and now.  A VDC study – Total Cost of Ownership (TCO) Models for Mobile Computing and Communications Platforms, VDC Research, July 2007 – surveyed a wide range of customers with deployed fleets of mobile devices and consolidated all of the above considerations into a set of average costs to deploy different classes of equipment, once everything is taken into consideration. When these costs are benchmarked against the cost of a rugged device deployment, it becomes clear that deploying consumer devices is a an expensive decision in the long run for your customer.
The table shown in figure 1 takes hard, soft and total costs, over a five year period and benchmarks them against the costs of a rugged device deployment. If a rugged device is going to cost $100 in hard costs, a consumer device would cost $94 – even allowing for the additional replacements required to continue using over five years.  When we look at the soft costs, if you spend $100 over five years supporting a rugged device deployment, you could expect to spend $394 per consumer device over the same period.
When everything is taken into consideration, deploying a consumer device for field mobility will on average cost an end–user almost four times as much as a rugged device. The beauty of this for a reseller is it is these cost savings that justify paying hardware premiums, and justify support and service contracts with the reseller. This helps create a true win-win deployment with higher margins for a reseller, while still offering lower overall costs and a more efficient solution to the end–user. 

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