TCO for a PDA can cost companies $3,000/year, says Gartner

As enterprises equip more employees with PDAs, they must understand the total cost of ownership (TCO) for these devices. Gartner Inc. analysts say the TCO for a PDA/user could approach $3,000/year.

TCO for a wireless device will mostly add additional hardware, software, and service costs on a per-user basis compared to mobile (but not wireless-enabled) devices. Additional software and service costs can vary, but average about $50/month/user. Gartner found PDA
TCO approaching $3,000/user/year. Adding a wireless modem with a TCO of $1,392 will bring the cost to $4,392, comprised mostly of hardware, support, and additional service fees.

“When assessing the total costs of wireless mobile products, we found that the more capable the device the higher the cost. The more processing power it has, the more applications it can store, leading to higher support and operational costs,” said Phil Redman, research director for Gartner. “Beyond typical costs for a mobile device, there is an additional and recurring cost element for wireless connectivity.”

The TCO for an integrated wireless PDA can be broken out into various cost segments. 60% of the cost will go to capital (including hardware, software, and network services), 30% to operations (including technical services and support, peer support, application management, and development), and 10% to administration (including evaluation, implementation and training).

Service costs are the biggest impact on wireless WAN TCO capital costs, so consolidating network service providers, bundling services, and aggressively negotiating contracts are best practices to reduce overall TCO, Gartner said.

Gartner analysts say that in moving toward a total understanding of ROI, enterprises must calculate the total benefit of ownership (TBO). TBO can be easily identified in vertical applications, but in horizontal applications, identification of TBO is more complicated.

Some things enterprises should look for to determine the TBO of mobile technology are an increase in productivity, increased revenue resulting from an increase in productivity, increased accuracy because of constant communication, and decreased costs based on
improving efficiency, eliminating redundant processes or even basic costs, such as printing fees that can be saved by providing an electronic format.

“ROI is possible for many mobile applications, but enterprises that proactively link mobile technology investments to job functions and bottom-line productivity indicators, such as sales revenue, customer support an internal operations goals, will be successful at defining a mobile ROI, as long as TCO is also understood,” said Redman.


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