Putting the “Total” Back in 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 to construction equipment rentals are seeing their workers quickly transform into “information workers” who expect real-time, digitally-delivered data about work orders, customer history, inventory availability and other logistical details at their fingertips all day long. 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. Therefore, mobility is no longer a question of “if” but “when,” “how,” and – ultimately – “how much”.

Well there are 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 OEMs who want to justify what seems to be a much higher cost their device? 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 OEMs. The top industry analyst firms do these studies independently, and the OEMs and end customers only learn of the study when it is published. The unbiased third-party analysts have considered a lot of the associated costs of mobility, real costs to an organization, and come up with proven TCO formulas that cover many more cost considerations than whether or not companies can replace many cheap tablets before their costs equate to that of one rugged tablet. In other words, sticker price is just one line item to consider.

So, what do third-party analyst firms report on TCO? In March 2016, VDC returned to look at this subject, which was thoroughly examined earlier in 2013.

Rugged Tablets Deliver TCO less than half of Non-Rugged

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.

So, let’s put the decision of which mobile devices to choose into some context…

Before you can pick the “best” mobile computer for you, make sure you define these “big 4” requirements :

  1. What software do you need to run?
  2. How connected do the workers need to be?
  3. What environmental conditions do they work in?
  4. 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.)

Then you can start to build in the additional line items that will help you calculate a more accurate TCO. Though each company’s TCO model will vary, there are standard tangible and intangible – or OPEX and CAPEX – factors to work in every time. 

Rugged Tablets Deliver TCO less than half of Non-Rugged

For example, these additional IT costs cover a lot of things; the cost of re-provisioning devices is just one of them. There are the costs to purchase and maintain the information systems that support these devices, and the MDM (Mobile Device Management) work for security and updates.

I know, there is a difference between capital budgets and salary budgets. But with a financial perspective that only considers the capital budget, IT budgets get strained. Too much work to maintain the wrong systems, not enough time to get ahead of issues. Remember, if management chooses the wrong device and causes an undue burden on IT, they aren’t going to say “oops”. They are going to demand that IT do better with their resources to keep their field workers working.

Which brings us to the top portion of the bars, the lost productivity. The couple of hours that a tech doesn’t have access to his tablet – whether because it broke or had to be sent back to IT for an update – are the biggest costs. It doesn’t take long for the lost hours to cost more in lost productivity than the cost differential of the initial purchase price. And consumer devices that don’t have the right peripherals to both streamline the work and reduce errors will contribute even further to lost productivity. These are things like True Serial ports to connect to industrial equipment, RF-ID readers with protocols you’ll never find on consumer devices, and barcode imaging systems that quickly read barcodes, even those barcodes many feet away on equipment above the worker on a pole or down in a manhole. This lack of direct connectivity, and error-prone manual data input that results, all equates to unnecessarily lost time that costs the organization. (Camera-plus-software barcode systems can’t match the speed, accuracy or range of imagers.)

Now, as I mentioned before, each organization is different and has different cost structures. Use this handy TCO Calculator to enter your specific variables and see how these choices play out in your case.

But, remember, even analyst-derived calculations aren’t always all-inclusive of the line items relevant to you. For example, one thing that doesn’t appear in VDC’s TCO analysis is the issue of aligning product life cycles. If you have a 5-year plan to support one workflow, you need devices that have a matching 5-year life. This means systems with enough horsepower and memory to be viable in the future, and the flexibility to upgrade to support multiple OS generations and multiple workflow software implementations if needed. You’ll also want to ensure that the mobile computing platform is supported by an array of vehicle docks, peripherals and other accessories that will fit your current-day specs. You want to be able to update your tablet PC to the next generation in 3-5 years without having to replace accessories too. Look specifically at carrying cases, docks, and the rest of the associated devices – have they been the same for years already? What about the device itself? Has the form factor, or really the dimensions, changed over the last few generations? And is the manufacturer planning to keep form factor the same – and therefore offer continued compatibility with the accessories in the future? The right answer to this question is always “yes”. Look at their historical device progression to confirm, and ask to see the manufacturers’ own roadmap if needed to increase your confidence that you’ll have the platform stability they promise.

No matter what, though: Remember that there is more to the TCO stats than comparing how many cheap tablets will break versus the premium sticker price for rugged tablets. Organizational and productivity costs dwarf the initial device purchase price every time and, beyond that, will determine whether your organization will have to be constantly reactive to issues or enjoy a stable platform upon which to plan and digitize the next generation operational system that works best for your workers.

Use the TCO Calculator

Blog Author: Bob Ashenbrenner
President of Durable Mobility Technologies, LLC.