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First, we work to understand our clients’ businesses—their workflows, people, cultures, and goals—and then we discuss the types of technology available to fit their needs.

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How to Calculate the Total Cost Of Ownership (TCO) of Your Tech Assets

Jun 4, 2021
TOPIC: Technology
2 min read

When it comes to a piece of company equipment, the organization's total cost of ownership (TCO) describes all the costs–both obvious and hidden–that go into owning that asset. The total cost goes well beyond the equipment’s initial price; added to that are the costs of its ongoing use, maintenance, support...even disposal.

So when it comes to new hardware for your mobile device program, what’s the best option if you’re looking to maximize TCO? One option is to purchase consumer devices–and why not: They do many of the same things as devices designed specifically for commercial use cases, and people are familiar with them. Plus, they cost less so you save money, right?

Not so fast.

When comparing the cost of consumer smartphones to enterprise-grade devices, the total cost of ownership calculation–their “fully loaded” cost–makes the enterprise devices a much more practical choice. In fact, research conducted by Zebra shows that consumer smartphones can increase TCO by up to 50%!

Cost Comparison: TCO of Consumer vs. Enterprise-grade Devices

Many factors contribute to the TCO of a mobile device deployment. In addition to the initial cost of hardware, devices require one or more accessories, appropriate software, and thorough user training to ensure that the devices are fully adopted. There are also some “soft” operational costs that must be part of the TCO calculation, such as:

  • Productivity loss. As workers are being trained or devices require maintenance/intervention, the “inactive” time reduces overall productivity
  • Opportunity loss. As with productivity measures, there is a loss of potential profitable work when systems are down or workers are taken away from their roles temporarily
  • IT support costs. To support the IT needs of a mobile device program, a company must maintain a staff capable of addressing technology needs

While these soft costs can be tricky to calculate, they’re crucial to your overall understanding of TCO. In fact, the research group VDC estimates that hard costs only account for 10% (or less) of TCO over the course of five years, making soft costs, like those mentioned above, a whopping 90% of your TCO!

While consumer mobile devices may look, at first blush, like a more cost-effective option because of their low initial cost, enterprise-grade devices are actually:

  • Far more durable, which translates to less downtime, less frequent replacement, and less intervention from IT
  • Less likely to become obsolete as fast as a smartphone, reducing the costs associated with device churn
  • More aligned from a software perspective to meet business and security requirements, and can easily be customized to specific organizational needs

Another benefit of utilizing enterprise-grade devices is that by working with an experienced mobility partner, you can lower your TCO even further. Most partners offer support, so you can reduce the time and effort required of your IT team–and possibly the headcount in that department, too. Because they have specialized expertise, a partner is likely to resolve issues more quickly, reducing worker downtime and the effects on productivity. Finally, partners make it their business to be well-versed in all available technologies and their capabilities, so they can help select the best devices for your situation and goals.

So, “you do the math” and you’ll see that although their initial cost may be a bit higher, enterprise-grade mobile devices cost less to own than devices designed for consumer use. That being said, there are use cases in which a consumer smartphone may be used effectively and efficiently, and a partner can quickly identify if and where in your workflow that might be a practical option.

If you’d like to know more about today’s devices and what they can do to optimize your supply chain, just ask us! We’re happy to learn more about your business and its needs, and discuss solution options. Just reach out by clicking the link below!

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