Building a business case for mobile technology investment

A business case for mobile technology shows decision makers what problem the devices will fix, what they will cost over their full life, and when the savings will pay that cost back. Build it from your own baseline numbers, a total cost of ownership over 3 to 5 years and a simple payback sum. Then add a pilot plan and a way to measure results.

What should a mobile technology business case include?

Keep it short and use numbers your finance team can check. Most strong cases cover seven parts:

• The problem, in plain terms, with today’s numbers
• Clear targets that you will measure
• The full cost over the life of the devices
• The expected savings and the payback period
• The main risks and how you will handle them
• A rollout plan that starts with a pilot
• The cost of doing nothing

Start with the problem, not the device

Decision makers approve fixes to business problems, not hardware for its own sake. Name the problem first. Common ones include:

• Paper forms that cause delays and data entry errors
• No real-time view of stock, assets or staff
• Picking and shipping mistakes that lead to returns
• Slow service because staff wait on old systems

Then measure where you are today. Count how long key tasks take, how many errors happen each month and what each error costs. This baseline is the base for every number that follows.

Set targets you can measure

Turn each problem into a target with a number and a date. The targets below are examples only. They are not promised results or industry averages. Set your own from your baseline and from what a pilot shows.

• Cut order fulfilment time by 30%
• Raise inventory accuracy from 92% to 99%
• Halve paperwork errors
• Raise picks per hour by 25%
• Lift customer satisfaction scores by 15%

Count the total cost of ownership

Total cost of ownership (TCO) is everything you will spend on the devices over their working life, not just the purchase price. Plan for 3 to 5 years. Include:

• Hardware: mobile computers, scanners, printers, cradles and spare batteries
• Software: licences, device management and any custom work
• Setup: links to your ERP or warehouse system, Wi-Fi upgrades and project time
• Training and change management
• Support plans, repairs and replacement devices
• Lost output while staff learn the new process

Hidden costs add up. Zebra Technologies notes that several studies put the hardware price at under 10% of a mobile computer’s TCO. Lost worker time and IT support are among the largest costs.

Work out the return and the payback period

Return on investment (ROI) compares what you gain with what you spend. The payback period is how many months it takes for savings to cover the up-front cost. Here is a worked example. All figures are made-up round numbers, in Canadian dollars, to show the method.

Example: 20 warehouse staff move off paper

Up-front cost:

• 20 mobile computers at $2,500 each: $50,000
• Software setup and integration: $30,000
• Training: $10,000
• Total up-front cost: $90,000

Ongoing cost is $12,000 a year for licences, support and repairs.

Yearly savings:

• Labour: each worker saves 30 minutes a shift. That is 20 workers × 0.5 hours × 250 shifts, or 2,500 hours. At $30 an hour, that is $75,000.
• Fewer errors: 50 fewer wrong shipments a month at $25 each is 50 × $25 × 12, or $15,000.
• Total yearly savings: $90,000

The sums:

• Net yearly benefit: $90,000 minus $12,000 is $78,000.
• Payback: $90,000 ÷ $78,000 is 1.15 years, or about 14 months.
• Five-year TCO: $90,000 plus 5 × $12,000 is $150,000.
• Five-year savings: 5 × $90,000 is $450,000.
• Five-year ROI: ($450,000 minus $150,000) ÷ $150,000 is 200%.

Use your own pay rates and error costs. Show a cautious case too. With half the savings, the net yearly benefit falls to $33,000 and payback grows to about 33 months ($90,000 ÷ $33,000 is 2.7 years). That still fits inside a five-year plan, which makes the case stronger.

Plan for risk and rollout

Name the main risks and how you will handle each one:

• Staff may resist the change. Involve them early and train in short sessions.
• Integration may take longer than planned. Test the link to your ERP or WMS in the pilot.
• Devices hold business data. Plan device management and security from day one.
• Work must go on during the switch. Roll out one area or site at a time.

A phased plan shows you have thought it through:

1. Discovery: map current processes and set requirements.
2. Pilot: test with one team and measure against your baseline.
3. Rollout: expand by department or site.
4. Review: tune the process using results and staff feedback.

Build support early. Ask operations, IT, finance and the floor team to review the numbers. A case that several departments back is easier to approve.

Show the cost of doing nothing

Doing nothing has a cost too. Errors, overtime and slow service carry on. Old devices get harder to repair and support. Put a yearly figure on these costs, using the same baseline as your savings.

Decide how you will measure success

Agree on how you will report results before you buy. Set out:

• The key performance indicators (KPIs) tied to each target
• The baseline you will compare against
• How and how often you will collect data
• Who owns each report

Frequently asked questions

How short should the payback period be?

There is no fixed rule. Payback should fall well inside the time you plan to use the devices. Ask your finance team what limit they use before you build the numbers.

Should we choose rugged or consumer devices?

Compare them on TCO, not on price. A 2021 VDC Research study, cited by Zebra Technologies, found 85% of rugged handhelds still working at year three, against 63% of consumer devices. Repairs, replacements and downtime can outweigh a lower purchase price.

What is the difference between ROI and payback?

ROI shows the total gain over the project’s life as a share of the cost. Payback shows how fast you get the up-front money back. Most decision makers want to see both.

Do we need a pilot?

A pilot is the best way to replace estimates with real numbers. Run it with one team for a few weeks, measure against your baseline and update the business case with what you find.

Ahearn & Soper has supplied supply chain technology to Canadian businesses for about 50 years, including Zebra Technologies mobile computers, scanners and printers. If you are building a business case, talk to our team about devices, costs and a pilot plan.