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Optimizing Costs of Field Force Mobility Using Consumer Technology

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For field force mobility costs, replacing rugged devices with handhelds can save a lot of money while enhancing functionality, productivity and multitasking -- due to the pace of consumer products evolution and the growing bring your own device (BYOD) trend at work. We offer a roadmap for scenario analysis, use-case appropriateness and a phased approach for smartphone deployment.

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Optimizing Costs of Field Force Mobility Using Consumer Technology

  1. 1. Optimizing Costs of Field Force MobilityUsing Consumer TechnologyField force empowerment is critical for brand management, customerservice and improving productivity and efficiency. The current trend ofthe consumerization of IT can help reduce the cost of field force mobilityas well as improve productivity in a secure manner.Executive SummaryFor over a decade, diverse industries such as retail,manufacturing, logistics, pharmaceuticals andconsumer goods have deployed mobile devicesfor their field forces to enable higher productiv-ity, enhanced customer service, better inventorymanagement and improved sales planning andforecasting. Traditionally, rugged devices fromvarious manufacturers running variants ofWindows Mobile (v6.5 or earlier) have been usedacross all four facets of field operations: fieldservice, field sales, direct store delivery and assetmanagement.The lack of better alternatives meant that CFOstucked their high price points into balance sheetsas a “necessary premium.” Over time thesedevices gained the “legacy” label.However, with consumer technology growingin leaps and bounds and rapidly proliferatingacross enterprises, this traditional method ofempowering the field force is due for a disruption.Organizations considering device replacementare beginning to take a close look at the ROIof rugged devices and assessing the potentialvalue of replacing them with consumer devicesrunning modern mobile operating systems suchas Android and Windows 8. These devices arenot just significantly cheaper but are also morefunctionally powerful. Additionally, the evolutionof new business models is opening up oppor-tunities to better manage field mobility costs,beginning with the conversion of capital expendi-ture (Cap-Ex) to operational expenditure (Op-Ex).This disruption has already begun in growth/developing markets such as India and China wherehypercompetition, the need for lower Cap-Ex andthe retention of hard-to-find talent are forcingcompanies to be innovative.Our industry assessment and research indicatesthat there is a clear business case for optimizingfield mobility costs.This white paper presents an approach todetermine the feasibility of deploying consumertechnology in specific field scenarios. Sub-sequently, it proposes a roadmap to deployconsumer devices and improve field productivity,while optimizing costs and ensuring security ofapps and data.• Cognizant 20-20 Insightscognizant 20-20 insights | april 2013
  2. 2. cognizant 20-20 insights 2IntroductionFor a long time, the field force has carriedsturdy but bulky handhelds that weigh anywherebetween 300-500 grams and cost anywherebetween $1,000-$2,500. These “rugged” devicesare meant to operate reliably even in harshconditions. They have beenbuilt to withstand extremetemperatures, dust andhumidity, and are impact-resistant.On the functional side, theyrun applications that enablethe field force to performactivities ranging from workorder management to fieldreporting. In some cases,the devices are equippedwith I/O peripherals such asbarcode scanners, RFID readers, payment trans-action panels, etc. that enable the field force toperform activities such as asset management andpayment collection.However, given the rise of enterprise-readyconsumer technologies, it is time to ask somebasic questions.• How often do rugged devices in the fieldactually get exposed to the harsh environmen-tal conditions they are built for?• Do all field force scenarios warrant ruggeddevices?• Is consumer technology now capable ofexecuting the same functions as ruggeddevices?• Is the inconvenience of carrying bulky devicesin the field worth the benefits?• Is the uni-functional nature of these devicesand their lack of seamless multitaskingdetracting from optimum productivity insteadof supporting it?• Have rugged devices kept up with the latestmobile technologies and platforms, facilitatinghigher levels of productivity?• Most important, given the plethora of consumeralternatives available, is the cost of ruggeddevices worth the benefits they deliver?Trends in the Field Mobility Space• According to VDC Research, investments byorganizations in consumer devices for fieldmobility have risen by 14% and 16% over thepast two years as compared to a 7% increasefor rugged devices in each year.1• Even by a conservative estimate, consumerdevices are around 33% cheaper than theirrugged counterparts. Therefore, the increasein the number of consumer devices on the fieldhas outstripped that of rugged devices.• Over 50% of organizations that VDC Researchsurveyed plan to migrate to Android for fieldoperations, while 43% would prefer iOS. Thethree reasons outlined for these moves are:increased flexibility, limited functional capabili-ties of the current OS (mostly Windows 6.5 orearlier) and preferred devices not running theOS currently deployed (mostly Windows).• Of the surveyed organizations, 75% cite“intuitive user interface” as the top require-ment for field mobility applications. In addition,50% cite “improved worker productivity” asthe top requirement for the field mobility setup.• Over 30% of the surveyed organizations areactively seeking ways to reduce field mobilitycosts. For the past several years, most organi-zations had believed that existing field mobilitycosts were optimized.Given the demand for more intuitive field mobility,better worker productivity and a reduction incosts, the switch to consumer devices will onlyaccelerate. However, a few concerns remain:• Can consumer devices completely replacerugged devices from a functional and oper-ational standpoint? If yes, in which fieldscenarios is this particularly applicable? If not,what is the best mix?• Do they really offer significant cost benefitsover their rugged counterparts when allaspects are considered?• Is optimization of field mobility costs onlyrestricted to replacement of rugged deviceswith consumer devices or are there otheropportunities available?Smartphones as Replacement forRugged HandheldsBy virtue of their significantly lower costs,improving durability, OEM-led enterprisereadiness, rapidly evolving onboard technolo-gies, high-quality user interface and widespreadconsumer acceptance, smartphones are provingto be tough competition for rugged handhelds ina growing number of field scenarios.The cost structure for field mobility can be brokendown into hard costs (tangible and fixed) and softcosts (intangible as well as variable) (see Figure 1).Not all field jobsrequire extreme levelsof device ruggedness;21% of field scenariosdo not need anydevice ruggedness,while 52% need itonly to negate devicemishandling by users.
  3. 3. cognizant 20-20 insights 3The hard costs account for the hardware (deviceand peripherals), software (application develop-ment/license and back-end integration) and infra-structure (device management and security). Thesoft costs consist of training, IT support and, mostimportantly, potential productivity losses due todevice failure.Hard Costs Are Much Lower forConsumer DevicesA comparative analysis of hard costs (see Figure2) over five years reveals that replacing ruggedhandhelds with equally capable consumerhandhelds can cut the overall cost by 48%.This reduction is primarily driven by the devicecomponent which drives most of the hard costs.In terms of upfront investment, the change iseven more significant. While a rugged handheldcan cost anywhere between $1,000-$2,500, anequally functional, enterprise-ready smartphonecomes with a list price of $300.Soft Costs of Smartphones Are Falling RapidlyOne of the arguments against the use of consumerdevices in the field has been the comparativelyhigh soft costs due to device failure on the groundleading to lost productivity. However, smartphonetechnology has evolved from failure rates of 33%four years ago to around 10% now (see Figure 3on the next page).Interestingly, a strong argument in favor ofsmartphones now is the gain in productivity dueto their ability to seamlessly run multiple applica-tions, thereby enabling multitasking.These factors are erasing the soft cost disadvan-tage (see Figure 4 on the next page) traditionallyassociated with these devices.Figure 1Cost Structure for Field MobilityHard Costs Soft Costs• Hardware:»»Device.»»Peripherals.• Software:»»App development.»»App license.»»Back-end integration.• Infrastructure:»»Device management.»»Security.• Productivity loss due to failureor downtime.• Training.• IT support and maintenance.48%60%57%25%-16%-20%-10%0%10%20%30%40%50%60%70% Hard costs Device Peripherals Software ServicesCost(Indexed)Rugged Consumer Cost benefits of replacing rugged with consumer deviceSource: Cognizant analysis, based partially on VDC research data.Figure 2Hard Cost Comparison for Rugged and Consumer Handhelds (Over Five Years)
  4. 4. cognizant 20-20 insights 4Smartphones Can Be Reasonably Ruggedizedat Low CostNot all field jobs require extreme levels ofdevice ruggedness. According to a recent surveyconducted by Field Technologies Online, closeto 79% of organizations believe some level ofruggedness is necessary for devices. However,52% of the respondents felt ruggedness wasessential to offset technicians’ mishandling of thedevices while 21% felt the activities conductedby their field force did not require any deviceruggedness.2While smartphones are not drop-proof, the useof “rugged cases” provides durability at a lowprice. These cases come with screen protectors,are made of durable silicone to absorb shock andhave other impact-resistant exterior features.Some cases also enable docking of the device asrequired. These cases are available for $25-$50and offer rugged alternatives for all possible formfactors.Peripheral Features on Consumer Devices CanExecute I/O RequirementsOne of the USPs of rugged devices has beenintegrated I/O peripherals such as barcodescanners, cameras, RFID readers and credit cardswipers that enable easy asset management,payment collection and product delivery. Halfa decade ago, these technologies were eitherexpensive or not up to industry standards.However, given the pace of consumer technologyevolution, these I/O technologies have not justscaled up in quality but have also become com-moditized, thus enabling easy and cheap integra-tion with smartphones.Today a $300 smartphone comes with a5-megapixel camera that is capable of reading,scanning and processing all forms of digital codes.This capability becomes even more relevant whenwe analyze the popular I/O functionalities thatare actually used in the field. According to VDCResearch, over 60% of I/O requirements arelinked to camera processing while another 30%9.0% 8.5% 8.0%33.0%16.7%10.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%2008 2010 2012RuggedConsumerSource: Cognizant analysis, based partially on figures from VDC and SquareTrade.Figure 3Device Failure Rate0. 2012 2015 (E)Cost(indexed)Costs Due to Loss of ProductivityRugged HandheldConsumer HandheldSource: Cognizant analysis.Figure 4Soft Cost Differential Diminishes
  5. 5. 5cognizant 20-20 insightsare linked to a 2D imager.3A low-cost smartphonecan easily execute these functionalities.Another prominent trend has been the growingmaturity of device-embedded, software-enabledI/O processing as potential replacements forhardware-driven execution. With the evolution ofsoftware-based payment firms such as Square,more uni-functional hardware (e.g., barcodescanners and credit card swipers) are expected tobecome obsolete.However, field operations of all scales and sizescannot be immediately enabled by software-based smartphone I/O capabilities. For highvolume barcode scanning such as in shipyardsand industrial delivery, a hardware scannerintegrated with a pistol-grip rugged device wouldstill be a better choice.User Acceptance, Experience and ConvenienceHigh for Consumer DevicesA recent survey conducted by VDC Researchindicates “intuitive user interface” is the toprequirement for field mobility applications,with close to 75% of respondents voting for it.4Smartphone usage is based on intuitivenessand high-quality user interface. Add to this thecomfort level workers enjoy with smartphones intheir personal lives, the uni-functional nature andinconvenience of rugged devices weighing up to500g and user preference becomes even moreskewed toward smartphones.McKinley Equipment, a U.S.-based warehous-ing equipment supplier, has rolled out consumerdevices for field technicians primarily for theiruser acceptance, intuitiveness and popularity inthe consumer world. “We wanted a device thatwould provide all of the functionality we werelooking for, but also that our techs would actuallyenjoy using. There are two major “pros” that ledus to the consumer device — the first is its easeof use and intuitiveness. The second major pro isthe general, universal appeal of the device,” saidKevin Rusin, CFO of McKinley Equipment.5Some organizations are going a step aheadand embracing BYOD for their field force — thusmaking smartphones the only device the fieldforce needs to carry, be it for professional orpersonal purposes.Brand Image EnhancementTraditional rugged devices are prone to slowboot-up, loss of Internet connectivity and issueswith I/O peripherals. Consumer devices with their“always on and connected” state and sleek looksnot only enable quick responses to customerrequests but also suggest an organization that iskeeping pace with technological advancementsand is well equipped to serve customer needs inthe best possible way.Field Scenario Assessment:Determining Field Cases forSmartphone DeploymentWhile consumer devices trump rugged deviceson elements such as cost, multi-utility scope,convenience, intuitiveness and user acceptance,it would be risky to opt for consumer devicesfor all field scenarios. In fact, in scenarios withextreme environmental conditions and highvolume I/O functional requirements, deploymentof consumer devices couldbackfire, with consequencesranging from significant loss ofproductivity to instant capitaldestruction. Hence it becomescritical to perform an in-depthscenario analysis to determinethe feasibility of deployingconsumer devices in the field.While the scenarios will vary across organizations,Figure 5 (on the next page) outlines high-levelguidelines for such an analysis.A majority of the field activities relate to sales andservice and take place in reasonable operatingconditions.Figure 6 (also on the next page) lays out guidelinesfor determining use-case appropriateness forsmartphones and rugged handhelds across allfour facets of field operations. It is important tonote, though, that the actual use-case appropri-ateness can only be determined after a detailedassessment of the intricacies involved.Cost Optimization ThroughSmartphone DeploymentOnce the decision to deploy smartphones in thefield is approved, a detailed assessment shouldfollow. Such an assessment would encompassmobile platform, infrastructure, applications,user requirements, policies and the total cost ofownership (TCO).Figure 7 on page 7 outlines a high-level approachfor organizations looking to deploy smartphonesin the field.Sample Case for Android DeploymentWhile the cost benefits of Android (in the formof low-cost, enterprise-quality smartphones) andSeventy five percentof organizationsrate “intuitive userinterface” as the toprequirement for fieldmobility applications.
  6. 6. cognizant 20-20 insights 6its popularity among global consumers have con-sistently attracted enterprises, security concernsaround the platform have been a deterrent.However, over the past year or so, Google hastightened the security base of the platform withevery new version release while OEMs haverealized the importance of making Androiddevices enterprise-ready. Companies such asSamsung have made significant investments inpreparing their devices for enterprise use both onthe technology and marketing fronts. The resultshave been encouraging, with enterprises acrossindustries steadily adopting the platform acrosslines of businesses.From a field mobility perspective, enterprise-ready Android devices available for as little as$300 make a strong case for field deployment andcost optimization. In such a scenario, execution ofsome of the steps highlighted below can ensurethe deployment of secure and enterprise-readyAndroid devices.• Tight integration of the devices with globallyrenowned MDM tools (such as Airwatch, SOTI,etc.).• Selection of Android devices that either run onthe latest platform version or can be upgraded.• In-depth assessment of the field applicationportfolio for data security, encryption andtransmission over the network. Since Androidhas been prone to malware, it is this data thatneeds to be secured first.Figure 5Guidelines for Scenario AnalysisStep 1 Step 2 Step 3Take Stock of theOperating ConditionsAssess the I/ORequirementsAnalyze the Use CasesDetermine the level ofexposure to extreme temper-ature, dust, shock, vibration,water and scratches.Based on the exposure,determine the suitability ofconsumer devices.Map the durability of therugged cases to the groundconditions to check feasibility.Determine the volume and natureof I/O requirements (barcodescanner, card swiper, etc.).Map the volume of I/O execution tothe consumer device’s executioncapacity (e.g., speed of I/Oprocessing) to determine feasibility.Grip and use of accessories (e.g.,wearing gloves) will also determinethe choice of device.Accurate mapping of field use caseswith device capabilities is the singlemost important step in choosing aconsumer device over a rugged device.Consumer devices are more suitable forcustomer interaction, access to informa-tion, scheduling and intuitive data entry.Field sales and field service have higherscope for consumer device usage ascompared to asset management.Field Segment Use-Case AppropriatenessField SalesAccess to product information and customer data, field reporting, product promotion andcustomer engagement make a stronger case for smartphones.Rugged devices are more suitable for scenarios such as high-volume industrial sales.Field ServiceSmartphones prove more effective for requirements such as instruction manuals, work-ordermanagement, scheduling, access to warranty details, maintenance history and SLAs.For executing field service in fragile conditions such as shipyards and remote locations aswell as for high-volume data entry, rugged devices are more suitable.Direct StoreDeliveryOrder processing, low volume order delivery, access to cross-selling and up-selling informa-tion and address detectors make smartphones a better choice.For industrial goods delivery, payment processing and card swiping, rugged devices are abetter option.AssetManagementRugged devices typically tend to dominate this area of field operations.High-volume asset tracking, RFID tag scanning, scanning under poor visibility make strongcases for rugged devices.Smartphones though do see application in low-volume asset management.Figure 6Guidelines for Determining Use-Case Appropriateness
  7. 7. cognizant 20-20 insights 7• Installation of mobile anti-virus and anti-mal-ware on the devices.• Outlining of appropriate governance and secu-rity policies to tightly regulate Android usage.Alternative Means of Field MobilityCost OptimizationIdeally, with the right assessment and appropri-ate cost modelling, the potential cost benefits ofsmartphone deployment should be evident rightaway. However, there could be scenarios wherethe TCO for rugged is not very different from thatfor smartphones. Some of the reasons could be:• Selection of a comparatively expensive device(the iPhone, for example), the cost of whichgets compounded due to a high refresh rate.• The current device might be durable and notnecessarily rugged. Durable devices havemoderate ruggedness and are available in aprice range of $600-$1,000. While the minimumprice of these devices is still twice that of anequally capable smartphone, the compara-tively high refresh rate for smartphones couldnarrow the TCO benefits.• Inaccurate assumptions about either hard orsoft costs. Soft costs are especially difficult toforecast owing to their intangible nature, andthis may result in overly conservative cost/benefit assumptions.Renting Field Mobility — Converting Cap-Exto Op-ExGiven mobile technologies’ rapid evolution, moreand more organizations are now looking formeans to avoid heavy upfront costs and makegradual “value-based investments” instead. Thisnot only makes it easier for business units andCIOs to pitch for mobility investments but alsoallows them to experiment with mobile advance-ment at minimal risk by future-proofing them.While the switch from rugged devices toreasonably priced consumer devices does reducethe upfront cost significantly, there is a largechunk of field mobility investment (including thesmartphone costs) that still goes on the balancesheets as capital expenditure. However, newerbusiness models now enable these costs to beconverted into operational expenditure. Theentire stack of field mobility deployments arehanded over to service providers who charge on aper-user/per-month basis. This includes:• Sourcing of device, data plan and voice planfrom the carrier, which charges a fixed amountper month per user. All major carriers supportsuch a model for smartphones across all formsand pricing for various OEMs. This is not the casewith rugged devices, which need to be procureddirectly from OEMs as a full-device purchase.• Sourcing of the field mobility app suite and theassociated support and maintenance from atechnology services provider.• Sourcing of the back-end infrastructure (MDMsuite, servers and cloud services) from atechnology services provider.• The task of identifying relevant use-cases forfield mobility and driving those that have aStep 1Identification of the appropriate smartphone platform (iOS, Android, Blackberry,Windows, etc.) based on cost, security and enterprise integration specifics.Step 2Assessment of the organization’s IT and field infrastructure for security and mobileplatform fitment.Step 3Creation of reference architecture incorporating gap-plugging measures for “secure”mobile platform deployment and device management.Step 4Field application portfolio assessment for app security, data security and mobileplatform fitment.Step 5Field user requirements identification specific to app usage, field environment, usermaturity and user preferences.Step 6Device identification based on field requirements, inclusive of OEM assessment andaccessories identification.Step 7 Governance, usage and security policy formulation.Step 8TCO identification and benefits encompassing expected cash outflows and returnsannually as well as over an appropriate period of time.Figure 7Phased Approach for Smartphone Deployment
  8. 8. About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 156,700 employees as of December 31, 2012, Cognizant is a member ofthe NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.World Headquarters500 Frank W. Burr Blvd.Teaneck, NJ 07666 USAPhone: +1 201 801 0233Fax: +1 201 801 0243Toll Free: +1 888 937 3277Email: inquiry@cognizant.comEuropean Headquarters1 Kingdom StreetPaddington CentralLondon W2 6BDPhone: +44 (0) 20 7297 7600Fax: +44 (0) 20 7121 0102Email: infouk@cognizant.comIndia Operations Headquarters#5/535, Old Mahabalipuram RoadOkkiyam Pettai, ThoraipakkamChennai, 600 096 IndiaPhone: +91 (0) 44 4209 6000Fax: +91 (0) 44 4209 6060Email: inquiryindia@cognizant.com­­© Copyright 2013, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.About the AuthorsVinod Venkatasubramanian leads Cognizant Mobility for Asia-Pacific, advising customers on their mobilestrategies. He has worked with clients in the U.S., as well as in China, Hong Kong and Singapore over thepast 11 years. During this period, Vinod has helped a number of clients with multichannel commerce andmarketing strategies. Vinod earned his engineering degree in India and an M.B.A. from HKUST-School ofManagement, Hong Kong. He can be reached at Vinodrv@cognizant.com.Ashutosh Didwania leads advisory engagements for Cognizant Mobility in the Asia-Pacific region. Hehelps clients define and execute their mobility strategies in the context of their larger business goals.Ashutosh has valuable business consulting experience in the sales and marketing domain. He has helpedindustry majors in pharmaceuticals, consumer goods and retail lay out their digital approach, leveragingemerging technologies such as mobility and social media. Ashutosh holds an M.B.A. in strategy andinformation systems and an undergraduate degree in computer science engineering. He can be reachedat Ashutosh.Didwania@cognizant.com.Footnotes1 “Strategic Insights 2012: Field Mobility Solutions,” VDC Research, September 2012.2 “Field Mobility 2013: How the latest technologies & trends are transforming the mobile workforce,”Field Technologies Online, December 2012.3 Total Cost of Ownership models: Field Mobility, VDC Research, 2010.4 “Mobilizing Enterprise Applications: Executive Brief,” VDC Research, April 2012.5 Q&A: What’s the iPad’s role in Field Service?, Field Technologies Online, December 2012.strong business case and can be handed overto service providers.Service providers take ownership of the entirestack from organizations, coordinating withpartners, providing services in collaboration withthem and charging a fixed fee per user per month.ConclusionWith greater cost pressures and ROI expectationsin companies, consumer devices based on modernplatforms are being deployed or consideredfor field force use where appropriate. Whencombined with new business models that enableconversion of the associated cost from Cap-Ex toOp-Ex, this approach opens up significant oppor-tunities for transforming field operations in acost-effective way.While rugged devices will continue to add valuein specific field scenarios, a careful assessmentof the applicability of consumer devices willyield use-cases for their deployment, resultingin cost savings, increased productivity and evenincreased morale.