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The myth of upfront savings
When enterprises look at mobile devices, the initial purchase price often dominates the decision-making process. It’s tempting to opt for cheaper devices to cut costs upfront. However, this narrow focus on purchase price overlooks the broader picture. Analysis reveals that management and administration account for 67% of the total cost of ownership (TCO) for a mobile device, while hardware purchase represents just 20% of TCO. These hidden costs include management, administration, repairs, and lost value at end-of-life.
Cheaper devices might save money initially, but the savings are often outweighed by the subsequent expenses. For instance, cheaper devices tend to have shorter lifespans and higher failure rates, leading to increased repair and replacement costs. Therefore, the initial savings on purchase price can quickly erode as hidden costs begin to pile up.
Hidden costs of Mobile Device Management
One of the most significant contributors to the overall TCO is the cost of managing and administering mobile devices. Enterprises spend an average of €61 annually per user on Mobile Device Management (MDM) software licences (€67 for BYOD models). Beyond software, there's the human cost of managing these devices. IT staff spend countless hours enrolling, securing, supporting, and replacing devices.
These administrative tasks are not just time-consuming but also costly. The average enterprise spends a significant portion of its budget on these hidden management costs, which are often underestimated. Streamlining these processes through smarter lifecycle management can lead to considerable savings, freeing up valuable human resources for more strategic tasks.
The impact of repairs and maintenance
Repairs and maintenance represent another substantial hidden cost. A smartphone typically requires 1.3 repairs over its 2.59-year lifespan, with screen replacements being the most frequent and costly. Each repair not only incurs direct costs but also involves administrative overhead and productivity loss, due to device downtime.
For enterprises, the administrative burden of handling repairs can be significant. The time spent by IT staff coordinating repairs and replacements adds another layer of expense. Moreover, the productivity loss when employees are without their devices can be substantial. Implementing robust repair handling processes and educating employees on device care can mitigate these costs.
Leveraging residual value for better savings
Many enterprises overlook the potential savings from the residual value of mobile devices. High-end devices, particularly those from premium manufacturers, can retain up to one-third of their initial purchase price after two years. Effective end-of-life processes, such as device return and resale programs, can recapture this value, significantly reducing the overall TCO.
To maximize residual value, enterprises need robust processes for managing device returns, data erasure, and ensuring devices are in good condition for resale. Protective measures such as screen protectors and cases can help maintain device condition, further enhancing residual value. By leveraging these savings, enterprises can achieve a more cost-efficient and sustainable mobile strategy.
Uncovering and addressing the hidden costs of mobile device ownership is crucial for enterprises aiming to optimize their mobile strategies. Smart lifecycle management, backed by data-driven insights, can lead to substantial savings and operational efficiencies. By focusing beyond the initial purchase price and considering the entire lifecycle of mobile devices, enterprises can achieve true cost efficiency and sustainability.
