March 23, 2006
 

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March 1, 2006

CONTRIBUTED ARTICLE

How to Maximize Your ROI from Mobile Field Service Solutions -- By Steve Davis, ECONZ Wireless
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Deploying a mobile business solution is a powerful way for a company to gain a competitive advantage. Field service companies, in particular, face many challenges, making them prime candidates to benefit from mobile business solutions.

 

In the past, mobile business solutions have been the domain of large corporate enterprises and have been too expensive for the small to medium-size business (SMB) market. However, that is rapidly changing. Robust adoption is projected among SMBs due to the lack of internal implementation bureaucracy, the availability of more turnkey solutions, and the increasing recognition of high return on investment (ROI), efficiencies and competitive advantage that can be gained from the deployment of mobile business solutions.

 

There is no question that mobile solutions such as wireless job dispatch and management can provide many benefits—worker productivity, customer service and cost reduction. But the fact is that wireless mobility comes at a cost. The days of using technology for technology’s sake are over. A clear ROI should be shown before the deployment of a mobility solution.

 

The question is: Can field service companies really capitalize on the power of today’s wireless data applications, without breaking the bank? The answer is a definite yes!

 

This article presents a straightforward look at the business areas positively influenced by wireless job dispatch applications. This includes a sample ROI calculator that employs financial tools to provide a clear picture of the areas influenced and the return to the business. It also highlights non-monetary returns such as management decision-making, lifestyle and customer service. Finally, it will outline the key factors that ensure that companies can successfully implement and adopt mobility solutions to realize the greatest ROI.

 

Business Benefits of Mobility

Deploying a mobile business solution (such as ECONZ Wireless’ EService), is a powerful way for a company to gain a competitive edge. Many of yesterday’s early adopters have become today’s feared market leaders as they use mobility to build capabilities to further separate themselves from those that have been slow to the game. In addition, changes in the wireless market are converging to promote the rapid adoption rate of wireless technologies.

 

Some key factors that prompt companies to consider implementing a mobile business solution include:

  • Desire to make mobile workers more accountable
  • Recognition of current inefficiencies
  • Importance of customer service
  • Comfort with use of cell phones
  • Drive to improve the bottom line 

Field Service Issues

Within field service industries, there are a number of issues that make them prime candidates to benefit from mobile business solutions such as wireless job dispatch and management. There is no question that managing field service can be very challenging. For instance, poor response times, errors, lost paperwork, time wastage and customer service challenges are just a few of the problems field service companies face.

 

More specifically, issues can occur in the following areas:

  • Communicating with and managing mobile workers
  • Data entry and the errors that result from paper-based job management and time/attendance systems
  • The large gap in time that can occur between work completion and invoicing
  • Managing service level agreements
  • Vehicle costs, and cell phone and other communication costs
  • Improving, or simply maintaining, customer service standards

These issues have one thing in common—they all affect the bottom line.

 

Calculating the Return on Investment

In developing an ROI calculator for wireless job dispatch and management, some assumptions have been made with respect to the staff employed and the management of work and field service teams. These assumptions are based on over 20 years of experience in deploying field force solutions and draw heavily on actual field service company feedback.

 

Below is a list of the areas that need to be addressed in calculating ROI along with the stated assumptions of the returns used:

 

Productivity – Worker productivity is the number one benefit in terms of ROI in the calculator. Improvements result from:

  • Elimination of timesheets and job paperwork.
    • Client details, time, parts and materials, equipment information and data forms can now all be completed electronically. This is calculated as a function of the time savings, average job duration and average gross profit per job.
  • Infield productivity.
    • 5 percent improvement. This includes less time between jobs and fewer returns to the base. Greater worker visibility allows the scheduling of additional work. This is calculated as the number of additional jobs multiplied by the average gross profit per job.

 

Lower Cost—Cost reduction is always a priority for any company. The following areas can realize significant cost savings.

  • Reduced dispatcher time.
    • 10 percent reduction. This includes savings in job administration, communication costs and rework caused by errors and omissions.
  • Data entry savings.
    • 33 percent reduction. Errors and duplications are virtually eliminated because data is entered once and then acted upon electronically as a job is progressed through its lifecycle.
  • Reduced vehicle expenses.
    • 10 percent savings. Since unnecessary returns to the base are decreased, if not eliminated entirely, and dispatch routing can be optimized.
  • Improved inventory management.
    • 80 percent improvement. Inventory loss (shrinkage) can be reduced through more accurate recording and tracking of inventory consumption.

Other Returns—In addition to the productivity and cost savings, there are also a number of other benefits that can be realized.

  • Stronger management decision making. Improved job information, visibility of mobile workers and reporting allows more time for strategic, revenue building activities.
  • Improved customer service. Faster response times and better customer information is available to in-office and field workers through systematic work flow.
  • Increased cash flow. With the ability to invoice immediately after a job is completed rather than waiting for data to be entered, cash flow can be significantly improved.
  • Better quality of life for SMB managers. Reduced time required for worker management, administration and paperwork affords managers with more free time.

ROI Productivity Calculator

The productivity calculator determines the return that can be achieved using a mobile dispatch and job management solution. Significant cost savings such as data entry and dispatch improvements will not be included in this portion of the calculation since this will attempt to quantify “productivity improvements” only.

 

For this example, a food service company with 10 field workers and two back-office staff (handling job inquiries, job dispatch, data entry and customer billing) will be used. The field service team averages four jobs per day, 22 days per month. They are paid $25 per hour for a 40-hour work week. The average job is billed at $352, and direct costs are $211, providing a gross margin of $141.

 

JOB INFORMATION

On average, how many days does your mobile field service team work per month?

22

On average, how many jobs does your mobile service team complete per month?

880

What is your average revenue per job?

$352

What is your average direct cost per job (including direct labor and materials)?

$211

On average, how many non-billable hours are spent per day per mobile worker on items such as timesheets, paper error resolution, etc.?

.50

 

 

STAFF INFORMATION

How many mobile service workers do you have?

10

What is their hourly rate of pay?

$25

 

MOBILE BUSINESS SOLUTION INFORMATION*

Cellular phone/mobile device cost? (average cost; subject to actual device selection)

$99

Application cost per month/per worker

$19

Other add-on costs (i.e., VCAST Data Plan, additional packages)

$20

Ongoing cost/worker/month

$39

*For the purposes of this calculation, EService wireless job dispatch and management application, which runs on the Verizon Wireless Network, will be used.

 

PRODUCTIVITY IMPROVEMENT REPORT

Ongoing monthly cost of application

$390

Infield worker productivity improvement

$6,204

Office time/paperwork productivity improvement

$7,755

 

INVESTMENT SUMMARY (Per Month)

Savings Gained

$13,959

Ongoing Monthly Net Return on Investment

$13,569

% of Return Ongoing

3580%

Internal Rate of Return**

3477%

** The internal rate of return (IRR) is the return where the present value of the savings equals the present value of the costs associated with the implementation. IRR accounts for the ‘time-value’ of money. That is, $1 next year is not worth as much as $1 today.

 

Success Factors to Ensuring Maximum ROI

The ROI calculator shows that the ROI is there, and it can be substantial. But there are a few factors companies must keep in mind to ensure that they actually realize the maximum amount of ROI. To ensure the greatest ROI companies need to:

  • Review their work processes to ensure that they are using best practice job dispatch and management principles;
  • Devote senior management time and effort during setup and implementation;
  • Appoint a product champion to be responsible for “selling” the application internally to both back office and field staff;
  • Make field workers part of the process—to help them understand the benefits, particularly how it will benefit them.
  • Share the return—consider implementing a “productivity bonus” to reward revenue growth.

Mobile business solutions that provide wireless job dispatch and management for field force companies can mean significant gains to a company’s bottom line. They reduce paperwork, save time and improve management efficiencies. In a fast-moving technological age, mobile business solutions really do show you the money!

 

 

About the Author

Steve Davis is Chief Marketing Officer of ECONZ Wireless (www.econz.com), a leading developer of mobile business solutions for the small to medium-size business (SMB) market. ECONZ develops products that connect mobile workers with their office using cell phone–based in-field applications. ECONZ EService wireless job dispatch and management application is designed specifically to address mobile service business issues to return the greatest productivity and cost savings benefits. In his current role, Mr. Davis is responsible for the marketing function of ECONZ Wireless from strategic planning through to product promotion. Mr. Davis has spent five years in IT, including two years as marketing and strategy director for an Australian business incubator where he assisted over 130 companies to produce strategic plans for growth and raising capital. Prior to this, he served 14 years in the Royal New Zealand Navy as an engineer officer. Davis holds a Bachelor of Science degree in mechanical engineering from Auckland University and a Master of Business Administration degree with distinction from Griffith University.

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