Mobile Systems Costs and Benefits

Mobile Systems Costs and Benefits

Jim Hargis
har*GIS LLC, Field Information Systems™
8093 S Oneida Ct. Centennial, CO 80112-3133
303-220-0253
E-Mail: jim@har-gis.com

Abstract
Barriers to implementing a mobile system include technology risks, lack of resources, and for many companies, Money. While most analysts agree that mobile/wireless 'strategic benefits' are compelling, there are few who can realistically estimate total costs and paybacks in the mobile environment. It turns out that mobile projects typically have much faster payback than projects like GIS. This is due to several features unique to mobile systems. This paper will present a simple to use cost/benefit methodology for analyzing the environment. The paper includes sample tables listing the complete range of project cost items and benefit items.

Introduction
The approach to this paper is to provide a realistic list of tangible project costs and benefits associated with a mobile system. Mobile Systems are unique from other projects in that the majority of the benefits depend on field productivity improvements rather than office. These systems include both field applications, and the office systems and data required to them. Traditional cost/benefit analysis often fails to recognize the unique differences of the mobile environment. Projects should support business needs, be accepted by user, and provide measurable benefits both to the user and the company. Studies of several mobile projects identify many that have paybacks of less than one year, even a few months. How realistic are these?

Corporate Objectives
A Mobile System project should support multiple company objectives, such as:

Operational Excellence: improve customer service and reduce costs of service.
Improve Field Productivity: reduce wasted time, eliminate bottlenecks, and improve communications.
Empower Workforce: with easy to use, quickly accepted, collaborative, and secure tools and information.
Timely and Accurate Information: integrate with enterprise network applications, real time communications, current facility status, and large amounts of dynamic geographic information.
Leverage Corporate Strengths: through data distribution and access, Location Based Services, GPS, Automated Vehicle Location, automated routing and seamless mapping.
Increase Profitability: timely deployment, lower development risks, leverage existing data, phased implementation, and re-usability multiple field applications.

Typical Field Applications
The project must provide certain applications to realize benefits. The following are important for many field applications.

Application/Feature	Benefits
Map Viewing: aerial photographs. satellite images, scanned drawings, CAD maps, and GIS maps.	High performance, compact data storage for large geographic areas. Maps for entire service territory are instantly available. Eliminate Paper. User defined custom maps, streets,equipment and facilities, at multiple scales. View maps anytime, anywhere, with or without communications coverage. Use underground and in rural areas. Current, accurate information
Field Notes and Map Sketch.	Crews can markup maps with notes, text, sketches, and pictures. Essential operating Information that is not in GIS or mapping. Provide accurate, timely updates to engineering, GIS and operations.
Wireless communications	Real-time, location-based status, messages, and query. Information available immediately. Reduces voice traffic. Provides dynamic information such as crew locations, incident reporting, equipment operating status, and job locations.
Messaging	Avoids dispatch bottlenecks. Provides guaranteed delivery, durable connections when there is intermittent wireless coverage. Better crew coordination and control. Compatible with most wireless services, Internet and digital radio.
Locate addresses and landmarks, points of interest. Perform street routing to multiple locations.	Crews can find unfamiliar locations less time wasted on routing, directions, driving instructions and trip planning. Automatically converts addresses to location. Remove paper index maps and listings.
Locate facilities by identifier	Quickly find facilities, eliminate paper lookups. Quickly locate network problems. Reduce time to repair.
Field Data Forms	Accurate field data entry, inventory, recording. Eliminate paper, office work.

Cost/Benefit Approach
The cost/benefit analysis seeks to determine all the incremental costs associated with implementing a field automaton project. The analysis must also identify the resulting operational savings. The following four steps can be used to perform a cost/benefit analysis.

Identify and estimate the costs for implementing the project.
Identify and estimate the baseline costs currently required for field operations.
Estimate benefits or savings to be realized by the project.
Calculate the resulting paybacks and cost/benefit ratios.

The following identifies each of these steps. Tables and spreadsheets for calculating the information are available from the author on request to jim@har-gis.com.

Project Implementation Costs
Project costs -- hardware, software, data, personnel, support -- vary greatly on the scope of the project, number users, applications. For instance, using a handheld computer instead of a laptop PC can cut hardware costs by factors of 2 to 3, providing the efficient software application exists. Usually, the data already exists, and the problem is to provide it to the field in a productive manner.

Mobile Systems Cost/Benefit

Table 1. Project Implementation Costs

Baseline Costs
The company incurs Baseline costs under existing conditions (pre-project). These costs occur if nothing is done. That is, the company spends some amount of money now that will be impacted by the project. Baseline costs identify the current required operating costs. These should include any anticipated growth or inflation. Although there can be many different activities, we focus on the field activities that most companies have information about.

Mobile Systems Cost/Benefit

Table 2. Baseline Operating Costs

Savings and Benefits
Savings are based on the field applications to be implemented. Tangible (measurable) benefits include reduced labor, increased productivity, and reduced vehicle costs per job. Obviously, other possible benefits could include avoided costs (not having to buy something), increased productivity, better customer service response, ability to support to crews operating in unfamiliar territory, and ability to perform office jobs more effectively in-field.

Mobile Systems Cost/Benefit

Table 3. Field Automation Savings

Payback Analysis
Tangible benefits are the difference between the operating costs “before automation” and “after automation”. Here we recommend allocating the costs and benefits annually and by mileage. The Annual costs reflect labor and materials savings. The Mileage costs reflect mobile equipment efficiencies. That is, reduced vehicle maintenance and more effective equipment utilization. Payback time is the number of months of savings needed to recover the investment. This also indicates a measure of risk, since longer implementations are more likely

Mobile Systems Cost/Benefit

Table 4. Payback Analysis

Conclusion
With the above approach, the user can undertake a cost/benefit to any desired level of detail.

However, we usually find that

A select set of field applications contributes the highest saving.
The largest cost tends to be software development
Technology is driving hardware costs much lower

If the project manager focuses on standard technologies, licensed software supporting multidisciplines, and high field usability, he can significantly reduce then project costs enhance benefits. A larger market can support the cost of development and support, so that “product buy” approaches can be much less expensive than “project build” approaches. On the other hand, vertical and custom applications specific to an industry can provide additional applications and integration. The above methodology can support both “buy” vs. “build” comparisons, as well as different implementation strategies.