Every Friday, we like to “poke the bear”, meaning that we take a subject and we try to work out the truth. And this week I think the Ruggedness ROI table needs a fresh look!
ROI or return on investment is simply a way business can measure the breakeven point that any investment in technology has in helping turn a profit. In the rugged mobile market, ROI has always been about advising customers that if they buy cheaper, consumer, non-durable devices then over a period of 3 or 5 years they will end up paying a lot more in repair and lost time costs that non-rugged devices will bring.
So pay more for a rugged device. Get fewer issues and over 3 or 5 years you’ll be quids in!
However, I have a problem with this model and I think it’s time we talked about a few of these.
Problem 1 – ROI in a modern world
If you don’t innovate in businesses today, you will not succeed. It’s a somewhat sad fact, that you have to constantly change, re-visit and re-align strategy to survive in business today. In my opinion, 5 year ROI models for smartphones is ridiculous. If we go back 5 years, then we’d all be using 3.5″ screen iPhones, Android had still not entered the rugged market and Windows Mobile was the only option. Are we saying that we have to face up to that if we want ROI from our rugged mobile devices?
To innovate you need new technology. This means in the mobile world that you need a model that gives you ROI over 1 or 2 years or even months. I think this ROI model is broken and it’s time we thought about ROI as an annual thing.
Problem 2 – The real cost of repairs
The cost of repairs is not factored into this model at all. Either you have to pay upfront for a 3 year TCO model or you are typically facing exorbitant repair fees with poor return times, the real impact of which is not reflected in this table.
Isn’t it about time that you should be able to buy cheap devices up front, not have to go for TCO support but also have cheap and quick repairs when things go wrong?
Problem 3 – Missing costs
There are also a lot of missing costs to having longer ROI not demonstrated in this model. Here’s just a few for you:
- Software applications are as expensive to be supported on older kit than they may be to update. Add to this, if you’re not updating your applications frequently then you’re not innovating. And if we aren’t doing that in our market then there will be someone who will be!
- Older kit actually does go wrong a lot more frequently. So whilst the overall model comes on the budget, it is still painful in years 4 and 5, where some issues can be frequent and also painful to your business.
- Rugged manufacturers talk about roadmaps and the cost of roadmaps. However, history has shown that they pull devices as quickly as any brand you can buy from. This completely breaks the model and actually creates a lot more rationale for having cheaper devices with shorter ROI.
- Lastly, this does not hold true a lot of the time. In our reseller past, we’ve had many customers who have paid a lot of money on rugged kit simply not get the best out of it. Likewise, we’ve seen many customers buying less expensive rugged kit and they have had no issues at all.
The moral of the story here is that there’s a lot more you can learn and a lot more you can do to help yourself!
Problem 4 – Upfront costs
In order to achieve this ROI, it seems you have to be in an exclusive club, called the “I can afford a £1000 per device up front” club. To me, that limits the members who can join this club or put in a better way it’s telling the majority of smaller customers that they can’t have this model without significant investment and in turn risk.
Why can’t you have the same model with a lower up-front cost device that also allows you to upgrade your technology easily and far more frequently?
If you’d like to read more on this subject, have a look at our guide to Improving TCO with Rugged Devices.