Integrated plan keeps costs down

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If building a Wi-Fi network involved no more than buying a few base stations and handheld devices for the office it would be a relatively inexpensive and simple business.

The benefits of implementing a mobility strategy are often so compelling that little attention is often given to the costs of building a network. Charles Pangrazi, head of telecommunications, media and utilities at Atos Consulting, suggests the cost of internal Wi-Fi can be justified on the cost saving of moves and changes. “It is not quite free,” he says, “but it is not worth the labour to do a business case.”

Nevertheless, experience shows that a piecemeal approach to mobility can have a negative return on investment. Only by drawing up an integrated mobility strategy can costs be contained and benefits delivered.

“A lot of people are getting seduced by the low cost of wireless access points,” warns Garry Metcalf, a principal analyst at Analysys Mason Group. “The technologies are very forgiving and the ‘Lego’ concept allows you to add end stations very easily, like the early days of Ethernet. What they don’t realise is that they can add one more base station and the whole thing could fall over and they cannot manage and support it. We have seen companies forced to completely disassemble an undocumented wireless Lan (local area network) and rebuild it from scratch.”

Mr Pangrazi recommends setting up a project to determine an overall mobility strategy that will identify demand and benefits, survey individual users’ needs, draw up a business case, conduct a trial and prepare a summary to justify full roll-out.

The cost of installing a local network to cover 3G, Wi-Fi and other mobile technologies - with some regional variation - would be between $145,000 and $275,000.

The overall cost of the strategy itself includes devices such as laptops, personal digital assistants (PDAs), data cards and smartphones; back-end server hardware and software, including security and authentication: and services costs, including integration, training support staff and users and providing ongoing support.

By their very nature, mobile devices must be managed remotely, requiring very specific management software and IT skills. Brent Nixon, director for wireless at 3Com, a wireless Lan vendor since 1994, says management tools cost between $3,000 and $15,000, with a three day training course costing another $1,500.

Mr Metcalf warns that a significant hidden cost is a wireless survey, to ensure that there are enough access points to provide adequate coverage and sufficient bandwidth. It must also ensure that signals are not leaking out of the building.

“The modern office environment has a lot of equipment and furniture, such as metallic partitioning, blinds and filing cabinets, that can screen signals,” he says. “You have to get a team of engineers on the ground with special equipment to survey it.”

Mr Nixon explains that each access point can support between 10 and 20 users, so between five and 10 are needed to support 100 users. A 10 point package costs $10,000 at list price, including a switch and configuration software.

Systems integrations for an overall mobility strategy is labour intensive, especially making sure that it is available on all the different devices that have proliferated, securing them and integrating them with different applications.

Chris Bray, wireless solutions executive for IBM, adds that the most difficult aspect is implementing the process changes that are essential to getting the return on investment.

“Over the last three years internal resources have either been stripped almost to the bare bones or outsourced,” warns Ragu Gurumurthy, head of technology practice at Adventis, a management consultancy. “For a medium-sized company with 500 employees, external systems integration costs could be $1-1.5m, out of a total project cost of $1.5-2m.”

According to Greg Jenko, global practice leader for enterprise mobility at Accenture Systems, most clients initially home in on device costs. These could be as high as 50 per cent of the total solution for a ruggedised laptop for a field service solution, whereas a white collar device such as a BlackBerry, Palm, Pocket PC or smartphone could be only 30 per cent.

He warns that heavy user training costs, which will vary with the application and the sophistication level of the end users, can be hidden. Half a day’s training is normal and it could be several days if there is a mismatch between the application and the sophistication of the current user base.

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