Mobility for the SMB March 2008 Mobility for the SMB Page 2 © 2007 Aberdeen Group. Telephone: 617 723 7890 Executive Summary Research Benchmark Aberdeen’s Research Benchmarks provide an in- depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations Aberdeen’s research shows that while enterprise mobility has made significant inroads in organizations and more importantly, is having a measurable impact on the productivity of an organization’s workforce, there is still much room for growth and maturation in the SMB space. Best-in- Class (BIC) SMBs are leveraging their mobility solutions as an integrated part of their overall business strategy. The findings are drawn from an October / November 2007 survey of almost 300 organizations. Best-in-Class Performance Aberdeen used three key performance criteria to distinguish Best-in-Class SMBs from all other organizations. These Key Performance Indicators (KPIs) are some of the operational metrics that are fundamental to defining workforce productivity: • 58% increase in employee responsiveness to others – 27% better than the Industry Average • 53% increase in an employee’s ability to gain knowledge / data from others – 54% better than all other organizations • 63% increase in the flexibility of the workforce – 36% better than the Industry Average Competitive Maturity Assessment Survey results show that Best-in-Class SMBs shared several common characteristics: • Best-in-Class SMBs are 47% more likely than Laggards to have IT staff in place to test new mobility initiatives • Best-in-Class SMBs are 26% more likely than all other SMBs to have help desk staff trained on mobility solutions • Best-in-Class SMBs are 41% more likely than Laggards to monitor their mobility policies Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: • Standardize mobile device options • Secure mobile devices and their content • Develop processes to evaluate new mobility initiatives www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 3 © 2007 Aberdeen Group. Telephone: 617 723 7890 www.aberdeen.com Fax: 617 723 7897 Table of Contents Executive Summary 2 Best-in-Class Performance 2 Competitive Maturity Assessment 2 Required Actions 2 Chapter One: Benchmarking the Best-in-Class 4 SMB and Enterprise Mobility Are Not The Same 4 The Maturity Class Framework 5 The Best-in-Class PACE Model 6 The Returns from Best-in-Class Performance 6 Mobility is Driven by its Underlying Components 7 Chapter Two: Benchmarking Requirements for Success 9 Competitive Assessment 9 Capabilities and Enablers 11 Chapter Three: Required Actions 13 Laggard Steps to Success 14 Industry Average Steps to Success 14 Best-in-Class Steps to Success 14 Appendix A: Research Methodology 16 Appendix B: Related Aberdeen Research 18 Figures Figure 1: Key Pressures Driving SMBs to Leverage Mobile Solutions 4 Figure 2: Investing in Mobility Impacts the Top and Bottom Lines 6 Figure 3: Best-in-Class Actions for SMBs to Improve the Mobility of Their Workforces 7 Figure 4: Top 5 Deployed Mobile Applications 12 Figure 5: Top Key Performance Indicators for SMB Mobility 13 Tables Table 1: Companies with Top Performance Earn Best-in-Class Status 5 Table 2: The Best-in-Class PACE Framework 6 Table 3: Key Considerations within a Mobile Strategy 7 Table 4: The Competitive Framework 10 Table 5: The PACE Framework Key 17 Table 6: The Competitive Framework Key 17 Table 7: The Relationship Between PACE and the Competitive Framework 17 Mobility for the SMB Page 4 © 2007 Aberdeen Group. Telephone: 617 723 7890 Chapter One: Benchmarking the Best-in-Class SMB and Enterprise Mobility Are Not The Same Fast Facts √ On average, SMBs state that 46% of their workforce is considered mobile √ 96% of SMBs believe that smartphones have improved the performance of their workforce √ 66% of SMBs have increased the proportion of their IT budgets spent on mobility over the last two years Aberdeen's November 2007 study, The 2008 Enterprise Mobility Benchmark Report, showed that the number one reason organizations were developing a mobility strategy was to manage an increasingly decentralized workforce. This was in contrast with the research Aberdeen had conducted 12 months earlier that found the number one driver was the need to respond to customer needs more quickly. While SMBs share the same #1 pressure as do enterprises, it is interesting to note the differences Small and Medium Business (SMB) face as compared to enterprise organizations. Specifically, while one in three organizations in the November 2007 study stated that reducing operational costs was a key driver, Aberdeen’s data shows that SMBs vary greatly in terms of how they prioritize reducing operational costs. The smallest organizations, those under $50 million, are some of the most costs conscious organizations in the market, ensuring that every expense is not only justified but optimized, as they strive to make the jump to their next financial milestone (Figure 1). Figure 1: Key Pressures Driving SMBs to Leverage Mobile Solutions 21% 48% 31% 15% 38% 19% 47% 35% 30% 23% 13% 58% 38% 15% 21% 0% 10% 20% 30% 40% 50% 60% 70% Competition for new customers Manage a decentralized workforce Increased number of remote workers Geographic expansion of customer base Reduce operational costs % of Respondents $0 - 50m $50 - 100m $100 - 250m Source: Aberdeen Group, March 2008 The data also shows an interesting difference between the three tiers of SMBs in terms of how they rank the importance of “competition for new customers.” Specifically, it is worth noting how much more important the geographic expansion of the customer base is to organizations with $50 – 100m in revenues versus the other two SMB groups. Often, organizations that have reached $50 – 100 million in revenues are in the interesting position where the addressable local or national customer base may be www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 5 © 2007 Aberdeen Group. Telephone: 617 723 7890 Fast Facts √ 80% of Best-in-Class SMBs either already have in place or plan to implement policies to standardize their employees’ mobile device options √ 61% of Best-in-Class SMBs have a mobility “guru” on staff √ 72% of Best-in-Class SMBs are using or have budgeted for 3G wireless data cards maturing to the point where higher growth rates can only come from (inter)national expansion. The increasingly geographically diverse customer base inevitably requires one’s workforce to travel greater distances more frequently, meaning they will be away from their offices (and the data that can most easily be accessed from those offices) for greater periods of time. This increased travel drives an even greater need to ensure that employees can access data anytime and anywhere. That connectivity – particularly when facing international roaming charges - can significantly increase the costs of doing business. The Maturity Class Framework The value of any solution – let alone a mobile solution – must be tied to the quantifiable results it can deliver to an organization. While there are pockets of tangible and measurable value in enterprise mobility (e.g.: time savings from the adoption of mobile field service solutions), it is far more difficult to develop a meaningful ROI for more widespread horizontal mobility solutions such as mobile email. Aberdeen used three key performance criteria to distinguish Best-in-Class organizations from Industry Average and Laggard organizations. These KPIs are some of the time- sensitive operational metrics most frequently touted as key factors in measuring an organization’s (and its employees’) effectiveness and productivity: (1) responsiveness to others; (2) ability to gain knowledge / data from others; and (3) the overall flexibility of an organization’s workforce. Table 1 summarizes Aberdeen’s findings and defines Best-in- Class performance for this study. Table 1: Companies with Top Performance Earn Best-in-Class Status Definition of Maturity Class Mean Class Performance Best-in-Class: Top 20% of aggregate performance scorers ̇ 58% increase in employee responsiveness to others ̇ 53% increase in an employee’s ability to gain knowledge /data from others ̇ 63% increase in the flexibility of the workforce Industry Average: Middle 50% of aggregate performance scorers ̇ 46% increase in employee responsiveness to others ̇ 41% increase in an employee’s ability to gain knowledge /data from others ̇ 47% increase in the flexibility of the workforce Laggard: Bottom 30% of aggregate performance scorers ̇ 19% increase in employee responsiveness to others ̇ 18% increase in an employee’s ability to gain knowledge /data from others ̇ 23% increase in the flexibility of the workforce Source: Aberdeen Group, March 2008 www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 6 © 2007 Aberdeen Group. Telephone: 617 723 7890 The Best-in-Class PACE Model Using applications and technologies to drive enhanced workforce productivity and further enterprise mobility to ultimately achieve the Best- in-Class performance in Table 1 requires a combination of strategic actions, organizational capabilities, and enabling technologies (Table 2). Table 2: The Best-in-Class PACE Framework Pressure Actions Capabilities Enablers ̇ Managing a decentralized workforce ̇ Streamline business processes ̇ Develop systems for global access to information ̇ Policies for appropriate use of devices ̇ Policies for appropriate use of wireless data services ̇ Procedural controls in regards to enterprise mobility (Sarbanes Oxley, etc.) ̇ Processes to evaluate new mobility projects ̇ Mobile VPNs ̇ Mobile VoIP ̇ Wireless data cards / 3G plans ̇ WiFi enabled smart-phones ̇ Mobile PBX integration ̇ Mobile IM / collaboration Source: Aberdeen Group, March 2008 The Returns from Best-in-Class Performance Figure 2 shows how a policy driven strategy for mobility for SMBs directed at enhancing workforce productivity can provide tremendous benefits to an organization. Best-in-Class SMBs invested, on average, almost 65% more than all other SMBs invested on mobile solutions. That upfront investment has paid off handsomely over the last 12 months. In fact, the larger investments in mobility translated into a 222% relative increase in top line revenue and in the overall profitability of the organization. "We really haven't gone into it but considerations are underway though the later part of the year as we streamline our operations from Thailand, Malaysia and Singapore." ~ Business Process Manager, Asia/Pacific transportation company Figure 2: Investing in Mobility Impacts the Top and Bottom Lines 9% 9% 7% 29% 29% 11% 0% 5% 10% 15% 20% 25% 30% 35% Increase in profitability over last 12 months Increase in revenues over last 12 months % of company wide budget spent on mobility All Others Best-in-Class SMBs Source: Aberdeen Group, March 2008 To achieve that performance, the Best-in-Class actions in Table 2 show that top performing SMBs place the most emphasis on leveraging their technology enablers as a means to provide global access to information (i.e. provide the mobile workforce the information they need when they need it) www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 7 © 2007 Aberdeen Group. Telephone: 617 723 7890 to enhance that productivity. Figure 3 illustrates how Best-in-Class SMBs strategically approach the challenges illustrated in Figure 1. Figure 3: Best-in-Class Actions for SMBs to Improve the Mobility of Their Workforces 31% 31% 35% 35% 39% 0% 10% 20% 30% 40% 50% Increase workforce collaboration Create a borderless office Deliver prompt customer service Streamline business processes Provide global access to information % of Best-in-Class SMBs Source: Aberdeen Group, March 2008 Mobility is Driven by its Underlying Components While taking the most appropriate actions is key to any successful strategy, the old adage that “the devil is in the details” holds particularly true in mobility. Aberdeen surveyed SMBs not only on the maturity of their mobile initiatives, but also on the scope of their initiatives– specifically looking at the factors they included in their mobility strategy. A complete mobile strategy must cover a broad set of factors, including: back-office hardware / software, end-user devices / platforms, and appropriate usage and procurement / payment policies. Table 3: Key Considerations within a Mobile Strategy Best-in- Class SMBs All Other SMBs Back-office mobility hardware 65% 52% Back-office mobility applications 64% 55% End-user devices 84% 77% End-user mobility platforms 69% 60% End-user applications 69% 64% Security policies for enterprise mobility 72% 51% Security for devices 61% 50% Security for content on devices 55% 33% Solution interoperability 48% 25% "We are still struggling with the performance of the applications we are using on our devices. We need to review what applications are being deployed and who should be required to use them vs. who can use them optionally." ~ Senior Executive, US High Tech company www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 8 © 2007 Aberdeen Group. Telephone: 617 723 7890 Best-in- All Other www.aberdeen.com Fax: 617 723 7897 Class SMBs SMBs Wireless expense management 49% 31% Wireless device management 53% 40% Carrier selection 65% 53% Source: Aberdeen Group, March 2008 What the above table highlights is that SMB mobility must be driven by both a top down (i.e., proper strategic planning) and a bottom up approach (i.e., proper tactical execution). Mobility is in fact, less about the devices that are being used (although that certainly is an important component of the equation), and more about how those devices are being used, managed, secured and paid for. Aberdeen Insights - Strategy SMBs need to take a holistic approach to mobility and understand the importance of a complete strategic vision and total visibility around their mobile initiatives, whether it be regarding devices, applications, security, or even the carriers selected. The fact that Best-in-Class organizations consider more facets of mobility in their mobility strategy is directly linked to the fact that as mobility becomes strategic to an organization, more senior executives are involved in the decision making process at Best-in- Class organizations. However, because they may not be able to have a mobility “guru” on staff, CEOs at Best-in-Class SMBs are actively involved in their organization’s mobility initiatives. Specifically, Aberdeen’s research found that 55% of the CEOs at Best-in-Class SMBs are spearheading the mobility initiatives at their organizations. "Currently we only really use mobile email but we use it a lot. We are now exploring what other applications we should mobilize." ~ CIO, European Software Manufacture r In the next chapter, we will see what the top performers are doing to achieve these gains. Mobility for the SMB Page 9 © 2007 Aberdeen Group. Telephone: 617 723 7890 Chapter Two: Benchmarking Requirements for Success Fast Facts √ 63% of Best-in-Class SMBs currently use or plan to implement remote over-the- air backup systems √ Best-in-Class SMBs are 50% more likely than Laggards to leverage over-the-air updates for devices and applications √ 69% of Best-in-Class SMBs currently use or plan to implement remote device maintenance systems The selection of mobility solutions and their integration with business intelligence and business process management systems plays a crucial role in the ability to efficiently apply these strategies, resulting in increased productivity and profitability. Case Study – MS Walker Take, for example, MS Walker (MSW), a Massachusetts based, 4 th generation family-owned wine and spirits wholesaler/distributor operating in 29 states across the country. One of the largest distributors in the area, MSW distributed over three million cases of wines and spirits in 2007. MSW began its mobility initiatives in 2002 when it started providing mobile solutions including VPN and web access to email to its employees. Later that year, it began deploying smartphones and PDAs in response to its sales force’s need for more effective and time sensitive sales tools. MSW deployed handheld devices that had a SFA application to access information regarding product inventory, pricing and client sales history. These devices, combined with a wireless data card, allowed the sales force to perform real-time order entries, thereby speeding up the entire order generation and delivery process. As the cost of wireless data services declined, MSW chose to streamline its mobility strategy by combining the functionality of the PDA and mobile phones onto one device. With that newfound technology, MSW was able to provide its workforce with push email services, as well as the SFA application with extended business intelligence functionality. The mobilization of any process is predicated on a case by case business analysis where MSW’s CIO, Michael Saitow, works with the line of business managers to determine how the technology can best impact the business process in question. “We look at the individual pain points and put a value to those specific returns,” says Saitow. Although a major challenge for Saitow is that his industry is not a strong adopter of technology, he remains confident of the benefits mobility has brought to his organization and is now examining how to mobilize processes such as invoice processing. “We’re at the tail end of crossing the chasm,” concludes Saitow. Competitive Assessment The aggregated performance of surveyed companies determined whether they ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (policies for appropriate use of devices and processes to evaluate new mobility projects); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (documenting mobility implementations and staff training on www.aberdeen.com Fax: 617 723 7897 Mobility for the SMB Page 10 © 2007 Aberdeen Group. Telephone: 617 723 7890 the applications); (4) technology (the selection of appropriate tools and intelligent deployment of those tools); and (5) performance management (the ability of the organization to measure the benefits of technology deployment and use the results to improve key processes further). These characteristics (identified in Table 4) serve as a guideline for best practices, and correlate directly with Best-in-Class performance. Table 4: The Competitive Framework Best-in-Class Average Laggards Policies for appropriate use of wireless data services 66% 59% 48% Procedural controls in regards to enterprise mobility Process 26% 21% 16% IT staff to test new mobility initiatives 69% 60% 47% Cross-functional (non-IT) teams to evaluate new mobility initiatives Organization 31% 26% 15% Help desk staff trained on mobility 49% 40% 37% Staff training programs for mobile applications Knowledge 44% 33% 25% Enterprise mobility technology currently in use: Technology ̇ 53% mobile VPN / VPN for mobile devices ̇ 53% WiFi enabled smartphones ̇ 39% antivirus software for mobile devices ̇ 47% mobile VPN / VPN for mobile devices ̇ 44% WiFi enabled smartphones ̇ 27% antivirus software for mobile devices ̇ 45% mobile VPN / VPN for mobile devices ̇ 38% WiFi enabled smartphones ̇ 18% antivirus software for mobile devices Measurement of the impact of mobility solutions: Performance ̇ 79% monitored the progress of their mobility initiatives ̇ 85% monitored the performance of their mobile applications ̇ 68% monitored the progress of their mobility initiatives ̇ 68% monitored the performance of their mobile applications ̇ 53% monitored the progress of their mobility initiatives ̇ 57% monitored the performance of their mobile applications "Remote access capabilities blur the landscape. For a small business such as ours, the mix of smartphones for mail/collaboration, and remote access means we can be productive no matter where we are in the country." ~ Senior Executive, US based publishing company "Mobility has at times caused headaches for us, especially when there was a virus on a device, but we are doing ok with it now." ~ Senior Executive, North American IT company Source: Aberdeen Group, March 2008 www.aberdeen.com Fax: 617 723 7897 [...]... overall progress of their mobility initiatives In fact, almost one in three Best-in-Class SMBs reviews the progress of their mobility initiatives on a quarterly basis These organizations understand that as mobility takes on an increasingly strategic role within their organizations that they can not simply let the projects run their course Application performance and the value it provides to the end users... 7897 Mobility for the SMB Page 13 Chapter Three: Required Actions Best-in-Class SMBs’ adoption of mobile solutions is driven by the need to 1) manage a decentralized workforce, 2) manage an increasing number of remote workers, and 3) reduce operational costs The greatest challenge for organizations is to ensure they are deploying the most appropriate mobility solutions to the right people within the. .. 5: Top Key Performance Indicators for SMB Mobility Improvements in workforce flexibility Fast Facts 58% of SMBs indicated that the selection and purchase of smartphones is managed by the IT department 66% of Best-in-Class SMBs have policies for the appropriate use of wireless data services 66% of Best-in-Class SMBs believe the performance of their mobile applications has improved in the last two years... study have more formal policies governing the appropriate use of mobile devices and applications, as well as having more formal policies in place around the procedural controls for industry regulations such as Sarbanes-Oxley or HIPAA compliance The importance of having these policies in place around governance is that they play a critical role in a better understanding within the SMB of the business processes... of Industry Average SMBs secure their mobile devices and the content on those devices, respectively The security of the devices and their content is of paramount importance as these tools will with increasing frequency carry critically sensitive information The security of these devices must encompass tools to ensure that even when data is transmitted over the air that the content is secured through... department (assuming the department is more than one person), as well as a need (or lack thereof) for many of the applications that are generally considered “enterprise” applications including ERP and HR systems That said, SMBs can and should be leveraging their management teams, particularly the CEO for the smallest of organizations, to determine how the technologies can drive value within their organizations... solutions, these organizations should look at how those technology vendors are mobilizing their solutions Mobility is not just for the enterprise but can also provide tremendous value to the SMB © 2007 Aberdeen Group www.aberdeen.com Telephone: 617 723 7890 Fax: 617 723 7897 Mobility for the SMB Page 16 Appendix A: Research Methodology In October and November 2007, Aberdeen examined the use, the experiences,... COO North American Financial Company Organization While having the right business processes in place for how mobility can impact an SMB is critical, having the right staff in place is of equal importance However, the staff for these kinds of initiatives must include both IT and non-IT professionals because of the impact that an unsuccessful mobility initiative can have on a SMB Specifically, Best-in-Class.. .Mobility for the SMB Page 11 Capabilities and Enablers The essential ingredients of successfully deploying and reaping the benefits of a mobile solution that can increase the productivity of an organization’s workforce include process, organization, and technology enablers that come together to form a working solution that translates to more effective and profitable working environments for organizations... evaluate new mobility initiatives While all organizations should have formal policies and processes to evaluate any new initiatives, technological or otherwise, SMBs with their limited resources must be even more diligent than larger organizations There is no room for missteps Currently only 40% of Best-in-Class SMBs have formal policies and procedures in place for evaluating new mobility initiatives These . software for mobile devices Measurement of the impact of mobility solutions: Performance ̇ 79% monitored the progress of their mobility initiatives ̇ 85% monitored the performance of their. applications ̇ 68% monitored the progress of their mobility initiatives ̇ 68% monitored the performance of their mobile applications ̇ 53% monitored the progress of their mobility initiatives. 57% monitored the performance of their mobile applications "Remote access capabilities blur the landscape. For a small business such as ours, the mix of smartphones for mail/collaboration,