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Cost-justifying a mobile FFA strategy

IT projects have to pass through a finance department to get off the ground.

The mobile field force automation (FFA) strategy that your team drafted would fit the business processes of your company perfectly. You're now ready to purchase handheld computers for the field staff and integrate the CRM and back office software with the devices. There's just one obstacle preventing the field staff from running out with the handhelds -- the CFO.

For as long as IT projects have existed, they have had to pass through a finance department to get off the ground. To get the funding, mobile projects should be treated as any other project and show the ability to increase revenue, profitability and productivity, according to Daniel Griffin, chief operating officer of San Francisco, Calif.-based MobileVillage LLC.

"Field force automation is re-engineering and automating business gain a competitive advantage in either cost reduction, productivity increase or service expansion," Griffin said.

For some companies, field service can even become a main revenue center, as opposed to its traditional role as a cost center, said Brian Jones, analyst at Boston-based Yankee Group and author of the "Field Service Enters the 21st Century" report.

Companies can increase their revenue by bidding for service contracts on their competitors' products in the field. Johnson Controls, a maker of building materials, air conditioning systems and lighting controls does just that, and their service operation makes money by servicing the parts from their competitors, he said.

In the end, justification will go back to cost -- the cost for resources, and the cost for not utilizing them, as in excess inventory and wasted time getting from one job site to another, Griffin said.

The basic costing covenants for bringing the mobility project to a CFO are to be honest, show both the upside and downside of the project in terms of costs and risks, maintain a professional distance from the project, stay focused on the business case and answer the tough questions, Griffin said. In fact, lead with the tough questions, he said.

Other types of justification for a mobile project include making it a cross-functional initiative, where other departments get involved. The mobile FFA project can also show a competitive advantage. For example, a mid-size package delivery company implemented a package tracking system, and after six months, gained 17% market share, Griffin said.

Customer demand can also be used as a justification. "Human nature says that the guy with a computer knows what's going on," Griffin said.

The return on investment (ROI) has a wide range. Griffin has seen anywhere from a 5% return to a 77% ROI. In terms of dollars, some companies have gained $117 for each single dollar spent, but these companies planned for the initiative thoroughly, through tertiary costs, he said.


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