Tapping into the hidden value of mobile apps
According to an IBM Institute for Business Value (IBV) report (Return on mobile: Capturing the value beneath the surface), more people today have access to mobile devices than to banking services.1 In fact, the number of mobile devices (7.9 billion) exceeds the world’s population (7.35 billion.) Mobile computing, for most of the world populace, has become essential to everyday life.
And it has become indispensable to the way we do business. For example, more than 27 percent of global online transactions are conducted through mobile devices. By 2017, it is estimated that 30 percent of all travel sales in the United States will be generated through mobile devices. By 2021, the compound annual growth rate (CAGR) for total mobile data traffic is expected to increase to 45 percent.
Yet, the return on investment (ROI) for mobile applications currently accounts for only a fraction of what is possible. Like an iceberg—the small, visible tip hiding a veritable mountain of ice below the waterline—mobile has the potential for untold millions of dollars of untapped value. Today, some progressive mobile organizations are beginning to recognize the opportunities available and are moving aggressively to launch new platforms, products and services to take advantage.
However, even the most insightful companies often develop and release mobile offerings on an ad-hoc basis, instead of as part of highly coordinated strategic initiatives designed to foster consistent, long-term customer value and business growth.
Executives surveyed indicated that they currently dedicate at least 13 percent of their total technology spend to mobile initiatives and plan to increase that allocation to 15 percent in 2017. In addition to spend, they also reported they plan to grow the number of initiatives undertaken. The big spenders, which represent one-third of survey respondents, plan to spend at least $15 million USD on mobile initiatives next year. Also, 22 percent of companies plan to undertake ten or more mobile initiatives by 2017, while another half is planning between five and nine projects. Totaled, approximately 72 percent of the executives we interviewed plan a minimum of five initiatives over the next 12 months.
Beyond just planning for a greater number of mobile initiatives and investing more money in them, these executives said they look for payback periods of less than a year. In fact, 62 percent of executives indicated their most successful projects pay for themselves in fewer than 12 months, considerably faster than the two-to-three-year payback for typical technology projects.
Capturing and extending the value of your mobile applications
With such ambitious plans, investment commitments and ROI expectations, it becomes crucial to understand the obstacles that might stand in the way of successful implementation. Almost half of the executives we surveyed admitted their companies approach mobile initiatives in an ad-hoc manner.
Without strategic alignment with company value propositions and corporate objectives, many of these offerings become hit/miss endeavors and often fail to achieve the desired value. How, then, can organizations begin to explore differing product objectives, more integrated approaches and a focus on quality of user experience in order to impact the achievement of desired outcomes?