The Hidden Costs Of Handhelds

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As handheld devices flood into corporate networks, a study released this week shows that each device is draining about $3,000 from a company’s IT budget every year.

A study by the Gartner Group, an analyst firm based in Stamford, Conn., shows that the total cost of ownership for a handheld device, such as a Palm Pilot, smart phone or Blackberry, is higher than that for a laptop. Phil Redman, a research director at Gartner, blames the higher PDA costs on a mixture of reasons, ranging from evaluation costs, administration, training and maintenance.

“If you think about $3,000 per device and multiply that out by a lot of individual users, it gets costly,” says Redman, who adds that the costs associated with handhelds will go up as the devices and the jobs they perform become more sophisticated. “Individual users are still buying a lot of the handheld technology. It’s still not a standard, like a mobile PC, so I don’t think a lot of people are looking at the overall cost…It’s important to evaluate what that actually means to the enterprise.”

Personal digital assistants (PDAs) are no longer just the geek’s favorite gadget. In an era when real-time information is the lifeblood of business, and everyone from the sales rep to the CEO is virtually useless unless they’re connected, the PDA is fast becoming a necessary tool for enterprise.

Millions of employees have rushed out and bought the latest PDAs. Some companies are joining the rush, buying and distributing them to employees, but that trend has been fairly slow to pick up speed in the corporate IT world. Souped up with wireless connections, increased power and enhanced Web capabilities, the devices are quickly becoming part of what analysts are calling a worker’s personal computer network — a seamless web of desktops, laptops, handhelds and smart phones.

Mike Riley, chief scientist for emerging technologies at R.R. Donnelley & Sons in Chicago, says many companies still are not distributing and officially supporting handheld devices. But that doesn’t mean the devices aren’t working their way into corporate networks. And it also doesn’t mean they’re not taking a toll — both on finances and workers’ time — in IT shops.

“They’re coming into the enterprise because they’re so available on the consumer end,” says Riley, who adds that his company supports some users’ PDAs. “Employees are fairly involved in purchasing them on their own accounts and using them for simple management tasks. That’s how they’re creeping into the enterprise.”

Gartner’s Redman says a lot of IT managers are caving in and maintaining employees’ PDAs, even if the company didn’t buy them, simply because it’s easier to deal with the device than with an employee freaking out that he’s lost the information he stored on one.

“If an individual spends a lot of time supporting his own device, he’s not doing his own work,” says Redman. “The smarter [IT managers] support them because of security…and so the employee can use it as a productivity tool and not just as a toy.”

Handheld Management Strategies Needed

Since handheld are creeping into the enterprise — officially invited or not — industry watchers say IT managers need to think about how the devices affect their workers’ time, their budgets and their training.

“They need a strategy around managing those devices,” says Riley, who notes that he thinks Gartner’s cost estimate is on the high side. “It’s hard to escape the fact that a lot of folks are saying that in the future this is where a lot of data will reside and where data will be interacted with. Progressive companies should think of them as part of their enterprise and plan them into their budgets. They’re now part of the network.”

David Kerr, vice president of wireless practice at Boston-based Strategy Analytics Inc., says he too thinks Gartner’s estimate is high, but that PDAs are a costly venture for companies right now because the technology is just ramping up when it comes to the enterprise. He adds that today handhelds incur high support costs, along with costs associated with linking them in with legacy systems, new application development and increased security.

“The average PDA this year is only running around $240,” says Kerr. “That’s not where you’re getting hit. The real issues come down to linking it in, corporate scheduling, inventorying them, and making sure the security aspects are covered…IT people have very little time available. It’s a labor cost and a resource drain more than a dollar cost.”

One thing that will lower the total cost of ownership for IT shops is to provide IT workers with the training to support them, according to Kerr.

“I think support for PDAs is really being handled on the second page of priorities for IT managers, and their knowledge base is quite limited at this point,” he says. “There needs to be training, particularly in terms of synchronization and security. The actual upfront time will have to be spent on training and to approve devices and applications — to keep tight control on what will be allowed into the network.”