For two years now, I’ve been talking in this blog about the two main client populations of the IT systems of companies, the white collar workers and the FLW, Front Line Workers.
Universal white collar office automation tools have been massively deployed since the 1990s. Companies “naturally” invest in these white-collar workers without asking themselves the question of the profitability of this investment, which is considered essential for white collars to be able to work.
Conversely, every time I propose to a company to equip FLWs with universal digital tools, I get the question: what is the business case for this project?
In this post, I’ll compare the costs of providing universal digital tools for white collars and FLWs
A summary of the computer history of companies
How can we summarize the evolution of business computing since its first steps?
I have the ambition to do it in a few lines and two diagrams!
On this first diagram, I propose a matrix with four boxes:
- Structured uses and universal uses.
- White collars and FLWs.
The first segmentation is related to the nature of the applications:
- Structured uses correspond to complex processes, which follow strict rules, such as accounting, payroll or billing. Automating these structured processes has been the priority for companies, and it makes sense.
- Universal uses, not very structured, correspond to applications that everyone needs. For white-collar workers, these are office tools for writing, calculating, sending e-mail, managing their agenda…
The second dimension corresponds to the profile of the people:
- White Collar Workers
- Front Line Workers
I have analyzed the differences between these two populations in several posts on this blog:
- Digitization: after Office Workers, priority to FLWs, Frontline Workers
- After a computer for each white collar, a smartphone for each FLW (Front Line Worker)
- Digital Divides
The second diagram presents the calendar of the major dates of the computer science in these two dimensions, uses and population.
This diagram highlights some strong ideas:
- The equipment of the white-collar workers preceded that of the FLWs.
- Structured solutions were deployed before universal tools.
- It is the birth of new generations of access objects that accelerates these evolutions.
There are four key dates:
- 1960: arrival of the first universal computers such as the IBM 360 and the IBM 3270 screen terminals. They are used primarily for structured management applications.
- 1990: democratization of the first PCs and simultaneous arrival of office automation tools such as word processing and spreadsheets. Microsoft carries out a hold-up on this market with Windows and Office.
- 2010: the first smartphones appear in the professional world and innovative companies start to equip FLWs with structured applications. The announcement in 2007 by Steve Jobs of the first iPhone will remain a major date in the history of the digital world.
- 2020: democratization of smartphones throughout the world and emergence of the first universal applications for FLWs
The exponential acceleration of these developments is confirmed by the reduction of the gaps between these dates:
- 30 years between 1960 and 1990.
- 20 years between 1990 and 2010.
- 10 years between 2010 and 2020.
White collars: office automation costs
Preliminary remark: all calculations in this paragraph and the following one are based on reasonable average assumptions. Each company may use its own figures to calculate its costs using the same calculation model.
To simplify the calculations and to have figures that are as relevant as possible for as many companies as possible, I have made the following assumptions:
- All white collar workers have a PC and a smartphone.
- The lifespan of a PC is 5 years and of a smartphone 3 years.
- All white collar workers use a cloud office solution, Microsoft’s Office 365 or Google Workspace.
- The calculations are made in two situations, base case and high case.
- I only take into account direct costs. Indirect costs, such as training or support, are not included.
- Network costs, which vary greatly from one company to another and from one country to another, are not taken into account.
The result: the provision of office automation solutions for white-collar workers represents a direct monthly cost of between €61 and €115 per person.
FLWs: frontline automation costs
For FLWs, the assumptions are as follows:
- FLWs are equipped with a smartphone.
- The lifespan of a smartphone is 4 years. The fact that the majority of these smartphones are “rugged” models allows them to be kept longer.
- To guarantee security and facilitate management, all smartphones are equipped with EMM software, Enterprise Mobile Management.
- FLWs use a cloud-based front-end solution. I used WizyVision as an example.
- The calculations are made in two situations, base case and high case.
- I only take into account direct costs. Indirect costs, such as training or support, are not included.
- Network costs, which vary greatly from one company to another and from one country to another, are not taken into account.
The result: the provision of frontline solutions for FLWs represents a direct monthly cost of between €12 and €39 per person.
Comparison of office and frontline costs
This small table summarizing the key figures of the calculations made for white-collar office solutions and frontline solutions for FLWs gives an interesting result:
Office equipment for white collar workers costs between 3 and 5 times than the frontline equipment of FLWs.
This gap is widest when basic solutions are chosen, which is the most common situation in companies.
The paradox raised at the beginning of this text becomes even more surprising:
- Companies are equipping all white-collar workers with digital solutions without economic justification.
- The same companies demand economic justifications for equipping FLWs with digital solutions when the amounts involved are between 3 and 5 times lower!
Digital equipment for FLWs: main scenarios
You have decided to equip your field teams with frontline solutions: what are the budgets involved?
To make the calculations, I took for the costs the average between the basic assumption and the high-end assumption.
In this table, I propose three hypotheses about the initial situation:
- H1: Field teams are already equipped with a smartphone and structured applications. In this case, the additional cost is only that of the front-end application.
- H2: the FLWs are not equipped with smartphones and each employee receives an individual smartphone. The cost per person is for the complete solution, smartphone and front-end application.
- H3: FLWs are not equipped with smartphones and smartphones will be shared among several people. This will be the case in companies where work schedules require several people to occupy the same posts successively. The cost per person is that of the complete solution, divided by the number of employees sharing the smartphone. The chosen hypothesis is an average of one smartphone shared by three people.
Depending on the scenario, the cost per person to equip FLW with frontline solutions is between €8 and €25 per month.
Every company can now easily calculate the minimum profit it must obtain to justify this investment. The parameter often used for this calculation will be the time saved by the FLWs.
Summary
The objective of this analysis is to remove the financial alibi as an excuse for not deploying frontline solutions to the field.
Finding a quick return on frontline solutions is quite the easier part!
There are still more difficult barriers to break down before equipping FLWs with universal, frontline solutions becomes as “natural” as equipping white-collar workers with office automation tools.
This will be the topic of a future post.
