The document discusses creating a strong business case for developing a mobile application. It emphasizes the importance of determining development costs, operational costs, and calculating benefits, cost savings, and return on investment. For development costs, it highlights estimating costs for staffing, testing, and integration. Operational costs include promotion, licensing, infrastructure, cloud services, support/training, and updates. Calculating benefits could include improving customer loyalty, tapping new revenue streams, reaching key demographics, and enhancing customer service. The document provides guidance on estimating these various factors to build a comprehensive business case.

1. The Essential Guide to Becoming A
MOBILE app
rock star
Part 2:
Creating a mobile
application business case

2. Introduction
Mobile devices and technologies are driving the most sweeping changes in marketing
and customer engagement since the Internet. Mobile apps make it possible to reach
customers and prospects like never before – reaching key demographics, building
un-dreamed of levels of intimacy, driving personalized offers that increase loyalty and
generate revenue, and dramatically cutting costs, as compared with old media and
paper based solutions. Mobile makes marketing more exciting – and effective – than
ever before.
But before you can leverage mobile apps to connect with your key audiences, you
need to build an effective business case to unlock funding and garner the support you
need to make it happen. Knowing how to create and evaluate mobile app business
cases will also help you to evaluate multiple mobile opportunities and pursue the ones
with the most promise.
This 3 part “Rock Star” series will guide you through:
1 Developing an actionable mobile application strategy
2 Creating a mobile application business case
3 Choosing the right Mobile Enterprise Application Platform (MEAP) partner
80%
of tablet and smartphone
users time is spent in
mobile apps
Source: Flurry Five-Year Report:
It’s an App World. The Web Just Lives in It
The essential guide to becoming a mobile app rock star (Part 2)
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3. Creating a strong
mobile app business case
It’s tempting to dive head-first into mobile app development especially
when you read, daily, about other organizations that use them to reach
key demographics, increase sales and loyalty, transform business
operations, enhance productivity, and improve customer satisfaction.
But it’s important to take the time to define a proper business case to
prioritize projects, get buy in, and measure success.
But building your business case is no easy task! Some cost and revenue
models for application development are well-understood for web apps,
but the development and operational costs for mobile apps can be very
different.
“Instead of buying tiny
banner advertisements,
marketers should create
apps that add value to
consumers’ lives and
enhance long-term
engagement with their
brands.”
Source: Sunil Gupta - Head of the marketing unit at
Harvard Business School
Reasons that Mobile Device Users Worldwide Use
Branded Mobile Apps
% of respondents
Keep informed about the brand, product, store or company
Get discounts and coupons
43%
41%
Easier and quicker than going to their site or social media page
38%
They have tools that help me
35%
They have fun, interesting and cool content
27%
Participate in their contests
20%
Offer opinion and suggestions
18%
They make me feel connected to the brand, product, store or company
17%
None of these
9%
Source: Ipsos OTX and Ipsos Global @dvisor, “Socialogue,” July 23, 2013
The essential guide to becoming a mobile app rock star (Part 2)
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4. Inspired by the ancient Project Management proverb - “How do
you eat an elephant? One bite at a time” – this paper offers a
discussion of how to create a strong mobile app business case
by breaking down the work into 3 bite-sized pieces:
Determine Development Costs
1
After completing this process at your business, you’ll will have a
better idea of how to set appropriate budgets, know where best
to direct investment, and you’ll understand how to assess the
potential revenue, cost savings and intangible benefits derived
from mobile applications.
Determine Operational Costs
2
Calculate Benefits, Cost Savings and ROI
3
operational Costs
Promotion
Licensing
Infrastructure
Cloud
Support & Training
Updates
Development
Costs
Staffing
Testing
Integration
The essential guide to becoming a mobile app rock star (Part 2)
benefits
Improve Customer Loyalty
Tap New Revenue Streams
Reach Key Demographics
Enhance Customer Service
Increase Efficiency & Effectiveness
3

5. 1
Development Costs
Staffing
The staff and skills you’ll need include:
App development for each platform
User experience design
Visual design
Backend/middleware development
Project management
If you have some or all of these resources internally and would prefer to run the project
in-house, we recommend that you consult with mobile development specialists to assist
in designing the service concept. This will help minimize the overall risk of the project.
This is likely to raise the cost in the short-term, but with the rapid evolution of mobile
application development platforms, technology and capabilities, you’ll want to ensure
that your team has the most up-to-date knowledge/recommendations/ideas from a
team of professionals who live and breathe mobile.
Testing
Consider:
Do you have the capabilities in-house to test all platforms or will you need
to outsource?
Estimate approximately 50% of the overall cost of development for QA
What about devices? You’ll enhance the overall quality of the app by testing
frequently on actual devices rather than emulators
The essential guide to becoming a mobile app rock star (Part 2)
Development
Costs
Staffing
Testing
Integration
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6. Testing is often under prioritized in development projects, but the reality is that
mobile testing remains a complex, multifaceted activity. Take it seriously because
users will not adopt a buggy app! That being said, we recommend limiting
deployment to certain approved devices to reduce the scale of testing required.
Integration
What is the cost of integrating with your existing IT Systems if there are no
web services available today?
Would it be worth investing in middleware that exposes your legacy services
to mobile? This way you can build a future-proof solution that scales and is
cheaper to maintain.
Do you have costs associated with opening and securing back-end systems?
These could be amortized as part of a general move to multichannel delivery.
Is there a need for containerization or virtual private network solutions for
private connectivity?
The lack of suitable integration points is one of the most common issues
encountered in mobile development. Don’t take it lightly. Allow sufficient lead
time or budget to consult with mobile API specialist to help you design the best
architecture for your applications.
The essential guide to becoming a mobile app rock star (Part 2)
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7. 2
Operational Costs
In the excitement to develop a compelling mobile app, it’s easy to overlook the
ongoing operational costs of running, maintaining and improving your app over time,
and supporting the customers who will use the app and the personnel who will support
it. As you create your business case, don’t forget to do as complete a job as you can
considering the costs of operation, not just development.
Promotion
One necessary investment that’s often overlooked is the cost of promoting your new
app. If you’re going to invest in building a great app, make sure you do what it takes to
get your customers to use the app. Certainly, you can leverage existing communication
channels to reach existing customers, but you’ll still need to develop content, offers,
and promotions to drive awareness and adoption. You may also want to consider
additional programs and media channels to drive adoption among your customers and
prospects. We’ve seen some really exciting, cutting edge apps languish because clients
failed to consider the importance of promotion. Assuming that “If you build it, they will
come.” Is a big mistake.
Licensing
If your app makes use of third-party software apps, or integrates with back-end
systems, you’ll need to find out whether there are licensing costs to factor into your
plan. While you’re at it, see if there any volume-based licensing fees to consider (CRM,
Document Repository, MDM, MAM, etc.)?
Infrastructure
How many users do you expect to support? If your app ties in with back-end systems –
for customer support, or m-commerce, for example – will back-end systems need to be
upgraded to handle the increased load?
Make sure to consider these and any other potential impacts that deploying an app can
have on your existing infrastructure. Consider the costs of upgrading bandwidth and
equipment if you want to ensure quality service for your users.
The essential guide to becoming a mobile app rock star (Part 2)
operational
Costs
Promotion
Licensing
Infrastructure
Cloud
Support & Training
Updates
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8. Cloud
Will you be using cloud services for your app middleware?
You’ll need to estimate use and associated costs.
Support & Training
Will you need to pay for training courses on new systems for your internal support staff?
By how much will you have to increase the head count?
What about end-user support? Do you need to have helpdesk personnel standing by to field
user questions about the app or about the products and services your app will be promoting?
Will you offer support 24 x 7? As the range of supported systems and devices expands, so
does the need for support staff and training. There are companies that you can outsource this
to, but at the very least you must consider the cost associated with growing your team’s size
and knowledge.
Updates
No matter what, if it’s an app, it will need to be updated. In development, you’ll probably
decide some features will have to wait till Version 1.1, or Version 2.0. How frequently will you
update your app? Point releases? Major upgrades?
You’ll want to provide users with a way to ask for enhancements. How will you support
enhancement requests and bug reports?
What about security updates?
Don’t pretend it’s not going to happen. How much will each update cost to develop,
test and deploy?
The essential guide to becoming a mobile app rock star (Part 2)
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9. 3
Calculating Benefits, Cost Savings
& ROI
42%
Improve Customer Loyalty
The intimacy of mobile devices and apps makes them ideal vehicles for enhancing
customer engagement and building loyalty.
According to one recent study, 75% of consumers said they would switch brands
if offered real-time promotions delivered to their smartphones. 1
And the Aberdeen Group has estimated that retailers that are able to personalize
online marketing messages have seen 16% increase in retention rates, and a 15%
increase in response rates2
of US consumers said using a
company’s mobile app
made them more interested in
buying from that company
Source: Ipsos OTX and Ipsos Global @dvisor
Look into relevant research for your industry, and any internal data that might enable
you to construct a realistic estimate of the impact of your app on loyalty.
Tap New Revenue Streams
According to the Yankee Group, adding location-targeted promotions to your
mobile app can drive incremental revenue by more than 4%3
Look carefully at how you’ll be using your app to engage customers. Will you be
using it primarily to drive traffic to retail locations? How do you expect this will impact
revenue and sales? What about m-commerce? How much incremental revenue can you
realistically expect to generate through mobile sales?
Mobile Shopping Survey Series, Part 2: CPG Shopping Behavior
Aberdeen Group’s Omnichannel Experience Report
3
Yankee Group, Mobile Loyalty Conundrum: The Battle for the Mobile Shopper
1
2
The essential guide to becoming a mobile app rock star (Part 2)
benefits
Improve Customer Loyalty
Tap New Revenue Streams
Reach Key Demographics
Enhance Customer Service
Increase Efficiency & Effectiveness
8

10. Reach Key Demographics
Smartphone users between the ages of 35 and 44 were the most likely to
download a mobile app, followed by the 18 to 24 age group. Out of the 35 to
44 age group, 86% of smartphone owners have downloaded a mobile app. 85%
of the 18 to 24 age group have downloaded an app.4
Are you reaching the key audience you want to engage with? This could have
significant impact on your business, depending on the content, convenience, social
integration and value your app is providing.
Enhance Customer Service
Will you be using your app to provide enhanced customer service to your users? How
will this impact retention and sales?
Increase Efficiency & Effectiveness
Now, think about some of the other benefits of your mobile app.
Eliminating paper handling & printing
If your mobile app will replace paper- or plastic-based coupons, gift cards, and
catalogs, how much will you reduce costs by switching to digital? Think about the full
range of design, production and shipping costs.
Process Transformation
What is the long-term impact of using mobile to engage customers directly with
business processes?
Enhanced customer communication
Will you use your app to gather feedback from your customers on your product
design and features? How will this direct feedback impact product marketing and
development? Will it enable you to deliver more frequent/better enhancements?
How will this enhance your competitive position?
4
Source: E-Marketer
The essential guide to becoming a mobile app rock star (Part 2)
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11. Conclusion
National Range Officers Institute metrics for mobile app development are not black and white. The metrics described in this
report are a combination of industry research and 8 years of application development experience. Take this model and work with
both the business and end users to uncover more opportunities to engage customers, drive incremental revenue and improve
business processes. Identify the ones that work best for your company and your app.
It’s a big task, but the reality is that mobile has the power to move from a cost center to a driver of business innovation—so
getting a benefit template in place for each of the typical mobile apps you plan to deploy will be an essential planning exercise.
Break it down:
1 Identify a small number of tools and vendors to estimate costs
2 Use the metrics derived from the model above to assemble a case based on specific benefits and values
For more information on how to become an enterprise app rockstar read the other parts of our series.
Part 1: Developing an actionable mobile application strategy
Coming Soon! Part 3: Choosing the right Mobile Enterprise Application Platform (MEAP) partner
The essential guide to becoming a mobile app rock star (Part 2)
10

12. DMI
About DMI
DMI Sales Team
One Rock Spring Plaza
6550 Rock Spring Dr
Bethesda, MD 20817
U.S. Sales: 855.963.2099
Int’l Sales: 240.200.5848
sales@DMInc.com
DMInc.com
DMI is the world’s leading provider of enterprise mobility services and solutions. We build enterprise class mobile solutions that
generate results for the world’s top brands and businesses. Our mobile solutions combine the award-winning user experience design
that has made us one of the top creators of consumer apps, with the deep middleware and engineering expertise that we’ve used
to build and manage enterprise applications for the most demanding IT departments in the world. DMI mobility solutions improve
business processes, tap new revenue streams, build customer loyalty, and increase employee productivity. And we offer a full range
of Managed Services to securely set up, configure, and manage your mobile devices.
The proof:
We’ve built more than 400 mobile apps—in the past 12
months alone—for more than 150 leading organizations—
like Disney, Coca Cola, Toyota, Vodafone, P&G, The
National Guard, and Universal Studios.
We offer a full range of security options that include
Federal-grade hardware-based security, two-factor
authentication, secure container, and sophisticated
encryption solutions.
We offer brilliant creative and user experience: Our mobile
app development group was named the Best Branded
App Developer at the 2012 Mobile Entertainment Awards.
With our expertise and economies of scale, we can provide
mobility management at a higher service level and on
average 20% lower cost than most companies can do on
their own.
We have 500,000 devices under management for more
that 100+ clients, including many Fortune 500
companies—like BP, Johnson & Johnson, Sears, The
Associated Press, Allergan, and more. At BP, we’re
deploying 1,000 managed mobile devices each day.
We provide 24 x 7 x 365 mobile service support for more
than 500,000 users. DMI is the one call our customers
need to make to resolve any issue—devices, apps,
infrastructure, even carriers.
Pervasive excellence is our commitment to quality service.
DMI is one of only a handful of companies that is CMMI L3
appraised for both application development and services,
as well as ISO 9001:2008, ISO 27001:2005, and
ISO 200001:2011 certified. Our average D&B Open
Ratings performance score from our clients is 94/100.
The essential guide to becoming a mobile app rock star (Part 2)
©2013 Digital Management, Inc. All right reserved.
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