Mobile applications have become quite the fashion statement, with companies and individuals the world over spending time and money developing solutions for every conceivable problem. Even larger corporates and governments have been getting in on the act in the hopes of increased productivity, revenue, efficiency, improved customer service and other presumed benefits of mobile apps.
A problem is that very few businesses do the necessary research to determine whether the apps they think will deliver the goods will actually produce any real business value. Richard Kantor, executive at software development company bbd, says the tide is turning and more CIOs and CFOs are asking what the business return is when considering the development of new apps. “There are two aspects to determining whether an app delivers value,” Kantor says.
“The first is the true return on investment (ROI), as measured in increased revenue or reduced costs. The second is the non-financial returns a company can gain. These can be measured in terms of brand value, maintaining a strong market position in relation to its competitors and so forth.
“Gartner recommends ignoring the hype about apps and focusing on gaining value from your mobile development investment in terms of a combination of these two points, which it terms value of investment (VOI).”
While there will still be tremendous activity in the mobile development space, not all of it will result in measurable returns. However, Kantor believes there is another reason CIOs and decision makers invest in apps. Many view their initial app development as a learning and RandD process to understand the intricacies of mobile development, user interfaces and customer adoption. “However, the point is fast approaching where senior executives will ask what value these apps really provide the company before allocating more budget to development,” Kantor adds. That is not to say all mobile development has been experimental or a failure. Kantor points out that there have been many successes both locally and internationally.
FNB’s mobile app was a significant local milestone in the financial market and has seen tremendous success since its launch. The combination of a well-written app with the support of a well-designed advertising campaign proved to be a winner for the company.
Of course there are older apps that have been used for ages on almost all GSM feature-phones, although they are not apps in the present sense of the word. These are the USSD or SMS apps used successfully in areas such as selling cellular services, data and air time and even mobile banking. Kantor says the key for any app success is to deliver an integrated service.
Users need a combination of a well-written app and a marketing campaign aimed at the customer segment they want to attract. Nevertheless, the rise in app development and the hype surrounding mobile and its importance to business is clear, Gartner expects to see a 4:1 ratio of applications written by the business market for mobile devices versus traditional personal computers for the next three years. Kantor adds that devising ways to measure an apps’ success is also crucial. This is important both from external value perspective, as well as through in-app metrics which are used to ascertain how the users use it as well as which parts of the application are most popular.
“Mobile services and apps are here to stay, but these applications will not add to the bottom line if companies do not do the prerequisite work to ensure their apps deliver value and are launched with a well thought-out marketing plan,” says Kantor.
“BBD advises that for strategic mobile projects, clients evaluate and find proven cases where mobile apps will deliver measurable value and develop their systems accordingly, instead of responding to the hype and creating mobile apps for the sake of developing mobile apps.
“For new entrants into the mobile application space, tactical projects which help organisations to gain a good understanding of the technical intricacies of mobile development and customer demand are a worthwhile investment on an ad hoc basis.”