True Cost of Failure in Mobile and APM Solutions
August 09, 2013

Jeannie Liou
Crittercism

The mobile enterprise has arrived. In a world where there will be more devices than people on earth by 2017 according to Cisco’s Visual Networking Index (VNI), mobility will continue to transform enterprises in a profound way that cannot be ignored. The idea of being able to interact with customers, prospects, and stay attuned to competitive pressures is not new, but the velocity at which the mobile market is maturing poses a new set of challenges.

One of the main issues enterprises struggle with is identifying how many of their apps actually fail, and how often.

According to a study by Localytics, many apps are downloaded, tried once and then discarded. The first step to measuring an app’s success is tracking downloads, but download stats often provide an incomplete
 and artificially high view. High download numbers always feel like movement in the right direction, but if those customers never open the app or abandon it after a few uses, those high download numbers are ultimately part of a high churn rate.

Though there are several reasons for mobile apps to lose traction with users, one of the biggest problems can be attributed to performance issues. In fact, the average online shopper expects web pages to load in 2 seconds or less. After 3 seconds, up to 40% will abandon the site. 74% of users will abandon a mobile site after waiting only five seconds for it to load.

It goes without saying that once visitors leave, it is very difficult to get them back. 88% of online consumers are less likely to return to a site after a bad experience. More importantly, given that 90% of mobile apps are downloaded on the first day (Mobilewalla), there is no margin for error.

For enterprises, two specific costs that should be taken into consideration are remediation costs and business costs.

Remediation costs are fairly straightforward – these are costs associated with the resources required to resolve a problem. They could be in the form of man-hours (hourly costs), machine, or device costs.

Business costs affect the enterprise directly, such as reduction in customers due to limited access, opportunity cost of taking a different course of action, or even the cost of people drawn away from value adding or profit-making activities. Putting this in an employee contribution perspective, “productivity loss due to application performance issues is estimated at a loss of $42,000 per hour for each user group impacted (IT Management News).”

We can look at a prominent UK bank as a prime example of how the cost of failure for a mobile app can be quantified. The bank was hit by an IT failure recently in May 2013 that left customers unable to access their accounts through the mobile banking app. This follows another IT glitch last year that left the bank with £175m in costs, or nearly $275M. Millions of customers experienced the consequences of a faulty software upgrade that froze the bank’s systems, stopping all payments in and out of accounts.

Given these staggering numbers, enterprises need to factor in best practices for cost of failure elimination by proactively designing, developing and testing for mobile application performance. A reasonable way to reduce failure is by doing more preventative maintenance upfront. Preventative maintenance is a proactive, failure-reducing activity, and is much more cost-effective than maintenance of the repair kind.

Jeannie Liou is Marketing Manager at Crittercism.

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