This article was originally published on our sister site ClickZ, but it’s so helpful we thought we’d share it here too.
No mobile project should get the green light until there has been a thorough economic feasibility assessment to evaluate if the potential benefits will exceed the costs of developing, promoting and running it.
Conducting an economic feasibility study, which determines if your mobile site, web app or native app will deliver return on investment (ROI), is a critical stage of the feasibility assessment process.
Even if the technical, operational and schedule feasibility tests outlined in the previous column deliver favorable results, the board is unlikely to invest until they see the economics of the project are proven.
To be persuasive an economic feasibility report must:
Detail, quantify, and justify – in financial terms – the benefits of the project.
Detail the total costs over the entire lifetime of the project.
Calculate when the project will break even.
This should be done for each of the different options for the project e.g. outsource v build yourself; web based v native app.
Noah Elkin, a mobile marketing veteran and co-author of Mobile Marketing: An Hour a Day?
ROI is a metric that generally catches the attention of the higher-ups. If you clearly establish the benefits you expect your strategy or a specific set of tactics to yield, it will be that much easier to justify investment in your efforts from those who control the cash flow. It’s a matter of thinking about it from their perspective.
Guides to conducting economic feasibility studies for mobile projects are hard to find – though this infographic by Kona is a useful introduction to mobile app ROI.
But you can apply a mobile interpretation to the methodologies for IT projects such as these by the departments of computer science at University of Waterloo and University of Toronto.
How to establish …
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