The case for dispersal
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Making a water-tight business case for mobile applications requires careful consideration.
Ever since the wild optimism of the 1990s wireless boom, a new reality has set in at organisations considering mobile technology rollouts. Although the case for bringing greater efficiency to the dispersed workforce is still vigorously argued, it often falls down in the face of a multitude of intangibles. Many of the technology components, as well as the backbone infrastructure, are only just proving themselves in large-scale rollouts, and corporate success in redrafting the business processes of mobile workers are mixed. The result is that large question marks still hang over the costs of mobile projects, and, indeed, the likelihood of them delivering the promised business benefits.
"The value proposition of mobile is compelling yet confused," admits Dave Shoup, president and chief operating officer of Dexterra, a mobile field service applications start-up. Customers should approach new projects conservatively, avoiding what he terms the "irrational ROIs" of drawn out payback periods.
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But the conservatism may be misplaced. Farid Yunus, research manager at market watcher the Yankee Group, says that overall project costs are surprisingly similar for a wide variety of applications -- from standard mobile office applications to field service and sales force projects. The big difference comes in how the costs break down. In the more sophisticated projects, for example, consulting fees take the biggest slice; in others, it is simply the cost of the mobile devices that is the biggest expense.
When Yorkshire Water rolled out a mobile field service application to 750 site engineers, it found that the cost of buying rugged Panasonic ToughBook CF-M34 mini-laptops (at roughly £2,800 each) was equalled by the cost of software development and configuration. Duncan Bennett, the privatised utility's IT change programme manager, who oversaw the rollout of the main application - a work management package from Mobile Data Solutions Inc (MDSI). He says one major challenge was configuring MDSI's Advantex technology as well as its existing customer relationship management software from Clarify and enterprise resource planning software from SAP to support a new ways of working. "We reviewed our business processes and re-engineered them from end to end. The whole point was to break down the silos and operational boundaries that existed between our engineers and our call centre," he says. Such a reengineering task touched 28 systems and 213 interfaces, he points out.
But such undertakings are worth the effort. Advocates of wireless technology insist that the extra costs of rolling out and supporting a new mobile application are more than offset by long-term savings and productivity gains. Even a simple 30 minutes a day productivity gain from being able to check email on the road can deliver a return of $3,750 per user per year, says Yankee's Yunus.
In Yorkshire Water's case, the company estimates that the project will save it about £8.5 million a year, largely as a result of a 50% cut in field service operations. Says Bennett: "With any major change of this type, you go through three phases. The initial phase after implementation is all about business survival. In the next phase you get benefits as the technology beds down. But then you start to really exploit it. We believe we have a leading edge platform and we want to maintain our lead."
Making a case that will lead to such gains is not easy, although many vendors in this sector go a long way to helping prospective customers make a business case for mobile rollouts. "I'm happily surprised to see most tier-one vendors offering an ROI tool, often in spreadsheet form," says Yankee's Yunus. For example, Microsoft's mobility division has a very detailed tool that it makes available to partners.
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With some operators still on a steep learning curve, and others focused more on delivering voice services to individual subscribers, the gap in the market is being filled by a number of middleware and mobility specialists such as RangeGate, MDSI, Viryanet, ClickSoftware and Dexterra, say analysts.
RangeGate's UK solutions director, Danny Bagge, says customers should expect a demonstrable ROI on mobile rollouts within a year. The return comes initially from increased accuracy of data and more visible business processes, he says. One RangeGate customer, a large home shopping company with 2,500 delivery vehicles, cut the number of goods lost in transit by two-thirds after rolling out mobile track-and-trace technology, for example.
Another company that has cut costs by introducing greater visibility into its business processes is Amalgamated Cleaning Services (ACS), part of the Lojics Services Group. It pitched for - and won - a contract to maintain about 80,000 BT phone boxes across the UK. A central plank of its strategy for managing such a big contract without incurring excessive administration costs was to equip its 80 field engineers with Symbol Technologies SPT-1700 ruggedised pocket computers running RangeGate's Service-Edge real-time data application under the Palm operating system.
"We had done things like this on a smaller scale in one area of the country," says ACS's financial director Robert Levesque. "At that time we used faxes, and engineers called in to report completion, but now we've got rid of all that." ACS is "very happy" with the result, he says. "This has given us great visibility."
The biggest costs in the BT project were "a combination of hardware and software", he says, as the technology required some customisation (the Symbol handhelds with a GSM wireless connect currently cost around £1,300 each). ACS has since acquired some additional warehouse management technology to improve stockholding and forecasting, and it has also brought an extra group of users onto the system. The key to the project's overall success, according to Levesque, has been its simplicity. Although the task of customising the system was costly, he feels it was worth getting it right. He adds: "We spent a lot of time ensuring the interface was user-friendly and simple. If it's too complicated, people won't want to use it."
Perceptively, ACS has extended this pragmatism to other areas of the project. While RangeGate's technology can work in real time, ACS has discovered that it can still meet the requirements of the BT contract with more cost-effective once-daily downloads of data. It is a lesson that has also been learnt by UPS. The package delivery company does not submit signatures electronically because of the cost that would be involved in sending such a high data load over a GPRS (general packet radio services) network.
Elsewhere, companies are basing their projects on more straightforward business cases. Radio station owner GWR initially funded its mobile rollout four years ago by consolidating its mobile provider to a single supplier, Orange. It estimates that it saved £150,000 a year as a result. Since then, it has used the network for a number of initiatives including linking in a telemetry system that can automatically alert engineers to faults. "By consolidating all our interests with Orange, we rapidly came to a significant saving," says technology manager Ian Anderson. "Having a smart and efficient communication system has been absolutely vital to our business."
Given the growing number of mobile application projects now being funded, that is a conclusion that many other businesses are coming to.
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