With investment budgets under intense pressure, the focus is firmly
on productivity improvements to gain rapid return on investment
(ROI). In addition, competitive pressures are making customer service
and customer retention priorities. To address these requirements, organizations
are turning to wireless solutions to harness existing IT investments
and deliver improved efficiency, reduced inventory, improved
productivity, and maximum profitability, within short time frames.
Two key technologies
– pervasive devices
and mobile digital
services – now provide significant
potential for tangible business
benefits. IBM, for example,
saves $200 million annually in
reduced real estate costs alone
due to mobile working. But to
maximize wireless ROI successfully,
you need to be aware of
the other parts of the solution:
the infrastructure to provide a
secure, robust, and available
service to manage the high volume
of data and transactions
carried over these networks; an
understanding of the organizational
impact that can result;
and the integration of the technology,
people, and processes.
Another key aspect to
remember is that mobile digital
services are everywhere: the
wide area network provided
over GSM, GPRS, and UMTS by
the mobile operators; the local
area network for wirelessly connecting
to the Internet and your
office systems while in the
office or in public access areas
such as airports and hotels; and
the personal area network that
allows devices to talk to one
another wirelessly when they
are in the same proximity.
This article will outline the role
wireless technology can play in
increasing revenue and controlling
costs, and point out the key
factors for achieving success. We
will address key business areas for
wireless deployment and provide
a guide to achieving ROI.
Understanding the Wireless Potential
ROI in wireless can be
achieved from both cost control
and revenue increase.
COST CONTROL
The ongoing deployment of
wireless solutions and equipment
to employees has benefited IBM
with reduced costs and a considerable
return on investment.
Wireless solutions have given
IBM a five-year savings of
US$800 million, including a
two-year recovery period of project
expenses. It has also provided
savings of more than 30 minutes
of field service engineer time per
day or about three weeks per
year, and field service engineer
calls to dispatch have fallen by
81%. This has led to a reduction
in dispatch head count by 41%
and a total reduction of call-management
head count by 1,400.
In a tough economic climate,
focusing on cost control becomes
a key objective. The broad range
of wireless technology available
today can underpin a wide array
of cost-control options.
REVENUE INCREASE
British Overseas Tobacco's
implementation of a wireless
solution connecting back-end
systems among 12 branch
offices and the deployment of
wireless field sales tools has
shown:
Improved and more accurate
control of their entire
sales process
5% increase in sales visits
Increased sales and
reduced costs as a result of
better inventory control
On the other side of the economic
equation, organizations
are maximizing profitability,
and wireless solutions are playing
an important role in:
Increasing the efficiency of
the sales force
Improving interactions with
business partners and suppliers
Enhancing customer relationships
Developing new products
and services
Delivering new and innovative
customer services
Many wireless solutions will
deliver a combination of cost-control
and revenue-increase benefits.
Areas of benefit include improved:
Employee productivity
Service quality
Business processes
Asset management
Customer services
Here's how wireless technology can support
core objectives and deliver significant
business benefits.
Business Areas Delivering ROI
The benefits of wireless solutions to
sales and engineering field forces are well
documented, but areas such as warehouse
management offer further opportunities for
business development.
Savings can be achieved by implementing
wireless for field-based employees in
sales/support by:
Maximizing the investment in existing
infrastructure through provision of existing
information to staff in real time. For
a little extra investment, greater benefits
can be extracted from existing assets.
Reducing total cost of ownership by providing
the most appropriate wireless
devices. Many mobile employees today
have laptop PCs, but a wireless PDA may
provide everything they need at a fraction
of the cost, and reduce support costs too.
Improving communication for mobile
and remote workers – such as delivery
drivers. This helps to improve scheduling
and responsiveness to customer
demands. This can reduce overall costs
(e.g., savings on fuel by rerouting because
of traffic problems, cancelled deliveries,
and so on) and improve customer service
by being able to respond more quickly
with information and delivery.
There are several distinct business areas
that can deliver ROI from wireless deployment:
Sales Customer services
Field service Production services
Human resources Asset management
SALES
Senshukai Co. Ltd, a leading Japanese catalog
sales house, recently implementated a wireless
e-commerce system that has returned a
respectable return on investment in sales since
2001.
Philip Morris Singapore Pte Ltd, the
Singapore arm of Philip Morris, the largest consumer
packaged goods company, wanted an IT
solution that would offer its sales force realtime
access to their main office database. The
implementation of a wireless solution has led
to sales reps having accurate product and
inventory data available at their fingertips,
which has translated into better and more timely
information being passed on to customers.
Remote synchronization allows diaries
and contact databases to be updated, delivering
a significant travel-time saving,
enabling staff to utilize "dead time." This is
estimated to represent a 30% gain in salesstaff
efficiency.
Real-time information lets sales staff
review credit status, status of last order,
issues, etc., prior to visiting, and answer
customer questions on pricing, inventory,
and delivery times immediately. One
study showed a 9% increase in sales conversions.
Real-time direct access to corporate systems
eliminates back-office input of sales
information, while integration with billing
systems increases speed and accuracy of
invoice generation, reducing bad debts.
The estimated 70% saving in input time
enables administrative staff to focus on
more profitable or productive business
activity.
Wireless solutions can directly reduce
costs by reducing remote access and cellphone
charges and by replacing existing
paging services. Indirect cost reduction is
achieved by increasing productivity,
improving customer responsiveness,
enhancing customer satisfaction, and
improving employees' "work/life balance."
FIELD SERVICE
LVM Versicherung, a German insurance
company, adopted a wireless solution for
their field operatives that returned a faster
delivery of data and has allowed the
potential for telecomputing within the
company.
Chase-Pitkin Home and Garden, USA,
within the first six months of installing its
wireless solution, recorded significant
increases in the average number of sales
calls per day and sales per salesperson.
Dynamic scheduling enables organizations
to optimize task allocation, rescheduling
routes in real time to meet customer
demands, while in-field data capture significantly
improves the quality of information
fed back into billing and customer service
systems.
Access to parts information and best
practices, along with remote diagnostics to
resolve minor faults, reduces completion
time and the number of visits per problem.
HUMAN RESOURCES
In a study conducted by IBM across
25,800 employees, flexible working practices
delivered clear benefits:
71% reported a positive influence on
productivity
69% noted increased morale
68% enjoyed increased job satisfaction
63% cited increased loyalty
Work/life issues were reduced from
50% of employees to 33%.
Source: Global Work/Life Survey 2001
"IBM is at the cutting-edge of reinventing
how, where, and when employees
work. In effect, we are shaping the workforce
and workplace of the future for
employees. The right outcome of this effort
is the effective management of IBM
resources, facilitating the best possible
manager – employee relationships, and
providing value to our customers and
shareholders." – Ted Childs, vice president,
Global Workforce Diversity, IBM
Wireless provides a huge opportunity to
facilitate new working practices and
improve morale. Flexible working practices
are proven to increase productivity and
reduce absenteeism. Additionally, companies
report increased loyalty and a reduction
in staff turnover, as well as an ability to
attract new, skilled personnel.
CUSTOMER SERVICE
Wireless solutions have helped the
People's Insurance Company of China
improve the effectiveness of their customerservice
claim process. What was once a
three-day task is now reduced to two hours
of office work.
While the benefits of improved customer
services are intangible to an organization,
any developments that increase
customer retention are extremely valuable
given the significant cost of attracting new
customers.
Real-time information access provides
customers with the ability to make immediate
decisions about the cost and availability
of goods or services. Enhanced customer
information via wireless devices reduces
the cost of a customer-service infrastructure,
focusing staff on more productive/profitable initiatives.
Production Services
A combination of Radio Frequency ID
(RFID) tags, wearable PCs, and wireless
LANs is delivering significant financial benefits
throughout the supply chain for manufacturers,
distributors, and retailers.
Unlike barcodes, RFID tags are robust and
programmable, enabling organizations to
track goods as they pass through the supply
chain. RFID tags:
Maximize warehouse space: RFID tags
help cut high-storage real estate costs
and maximize warehouse space by
allowing organizations to track the location
of goods remotely.
Minimize goods shrinkage: A combination
of theft and imprecise inventory
management means retail shrinkage
(perceived to account for up to 1% of
stock), and puts a significant dent in
profit margins. Remote monitoring
devices ensure an alarm is raised should
goods be taken without payment.
Minimize errors in delivery: A tightly
integrated supply chain means fewer
misdirected deliveries or incorrect
orders and fewer "on-shelf out-of-stock"
situations. For organizations reliant on
specific components to fulfill their own
order schedule, delivery errors can cause
business-compromising delays.
Minimize inventory: Just-in-time retailing
enables retailers to reduce stock levels,
but distribution companies now
hold increased quantities of just-in-case
stock to meet demands. Improvements
in supply-chain visibility based on accurate,
up-to-date information will help
reduce these buffer stocks.
Asset Management
Airline customers worry more about lost
luggage than delayed flights, so airports are
exploiting the programmable nature of
RFID tags to improve luggage tracking.
"Smart Labels," enable tracking from
check-in to destination, with alarms sounding
if luggage is loaded incorrectly.
Keys to Success
Wireless solutions can be rapidly deployed
to support tactical needs, but significant ROI
needs wireless technology to be integral to
business processes. Key factors are:
Integration
Security
Cultural change
Measurements
Within each, understanding and resolving
the impacts on process, organization, and
technology is imperative. It is important to
work with an organization that not only has
wide experience with diverse wireless devices
and networks, but also understands business
processes and how to integrate new technologies
into existing infrastructure.
Integration
The most powerful benefits and ROI
depend on seamless integration of this new
channel across the organization, providing
users with rapid access to required information.
Working with experienced consultants,
who have previously deployed wireless
solutions, will aid the process of
achieving this integration quickly and successfully.
Security
Security of wireless networks has been
highlighted by the media as an issue, particularly
with wireless LANs. Security is critical
to the success of wireless e-business; a
minor breach could undermine customer
confidence and brand reputation. People
and organizations must be able to trust any
new solution before they will use it.
However, a wireless network can be made
as secure as a wired network, provided that
it is configured properly and has the appropriate
security processes and procedures
applied to it.
Cultural Change
When wireless solutions are provided for
employees or citizens, there can be significant
social implications. These can be very
positive. For example, the person is more
able to manage his or her work/life balance
more effectively, feels more in touch with
the office, and can be more empowered.
However, the perception of these new systems
can be negative with less reason for
going to an office, and so less opportunity
for direct interaction with colleagues, and
the potential for feeling that "big brother" is
watching our movements more. As with
any project, only a small percentage of reason
for success is due to technology. The
much greater percentage is due to people
and how they are involved and educated.
Measurements
All of these aspects are key costs that
need to be considered when planning the
adoption of a wireless solution. Costs
include:
System development
System deployment
Change management
Security
Hardware
Software
Network
Training
Running costs
Obviously, costs are dependent on the
organization's business goals and adoption
of wireless solutions. However, irrespective
of industry sector, successful organizations
will want to measure the ROI of wireless
implementation. While financial measures
can be quantified, it is also important to
assess other benefits to the organization.
Conclusion
In an environment of restricted IT budgets,
wireless offers organizations the chance
not only to attain new levels of productivity
and cost control, but also to deploy new
services to customers that will play a key
role in improved customer retention.
Wireless technologies have come of age,
and measurable ROI is a compelling argument
for further exploiting existing systems
and applications.
So the question is not "whether you
should deploy a wireless solution," but
"when?" It is also worth considering what
the impact on your business or organization
would be if you do nothing. Just how
much business would you lose to your
competitors who are exploiting this new
channel, accessing vast numbers of wireless
devices – not just with human interaction,
but also from machine to machine. How
much benefit are they getting and are you
missing?
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