The revolution may be starting with a whimper rather than a bang,
but companies, and especially those in the financial services
sector, are gradually finding ways to profit from a mobile
e-business strategy.
Despite supplier hype, the mobile e-business - or m-commerce -
revolution is still a little way off. However, the explosion of
handheld devices and wireless technologies such as Short Message
Service (SMS) and Wireless Application Protocol (Wap) is
transforming the landscape of e-business.
Revenues in the mobile application market are set to soar from
$3.3bn (£2.4bn) in 2001 to $44.8bn by 2005, according to analyst
firm IDC.
Despite the protracted delays over the roll-out of third-generation
(3G) mobile services, businesses are starting to integrate mobile
and location-based technology into their IT strategies. Companies
are harnessing m-commerce technology to allow mobile workers to use
handheld and mobile devices to access office productivity software
and sales and marketing information held on the corporate
network.
Financial services and logistics companies are using Wap gateways
and SMS technology to target customers and improve service.
However, IT managers face a steep learning curve. Many businesses
have yet to get to grips with e-business, let alone a multichannel
strategy that includes m-commerce.
Industry experts stress that m-commerce is still in its infancy.
They distinguish between the fairly basic m-commerce methods being
put in place now (Wap and SMS) and the more sophisticated systems
that are expected in the future (multichannel and multimedia
content) on the back of broadband Internet access.
"The higher-level trend in e- or m-commerce is the integration of
multiple channels into a business strategy," says Duncan Brown,
consulting director at analyst firm Ovum. "I think we are
approaching the stage where e-commerce and m-commerce are variants
of doing business with the same kind of people.
"To date, you have had a sticking plaster approach. First you had
e-commerce, then maybe a Web server bolted onto the management
system. And then you had m-commerce with a Wap server bolted
on."
The use of m-commerce within the business is a good place to start
when formulating an m-commerce strategy. A key application here is
sales force automation - giving sales staff access to e-mail and
other corporate information when they are out of the office.
A growing number of suppliers, including SAP and Siebel, now offer
wireless versions of sales automation packages. IT services giants,
such as IBM and Computer Associates, offer consultancy services and
nurture close relationships with the mobile device
manufacturers.
Chris Bray, wireless e-business executive at IBM, believes mobile
devices can be an effective way to share information across firms
through an intranet. "Companies could keep sales manuals on their
corporate intranet or you could have maintenance engineers
accessing back-office systems," he says. Companies are also using
SMS to keep in touch with staff by texting them reminders and
alerts.
Handheld devices and personal digital assistants (PDAs) are at the
centre of activity in the m-commerce market. Shrewd mobile device
manufacturers are targeting the business market through alliances
with enterprise suppliers and electronic payment providers.
For example, under an agreement signed with German enterprise
software giant SAP earlier this year, users of Palm's PDAs are now
able to access mySAP.com's e-business software, including
enterprise portals and customer relationship management software.
The two companies plan to jointly sell the system, which is based
on the Palm operating system.
Palm has also been extending its reach in the area of electronic
payments. Under an alliance with electronic payment providers
Verifone and Ingenico, Palm aims to develop technology that will
enable the secure transfer of payment details from Palm's handheld
computers to electronic point of sale systems run by the two
companies.
Internet connection
Meanwhile, earlier this year, Palm
started shipping the first PDAs to have Internet connection
software as standard.
Wireless handsets and PDAs are also converging, as illustrated by
the Nokia Communicator. The device is a cross between a mobile
phone and a PDA, and it offers Web browsing, phone, fax and e-mail
facilities. Users can also create and download Microsoft Word and
Excel documents.
Location-based technology is another example of m-commerce being
put into practice. It is designed to target customers or employees
in a particular area by tracking their handset.
Users can be located by three main options: the cell of origin (the
cell area of the mobile network base station); radio signal
transmission; and global positioning system, which is the most
advanced technology. Analysts view location-based technology as one
of the most practical aspects of m-commerce.
"Location-based technology has been around for a while but is quite
expensive," says Brown. "It comes from the main network suppliers
such as Nokia and Ericsson. A logistics company may use it to find
out where its drivers are. As long as their mobile phones are on,
the drivers can be tracked to the nearest cell."
However, before using location-based technology it is usually
necessary to get your network operator to modify the base station
transmitter.
There are also other practical issues for IT managers to consider
when planning a company's m-business strategy. These include the
integration of a portal or Web server with existing IT
infrastructure; security; and whether or not your existing legacy
systems are able to handle the increased number of transactions
hitting the company from the mobile channel.
"There is a transaction issue for banks," says Bray. "With PC or
mobile electronic transactions, it will normally mean that the
number of hits on your system will increase. If you are running to
a tight budget with small capacity machines then you are at
risk."
An increase in Web traffic could also place more strain on the
company's data storage systems, particularly when multimedia
messaging services hit the market.
Security is also high on the to-do list when implementing a mobile
e-business system. Some suppliers, such as Computer Associates, now
allow companies to adapt their existing security policies for the
mobile world.
But, overall, progress in m-commerce is patchy. The financial
services sector, for example, is much more advanced than the public
sector. In particular, many financial services companies are
rolling out Wap banking services.
However, they could soon face competition from telecoms companies.
A European Commission directive will allow non-banks to become
electronic money institutions from from as early as summer 2002.
They will be able to issue payments in electronic money - in
effect, telecoms providers could become virtual banks.
Earlier this month Vodafone signed an agreement worth more than £6m
with e-commerce supplier Brokat Technologies to provide its
customers with secure mobile payment capabilities.
Mobile developments
IT managers would also be wise to
keep an eye on overseas developments in mobile e-business.
The Japanese alternative to Wap, NTT DoCoMo's i-Mode, has made a
huge impact since its launch in 1998. By last year i-Mode had more
than 12.5 million users and revenues of $3.8bn. Based on alliances
with content providers, customers can subscribe to i-Mode and
download computer games or data services. "i-Mode is mostly
interesting for its business model rather than its technology,"
says Brown. "NTT DoCoMo has about a 70% market share."
Brown adds that NTT DoCoMo is keen to move i-Mode into Europe but
stresses that it is not designed to operate on the European network
standard, GSM.
With the economic downturn and uncertainty over the arrival time of
3G products, companies may be tempted to sideline plans to invest
in mobile technology. However, such a move could be short-sighted.
For many companies - particularly those in retail, logistics and
financial services - SMS, Wap and location-based technology are
becoming valuable business tools. And while constructing a mobile
strategy is not without its challenges - particularly concerning
integration with other business channels - companies need to start
sketching out their business plans now. Like it or not, the future
of e-business will be mobile.
Case study: TNT- keeping everybody informed of a package's
progress
Express distribution and logistics company TNT
has embraced mobile technology to improve customer service and
internal communication.
It has installed a combined Wap and SMS gateway from wireless
infrastructure supplier Anam. The Wirelesswindow software allows
customers to track the progress of their packages through text
messages.
Customers can check on the location of international parcels by
sending their consignment number, via SMS, to TNT. The company
immediately sends back a text message reply, giving information
such as current status of the parcel and estimated delivery
time.
TNT staff can also use the Wap gateway to access company
information and e-mails when out of the office.
TNT began its search for a mobile e-business package earlier this
year with a clear list of requirements. The technology had to
channel SMS and Wap traffic into TNT's existing infrastructure and
integrate with an in-house XML gateway for linking to back-office
systems.
"We trawled the market for a solution to channel SMS and Wap
traffic into our infrastructure," says Darryl Armstrong, groupware
and messaging manager at TNT Express. "TNT provided both levels
[for customer service and internal employees]."
The Wap and SMS gateway was installed within one day. It runs on a
Microsoft NT platform and is integrated with TNT's XML gateway. The
SMS service is provided by BT Cellnet.
TNT also plans to introduce a PDA-based service that connects to
its XML gateway. This will allow handheld users with Internet
connections to receive services such as price quotations and
pick-up requests by connecting to a TNT Web site.