Independent brewer Charles Wells is using wireless
technology to help it compete with its multinational rivals. But,
as Sally Whittle reports, SMEs need to weigh up the pros and cons
of what wireless can do for them before they take the
plunge.
In an industry
increasingly dominated by conglomerates, Charles Wells is an
exception. The family-owned brewery employs just 400 people, but it
sells some of the UK’s best-known beers including Bombardier real
ale and Red Stripe lager.
The brewery has
always relied on technology to compete with larger breweries, and
has deployed Geac enterprise planning software and Lotus Notes
groupware. Now the company is investing in Bluetooth and Wireless
LAN technology to improve the efficiency of its customer
service.
Charles Wells
relies on a team of 40 field sales reps who travel the country
selling beer to pub chains and restaurants. Customer orders used to
be entered into the planning systems from the rep’s home or when
reps visited head office. Orders could therefore be delayed for
several days, creating a knock-on effect on the brewery’s
forecasting. Cask-conditioned ales take three weeks to brew and
must be used within two weeks, so accurate forecasting is vital to
prevent wasted stock or long delays in filling orders.
Today, the sales
reps use a Bluetooth-enabled laptop and mobile phone to enter
orders in real-time, enabling the brewery to reduce wastage and
inventory and improve customer service. The company has also
installed a wireless LAN (WLAN) at head office to allow mobile
workers to access the corporate network when they visit.
The upfront cost
of the project wasn’t expensive, and ROI will be achieved in under
12 months purely from reduced infrastructure costs, says Wells.
Then there are
other, harder to measure, benefits. “People can now access
information more quickly, and use their laptops from home, which
improves productivity,” says Wells.
The evidence is
that increasing numbers of SMEs are following the lead of Charles
Wells, and deploying mobile technology. Because of the relatively
low upfront costs, mobile technology is well within the reach of
most SMEs. WLANs can be provided in a small office for under £500
and Bluetooth or WLAN-enabled laptops are now only £50 or £100 more
expensive than their non-wireless equivalents.
The good news is
that small companies are particularly well positioned to benefit
from wireless and mobile technologies, says Adrian Horne, a
marketing specialist with IBM’s ThinkVantage Technologies division.
“SMEs
generally are
hardest hit by products that need support because they have smaller
IT teams, and would rather focus their attention on running the
business,” Horne says. “Wireless is critical in that respect
because it is far less expensive to support than an Ethernet
infrastructure and it’s becoming increasingly easy for end users to
get to grips with.”
Vendors are also
realising that they need to develop solutions specifically aimed at
smaller businesses. IBM offers a discount programme for SMEs called
Top Express, while Microsoft recently launched ‘Connect Anywhere’,
a service that provides a mobile device, network access and
software for £2 per user per day. The service is already being used
by Marie Curie Cancer Care, which plans to roll out the package to
all its nurses by 2005.
Lowering
the TCO
The aim of the
initiative is to lower the total cost of ownership (TCO) of
wireless for SMEs, says Annemarie Duffy, of Microsoft’s Mobile
Services Division. “We recognise there is a need for wireless in
the SME market, and initiatives like Connect Anywhere reduce the
upfront cost of implementation and help SMEs calculate a clear
return on investment,” she says.
However, few
companies are aware of how to build a full ROI case for wireless
technology, says Ken Smiley, an analyst with Giga Information
Group. “Simply providing more convenience to a customer or an
employee doesn’t necessarily benefit the organisation,” he says.
“Wireless has to be used to accomplish specific tasks or satisfy
specific business needs if you want to achieve any sort of
ROI.”
The problem is
that the technology cost of a wireless deployment accounts for only
a small percentage of the total project costs. In general, the
device will account for only 10% of the total project costs.
Another 40% of the project budget will be spent on application
development (the software program running on the device), security,
network connectivity and management costs. Once these upfront costs
are dealt with, companies should expect to spend as much again on
maintaining the devices and training employees to use the
technology.
It may be, that
once all of these costs are factored in, an SME cannot afford
mobile computing. “Rolling out insecure wireless technology or
unmanaged technology is more damaging that doing nothing at all,”
says Angelo Lamme, European Product Manager with networking vendor
3Com. “SMEs, with their relatively unsophisticated IT systems, are
a prime target for hackers and virus writers, and wireless is
opening another gateway into the organisation. If you don’t have
the resources to secure that gateway, you don’t have the resources
to use wireless.”
Of course, the
cost of wireless computing is only half the ROI story. Companies
must also quantify the benefits the technology will deliver.
Forrester Research found that the most common benefits businesses
realise from mobile applications are better productivity (60%),
always-on access to information (40%), improved customer services
(36%), and better logistics (20%). However, many executives confuse
new capabilities with concrete benefits, says Charles Homs, an
analyst with Forrester.
Dollar
value
“If your staff are
saving 15 minutes a day, don’t assume you can translate that into a
dollar value,” says Homs. “Unless you can actually get rid of those
workers or get them something else to do with that time, it
shouldn’t be counted as a benefit.”
To build a solid
ROI case for a mobile or wireless technology project, Forrester
advises companies should start by ignoring technology completely.
“Consider who your employees are, and what level of mobility they
currently have, and whether they will benefit from more mobility,”
says Homs. “What new processes could be created, or what processes
could be improved?”
This information
should give you an idea of whether your users need mobile computing
(a laptop rather than a PC, for example), wireless computing (a
wireless network in the office) or both (a wireless-enabled
laptop). Wireless-enabling a mobile worker generally adds around
25% to project costs, but will the benefit of having real-time
information generate benefits that outweigh these costs?
“If you make the
technology decision first, you’re likely to make the wrong choice
and the cost of supporting your users won’t be matched by the
benefits,” Homs says.
Increasing
the ROI of mobility
- Never buy early Typically, the price of mobile devices falls by
25% within six months of release. Only buy new products if there is
a compelling reason.
- Limit platforms If you’re mobilising 200 field service workers
doing the same job, they should all be using the same technology.
Every additional platform adds to support costs.
- Buy bulk If you’re not planning a large deployment, consider
buying back-up units to take advantage of cost breaks. This will
also speed up the deployment of new users and keep support costs
down longer term.
- Stay flexible The ability to add peripherals, software or to
work on multiple wireless networks will enable you to build out
existing platforms in future rather than starting from
scratch.
- Look for service discounts Devices sourced from an operator or
carrier may be subsidised, thereby lowering upfront costs. In many
cases, devices are free if the CIO signs an agreement to make use
of the network for a set period of time. However, be aware not all
devices are available on all networks.
Source: Giga
Information Group
Promise of
a new wireless generation
The SME looking to
adopt next-generation wireless technology must consider a number of
profound issues. Equipping workers with wireless-enabled PC or
portable device is intended to be in the name of efficiency. What
SMEs should aim for in their wireless strategy is the fastest speed
possible, with the broadest coverage possible, and the lowest
cost.
To achieve this
aim means some serious business thinking. Enabling pervasive
wireless usage could bring about uncontrollable costs. Even as
3G/UMTS networks handsets become increasingly available it is
debateable as to what they mean to SMEs. Even though it has been
supplying technology for 3G handsets and systems for some time,
Qualcomm has very forthright on what it means for the SME. Says
Senior Marketing VP Jeffery Belk, “One thing has been missed is
3G’s relevance to the SME. The promise of 3G/UMTS has always been
centred on multimedia handsets with video phones, etc.”
Qualcomm sees its
role as working with as many device manufacturers as possible to
enable the greatest breadth of next generation devices and services
for SMEs to implement. Sales and marketing manager Barry Matsumori
says that he has witnessed a big change in products offered by
handset and equipment suppliers. “Phone manufacturers are evolving
and one thing that they are recognising is that the value they have
is not from developing a wonderful modem but from bringing the
whole package together.” This package includes knowledge of the
back office applications and systems.
Slowly but surely
the 3G networks are rolling out and the operators are beginning to
target the SME. To Qualcomm the ideal point will be when network
operators respond to SME feedback and issue them with requirements
that can be incorporated into chip set solutions. Before this day
arrives, it is essential that the wireless technology fits totally
into your business plan. Joe O'Halloran
Click here for SME supplement homepage >>
Click here for Part One of the SME supplement
>>