Will wireless deliver ROI?

Companies in the UK have been reluctant to adopt wireless technologies, fearing that the risks outweigh the benefits. But, as...

Companies in the UK have been reluctant to adopt wireless technologies, fearing that the risks outweigh the benefits. But, as Sally Whittle finds out, if approached in the right way, mobile computing can offer significant bottom-line benefits.

Wireless computing - the ability to extend the enterprise by using communications, mobile and IP technology to a range of user devices - should have arrived by now. Why hasn't it?

The 750 engineers at Romec, the maintenance division of Consignia, for instance, know all about wireless. They routinely use SMS (Short Messaging Service) to report back to head office, cutting down on the need to fill in paperwork. There is just one problem: the engineers also happen to be carrying state-of-the-art GPRS (General Packet Radio Services) laptops.

"We have had some problems, so engineers often use text messaging if they cannot get a connection," admits Stuart Keating, the firm's IS manager. Romec's problems were compounded by the newness of the technology. BT, which supplied the network, was unable to offer training for the engineers, and Panasonic, which supplied the laptops, struggled to configure them for a national roll out. "Everyone sat around pointing the finger at everyone else, and we had laptops that were constantly being recalled, reconfigured, sent out and still didn't work properly," Keating says.

Today, the GPRS network is still patchy, and engineers rely on mobile phones and text messages to keep in touch. Keating would like to fix the problem, but he is still unable to identify whether the problem is with the network or the hardware. "We are the first to use this kind of hardware, and the first to use GPRS nationally," he says. "You have got to expect some challenges with something so new - even BT isn't using it."

This cautionary tale clearly illustrates why wireless has slipped off the corporate agenda - wireless implementations are not paying off. The average company spent £500,000 implementing and supporting wireless technology last year, according to analyst group Forrester Research, but 80% did not see any measurable return. In an economic downturn, this is not a career-advancing strategy for any IT manager.

To date, few European companies have gambled on wireless because the benefits have not outweighed the risks, says John Fletcher, a senior consultant with Cambridge-based analyst firm Analysys. "No IT director is going to base his wireless strategy on a product developed by two guys working out of a lock-up in Camberwell. They are going to wait six months for Microsoft to develop it or buy the start-ups."

The good news is that mainstream enterprise software suppliers are beginning to offer affordable wireless applications that reduce the need for custom development and offer improved reliability. At the same time, improvements in wireless technologies such as Wap and GPRS mean that wireless access to corporate data is slightly less difficult than it used to be. "Wireless is really now a mainstream technology, and a real differentiator between products," says Andy Cleverly, business development manager at Oracle EMEA. "It has got to the stage where if Oracle won't give customers what they want, someone else will."

So, how do enterprises implement wireless in a way that ensures return on investment (ROI)?

It isn't rocket science, says Caroline Sceats, an analyst at Forrester. Companies should carefully work out the total cost of wireless data, including mobile devices, network costs, application development and training, then balance that against benefits in efficiency, accuracy and customer service.

"It is perfectly possible to achieve 269% ROI over five years, but only if you have that understanding of how mobile applications deliver value," she says. Added value is even greater for companies focusing on what Forrester identifies as "wireless sweet spots": process tasks (eg warehouse inventory); knowledge applications (such as bespoke discount calculators for sales staff) and interactivity (deploying wireless devices to remote engineers who work on customer sites). In addition, there are savings to be made from efficiency and reduced operational costs. For companies using laptops the savings can be particularly high, says Sceats. "We spoke to one organisation with 750 laptops which switched to desktop and handheld machines and saved £2.5m a year," she says.

Suppliers are working to create mix-and-match applications with a solid focus on ROI. SAP is currently testing a suite of wireless applications with 100 global customers, says Simon Angel, head of mobile technology at SAP UK. "The idea is that customers will be able to pick and choose pieces and fit them together to create more complex applications," he says. "It is all written in completely open language so it is platform-independent, and the cost should not be more than $300 [£210] per user."

Sybase's wireless subsidiary iAnywhere offers a full database for Windows, Unix and Linux platforms which will run on any mobile device. "Today, it is possible to offer access to any data, to any device, on any platform," says Alison Henderson, iAnywhere's UK operations director. "These are products that also deliver ROI extremely quickly if they are deployed intelligently, because they offer the management tools than start-ups generally cannot offer."

For example, Sybase Mobile Manager lets companies manage multiple applications across multiple wireless platforms and mobile devices, and costs £7,800 - a sum hardly likely to break the corporate piggy bank.

Oracle's Wireless Edition 9i Application Server stacks up at £282 per named user, plus 22% support per year. In addition, Oracle 11i offers a range of wireless modules for line-of-business applications such as sales (£208 per user), service (£419 per user) and field service (£1,406 per user).

Early adopters report faster than expected ROI. For example, Glasgow City Council rolled out the wireless edition of the 9i Application Server in six months, and recouped the investment in less than 12 months. Staff in the building services department can enter details of any building repairs that are needed into a scheduling system using Compaq iPaq handhelds.

The results have been surprisingly good, says Stewart Fallis, director of building services at the council. "When we balanced the efficiencies against the up-front costs, the ROI was extremely quick," he says. "It takes half the time to schedule repairs, and staff save an hour a day because they do not need to type things into the system twice."

Wireless does not have to be a waste of money, and it is perfectly possible to mobilise enterprise data on a shoestring, says Anne-Marie Duffy, wireless marketing manager at Microsoft. For example, a handheld device costing £200 can be used to provide mobile access to reference documents or customer details, she says. If the data needs to be accessed wirelessly, it is possible to do this using a mobile phone, or a plug-in modem. "It will be a slow connection, but if you are only sending numbers or short messages at the start and end of the day, you don't need a state-of-the-art solution," Duffy says.

Microsoft's PocketPC operating system offers POP3 and Imap support, which will allow users to dial into an e-mail server and synchronise Outlook data over GSM (Global System for Mobile Communications), but faster connections are possible using a GPRS modem and Mobile Information Server (MIS), which allows workers to dial into the corporate network over a secure link. MIS also lets managers update and monitor devices remotely. Licenses cost $20 per user, although MIS will be bundled with future versions of Exchange.

In fact, the big challenge is not making a return on wireless, it is persuading users to adopt systems that operate at half the speed of their dial-up modems, says Fletcher. "If you present them with something that operates at 14kbps, your efficiency gains won't be as great as you would like," he says. "Today, some things are still better than others."

Case Study: JD Edwards
Wireless doesn't have to be complex or expensive, says John Bade, managing director of catalogue company House of Stirling. House of Stirling rolled out Palm handheld computers running a Sapient application to 300 sales staff two years ago, and saw sales increase by 93% within three months.

"Companies often look at mobile and wireless computing in terms of enormous leaps, whereas you can do it in small steps, and with extremely fast returns," he says.

House of Stirling specialises in selling goods from catalogues to consumers who find it difficult to obtain credit. Door-to-door salesmen call on customers across Scotland and northern England, delivering goods, taking new orders and collecting customers' weekly payments.

Traditionally, salesmen used paper-based ledger systems that were sent to the head office at the end of the week. Today, they use PDAs to download their schedules and customer details each morning, uploading orders and information on returned goods and payments each evening.

"The improvements in efficiency were a fantastic achievement, but there were also benefits in customer service, because staff could spend more time with customers," says Bade. "The whole business benefited because the quality of information was better, and we had injected a degree of control into the whole process."

Questions to ask your wireless supplier
Make sure your supplier is able to deliver a scalable, reliable and future-proof product by asking the following questions:
  • Do your applications run on standard, upgradeable operating systems such as Epoc 3.2 or PocketPC 2002?

  • Do you have agreements with network providers to guarantee SMS delivery times?

  • Will this application cut task time by at least 20%, and can you provide customer references to prove it?

  • Do you offer strong encryption on client devices to protect confidential data?

  • Can clients integrate data from enterprise applications such as Siebel using APIs, and not just screen scraping or transcoding?

  • Do applications automatically detect different devices and customise layout accordingly?

  • Can clients fully extend enterprise applications to mobile devices, processing responses and sending feedback in real time?

  • Does the hardware supplier or OEM offer a guarantee of device availability or a rental agreement?

Source: Forrester Research/Analysys

Read more on Wireless networking