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Quick Payback critical to apps

Deploying a wireless data solution translates to increased productivity and better customer service, but the clincher for enterprises today is a speedy return on investment.

by sue marek

January 7, 2002

Not long ago, enterprises could justify the leap to wireless data technologies by showing how a mobile data solution would improve employee productivity or customer service. But in today's tough economic climate, decision-makers are scrutinizing every IT expenditure. Without a demonstrated quick return on investment, wireless data has little chance of making it beyond the drawing board.

"Wireless providers are facing an uphill battle," says Warren Wilson, practice director of mobile and wireless at Summit Strategies, a research and analysis firm. "They are selling this technology to customers who are extremely skittish about any significant capex. To be effective, they need to frame the solution in terms of the customer's own business and show a compelling ROI case tailored as closely as possible to that customer's business based upon real numbers."

Experts say that beyond showing how a mobile device will help an enterprise's employees gather information or improve efficiency, wireless providers need to demonstrate that the mobile solution improves decision-making or enables a transaction or other type of action.

According to research from Mobilicity Inc., a firm that integrates mobile solutions for enterprises, when the Atlanta Journal-Constitution newspaper furnished its door-to-door sales force with a Palm handheld solution, those salespeople saw a 30 percent increase in productivity.

Likewise, when Famous Footwear decided to use radio-frequency scanners to update the pricing of its shoes every week, the firm reduced errors by about 75 percent.

These are just two concrete examples of how wireless data can increase revenue and provide cost savings. Hundreds of other companies in various industry segments have implemented wireless data solutions and experienced similar results, but these companies are skittish about discussing the specifics for fear that their competitors will mimic their strategy. "A lot of companies are doing wireless apps, but they are simply not telling anyone about it because it's a good competitive advantage," says Iain Gillott, principal and founder of iGillottResearch.

Some mobile data companies and analysts have been able to penetrate that close-lipped philosophy, however. In December, Gillott released the results of a comprehensive market study in which his firm talked to 35 enterprises that have used wireless data in their businesses for about 12 months to 18 months. Instead of focusing on information that isn't quantifiable, such as "increased productivity" or "competitive necessity," Gillott tried to measure the return on investment by building a model that "nailed down the numbers and benefits to these companies," Gillott says.

The results were staggering. Gillott found that most enterprises experienced payback on their data investment in four to six months, much quicker than previously thought. Perhaps even more surprising was that these enterprises were reaping the benefits of wireless data using today's networks, which offer relatively slow data transmission speeds."I'm not saying that we don't need faster networks or speed, but there are lots of things you can do today that use the networks we have and are very effective," Gillott says.

Though many wireless data applications for the enterprise aren't new, they have become more sophisticated, making it easier for companies to implement and deploy them.

Along with more modular designs come more cost-effective solutions. Today's enterprises can re-engineer personal digital assistant devices for their mobile workers instead of having to develop proprietary devices as did some of the early wireless data pioneers, including package tracking firms, utility companies and many public safety outfits. According Wilson, those companies are prime candidates for a re-engineered or new solution that takes advantage of new Pocket PC or Palm devices. [WIM]