Exploring the Wireless Wilderness

Long before the dot-com bust, before the bull market ran back into the barn, just about everybody was predicting that wireless was going to be the next hot technology. And while some of the enthusiasm for mobile business has cooled a bit as companies have reined in their IT spending, many experts continue to believe that this arena is still in its infancy and that the commercial potential for wireless computing remains huge.
As part of an ongoing series of roundtable discussions co-hosted by Computerworld and ebizChronicle.com, a group of IT executives recently got together in New York to discuss wireless issues such as privacy and security challenges and geographic disparities.

Participants included Tracey A. Esherick, executive vice president of online brokerage for Fidelity Investments in Boston; David Lambert, telecommunications analyst at National Bank Financial in Toronto; Dan Glessner, director of enterprise marketing at Palm Inc. in Santa Clara, Calif.; John Distefano, vice president and practice director for the mobile commerce and wireless services practice at Cap Gemini Ernst & Young U.S. LLC in St. Louis; and Dan Black, director of e-commerce systems at United Networks, a wholly-owned subsidiary of United Air Lines Inc. in Chicago.

Hoffman: Which appear to be the long-term winners for mobile-commerce applications? Are there any killer apps out there?
Glessner:
A lot of our customers are using handhelds for horizontal applications like mobile office, which is e-mail, calendaring and scheduling. A second broad horizontal is in the area of CRM - customer relationship management - to provide better customer service and grow top-line revenues.
Esherick: One of the things that prevents consumers from participating more here is that it's too tough to figure out which device to buy. I know; I have three [a PalmPilot, a Research In Motion pager and a cell phone].
I think the killer app is fixing that problem, making it much easier for people to select the device that makes sense for them. And consumers shouldn't have to know the difference between Web and WAP [Wireless Application Protocol].
Black: M-business isn't always about using a wireless device for financial transactions. It can include business efficiencies, such as the use of these technologies by a ground crew for an airline.
Distefano: I think trying to figure out what the killer app is is a bit of a scavenger hunt. There are a lot of workplace-type apps that are a good fit for untethered field workers. It's the ability to give real-time information in a sales situation. If I'm a maintenance engineer, if I'm a field service rep, [it's] the degree that I can know right then at the point of repair what the part history is, what kinds of maintenance have been performed on this device - whether it's an airplane or it's an expensive piece of medical equipment.
Lambert: One segment that we haven't looked at here is the device-to-device [market]. I think that's going to be an important part of the wireless sector. For example, this is a really simple app: a location-based security system, where you stick a little device in the car and a [security] company can track that car and get insurance companies to pay them for doing the tracking of stolen cars.
ROI
Kashmeri: Is it possible to apply historical return-on-investment criteria against wireless investments? Should companies factor in these huge third-generation licensing costs?
Esherick:
Overall, we view this as part of doing business. And while it's a new, leading channel now, I think it's going to eventually be just like 800-number service was; it's going to be a cost of doing business.
The reason we're in this space is customer service. Ideally, this will allow us to serve our customers better. When you talk to customers who are actively using these devices today, they love them - they absolutely love them. It gives them freedom, and it allows them to keep on top of things, and they're easy to use. [Wireless technology is] still not where we'd all like it to be, but it's a heck of a lot easier to use these than it is to log on to the PC sometimes.
Lambert: I cover one of the companies that was bidding on the U.K. wireless spectrum and won one of the licenses. And some of the reasons they gave me for paying so much for their license were that there are capacity constraints for voice [and] that it was a strategic move, because if you think you're eventually going to have voice over IP in the wireless segment, then new networks will be more efficient than the old networks. And you're capable of paying more for the spectrum if you're able to put in a more efficient network.
Glessner: Do historical ROI analyses apply to these multibillion-dollar investments? From my perspective, the answer is absolutely yes. And Old Economy rules apply to this New Economy kind of situation, and the stock market has been bearing that out.
Distefano: On the topic of the hundreds of billions of dollars that have been spent [on spread-spectrum licenses], I struggle with that. Right now, it's not necessarily an enviable position, but I guess these guys are a lot smarter about exactly where this market may be going than I might be. This is not an investment that should be measured or evaluated within a three- to five-year horizon. This is a 10-, 15-, even 50-year investment that they're making.
Black: The ROI is not black and white. Qualities like customer retention are more measurable by surveys than they are measured by financial execution transactions.
Market Successes
Hoffman: What are some concrete examples of mobile-commerce successes, either in the business-to-business or business-to-consumer space?
Lambert:
There's a company in Canada called Grocery Gateway, and they're basically a grocery ordering service where, pretty soon, you're going to be able to order your groceries over wireless devices. So while you're in your car, you're going to say, "OK, I need some milk and butter," and then use your wireless device to order them.
Glessner: Safeway in the United Kingdom is giving out Palm-powered handheld devices to their customers, with little magnets on the back of them to put on their refrigerators. As people go through the orange juice carton or the milk carton, they just tick off [that they'd] like the MinuteMaid or whatever the brand is. And this gets transmitted wirelessly to the Safeway store. Am I more likely to stop off at Safeway to pick up the groceries that they know that I want, or would I stop off somewhere else to buy food on the way home? Safeway's bet, of course, is that this is a great customer-retention opportunity.
Fiat in France is using handhelds to automate and improve the whole buying process for cars. And we all know how pleasant that is. But they're basically trying to provide the salespeople with all the information about promotions and financing and options, so they never have to leave the customer for any period of time and they can always answer all their questions.
On the B2B side, The Atlanta Journal-Constitution uses handhelds to automate the newspaper delivery process, where drivers touch the screen and see that they need to deliver the morning newspaper to the second house on the left, touch it again, drive two blocks, make a right turn, deliver the evening newspaper to the third house on the right.
Distefano: One good example is one of the largest trucking and transportation companies in the U.K. They looked at their operations and realized that they've got somewhere between 20% and 28% of their vehicles on the back haul [from a delivery] that come back empty. They said, "How can we take advantage of that excess capacity?"
So what they've done is basically create a marketplace that allows shippers [to] bid on the ability to move that gear. So if there's a two-pallet load in Manchester that needs to be moved to London, I've got two empty trucks there that just emptied out this morning. As a carrier, I can take what would have been unused excess capacity that was just going to make this drive back to London totally empty, bid on that deal, get it within minutes because it's a real-time auction, load up the gear and drive it back.

Key Challenges
Kashmeri: What are the key challenges organizations face in rolling out mobile-commerce applications? Privacy and security issues? Skills shortages?
Esherick:
One of the biggest challenges is that I'm not sure we're thinking big enough, speaking for Fidelity. I think that there are so many possibilities with some of the new technology that even the experts can't envision how it can make people's lives easier. So I think one of our challenges is to be thinking far enough out so that we can really get to the killer app or get to that next service or next revenue stream or whatever it is.
Glessner: One of the big challenges companies are facing is how they cost-justify a lot of these wireless investments. Enterprises are struggling with that and so they are obviously just looking to begin with the highest-ROI projects. There are a lot of converging technologies as well. So having systems integration capabilities is very important. There's also a multitude of devices right now: cell phones, WAP phones, handhelds, laptops. So enterprises are struggling with "How do I support, how do I manage, how do I get out this enterprise information to a multitude of devices? And how do I do it securely?"
Distefano: Another big challenge is that the life cycle of new technology is now less than the life cycle of delivery. So we start a six-month project, [and] there's a new device. Are we outmoded as soon as we launch? That's extreme, but still, there's an issue there - there's a challenge there that we have to think about from a technology and infrastructure perspective.
Black: How does this compare to other business priorities? The Internet is the bread and butter right now. How much time and energy do you put into this wireless stuff that's really on the edge of adoption? You've got to put some effort into it, because you don't want to be left behind. But at the end of the day, where's your bread and butter? It's not here. My point is, where do you draw the line?
This roundtable was a joint effort of Computerworld and ebizChronicle.com, an online daily newspaper covering business-to-business e-commerce.

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