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The Matter at Hand

Should companies underwrite personal digital assistants?
Anne Stuart, CFO IT
June 16, 2003

From medical schools to law firms to animal-feed companies to the halls of Congress, personal digital assistants (PDAs) are proliferating. The handheld computers that were once no more than gimmicky phone books are evolving into important business tools in a select group of workplaces.

But the emphasis remains on select. Broad acceptance (that is, bulk purchases) has been a dream deferred for makers of PDAs, which continue to harbor hopes that corporate clients will augment or even supplant the consumer market that thus far has been their mainstay.

Global PDA shipments fell 21 percent year over year in the first quarter, according to researchers at International Data Corp. in Framingham, Massachusetts. IDC attributes the slump largely to individual buyers who haven't purchased or upgraded PDAs as quickly as expected. So as the consumer market cools, PDA makers and software developers have focused instead on convincing companies of all sizes to equip their workforces en masse.

They've got plenty of convincing to do. Right now, corporate purchases account for just 27 percent of conventional (nonvoice-enabled) PDA shipments in North America, says Kevin Burden, IDC's program manager for smart handheld devices. That's because as the economy faltered, the seemingly inevitable march toward the mobile workplace took a lengthy detour as companies opted to spend technology dollars for more-prosaic purposes, such as upgrading desktop PCs and increasing network security.

But Burden believes that as the economy recovers, so will corporate interest in PDAs. By 2006, he says, the "enterprise" share of the PDA market will rise to 46 percent, while consumer sales will drop to 54 percent.

Don't look for across-the-board adoption, though. Analysts expect to see growth concentrated in a handful of industries, including health care, education, government, law, manufacturing, and logistics, driven largely by the specific applications aimed at those industries and the fact that vendors are concentrating on them.

Companies that have embraced PDAs have found them to be a mixed blessing. On the one hand, these early adopters have come up with plenty of ways to use the devices on the job — and on the road, with the proliferation of wireless applications and a growing number of high-speed Wi-Fi access points.

Even simple features, such as "instant-on" capabilities, win raves from employees weary of the downtime that laptops impose as they boot up.

But they also report that PDAs have their pitfalls: they're far less powerful than laptop computers, and much easier to lose or break. They come with a whole new crop of security woes (see a summary of management issues in the box below). Their tiny screens, especially the monochromatic ones, can make for mighty tough viewing. And some people just can't, or won't, adjust to the pixie-size keypads on some PDAs and the special handwritten codes or techniques required to use others.

Let's Stay In Touch
In the beginning, aka the '90s — when Apple Computer struggled to market its doomed Newton and Palm launched its first Pilots — PDAs were billed as lighter, neater alternatives to the brick-size personal organizers that many executives hauled everywhere. Early handhelds typically offered a limited menu of features: address books, calendars, notepads, simple document files, calculators. For some users, that was enough.

But the technology marched on, thanks largely to the exploding popularity of cell phones and the concomitant interest in all things wireless. Devices like Research In Motion's BlackBerry, which made mobile E-mail access not only possible but downright cool, began popping up, soon incorporating a number of PDA-like functions as well. Next came a new generation of devices — Handspring's Treo, for instance — that took the all-in-one approach, grafting together a PDA and a cell phone.

Soon companies began to view all these portable devices as less about organization and more about communication. And that made PDA makers dream of selling hundreds or even thousands of them directly to corporate clients.

Carl Zetie, an analyst at Forrester Research, says that while corporate adoption is increasing, it's often guided by a "think globally, act locally" philosophy. Companies don't buy them by the thousands, but by the dozens, often choosing different models for different types of employees depending on the specific requirements of the job.

Take Edmunds.com of Santa Monica, California, a 37-year-old publisher of car-buying information. Just eight years ago, the company — then known as Edmunds Publishing Co. — derived 100 percent of its revenues from its hard-copy buying guides.

Today the books account for just 1 percent of the company's income. The rest comes from its advertising-supported Web site and its affiliated data company, Edmunds Data Services, which provides a comprehensive automotive data set to the Edmunds.com Web site, and licenses data, content, and tools to third parties.

As an online publisher, Edmunds is a round-the-clock business. But its employees still work a traditional five-day week, taking off from 5 p.m. Friday until 8 a.m. Monday. "That means 28 percent of our revenue stream is naked [less protected] over the weekend," says CFO Charlie Farrell.


So the company equipped about 30 of its 160 employees — executives, frequent travelers, and the IT team — with BlackBerry devices. With them, users can send and receive personal E-mails from almost anywhere.

That capability came in handy last winter, when a northeaster stranded several Edmunds executives in Newark, New Jersey, for a day. "They couldn't call out because the phones didn't work — but the PDAs did," recalls Farrell. "So we were able to communicate."

But the real value has less to do with employees far from home than it does with those who are simply at home. "Our server sends out four reports daily about leads being generated on our Web site," says Farrell, who carries a BlackBerry himself. "With that data, we can track revenues and trends, and spot any problems that may occur. All we need is one person to look at his or her BlackBerry over the weekend and see that the numbers are down, then send a message to the operations people to have them check the connections."

The transition hasn't been seamless. "The BlackBerry network can get clogged and queue up messages," causing delays in delivery, notes Chris Nimsky, Edmunds.com's director of new initiatives. That can prompt frustration or misunderstanding in a culture that relies on constant access and instant response. "For truly time-sensitive and mission-critical uses, such as emergency paging, I don't know if I'd completely rely on it," says Nimsky, who, like the rest of the executive team, also carries a company-issued cell phone.

Farrell considers the BlackBerries to be indispensable for some employees, but he's careful to issue them only to those who really need them. Yet when asked how much Edmunds.com spends on BlackBerry devices and service, Farrell provides a surprisingly un-CFO-like response. "I honestly don't mind the cost because they're so important for productivity," he says. "It's just part of the cost of doing business."

The focus on "doing business" is at the heart of company-supplied PDAs. Tom Marino, CEO of J.H. Cohn LLP, an 84-year-old accounting and consulting firm based in Roseland, New Jersey, says that "features like the calendar, the memo, the notes come in handy, but the E-mail capability brings it to another level. It allows you to make use of what used to be downtime."

For that reason, he sprang for PDAs for about 100 of his 600 employees, with travel frequency the primary determining factor. Initially, the IT department tested devices from a number of different manufacturers; in order to provide better support, the department settled on BlackBerries.

While employee productivity is the top selling point for PDAs, other trends are driving corporate adoption. At Schottenstein Zox & Dunn, a large law firm based in Columbus, Ohio, CIO Ken Illgen says the devices help bridge two gaps: one between older and younger attorneys and one between the firm and its clients.

Most new attorneys, typically in their 20s or 30s, came into the firm already using PDAs instead of paper for scheduling, note-taking, and even storing copies of documents and memos to carry to court. In contrast, older attorneys still carried around appointment books, correspondence-packed files, court documents, and even photocopies of every card in their Rolodexes. Illgen wanted to see the two groups move toward a common — preferably digital — approach.

Just as important, many clients use wireless communications and increasingly expect their attorneys to do so as well. "Competition between law firms is fierce, and the need to be in immediate contact is critical," says Illgen. Attorneys who can respond to client inquiries from the backyard or the beach on weekends, or who can instantly check a fact or figure in a stored document, provide a level of service that gives them serious competitive advantage.

Rather than provide the devices outright or specify a corporate standard, the firm offers each attorney $150 toward the purchase of any Palm, Handspring, or BlackBerry product. In exchange, attorneys agree to attend a 30-minute one-on-one training session with an IT staffer who shows them how to best use whatever device they've chosen, whether it's a basic $149 Handspring Visor Platinum or the $499 wireless Palm Tungsten C, which can run Microsoft Word, PowerPoint, and Excel.

So far, about 65 percent of the firm's 105 attorneys use PDAs. While a few partners still prefer seeing everything on paper, Illgen expects growing client demand to convert even the most technophobic users within a few years. Meanwhile, he hopes to expand the PDA-stipend program to the firm's other employees as well.

Some Users Are Beaming
Indeed, "viral" adoption may be the best hope for PDAs. For example, 100 percent of this year's freshman class at Harvard Medical School owned a PDA before setting foot on campus, and 70 percent of upperclassmen use them as well. So do dozens of faculty members, physicians, nurses, and technicians in the CareGroup Healthcare System, Harvard's network of six Boston-area teaching hospitals.

John Halamka M.D., CIO of Harvard Medical School and the CareGroup Healthcare System (and a board-certified emergency-room doctor), says that wireless PDAs are increasingly critical for efficient medical care. But he agrees with others who note that they pose a number of management challenges. "Taking an enterprise view of PDAs requires that you really think through the problems," he says. "What works for one person on the desktop is hard to scale to thousands of users."


Harvard's medical students and employees own nearly 30 different brands of devices, some using the Palm operating system and others running Microsoft's Windows-based Pocket PC software. And each PDA uses different hardware for synching to, or exchanging data with, regular computers.

His solution: support all those PDAs with a specialized server, in this case an AvantGo M-Business server with a Web-based interface that's familiar to everyone and compatible with either operating system. The server connects all those handheld devices to several key school and hospital databases, and uses infrared transmission ports placed throughout the medical campus to connect disparate devices to centralized information.

Because most PDAs have similar ports for wirelessly "beaming" data to other devices, users can easily update information several times daily — no clunky hardware required. "In effect, we have a gas station for applications," says Halamka.

Software can inhibit corporate adoption of handheld computers. While developers have created thousands of applications for both personal and business PDA use, some companies' needs are too specialized to benefit from off-the-shelf programs.

That was the case at Hubbard Feeds, part of Ridley Inc., a North American livestock-feed manufacturer based in Mankato, Minnesota. In the past, Hubbard's salespeople visited customers nationwide equipped only with clipboards and paper forms, which they used for jotting down observations they'd use to recommend management practices and feeding products to clients. When they returned to their offices, they manually created a herd analysis report.

Hoping to better automate the sales process, Hubbard's managers turned to Clevrware, a Sleepy Eye, Minnesota-based developer of business applications for handheld computers. Clevrware's team created Vista Consulting Software, a custom Windows-based program for Pocket PCs.

Using the Vista software, sales representatives now record customer information by using such features as check boxes and pull-down menus. Once the sales reps have called on customers, they can create herd analysis reports in a few minutes by uploading observations on their handhelds and synching to their desktop computers.

So the company paid for custom-developed software (about $15,000) versus hardware (employees either buy their own or win it through sales contests). Marketing manager Tom Koch expects a very quick ROI, thanks to the Vista software's ability to capture data and process information more quickly and efficiently. Food for thought as PDAs take root in Corporate America.

They Mean Business

Sidebar: A PDA&Q
A corporate use of PDAs brings with it some management challenges. Experts say answering a few simple questions can make for a much smoother transition.

Who already uses a PDA? Survey current users for their ideas about on-the-job PDA use. Sign up early adopters for pilot projects or first-stage rollouts; enlist them to serve as evangelists or trainers.

Who most needs a PDA? Figure out which job functions could benefit most from company-provided PDAs. Determine whether software exists or can be developed for those purposes.

What do users want? Learn whether there's a strong employee preference for a particular function (BlackBerry-style wireless paging, for example), operating system (Palm or Pocket PC), or manufacturer and product line.

What do users get? Decide whether you'll designate a company standard or provide employees with equipment options.

What do users need to know? Consider how much training you'll require, who will provide it, and how you'll keep employees informed about using PDAs effectively and securely.

Who pays? Will the company buy, issue, and retain ownership of PDAs? Will it encourage employees to buy their own, perhaps reimbursing all or part of the cost? Or will it provide them as both a work tool and a benefit?

What are the rules? Decide whether employees may install personal data or software on company-owned PDAs. Set policies for how often devices must be backed up or turned in for maintenance.

Sidebar: . . . And Mobility For All
Nathan Clevenger is a man with a mission: he wants to convince businesses that personal digital assistants (PDAs) are good for much more than storing phone numbers and tracking appointments. "It's a fully enabled computer operating within a different paradigm — a mobile paradigm," he says. Clevenger is president and CEO of Clevrware in Sleepy Eye, Minnesota, which develops software for PDAs. By thinking about the devices as handheld computers rather than electronic organizers, he says, companies can dream up innovative new uses for them. Among the possibilities he's already seeing:

Field inspectors collect information on the go, uploading data directly to the network later.

Retail employees and warehouse workers update inventory records from the floor in real time.

Sales representatives store order blanks, account records, inventory reports, brochures, daily pricing updates, and other information.


Delivery drivers and couriers use PDAs for route information (including maps) and to store account records and inventory reports.

Marketers survey consumers in stores and malls and use PDAs as they observe focus groups.

Property appraisers and claims adjusters take notes and fill out reports at homes and accident scenes.

Waitstaff use PDAs instead of order pads to send diners' requests from tableside directly to the kitchen. Next on the menu, predicts Clevenger: patrons at fast-food restaurants will use PDAs to place orders wirelessly while in line.




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