Strategy

E-commerce, Unplugged

The wireless workforce is coming -- but expect some bad chord changes along the way.
Randy MyersJune 15, 2001

On a recent spring day, Jay Marks walked into a house he had been hired to sell for his employer, Arlington, Texas-based RE/MAX Associates. Marks, an associate broker at the global real estate company, immediately began doing what real estate brokers do: writing down the number and size of the rooms, and listing the property’s best features. He also took some photographs.

But instead of jotting these notations on paper and recording the photos on film, Marks entered the details on a notebook computer and stored the pictures on a digital camera. Before leaving the house, he used the high-speed wireless modem in his portable computer to send all the digitized information — including the snapshots — to online computer databases. Almost instantaneously, the listing was viewable by potential buyers. ”This technology is setting me apart from my competition,” claims Marks. ”With these tools, I’m able to do my job 30 percent faster.”

Admittedly, posting photos of somebody’s rumpus room in a third less time may not rate as a revolution in commerce. But make no mistake, Jay Marks is on to something — something big. While analysts and computer gurus have been trumpeting the virtues of mobile commerce for the past few years, it seems they’ve been blowing the wrong horn. Most have assumed that companies would generate huge revenues selling products and services over wireless devices.

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Don’t count on it. ”Much of the hype surrounding M-commerce, from potential revenue to the number of people who will become M-commerce users, is just that — hype,” claims Ken Hyers, a senior analyst for the mobile-commerce information service at research firm Cahners In-Stat. Hyers says projections showing hundreds of billions of dollars generated from customer sales over the wireless Web are greatly overblown. Even in Japan, where 19 million citizens carry I-Mode phones, consumers still use these mobile Internet devices mostly to send messages and swap images of cultural icons.

Free downloads of Hello Kitty hardly qualifies M-commerce as a killer app. For the vast majority of corporations, the commerce in M-commerce will come from a different — and somewhat unexpected — constituency. For these companies, the real bottom-line wallop from wireless computing will come from their own employees.

The potential of a wireless workforce is truly remarkable. As Marks found, wireless remote access to the Internet enables employees to outperform competitors who are tethered to a network. With wireless connectivity, for example, workers can send and receive instant messages from practically anywhere on the planet. Instant messaging, experts note, is fast becoming a favorite tool to help salespeople close deals.

Some management teams, however, have M-commerce plans that go well beyond IM. Executives at dozens of companies are looking to make the entire range of corporate software and data available to their employees — from any remote location, on any device. In fact, in a recent survey of corporate managers conducted by Forrester Research, an overwhelming majority of the respondents said they expect their companies to begin rolling out wireless computing applications for their workers by 2003.

Cone of Silence

For many early adopters, a 2003 launch date may be somewhat optimistic. The fact is, devising and deploying an M-commerce application for corporate use can be a complex technological undertaking. And like any complicated IT project, the odds of an on-time rollout are not real good.

Granted, companies have been exchanging bits of data between the home office and field employees for years — the electronic keypads of Federal Express couriers come to mind. But giving workers mobile access to the full spectrum of enterprise data and applications … well, that’s a big step-up in class.

Managers face substantial hurdles in trying to cut the network cord. For one thing, the available communications bandwidth for wireless is still skimpy. It doesn’t appear that US regulatory officials seem overly interested in doing anything about it, either. They’ve essentially told providers to make better use of what they have.

Moreover, mobile service remains spotty in many parts of the country, and blind spots are still common. Hence, nationwide — and even regional — wireless programs experience information blackouts. Beyond that, experts point out that handheld devices are not yet up to the task of true wire-free computing. ”I don’t know of anyone really using wireless to get to corporate data,” says Rob Perry, senior research analyst at technology consulting firm The Yankee Group. ”There’s a lot of talk, and people are getting ready for wireless access, but nothing’s really happening yet.”

Others disagree. Stewart Bloom, senior vice president of eStrategy for Mainspring, a consulting firm specializing in digital business strategies, says the heavy lifting for M-commerce is being done today. Bloom grants that almost all his corporate clients refer to their wireless workforce initiatives as ”pilot projects.” But he quickly points out that in 1995, back when groupware such as Lotus Notes started becoming popular in the commercial sector, few companies installed the software across the enterprise. ”They just did a pilot,” recalls Bloom. ”But when it was done right, groupware became a mission-critical application. I think we’ll see the same thing with wireless.”

If Bloom is right — and even skeptics concede that third-generation (3G) communications technology will speed the wireless plow — then finance managers have some tough decisions to make right now. Manuel Barbero, a managing director at KPMG Consulting, says CFOs should already be devising policies for how wireless devices will be used. ”At many companies, individuals are buying their own devices,” Barbero notes. ”But they’re also going to the company help desk with requests for how to do certain things with those devices. The support costs aren’t even known.”

Nevertheless, chief financial officers are being asked to sign off on investments in wireless platforms, wireless applications, and wireless devices. Tough work, considering the hundreds of providers that offer those products. ”It’s a very confusing time for a CFO and CIO to determine the right wireless architecture for their company,” notes Bloom. In making that decision, consultants say, finance heads should apply the same rules they applied when their companies began to deploy intranets. ”Use pilot groups to figure out what is of value,” offers Bloom. ”Monitor the applications to see what level of use works for what kind of users in what types of instances.”

The Kitchen Synch

And be prepared for a load of compromising. Employees who insist on having access to full-blown versions of programs residing on a corporate network will have to lug around bulky portable computers, not lightweight personal digital assistants (PDAs). The screens on handhelds are simply not large enough for a clear rendering of detailed data. Trying to read spreadsheet columns on a PDA screen can be a maddening experience.

Transfer of data won’t prove any less frustrating. Currently, only 13 metropolitan areas have access to this country’s first, and still only, high-speed wireless network for the masses. Operated by Metricom under the Ricochet brand name, it can move data through the ether at 128 kilobits per second, or about 12 times the speed of conventional wireless networks. In situations where slow transfer speeds aren’t acceptable and the Ricochet network isn’t available, business users have two options. They can forgo wireless connectivity altogether. Or they can rely on synchronization sessions using a high-speed wired connection at home or through wireless local area networks now cropping up in airports, hotels, and coffee bars.

That’s the strategy employed by the management team at Sears, Roebuck. The Hoffman Estates, Illinois-based retailer relies on wireless transfer of data to deliver daily route information to 12,500 technicians servicing Kenmore refrigerators, stoves, and the like. When in the field, those technicians use ruggedized laptops to wirelessly exchange small amounts of data with company dispatchers. But when they go home, the workers plug their laptops into phone lines and download their schedules for the next day. They receive a customer’s name and address as well as the model number of the appliance to be serviced, a description of the problem, and a history of prior service calls.

Useful stuff, but hardly a tidal wave of data. Companies intent on offering employees wireless access to richer content can run into problems. Mostly, those problems stem from the lack of processing muscle and storage capacity on the current crop of PDAs and cell phones.

There are workarounds, however. One fix: software that takes data from existing enterprise applications and converts it for use on handheld machines. Equinox Solutions, for instance, has developed a program to help users receive bulky email attachments on Blackberry two-way pagers. The software forwards the attachment to a different email address on the Blackberry user’s corporate server. There, the attachment is converted to text format readable by the pager, then routed back to the remote user. Equinox has developed similar apps for other wireless gadgets, including Palm Pilots and Pocket PC devices. The programs allow offsite workers to open a pared-down, text-only version of an email attachment. The software also comes with a remote fax feature, enabling a user to route an attachment to a nearby fax machine.

Of course, not all companies require such firepower. In Odense, Denmark, managers at Scandinavian Garment Service, or SGS have gone a simpler route. The clothing delivery specialist recently equipped its drivers with WAP-enabled cell phones. Such phones, which feature browsers designed for the wireless application protocol (hence WAP), are extremely popular in Europe.

At SGS, which delivers new garments to retailers in the Nordic region, drivers use the mobile phones to interact with the company’s back-office computer systems. According to Kurt Nielsen, IT group manager at SGS, the setup allows drivers to access delivery assignments and to key in delivery confirmation data while on the road. So far, the plan seems to be working. Says Nielsen: ”Our drivers are doing some of the work that used to be handled by our back office.” Gunnar Jacobsen, group managing director at the Danish company, adds that, with the WAP-enabled phones, information no longer is keyed in twice. That, he says, has reduced the number of errors introduced into the company’s record-keeping system.

One Nation, Under Covered

While a bona fide time and money saver, the wireless initiative at SGS doesn’t qualify as a face-of-god project. That may be smart. Experts say more ambitious wireless rollouts tend to run into bigger obstacles.

Take the case of SAP, the German enterprise software developer, and its MySAP Mobile Workplace. SAP, maker of the popular R/3 ERP suite, started hawking a wireless enterprise portal product early this year. The big selling point of Mobile Workplace is that it can be customized for different departments. A salesperson’s portal, for example, might allow access to a T&E billing application, email, customer and product data, and pertinent public Web pages. But that employee wouldn’t be allowed to root around in corporate financial records or HR files.

Before putting the product on the market, however, the company rolled out the program for the benefit of the 320 sales executives at its SAP America division. It was an eye-opener. ”The first thing that slapped us rudely across the face was bandwidth,” says Tom DelMonte, manager of internal business consulting for the customer relationship management team at SAP America. ”When you’re working on a traditional network, that’s not a consideration. But when you go to a wireless environment, it’s a big consideration.”

To skirt the problem, SAP designed MySAP Mobile Workplace to automatically determine what wireless appliance a worker is using. The software then tailors the output for that appliance. A worker using a handheld device with a small screen, for instance, receives data in a simpler format than an employee who views the data on a notebook display.

But bandwidth wasn’t the only snag. DelMonte says executives at SAP America discovered that no wireless phone carrier offers true nationwide service. SAP America’s sales executives access their mobile portals using Compaq iPAQ handheld computers. Those devices run over CDPD (cellular digital packet data) networks — the sort operated by AT&T Wireless and Verizon. Neither of the two carriers offers full coast-to-coast CDPD coverage in the United States, however. ”If you went with just one vendor,” recalls DelMonte, ”you only had certain coverage areas included in your basic price, and as you roamed out of those areas, prices skyrocketed. The charges were just astronomical.”

So, project managers at SAP America decided to give sales executives access to the vendor whose coverage area most closely matched their own sales territory. ”Our costs were in the hundreds of thousands of dollars per month if we allowed roaming,” says DelMonte. ”With this scenario, we’re spending about $25,000 to $40,000 a month.” Even so, DelMonte concedes that 15 to 20 percent of the work done by the company’s sales force occurs in areas where there is simply no wireless service available.

Given these obstacles, it’s not surprising that m- commerce rollouts often run overbudget and long. To avoid project hell, experts say it’s vital to avoid overkill. Tony Esposito, vice president of sales at wireless platform provider Broadbeam, notes that executives often put together a wish list with every feature they could want in an application — including wireless capabilities. ”Then they try to find somebody to give them everything on that wish list,” he says. ”They spend years putting it all together, only to come out with nothing because they find out it just isn’t possible yet.”

Until 3G technology arrives, it’s best to start small. ”People who have seen instant payback on their investment,” says Esposito, ”are those who took a very good idea and concept, implemented the core piece, and then built off it as they went along.”

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