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September 28, 2002 Newsletter.
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Many IT professionals will tell you that the initial cost of a mobile enterprise application is usually well into five- or six-figures, if not more.
The wireless middleware alone can cost this much, and the latest high-powered handhelds are as expensive as a good desktop PC. Then, there are the costs of engineering for integration and customization, plus the high recurring costs of the latest broadband airtime.
Indeed, this may be appropriate for a large organization with complex, large-scale mobile requirements and clear-cut ROI opportunities. Many enterprises have planned and budgeted for this, but are waiting for a more favorable economic climate before making the strategic leap into mobile applications.
However, for many enterprises, now is a great time to take advantage of some great bargains in wireless. End-to-end solutions can now be assembled quickly and at a small fraction of previous prices. These aren't demos or prototypes, these are useful, production-quality, scalable systems that can pay for themselves and start adding to the bottom line almost immediately.
In this and coming newsletters Outr.Net will illustrate how to accomplish this for some real-world enterprise applications.
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Let's take hypothetical XYZ Inc., which is a small but fast-growing company in the parts and service business. The company's 10 salespeople currently use paper forms to take orders in the field, and completed order forms are dropped off or mailed to the home office. A data entry clerk in the back office manually enters completed orders into a company database.
XYZ has been looking into mobile data solutions to automate order entry to help reduce errors, and to generally streamline the order-taking process. The order forms are relatively static, but usually need to be updated every quarter or so. The devices will need to be reasonably durable and easy to use with minimal training because the sales force is expanding and has varying degrees of technical expertise. Offline operation will be required occasionally (with automatic reconnect and upload) because clients may be in marginal coverage areas, either deep inside a building or in a rural area.
Wisely, the company has decided to focus on an end-to-end solution just for order entry, but with the field experience gained on this application will re-evaluate the real ROI and business process benefits, and will then consider automating other mobile functions like dispatch, order tracking, and CRM.
The single biggest opportunity to simplify in applications like this is in the back end: rather than use a high-tier wireless gateway, some simple scripts running on the company's website server can interface directly with the wireless network and update the company's database. These scripts can also provide web pages inside the company firewall for managers to view real-time status of orders entered.
(Using some software templates, Outr.Net can typically develop, test and release these scripts in about 2 days of development.)
On the mobile side, a custom application can be developed which reflects the paper order forms, handles offline operation and automatic reconnect, and interfaces with the scripts running on the company web server.
One advantage of this type of custom application is that validation can be built into the forms, to help ensure that entries are correct. For example, the application will make sure that part numbers, dates and zip codes are in the proper format and within acceptable ranges, and that all required entries are made.
In addition to the order entry screens, this application would contain a splash screen, a password screen, and a configuration/preferences screen.
In this case information flow is relatively straightforward, and transactions and bandwidth requirements are limited, so another opportunity to simplify is to use circuit switching over a voice network rather than one of the overlaying data networks. For example, CDMA can be used rather than 1XRTT, or GSM can be used rather than GPRS. This will save on recurring costs, and at this time the voice networks are generally have greater coverage and are more reliable.
(Outr.Net can typically develop, test and release a custom application like this in about 3 days of development, using Overnight AppTM software templates.)
Because of the incredible pace of development of mobile devices, plus overbuilt inventories because of overly-optimistic forecasts, there are now some great opportunities to save on wireless data devices. Many of last years latest and greatest are now being cleared out at fire sale prices to make room for the upcoming generation.
We considered a number of devices for this application. Pocket PC devices have a very good displays, PIM functions, and backend server integration. RIMs have a good display and keypad and excellent email features. Timeports excel in durability, coverage, and battery life. Internet phones with thin-client browsers (like WAP phones) promise fast server-side development. We have developed similar applications on all of these platforms, and the final selection often comes down to details of the application, local coverage, or simply user preference.
But all things considered, we felt that wireless PalmOS devices offered the best overall compromise for XYZ's situation. They have good displays, battery life, PIM functions, and backend integration. In addition, all Palm communicators support Secure Socket Layers (SSL), which provides end-to-end security across both wireless and wireline transport.
Also, Palm OS communicators are available in a variety of form factors. For example:
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The Handspring VisorPhone is currently the "blue light special" among convergent devices. A Visor can be purchased for $150 or less, and the VisorPhone attachment (which makes it a phone and communicator) is now being offered for free with an airtime subscription.
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A step up, the Kyocera QCP 6035 is now available for as little as $250 with an airtime subscription. It is not the most compact of convergent devices, but has an impressive set of features and would probably be our first recommendation for this application.
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Another step up is the Handspring Treo 180, which is now available for $350. The Treos have received positive acceptance for their features and compact form factor, and this one is also available with a keypad.
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Of course, these bargains are subject to availability, but other, even more cost-effective opportunities will take their places. Serious bargain hunters may find even better deals among channel liquidators or the B2B sections of auction websites.
The initial costs of this end-to-end solution comprise backend development (2 days = $1600), client-side development (3 days = $2400) and devices (10 X $265 = $2650, for the Kyocera, including tax), for a total initial cost of $6,650.
The recurring costs are airtime (~$30/month for Verizon CDMA 125 anytime minutes/month) for a total recurring cost of $300/month for the 10 salespeople.
Some maintenance and training is required, but is probably close to that required for the paper forms.
The benefits are significant:
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 Fewer error caused by unclear handwriting, lost paperwork, and incorrect entries.
Timely acknowldegement to salespeople on order confirmation, and parts availability.
Elimination of the manual job of entering sales forms into the company database.
More timely information to company management on sales, backlog and parts inventory.
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Considering just the first two items, which affect the sales force alone, if the loaded cost of a salesperson is $60K/year, and XYZ anticipates that this solution will make the salesforce at least 5% more efficient and productive, the monthly benefit is $2500/month.
Projecting these savings, this mobile solution pays for itself in just a few months. Within 2 years, the initial $6650 investment pays for itself and puts another $46,000 into the company coffers.
By shopping wisely and using some simple and clever integration tricks, XYZ assembled a solution that paid for itself in four short months.
Other benefits of moving ahead with this simple approach are:
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The solution, and the benefits, are scalable as the company and the sales force grows.
The solution is extensible to other mobile functions, devices, and backend software.
The company is in control: the software is running on their systems, they own the source code, and are not dependent on any one third party for maintenance or upgrades.
The company is getting a head start on mobile applications, is getting real experience on new business processes and ROI factors, and is getting a clearer view of other ROI opportunities with mobile applications.
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In upcoming newsletters we will illustrate how this approach can be applied to other types of applications, like field force dispatch, and image handling.
Written by:
Kim Spitznagel
President
Outr.Net, Inc.
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