People are doing wireless today without having thought about it first, and now they have some real problems,” states John Stehman, principal analyst with the Robert Frances Group. “They can’t even support all the devices they have out there. They have five to seven different devices and the help desk doesn’t even know what some of them are.”
Wireless technologies are still experimental, and Thomas Tunstall, Ph.D. with
KPMG Consulting, believes it’s difficult to know “which applications will catch on and which providers will be successful.” Wireless technology is changing, coverage is changing, and providers and pricing are changing. Users are trying to decide if applications will have value. To enter this world requires a strategy built on flexibility and minimizing risk; both are best accomplished by outsourcing.
Stehman believes that 2001 is a good time for organizations to gain familiarity with the technology, even if it’s only a pilot. “If you wait too long, the challenge will be even more difficult because a year from now we are going to have more networks and more technology than we have today,” he advises. “We are going to see the 2.5 Generation networks start to roll out later this year, and that will create even more of a problem because there will be a larger selection.”
Determine the Value Proposition
Organizations must understand the risks when they put their applications in the hands of a wireless provider. If the company can use dial back up when the wireless access doesn’t work, or if it can live with several hours of downtime, then the risk is minimal. Stehman advises Fortune clients of the Robert Frances Group to determine the value proposition. “The buyer has to ask, ‘Why should we do this?’ If there is a strong why, then they should enter into negotiations.” The value proposition must outweigh the costs of the devices, help desk, making applications wireless compatible, and turmoil. If the value proposition is that the company will gain revenue or increase customer satisfaction, he advises them to move forward.†
In assessing an organization’s strategy for entering the wireless world, Stehman suggests establishing quality of service. How many users must the application support? What kind of server does the application have to run on? What security is needed? What is the response time that users will accept to access the application? What about availability?
Chris Lin, founder and CEO of iDini, an applications infrastructure solutions provider, advises companies not to be afraid of the technology. He believes the best starting point is to determine the common need of the majority of an organization’s mobile staff. It may be something basic, like email, which can be outsourced to a wireless application service provider (ASP). Or it may be something highly focused, such as warehouse inventory, where the organization would benefit from a wireless intranet. Look first for the solutions to meet those common needs. Then build on that and add more applications.
Eventually the applications will need to be integrated into a single environment. Large corporations can address this now. But “a vertical segment requiring a lot of integration is probably hard for a mid-size corporation now,” Lin suggests. “They will probably have to wait a little, until there is sort of a shrink-wrap grade application for that particular segment to come along (as opposed to spending a lot of money developing that application and making it a moving target).”
Lin advises people also not to bet on one technology. Buyers need to determine whether their wireless investments today will be viable for the next three years to five years. That is really, really important,” he says. “You don’t want to redevelop or re-invent or re-integrate all the applications you have on hand every time the wireless operators decide to move to the next level of browser or service.” It’s vital to be aware of upgrade paths before making a purchasing decision.
Determine mCommerce Strategy
KPMG’s Tunstall believes that mCommerce (wireless eCommerce) will be “to eCommerce just what eCommerce has really been to traditional business models. It will complement them where it makes sense. People thought that eCommerce was going to in wholesale fashion replace entire industries. But what has happened is that it’s successful where it makes sense and adds value to existing models. But the existing models haven’t gone away by any stretch.”
A progressive company will look at implementing wireless technologies as a complement to its existing eBusiness or eCommerce strategies, providing another means of access. If the buyer is outsourcing its customer relationship management (CRM) function, for example, it may want its current outsourcer to consider an out-of-scope- project and work with the buyer on implementing wireless technologies into the CRM process. The wireless application would be a new access mechanism to the buyer’s customers, but it would not replace an existing CRM process. It would need to be integrated to the existing eCommerce infrastructure and CRM process.
Should the buyer approach its existing supplier or seek a new outsourcer in such an instance? Tunstall says there is no pat answer. He advises the buyer to perform due diligence and get a feel for what companies are out there and what potential options are available, then internally assess how well the existing supplier compares. If there might be a fit, the existing supplier should be included in a bidding process.
Watch for Hazards
Tunstall cautions buyers of hazards inherent in a new technology. Normally, a buyer would “crisply define” what it looks to outsource. But in this case, what frequency would you use for a wireless application, for example? Some of that is going to be a function of quality of service (QOS). A high QOS will be more expensive. With wireless, it has to do with whether it’s a licensed or unlicensed spectrum.” He says that providers that have licensed spectra tend to have higher QOS and will also be more expensive.
Another hazard is the complexity of integrating systems and the processes involved. When it comes to new technology, Tunstall says companies often have competing IT† factions. “If you outsource, the outsourcer obviously has some ideas about which direction the infrastructure should go. Then the in-house IT folks, if they develop proprietary systems, have strong feelings about where things should go. It’s often difficult to obtain an alignment.”
Lessons from the Outsourcing Primer
- Assessing value proposition and needs are the first steps in devising a strategy for entering the wireless world.
- Outsourcing is effective in minimizing the risks in adopting new technology.