Business to Wireless: A greater return on investment

By Marc Phillips

With the success of Japan's wireless Internet provider iMode, the over-hyped wireless device manufacturers and application developers preachings, exorbitant 3G auction prices, and longer return on investment business models for consumer WAP services, no wonder CEOs of Asian companies are confused! Still smoldering from the burnt out undelivered promises of the PC based Internet revolution, CEOs should not dismiss the benefits of wireless within their corporation and review business cases in the Business to Wireless (B2W) market.

It is not all the WAP hype. Don't be misled by the negative reports on the availability of infrastructure for the wireless economy that has generated a considerable amount of skepticism. Network readiness and device availability has been a major basis for this ill feeling. Slowly but surely, more corporate wireless applications are making it easier for CEOs to see real return on investments from business to wireless activities. In March 2001, Lotus Development Corp. announced an agreement with Ericsson and Nokia to put a mobile version of Lotus Notes and Lotus Domino on cell phones and other wireless devices by year's end. Lotus and Ericsson plan to provide access to Lotus Domino Everyplace Access Server via the new phones, along with instant messaging capabilities through the Sametime Everyplace server.

Upon consultation with a few innovative businesses in the Asian region, it appears a few glitches in the road are not going to stop them realising the potential benefits of corporate wireless applications.

Ticketek - Hong Kong  

Ticketek, which sells tickets for events, is constantly challenged with the cost of acquiring customers. Processing ticket sales over the counter and providing customer service via the call centre are significant costs. According to Brett Judd, General Manager of Ticketek Hong Kong, “bookings and customer service over the phone really just transferred costs from our existing over the counter service. IVR (Interactive Voice Response) proved not to be a very enticing option due to the information transfer that was required and the loss of upselling and cross promotion opportunities”.

So what is it then that gets Mr Judd so excited about the possibility of interacting with consumers via a wireless device? The Internet has already had a major impact, so how is viewing content over a different device going to increase profitability?

“It’s the opportunity to develop a one-to-one relationship with the consumer that will deliver timely, concise information whilst the consumer is on the move” says Mr Judd who was responsible for one of the first commerce enabled WAP sites in Australia (http://wap.ticketek.com).

Ticketek has experienced the benefits of providing wireless benefits for their business by enabling the customer to complete a transaction and then repeatedly access this information at a later time for information on seating, dates, venue and travel details. The customer can access the information at any time, anywhere directly from Ticketek's internal systems guaranteeing up to date accurate information. Ticketek can also see the obvious benefits in their cost structure by moving human labour to more value added services. Mr Judd concedes that consumer awareness and take-up rates are major factors in returning their investment but believes the compelling nature of the service will be a driving factor in adoption rates.

Whilst many companies have ridiculed the wireless Internet market, Ticketek has been working on the back-end systems and focusing on getting ready for increased wireless interaction with their consumer base.

“Delivering and receiving information from key internal systems has been the challenge for us over the past couple of years” says Mr Judd. The Internet channel to consumers was proving more costly in labour terms until Ticketek was able to link the site to existing legacy systems. “The wireless channel delivers us an opportunity to improve customer service and likelihood of repeat business like never before" he added.

Lucent Technologies  

With advanced digital networks delivering information to sophisticated devices, one might believe the first wireless initiatives will be allocated to difficult and complex assignments. Not so, according to Amer G. El-Nahi, Asia Pacific Marketing Director for Lucent in Hong Kong, “We look at the most simplest of day to day operations. An employee travelling 10 metres back to his truck for a manual is a huge wireless opportunity.” Business processes and simple procedures can be extremely costly activities that can be reduced with wireless technologies and applications,” says Mr El-Nahi. “Manuals, customer databases, instructions, FAQ’s and various online support resources when delivered to the handheld device will produce immense cost reduction. The simple task of a technician travelling back and forward to a truck is costing corporations millions today.”

Mr El-Nahi said that in his experience it has been difficult to get people to focus on changing business operations. “The main stumbling block will be getting people to understand that we should be focusing on people’s behaviour. Not just the new technology.” Mr El-Nahi believes wireless applications and devices will fundamentally change the way corporations go about their day-to-day business.

As a CEO in the Asia Pacific region you can't ignore that there are now over 50 million wireless Internet users. In 2000 alone, the number of Portable Digital Assistants (PDAs) sold almost doubled, to 6.9 million units, from about 3.6 million units in 1999, according to research firm IDC. Sales are expected to reach a whopping 33.5 million units by 2004. A major portion of these projected sales is attributed to the corporate sector.

The important point for CEOs to note is that Palm Inc, the makers of the handheld device known as the Palm Pilot, is bundled with software called Avantgo (http://www.avantgo.com). Avantgo provides a service where the owners of Palm Pilots can sign up and when they synchronised it in their cradle that is connected to their Internet enabled computer, information is downloaded to the device.

Avantgo is increasingly being deployed at an enterprise level by corporations yet it has taken several years for corporate decision makers to understand the business case surrounding the use of Avantgo technologies. Avantgo has been a popular consumer service but as CEO of Palm Inc., Richard Owen has said “Corporate customers didn't understand how it worked for a long time, only now are management beginning to see its use in reducing costs."

Goodman Fielder, Australia  

In Australia, Avantgo has been successful in providing new distribution channels for traditional publications such as the Sydney Morning Herald. The general public can now download articles from the Avantgo service on to their PDA and absorb the information on the move. However, it is their work with Goodman Fielder, the diversified food company in Australia, that has displayed the power of Avantgo’s enterprise solution. “When we first talked with Goodman Fielder I remember seeing lots and lots of paper and people making lots of mobile phone calls,” said Ashley Bloch, Managing Director of Avantgo in Australia.

“Our solution delivers information to field workers for the company to reduce spend on telecommunications and costly visits to the office.” Merchandisers for Goodman Fielder now carry Palm Pilots and mobile phones which enables them to connect to the corporate servers. Critical information can then be accessed from the field on often lengthy road trips. Avantgo’s enterprise solution allows Goodman Fielder to upload information in a format that can be easily accessed by the workforce on the road.

Alcatel Australia were so convinced of the power of Avantgo’s services that they deployed the system and had it up and running within two weeks. Their web-based corporate data can now be deployed to mobile employees within or out of office. There is increasing competition in this market with analysts warning that organisations such as Oracle, IBM, Sybase and Microsoft have with their client base may give them a very strong leverage point. These big players are already moving extremely aggressively into this corporate wireless market. However, Avantgo's CEO, Mr Owen is not deterred, "It's a lot harder for large companies to focus on building out specific technology. Any solution they come up with is going to be linked to their existing infrastructure and applications that they sell, whereas we're agnostic." This is an important point that corporate decision markers should be aware of.

It seems that wireless intiatives are popping up everywhere in an attempt to drive down costs and improve business processes. So what is it then that stands in the way of the enticing information anytime, anywhere world?

A major stumbling block has been the lack of handsets available in the marketplace. “It has been difficult to display the advantages of improved processes when there is uncertainty about the delivery of devices,” Mr El-Nahi said.

In Japan, NTT DoCoMo president Keiji Tachikawa has announced that only two of the 11 handset manufacturers which have signed contracts with the company will be ready for DoCoMo's third generation (3G) launch in May. Matsushita and NEC have made the deadline where as European manufacturers Nokia and Ericsson have not. Mr El-Nahi’s concerns have been shared by the wider telecommunications industry considering Nokia had been working with DoCoMo on developing 3G handsets for several years.

With 3G comes the reality of wireless terminals with secure, high speed access to corporate Intranets are becoming appealing to mobile workers such as ambulance officers who could transmit urgent patient data to nearby hospitals or salespeople being able to access any presentations or supporting data to make a sale. Today, the terminals, security and high speed wireless connections are a little way off but the possibilities appear endless.

Interoperability has been a major hindrance in the US as well as parts of South East Asia. High roaming charges and penalties for using networks in different countries in Western Europe have also hurt the wireless market for voice and data. However, recent research conducted by APT Strategies suggests that one 25 per cent of CEO's across Australia, Korea, Japan, Taiwan, Singapore and Hong Kong are planning to roll out mobile commerce devices as part of their e-business strategy.  

So when will most of Asia be ready to start doing business over wireless devices?

Japan’s NTT DoCoMo has been leaders in acquiring massive subscription to their I-Mode service. More than 20 million users in Japan exchange animated messages and surf an average of 300-400 content sites. Whereas the use is approximately once a week in Europe for WAP access, I-Mode uses limited bandwidth but has attracted so may subscribers that is viewed as a possible hindrance to 3G adoption. Messaging seems to be a killer application and it can be done very effectively over existing slower networks. However, streaming video cannot be viewed over the current network and NTT DoCoMo will be the first operator to launch 3G services in May of this year.

Other developed countries include South Korea where half of the population has a mobile phone and 15 million users have WAP enabled phones. Two 3G licences have been auctioned in Korea and another is set to go under the hammer in the not too distant future. Singapore is due to auction four licenses in April or May at the starting price of US$ 86 million. Taiwan plans an October auction and Hong Kong is still debating its timing. Singapore, Hong Kong and South Korea plan to launch commercial services early in 2002. Just over US$590 million was spend on Australia's 3G licences that were auctioned in March, 2001.

It is quite clear that innovation and creative thinking about actual day-to-day operations will lead corporate focus with regards to wireless integration. Helpful, effective and powerful information was delivered during the Internet revolution. Now the focus tends not to be on the actual information (because it is taken for granted that any material printed should also be available online) but the actual point of contact with the user. A wireless device allows the employee or consumer to move freely in and out of the office. The potential to deliver timely and useful corporate information to an employee promises huge cost reductions and improved business processes. That is why CEOs of Asian corporations should be entertaining business plans for their Business to Wireless strategies.