Exclusive Book Excerpt
February 2003 - By Craig Settles


Editor’s note: In his new book, Wireless, Inc., (AMACOM) Craig Settles clearly lays out a no-nonsense approach for creating wireless strategies and tactics that reduce costs, increase revenues and improve business operating efficiency. Settles, president and founder of Successful Marketing Strategists (www.successful.com), has developed and implemented innovative marketing campaigns for over 16 years. He began Net marketing ahead of most of the pack in 1994, and provided successful services for companies such as Microsoft, AT&T, Lotus Development and Symantec. Settles was also director of electronic commerce for Metricom, developer of the Ricochet wireless Internet service. Since 1995, he has spoken at events throughout the U.S. and internationally, including Japan, Italy, Brazil and Australia. He has also taught Internet business courses for San Jose State University in Silicon Valley and conducted on-site training at leading high-tech companies.


Wireless technologies for internal communications are deployed to reduce costs and increase operating efficiencies. They also increase personal productivity and improve management of your physical assets (e.g. equipment, vehicles). This may seem like a tall order for a technology that some people consider to be in its infancy, but there’s a lot that can be done with it internally. The jury might still be out on the question of how much value there is in wireless communication to the outside world until your external audiences increase their use of the technology. But by the end of this excerpt you will find a few compelling reasons to at least test the wireless waters with a pilot project or two for internal communication….

Calculate Costs for General Employee Communication

How much are you currently spending per year on conventional communications tactics specifically for your employees? Do you deliver company news via faxes, printed calendars, newsletters and memos? Calculate how much you’re spending on other printed materials such as reports, company or government rulebooks and direct mail to employees working at home or in branch offices. What about other costs for communication between branch offices, such as wide and local area networks? You also want to calculate the costs to train employees about your organization’s products and services, as well as the costs for providing professional development courses.

For each of these categories, determine if it is practical and economical to shift some or all of this communication to wirelessly delivered content.

Calculate the Potential Impact on Department-Specific Communication

You should meet with each of your department managers to evaluate how much they’re spending for conventional communication. This might involve doing some of the same calculations as above. But you also want to concentrate on increasing efficiency. Organizations with just a few dozen employees may not cut enough expenses to justify the cost of wireless technology, but a 20-percent to 30-percent increase in efficiency that enables them to respond faster to customers’ needs can give them a major advantage over larger competitors.

Marketing

What is the value of your marketing staff keeping current with markets, customers, competitors and news specific to your industry? (This may be an intangible but important benefit.) Based on that estimated value, will wireless-enabling applications such as CRM software increase the responsiveness of the staff significantly enough to outweigh the expense? You may not be able to answer this now, but when you contact wireless application vendors, you definitely need to work through this calculation with them. Are there contractors (e.g. advertising, PR, design) and vendors who provide services and products that play a time-sensitive role in your marketing campaigns? If so, will there be significant increases in efficiency and marketing success with wireless communication that includes alerts when projects are completed, or wireless e-mail and instant messaging?

Estimate how much this is worth in terms of fewer calls made, fewer meetings, or time saved by launching marketing or PR campaigns faster.

IT

IT people resolve problems and enhance the performance of all things digital used by the rest of your employees. Calculate how much you can improve IT staff efficiency if they have anywhere, anytime wireless access to e-mail, message boards and software tools. Don’t forget to estimate how much time IT staff spend supporting the physical computer network of cables and hardware, and determine what percentage of this you can eliminate with wireless LANs. Also estimate the company-wide productivity increase if employees don’t have to sit around waiting for software or hardware support. Besides enabling interfacility roamers to be productive when they’re away from their desks, mobile devices can enable these individuals to keep working if their desktop computers or software crashes.

HR

If your HR staff frequently gathers and processes information from employees (i.e. data for benefits programs, EOE requirements, vacation requests) using printed forms, how much time and money can you save if these forms are completed and submitted wirelessly? Don’t forget to factor interfacility roamers into the equation as well as your mobile employees. Employees in the warehouse or IT staff who rarely see their desks may have the most difficult time completing paperwork. Calculate all of the expenses for time and materials associated with training both new and long-term employees. How much can you save by adding wireless access to materials and training software? And if you can deliver training reinforcement materials to employees’ PDAs, will this increase efficiency in a way that you can measure?

 Assembly Line and Warehouse/Shipping

Wirelessly enabling your assembly line, warehouse and shipping staffs is a topic that probably merits its own book, or at least a significant portion of books devoted to supply chain management. I will do the best I can here to give you a little guidance in financially analyzing wireless possibilities in these areas. You do not need to be a manufacturer to benefit from wireless. Distributors and retail operators may also find several of the following calculations beneficial, as well as government organizations that manage sizeable warehousing and shipping operations. Can assembly line managers run a more efficient and profitable production process if they are wirelessly tied into databases with sales forecasts and customer orders? Subsequently, will they have more accurate data on how much of what items to produce by specific times? What is the possible financial impact?

Next, estimate the financial benefits if your assembly line and warehouse workers are wirelessly connected. Will the production process improve through faster and better delivery of parts and components from the warehouse to the assembly line? Conversely, can wireless communication from the assembly line allow warehouse staff to better manage products coming off the line and headed for the warehouse? Can wireless communication channels between assembly workers, purchasing staff, and suppliers streamline parts and components purchasing? What is the potential financial impact? Manufacturers expect wireless technology in this supply chain management process to have the combined benefits of reducing costs and improving competitiveness, so be sure to factor both into your financial calculations. Will wireless communication enable the warehouse staff to provide marketing and sales with valuable information such as inventory availability data on product returns that result in more profitable relationships with customers and prospects? It might take a while to evaluate the financial impact of this particular application, so to give yourself some time to prove success. You may want to make it part of another wireless application whose benefits are easier to measure. Finally, are there customer service cost reductions or increased customer satisfaction that can result from wirelessly linking the shipping department with various aspects of the business? These links may be to CRM, sales, or accounting software and to outsourced shipping or delivery services.

Calculate Costs for Asset Management

What is the cost each year in physical assets lost or stolen from your facilities? How many of those assets could have been bar coded or otherwise embedded with wireless tracking devices and probably not lost? This calculation should reveal if your annual losses are significant enough to justify the investment in these wireless devices. By department, how many people frequently (over two times a week) spend more than five minutes trying to locate equipment and other important business tools? What does this amount to in personnel cost per week (total amount of employees’ time multiplied by their average hourly salary)? Then calculate the lost productivity cost for equipment when you calculate the time it is not in use while people are trying to find it. If your organization owns major pieces of capital equipment (include here computer networks) create a list of these assets, and then for each asset calculate the hourly or daily cost if it stops working because of a mechanical or other problem.

These figures should make it easy to determine if monitoring software or hardware with wireless communication capabilities that alert you to a problem is a good investment. What are the potential savings if your support staff (or contractors who provide support services) can receive instant wireless notifications before this equipment malfunctions? Add to all of these departmental and general business calculations ROI estimates for applying wireless technology to internal communications needs that are unique to other departments or your organization in general. When you have a clearer picture of the potential financial impact, you can start to develop your main strategic objectives.

Main Strategic Objectives

Some of the objectives that your organization sets for this strategic dimension will be different depending on whether you’re in the commercial, governmental or nonprofit sector. Most nonprofits, for example, may not worry about manufacturing, warehousing and shipping issues (except the Girl Scouts when it’s time to sell those cookies). There are three objectives that can be appropriate regardless of your industry or size of the organization:

  1. Decreasing communication costs
  2. Increasing employees’ personal productivity
  3. Enhancing your overall business operating efficiency.

Save Some Money, Honey

As with the previous strategic dimensions, cost reduction seems to find its way to the top of the list. After many organizations got burned by large and questionable investments in early Web technologies (technologies promoted by outrageous hype and fear), they put the brakes on. Reason began to overrule reaction in the decision-making process. So let’s be reasonable from the beginning and avoid that mistake. If you can show specifically where a new technology has measurable financial impact in the early days of its use within your organization, you will likely get the financial and political backing you need for more aggressive deployment. In some cases, the savings you produce can fund wireless efforts to launch applications that have valuable but harder to measure benefits. There is another value to focusing on cost reduction of internal communication. You can test new ideas and specific technologies away from the public eye.

When it comes to things such as interface design, mobile device performance and determining what is good or bad content, people are pretty much the same whether they work for you or they’re a potential customer. So experiment with different content design and layout styles. Give employees different mobile devices so you can see how content looks on the respective devices. What causes people to stand up and take notice? What causes yawns? Which activities really trim communication costs, and which ones just shift the cost from one point (printed newsletters) to another point (printed e-mails) within the organization? For small organizations that have only one or two people with full-time IT responsibility, you not only have to look at reducing costs after the application is in place, but you also have to be as attentive to how much you spend implementing it.

I’m a big fan of using ASPs. You have low start-up and on-going costs, you don’t have to sweat a lot of the details about what devices people have; and if things don’t work out you’re not left holding a lot of useless hardware and software (those mobile devices are still great personal productivity tools). Here are two companies that use ServiceHub, an ASP based in Northern California.

Rollin’, Rollin’, Rollin’, Keep Those Truckers Rollin’

Aggregate Haulers in San Antonio, Texas, owns a herd of 150 trucks in the area that hauls concrete and asphalt, plus another 750 trucks across the rest of the country. Their approach to finding the right wireless solution can be summed up as, “If at first you don’t succeed, try, try again.” Kyle Kellar, Aggregate’s terminal manager, says they used to have a system in which one or two guys would take a stack of shipping orders and make a lot of calls to drivers telling them where they needed to be the following morning for pick ups and deliveries. Often they would have to make several calls to each driver before reaching them, and sometimes call again to confirm that the driver could pick up and deliver the orders.

This “dialing for drivers” approach led to a lot of confusion, missed assignments and irate customers. It also led to dispatcher burnout. Dispatchers had to wait until the last shipping order came in at 5 p.m., work on a schedule until 6 p.m. and then spend several hours calling the drivers. All of this was after a full working day doing their other tasks. “We started with a paging system, but there was no way to confirm that drivers received the messages,” recalls Kellar. “So we still had people missing assignments. We upgraded pagers, but all they did was confirm that the messages were sent, not received. Also, there were areas where we couldn’t get coverage.” In the midst of this madness, AT&T referred Aggregate to ServiceHub, and life has been much better ever since. “Now when we send messages drivers’ phones beep, they read the messages and we get notified automatically that the messages have been read,” reports Kellar. “Drivers send confirmation messages back to verify that they understand the orders and have accepted their missions. We have complete confidence that messages are getting delivered and assignments should be completed. Customers are happy, dispatchers are less stressed and they get home sooner; and our drivers are happy because the increased efficiency means they can haul extra loads which means more money for them.”

Kellar says that to implement this system they only needed to invest in a $100 phone (which they lease to each driver) and $40 a month per driver for unlimited data delivery. ServiceHub set up all the technology needed to facilitate communicating the messages in multiple languages and also provides Aggregate’s dispatchers with a Web page where they enter and manage messages. Since they use ServiceHub, the application works with any back office system or with anything on the front end in terms of the wireless network. Aggregate can switch vendors and go with other carriers and telephones, or switch their entire back office system without changing their ASP service. Even if they drop the system there’s no loss of money because they haven’t invested in any infrastructure.

Since they’ve had success with their first phase of wireless technology implementation, Aggregate now plans to have bar codes on their trucks to know where they are in the quarry pit. The company can then give construction companies access to tracking information via the Web so they can see where trucks are or when they’re supposed to arrive and be able to give drivers new orders based on their location. There’s expense up front for this application, but Aggregate believes it will pay off down the road. Maybe I’ll get a chance to check out Aggregate’s wireless application personally one day. Kyle is trying to convince me that I want to leave this consulting life behind and start up a new life driving big trucks. Hmm, intriguing thought.

Meanwhile, Back at the Farm, They’re Saving $50,000 a Year

Fifty-thousand dollars a year isn’t exactly chicken feed so you probably want to check out what’s happening in California farm country. Borba Farms is a third-generation, family-owned farm with 180 employees. They grow row crops, which means that every year there’s something new such as cotton, tomatoes or sugar beets. Their land totals 17,000 acres, but there can be as much as 35 miles of other farms between Borba properties. We’re not talking Little House on the Prairie here. Borba Farms has a standard corporate structure with executives, managers, foremen and employees. The line foreman used to spend a lot of time driving across the vast properties to meet individually with four or five area foremen to give them sheets of paper with assignments for their people to do the next day. The area foremen then would work out all of these details with their respective workers.

“One day in 1997 the main foreman came in and said there had to be a better way to manage this communication process,” recalls Roy Martinez, Borba Farms’ controller. “We were considering wireless options when our AT&T rep recommended ServiceHub, who worked with us to develop a solution that would work. We felt our big problems were going to be learning how to use software, finding an application that could be used by foremen who spoke mostly Spanish and getting coverage in remote areas. ServiceHub assured us that learning to use the software would be simple since it’s run from a browser using forms that the company set up. They could also configure the application to automatically translate messages into Spanish.”

Borba Farms paid $8,000 for a laptop and five cellphones that could receive text messages, and ran a test with the main foreman to be sure the ServiceHub application would work. Though the display screens were small and more difficult to use than PDAs, they settled on cellphones because these also allowed the foremen to make and receive voice calls. The back end set up consisted of a simple spreadsheet with workers’ names, the fields they were assigned to and a list of farming operations. Everything was number or letter coded (i.e. Field A, 2: Till the soil), which resolved most of the language issues. The phones can’t print out messages, but they are saved so foremen can verbally pass them on to employees or write out instructions. Martinez states, “Once we tested and made sure it would work, we brought everyone together to train them how to use the application. It took several hours, but they were ready to try it the next day. The positive feedback was great right from the beginning. It has saved a lot of wasted drive time by foremen, and we have not modified the application much. If someone found a dead spot in coverage, they just moved a half-mile or so, plus AT&T eventually added another tower in the region. We calculated the time we used to spend before ServiceHub, plus wear and tear on vehicles, and determined that we now save in a range from $20,000 to $50,000 per year (the farming operations vary with the change of crops). One of the intangible benefits was that all of the foremen saw that management was listening to them and cared about what it would take to make their jobs easier to do. It was a great morale builder that we responded in the way that we did with the technology.”

While Borba Farms hasn’t changed the application much over the years, they are always evaluating what other technologies are out there. When you deal with perishable commodities, you only have a few days to get these products to market, and they’re lost forever if you miss this window of opportunity. When facing this type of situation always be open to evaluating new techniques or technology that can help improve your ability to get to market on time. Borba Farms is considering wireless tracking devices for all the equipment so they can monitor location, fuel consumption, electrical problems, and other functions. If a tractor runs out of gas because the service truck didn’t make the connection, they can correct the problem quickly, plus have data to use in a meeting with the trucker. Some of this equipment costs $100,000, so if there’s an engine problem, it’s good if the farm can be notified so they can shut the system down.

Increasing Personal Productivity

If you look at many of the wireless applications, a central component consists of PDAs, which were originally developed to help individuals be more productive. At a basic level, adding wireless capabilities to PDAs offered another level of productivity by giving users access to mountains of information available from the Web and back office software applications. What you need to do from a management perspective is harness and expand that personal productivity so you ultimately channel it into your other objective, which is to increase the overall efficiency of your business operations.

To accomplish this, it’s not enough to buy software that creates wireless links between employees, applications and your physical assets. You must also commit to going down in the trenches where your line managers and employees work to observe how they do their jobs. You have to actively gather their feedback and then act according to that feedback. As you read about various wireless implementations, notice that many are influenced by feedback from employees who must use the technology on a daily basis. I chuckle when I read about companies saying they are going to mandate this or that regarding the deployment of PDAs.

Those most likely to have successful wireless strategies are people who say, “We’re deploying iPAQs to our field service team because they determined that they need color capabilities to reference color-coded wiring schematics.” Or “We’re giving e-mail pagers to our custodial staff who said they only need to get e-mail alerting them to problem areas.” Because these hardware deployments are based on individual or department needs, as well as the organizations’ overall business needs, more employees will actually use the device. And you don’t overspend buying more features than people need. In terms of what your employees do on their PDAs, your organization’s business needs and back-end software often dictate what many of your wireless software applications will be.

But how employees interact with these applications with their mobile devices will determine their productivity levels. Just because you can give your consulting team wireless access to a 200-page briefing document about your client, which saves printing costs, doesn’t mean that they need to see every page when they’re at a client site. Spend time with the team to determine what top five or ten items they need to access, then develop wireless content to deliver those items in the fastest way possible, thus increasing productivity.

Simplicity in the Name of Humanity

The comparatively small business processes are often the ones that produce big payoffs in the wireless world. Here’s one case in point. Sigma-Tau Pharmaceuticals is the U.S. subsidiary of Sigma-Tau Group, Italy’s leading research-based pharmaceutical company.

The subsidiary develops what are called orphan drugs, meaning there are less than 200,000 possible users of these particular drugs because they cure or treat such specialized medical conditions. Since income potential relative to the money spent to research and develop these drugs makes profits slim or nonexistent, you might call this a humanitarian rather than a commercial venture. Sigma-Tau is committed to helping ensure that no patient anywhere is overlooked. Providing new or improved treatments worldwide for diseases that are complex and difficult to diagnose is a major challenge as employees travel to urban as well as remote areas to inform doctors and patients about treatment options.

Mobile executives, sales people, researchers and others need to constantly receive and send e-mail, and laptops aren’t the most practical tools to schlepp around as you’re dodging flora and fauna in the back country. Even though e-mail access was the main need, mobile workers still had to keep a lot of data handy. So Sigma-Tau decided to use Palm VIIs and ThinAirApps technology to give people in the field access to scheduling and contact data. Based on their initial success and rapid acceptance by the mobile workers, Sigma-Tau plans to add new wireless applications and expand the hardware to include Pocket PC devices and mobile phones with Net access capabilities. Va bene.

Personal Productivity—Not Just Another Pretty Interface

Whatever applications you implement to increase personal productivity, remember that it takes a lot of work to create an application UI that people will actually use. Since this is a priority, plan to commit to the necessary effort. The upside of this extra work, though, is that employees will use the applications more effectively. As productivity increases, employees will start to find other uses for their PDAs or the applications. Increasing productivity with technology often produces a feedback loop among employees and sometimes between them and management.

As one person finds a new way to resolve a particular issue and reduce headaches using a PDA, the person next to him or her will want to learn how to do it. This is how software user groups became extremely popular in the 1980s. Create an active wireless feedback channel or user group between the people responsible for deploying your applications and those that use them so you replicate and expand upon productivity gains. Don’t forget that substantial productivity gains also can come from the applications that are included with PDAs when you buy them or come from sources outside of your organization.

For example, the occupational therapists in the example I gave earlier could access a public wireless portal that provides advice for helping people to recover from a stroke. This resource improves the therapists’ professional skills, which in turn helps the firm better fulfill its mission and increase customer satisfaction. The result is additional income. You don’t have to create all of the wireless content that improves employees’ productivity. Actively help them take advantage of what the wireless world has to offer in terms of personal productivity services and tools. Or, at the very least, foster an environment in which the people using wireless technology are encouraged to seek out and share these services and tools with each other.

The decision to use ASPs to implement general business applications might also make sense for applications that enhance personal productivity. EarthLink (www.earthlink.com), one of the largest Internet service providers (ISP), offers small and mid-sized businesses a wireless service that combines e-mail hosting and BlackBerrys. Customers just order the service, and EarthLink staff does all of the set up, configuration of both the e-mail system and the BlackBerry devices, and service management. Individual users get their devices delivered to their offices ready to go.

Improve Operating Efficiency

If you can use wireless to increase the ability of both people and machines to work together more effectively, then you will be well on your way to truly impressive improvements in how your organization runs its business. Of course, therein lies the challenge. You have to actually get people and machines operating together at some higher level of integration than most organizations have ever experienced. It’s not that organizations don’t understand the potential benefits that this integration offers, but the task can seem so daunting. I can’t say that this task will be easy, fast or inexpensive, but it doesn’t have to be viewed as entering Dante’s Inferno either.

First you have to increase people’s productivity, then your machines’ productivity and conclude by uniting both wherever possible and practical. The individuals using wireless technology can drive much of the effort to increase personal productivity. But what about the physical assets? Well, that requires someone with a keen eye and a broad vision. The keen eye is required to look at an engine assembly, medical testing equipment, a forklift or a network server, and answer the question: How can we improve the way it operates, or reduce the times it fails to operate? How can we improve the way employees work with the parts in the warehouse or the shipping containers on the loading docks? How can we better manage our technology or our business processes so that we are more proactive than reactive?

Many times the answers will come from the people who work directly with these assets and business processes. Sometimes the answers will come from the vendors of various wireless technologies. Great things will happen when you bring together the visionaries, employees, and vendors to explore the possibilities. When you figure out if and what wireless technology is practical for improving the productive use of your various assets, it is the time to consider how to integrate your people and assets into a unified wireless implementation. You may be tempted to do everything in one fell swoop, but start by building infrastructure and applications that will allow you to implement projects in successive stages that may take as much as a year or two before the complete vision is realized.

Always think long-term, but take one step at a time. This is also the point at which you need to turn up the hype filters. Do not substitute vendors’ claims or industry analysts’ predictions for your business objectives. Use outside input from vendors and industry analysts to establish boundaries and best-case scenarios, but the objectives you set for your business operations need to be realistic and practical given the capabilities of your organization and its resources. Measuring cost reductions and even productivity gains can be straightforward. But quantifying improvements in operating efficiency can be tricky. In the Web’s hype heyday, it seemed everything and everyone associated with the Net could deliver quantum leaps in business efficiency. A lot of good money chased bad investments and produced questionable results.

When it comes to wireless technology, your organization’s mantra should be “Know first ourselves and our mission. All else shall follow in due course.”

Food for Thought

Here are a few questions to ponder on internal communications:

1. Where can you streamline internal communication costs by digitizing printed material for intranet posting and wireless access?

2. As an alternative or supplement to internal e-mail, does your IT staff recommend giving interfacility roamers wireless access to intranet message boards and using wireless instant messaging?

3. Is management committed to allocating similar resources to your internal wireless communication activities as it will allocate to the external wireless communication?

4. Can you double the payback from your wireless content developed for customers and prospects, particularly product information, by also using it for internal or remote staff training?

5. When cellular networks improve bandwidth capabilities, or if you are within the Ricochet network, is there a way to incorporate technology such as audio and video broadcasts into wireless applications that reduce the number of in-person meetings?

6. Is it practical to create systems that allow your mobile workers to wirelessly shop and order from your organization’s suppliers while still keeping purchasing staff in the loop?

7. Can you put a system in place for mobile workers to access your intranet to communicate, exchange documents and otherwise collaborate with others who are at the home office or on the road themselves?

8. Do you have someone assigned to keep pace with new embedded wireless technologies that you may be able to use for asset management?


Republished with permission of AM Management Association/AMACOM, from Wireless, Inc.: Using Mobile Devices and Wireless Applications to Connect with Customers, Reduce Costs, and Maximize Profits, Craig Settles, 2003; permission conveyed through Copyright Clearance Center, Inc. The excerpt has been abridged for publication in FFA.

 


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