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Posted: 01.04


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Within These Castle Walls

Smart execs are realizing the ROI hiding right under their noses.

By Craig Settles

The wireless industry, like most tech industries, is always hyping the next big thing. This often turns out to be some solution looking for a problem that makes vendors’ marketing people swoon with anticipation—and business users yawn with disinterest.

Forget the next big thing. What you should be looking for is the next big need your organization has that wireless might be able to meet. For example, internal operations. Yep, using wireless to facilitate business operations and communication within your physical facilities.

This definitely isn’t new. But it is next on people’s radar screens. Increasingly, smart executives are recognizing this potential ROI driver that’s sitting right under their noses.

The surge in popularity of wireless LANs (Wi-Fi) is behind some of this enlightenment. There’s also the declining cost of embedded wireless devices for equipment, vehicles and even the products rolling off assembly lines. Let’s look at how to turn this next big need into a business case for wireless.

There are three areas of your internal operations in which wireless can translate into hard dollars: a) the more effective use of inanimate objects; b) more productive use of animate objects (employees); and c) the wireless marriage of the inanimate and the animate.

Assets Speak for Themselves

When I wrote Wireless, Inc. I interviewed a vendor who said that personnel at many large hospitals hide expensive medical equipment so people in other departments won’t borrow it. Borrowers often don’t ask first, so when someone needs the equipment in a hurry, they can’t find it (I saw this happen once on “ER” on TV, so it must be true).

Want to start building a case for wireless? Look around and start putting price tags on your pricier resources that are easily moved. There may be items with 7-figure price tags floating around (literally), and not just in medical facilities: manufacturing equipment as well as products, inter-facility vehicles, shipping containers. And all of you have computer networks.

Here are three calculations to perform for each major asset: 1) determine the costs of employees who can’t do their jobs when they can’t find the asset; 2) what’s the cost if you can’t produce a product or deliver a service because the asset stops working or can’t be found; and 3) what are the costs for assets that mysteriously sprout legs and walk out the door, never to be seen again.

Assume, for example, that at the beginning of every work shift (two per day) in a large manufacturing plant, an employee who costs you $30 per hour spends 10 to 15 minutes looking for a fork lift. In a five-day work week, you’re paying $60 ($3,120 annually) to have two people play hide and seek with a vehicle. Then calculate the benefits of converting that lost 110 hours per year into time spent moving more products from warehouses to shipping docks.

From a different perspective, consider a more expensive lab tech wasting the same hours tracking down medical equipment. Plus, what if every hour lost equals a medical procedure for which you can’t bill? Or, using a positive spin, how much can you increase operating efficiency, cash flow and patient satisfaction if wireless tracking devices enable more people to find and use what they need, faster?

You probably don’t even want to talk about how much you lose to asset theft. But while retailers consider the worth of embedding tiny
wireless devices (radio frequency IDs or RFIDs) into products on shelves to improve inventory and sales management, you could be saving a
fortune keeping your assets where they belong.

Yet another calculation is the hourly or daily cost if a major asset stops working because of a mechanical or other problem. What are the potential savings if your support staff can receive instant wireless notifications before this equipment malfunctions? These figures could justify fortifying your equipment with monitoring software or hardware with wireless alert capabilities.

Wherever They May Roam

To initiate the business case for wireless enabling your inter-facility roamers—those employees who rarely leave the premises, but rarely are at their desks or even have desks—consider these important questions.

What is the hourly cost of the fully benefits-laden employee in question? If these employees are using paper-based systems to collect data or perform other tasks, what is the financial burden on your organization? What price do you pay for having human silos of isolated knowledge?

If you have people roaming around a warehouse, shipping yard, retail outlet, service center or anywhere else on-site using note pads or printed forms, I’d bet dollars to donuts they could do more work in less time using mobile devices. What you shave from their time doing current tasks with paper you should gain in those employees’ hourly costs.

Then there’s the data entry time, the errors, the do-overs and other headaches you eliminate by not having people key in data from those paper documents. Information goes straight from employees’ mobile devices to your computer servers, and with Wi-Fi the data traffic never leaves the premises.

Next, consider the hard-dollar and intangible benefits of having employees with mobile devices providing service and processing business transactions while customers are standing in lines or just standing around confused. Not only can you cut costs, you may find that employees can use that interaction with customers to sell additional

The other types of inter-facility roamers that you should factor into your business case are the employees, particularly managers, who accumulate knowledge that should be accessible to others sooner rather than later. The flip side of the same coin are the people who need to receive information sooner rather than later. Think warehouse and inventory managers, health care providers, IT support and facilities managers. If warehouse workers can input the data they capture into CRM and SFA apps immediately rather than eventually, can sales people close sales faster, upsell overstocked inventory, etc?

What’s the value of having employees fix equipment problems sooner by maintenance crews? In any scenario you envision, the bottom-line equation is the same. Moving knowledge from one person or group to another is a key role in your ability to make money, save money, operate more efficiently and be more competitive. Mobile devices can be the conduit that improves how you do all of the above.

The third leg of your business case centers around getting inanimate assets talking with animate assets. What is the cost savings when machines or computer networks can call in sick—or better still, call before they’re sick—to employees’ mobile devices, and employees can fix those problems immediately from wherever they may be?

What is the impact of sales force apps that alert assembly line managers instantly when big orders are posted, or requests for custom products are hit on the Web site, and those managers can reply ASAP with Tablet PCs? How about testing machines that wirelessly alert technicians when a particular process is completed so the tech can immediately start the next sequence of tests from a PDA?

Once you establish that there is a case for wireless-enabling either your assets or your inter-facility roamers, start evaluating the cost-benefits of uniting these in a two-way communication loop. You don’t have to implement this third step immediately, but as you shop for technology evaluate products or services that can facilitate the marriage of people and machines.

Which Technology is Right?

Wi-Fi will be a big driver of internal wireless usage because it delivers the value of data communication sans wires without many of the downsides of cellular networks—variable and expensive service charges, dropped connections and poor coverage. Once you get Wi-Fi in place and address the security issues, it should facilitate your use of fixed or mobile assets that can send data via an intranet, and any inter-facility roamer using a Wi-Fi-equipped mobile device.

Voice over IP offers a lot of promise because, briefly explained, it will allow you to take calls coming into your organization’s PBX, route them over an intranet, which then sends it wirelessly to VoIP phones. You get wireless voice without the cell phone twin demons of high charges and poor or no in-building coverage. I’m sure you’ll soon be able to route data to the same devices, so you further improve your ROI for the devices.

Enabling machines to talk to each other and to humans might be trickier and more costly than other wireless apps. But if you find a vendor that can minimize your headaches by using Web-based software, intelligent bar codes (i.e., RFID) and as many standards-compliant components as possible, this should maximize your long-term benefits.

Regardless of which technology options you review, quantify as much as possible your TCO, or total cost of ownership. You’re not just buying mobile products; you’re integrating several technologies, altering business processes and (temporarily) disrupting employees’ work environments. Wireless can still deliver big benefits that more than justify the investment. But your ROI analysis will be much better if you’re clear on TCO. •

Craig Settles is author of Wireless, Inc. and runs a
consultancy based in California (www.successful.com).

Copyright 2004 Leisure Publications, Inc. All rights reserved.
Reproduction in whole or in part without permission is prohibited.
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