Quelle: CIO USA
At the turn of the century, way back in 2000, there were few or nobest practices governing wireless investments, and there really didn'thave to be. Just saying a project was wireless evoked a limitlesslandscape strewn with potential profits. Pronounce the magic word,wireless, and CEOs sat up and listened. CFOs unsnapped theirpocketbooks.
In March 2001, CIO published a survey of 170 IT executives; 84 percentsaid they either already had or planned to deploy a wirelessproject.
But, of course, that was then. A new CIO survey completed last Mayshows that a good many of those projects either failed to materializeor failed to work. Today, companies support wireless devices and offerwireless applications at rates far below what they anticipated theywould a year and a half earlier. (See our complete survey, "2002Wireless Update," at www2.cio.com/research.) PDA and pager adoptionwere both off by 20 percent, and the number of wireless applicationinstallations fell anywhere from 8 percent to 20 percent short ofexpectations.
There are a number of reasons why wireless projects withered on thevine, most notably an economy that no longer encourages speculativeinvestment. CIOs have also been burned by the shortcomings of wirelesstechnology andby projects targeted at audiences that weren't really there. JeffScott, chief technology officer of New York City-based ThomsonFinancial, which in the last quarter of 2000 deployed a wirelessapplication that delivered financial data to handheld devices, sums upthe feelings of many of his colleagues when he says that "thefinancial services industry has cooled a bit for these services,either because of the market conditions or a changed view of ROI forwireless or both." Barry Strasnick, CIO of Quincy, Mass.-basedCitiStreet, is more blunt. Describing an abandoned wireless effort toextend website capabilities to handheld devices, he says,"Realistically, you shouldn't trade your 401(k) as you're walkingthrough the airport."
Wireless technology has improved during the past few years but stillhas a ways to go before it catches up to the original hype, saysVictor Milligan, vice president of consulting for Stamford,Conn.-based Gartner. "The only way to make sense of it is to build abusiness case," says Milligan. "If you have a mobile workforce that ispart of a mission-critical or valuable business process, you need tohave a wireless strategy. That strategy may be to defer, but at leastyou're making the decision based on information."
Building a business case is not as simple as it may first appear. ManyCIOs still have a hard time determining a hard ROI for wirelessprojects. In CIO's latest survey, the two most popular measures of ROIwere increased productivity (54 percent) and improved internalcustomer satisfaction (40 percent), neither of which is easilymeasured. Furthermore, an astounding 25 percent of CIOs surveyed saidthat they didn't measure the ROI of wireless projects atall.
That's not good.
Although the executives interviewed for this article say they will nolonger pay for projects that won't pay them back, few are able todefine that payback in anything more than general terms. Still, bestpractices for planning, launching and implementing wireless projectscan be derived by examining projects that work and those that don't.And what works are projects that start with a clearly stated problemand proceed by deploying the most direct solutionleveraging the righttechnology. CIOs who have led those successful implementations areable to track how they increase revenue and how they reducecosts.
"Who's Got the Doohickey That Fits into theThingamabob?"
Air Canada is Canada's largest airline. Its 234 planes make an averageof 1,600 flights per day, 40 percent of which travel through theairline's Toronto hub. The weakened economy and the aftershocks of the9/11 hijackings have ravaged the North American airline industry, andAir Canada is no exception. From an operational perspective, says VicePresident of IT and CIO Alice Keung, the downturn has forced theairline to look for ways to improve airplane utilization, which meanskeeping planes in the air and off the ground. "With a shorterturnaround time [between flights] you can use the aircraft morefrequently," she says. "This leads both to more profitability andimproved customer service."
The number-one culprit for ground delays is linemaintenanceunscheduled repairs to a plane's equipment, instruments orbody. (That is different than heavy maintenance, in which planes canbe stripped down to the wires. Heavy maintenance is conducted atscheduled intervals in either Calgary, Montreal, Vancouver orWinnipeg.)
Here's how line maintenance works: A pilot or mechanic sends an alertto Torontoby teletype, fax or simply with a note in the plane'slogsaying that a plane needs repairs. When the plane lands in Toronto,mechanics meet it. Or they don't.
Sometimes the mechanics don't get the message, or they don't get ituntil after the plane has left. All too frequently, a mechanic arrivesat the gate only to realize that he has to return to the hangar for apart. So Keung figured that if mechanics had real-time access to themaintenance system, they would be better prepared to service the planewhen it arrived. That would mean faster turnaround.
Keung is a wireless skeptic, but after conversations with otherToronto-area wireless usersincluding the local police force and theToronto Bluejays baseball teamshe concluded that "we needed it whetherwe liked it or not." So last April Air Canada invested $254,000 in apilot project to see whether wireless could in fact improvemaintenance efficiency.
Air Canada mechanics needed to access information, includingmaintenance manuals, diagrams and as many as 10 different datasystems, and Keung realized early on that devices connected through awireless carrier's data network wouldn't have the necessary bandwidth.Furthermore, overhauling back-end systems to make them accessiblewould be prohibitively expensive. Instead, Keung deployed a wirelessLAN-based solution, investing in complex encryption and authenticationtechnologies that would keep it secure.
What devices to use was another un-known. "We tried a few," saysKeung. "We started with a handheld device, but the mechanics didn'tlike it. They have to wear huge gloves in the winter"this is AirCanada after all"and the number of data sources and diagrams madehandhelds way too small." Eventually, with help from IBM, Keungdeveloped a tablet-like device that could be mounted on a mechanic'struck.
During the five-month pilot, Air Canada found that productivityimproved. Mechanics didn't have to travel back and forth to the hangaras much, and it was easier to plan for repairs. If a plane heading forVancouver needed a widget, management could make sure the widget wouldbe there, waiting. "That all has a bottom-line impact," Keung says.She believes that the pilot made a (modest) contribution to AirCanada's 2002 $134 million second-quarter operating income increaseover 2001's second quarter.
It was, in fact, the only North American-based international carrierto post a quarterly profit.
The next step, says Keung, will be to roll out the devices graduallyto Air Canada terminals in other cities.
"Did You Say Champagne or Champale?"
Southern Wine & Spirits is America's largest adult beveragedistributor, controlling about 13 percent of the market. TheMiami-based company has 40,000 customers, including restaurants, bars,hotels and liquor stores, and stocks 25,000 different products inCalifornia alone. "There's not enough paper in the world for a salesforce to track all the items and vintages," says Vice President ofSales and Marketing Steven Burrows. Yet, before the wireless system,that's what they had to do. Reps would keep stacks of books in thetrunk of their car so that they could have descriptions of the variousbrands and vintages handy.
Furthermore, there was no easy way of tracking inventory or suddenprice spikes, which are common in an industry where the weather playsa large role in determining both quantity and quality of thegrapes.
If sales reps had improved access to inventory and price data, as wellas each customer's order history, they would be more productive,Burrows believed. Based in San Francisco and responsible forSouthern's Web presence (though not corporate IT), he thought thatwireless devices with access to the corporate systems could do thejob.
The reps thought so too. Most reported wasting several hours a dayresearching vintages, checking voice mail for order status, andcalling the main office for inventory and price updates. They allthought that wireless devices would help them close deals and improvecustomer service.
Meanwhile, consultants told Burrows that making the data fromSouthern's mainframe-intensive back-end systems (which have beenhighly customized over the years and update information in batches)available to devices in real-time would cost many millions of dollars.But sales reps didn't need real-time info. Most gathered what theyneeded such as price changes and order status in the morning and spentthe rest of the day selling. Converting the back-end systems to allowreal-time inventory updates wasn't worth it. "We're not an emergencyroom," says Burrows.
Instead, Southern spent $1.5 million to extend the batched data fromthe back-end systems to wireless devices and about $1 million fordevices for half of the company's 2,000 sales employees. It will spendanother $1 million as it extends wireless devices to the rest duringthe next six months. An initial pilot with 20 Northern Californiasales reps and a second trial with 50 people in Southern Californiahelped Burrows design the access application. Now, sales reps spendfive minutes downloading updated inventory, pricing and customerinformation to Windows Wintel or Windows CE compatible devices througheither a wireless or dial-up Internet connection. Reps can also entersales and customer information through the devices, again eitherthrough a wireless connection or dial-up.
The benefits are twofold. If, for example, a restaurant manager wantsa brand of Merlot and Southern is out of it, the rep can say so andrecommend a similar wine on the spot. Also, thanks to the customerprofile he just downloaded, the rep can remind the manager that henormally carries Tanqueray gin, thereby picking up an order that hemight otherwise miss. Second, placing orders through the device'sWeb-based interface is more reliable than the old automatednumber-code system. With the old method, reps would find a pay phoneand punch in the item number. Then they'd get a notice confirming thatthe order had been placed, not what the order was for. "If you wantedBeringer Chardonnay you might enter 12345," says Burrows. "But if youenter 12346 by mistake, you could get Mondavi." The mistake wouldn'tbe noticed until a truck delivered the order. Last year Southern saved$150,000 in California alone by eliminating shippingmistakes.
The biggest return, however, is in increased sales. Burrows admitsthat attributing a percentage of increased sales to the wirelessproject is trickywho's to say it isn't because you got lucky or workedharder? he notes. But by tracking order history and conductinginterviews with customers, as well as considering overwhelminganecdotal evidence, Burrows credits a 1 percent to 2 percent increasein sales in Californiaabout $10 million (a figure he callsconservative) to the wireless project.
Stuck in Nashville with the Memphis BluesAgain
Birmingham-Nashville Express (BNE) is a midsize transportationcompany with a fleet of 80 trucks, 65 of which are big rigs that makedeliveries throughout the eastern United States. Rick Osgood, CFO ofthe Nashville, Tenn.-based company, says that he thought he would haveto put in a wireless system when his customers started demanding toknow where their freight was in real-time. In fact, the customersnever did, but when BNE had to replace its fleet management system forY2K, it bought a system that was wireless compatible.
At first BNE used its old tracking and management method with the newsystem. Every day, drivers would phone in their location between 8 and9 in the morning, and again between 4 and 5 in the afternoon. "Unlesswe had a problem, we didn't hear from them at any other time," saysOsgood. If, for example, a driver was on his way to Chicago and "weheard he was in Bowling Green in the morning, we'd figure he'd make itby mid afternoon." They didmostly. But Osgood recalls lots of timeswhen he'd tell a customer a delivery was on its way and he reallydidn't know. "It's disconcerting," he says. "You have to hope you'reright."
Two things would happen when drivers checked in: 1. they would losedrive time; 2. they would either have short conversations or leavemessages with overwhelmed fleet managers who rarely capturedeverything.
Between December 1999 and March 2000, after upgrading the managementsystem, BNE installed a satellite-based fleet tracking system fromOwings Mills, Md.-based Aether Systems for an initial cost of $15,000plus $2,000 per truck. With training, that added up to $150,000. Thesystem let BNE capture real-time location information about its fleet,and saved the drivers stop time. Cell phones would have also savedtimeand cost lessbut many drivers still would have been forced toleave messages. And always-connected mobile devices don't have therange that truckers need.
Osgood reports that the investment has produced an immediate return.Excluding freight rate hikes, revenue per truck per day has increasedfrom 7 percent to 10 percent, he says. That adds up fast, and Osgoodsays that the increased truck revenue has already led to a 115 percentROI, approximately $175,000. That doesn't even take into accountincreased efficiency at the home office. BNE no longer needs staff toanswer phone calls from drivers and check voice mails, and Osgood saysthat those managers have been reassigned. The additional locationinformation also leads to better customer service, allowing Osgood ameasure of peace of mind when people ask him where their cargo is.