High Payoffs Drive Growth in Wireless CRM - Transactions Marketing

High Payoffs Drive Growthin Wireless CRM

by Brenda Lewis

Overall corporate IT spending may be growing in mere baby steps,

but all signs point to one conclusion about the growth in wireless

customer relationship management (CRM) solutions: big strides.

This Executive Report highlights outstanding returns and market

advantages that four enterprises are experiencing from four different

vendors, and offers advice on how wireless CRM can help your

organization.

Business Intelligence

Vol. 4, No. 6

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Prior to September 11, thewireless customer relationshipmanagement (CRM) marketwas very small. A groundbreakingresearch report, “Wireless Datain the Enterprise,” published inNovember 2001, was the first pub-licly available, statistically relevant(95th percent confidence interval)research on enterprise demandfor wireless applications. Theresearch was conducted in thesummer of 2001, but author JohnBucher recontacted the surveyparticipants after 9/11 to makesure their responses were stillvalid. Bucher, Vice President,Harris Nesbitt (formerly of GerardKlauer Mattison), found that only17.7% of the Fortune 1000 hadinstalled wireless CRM systems(see Figure 1) [1].

The 9/11 attacks proved a pivotalpoint in the market for enterprise

wireless applications, especiallyfor CRM. A global survey by EvansData Corporation (with a 95thpercent confidence interval)of more than 600 wireless devel-opers showed that by February2002, 27.9% of developers wereengaged in wireless CRM initia-tives (see Figure 2, which offers aregional breakdown of wirelessdevelopment activity in spring2002) [5]. A new Evans Data sur-vey, undertaken earlier this year,found 34.2% of developersengaged in wireless CRM (seeFigure 3 for regional details) [6].That 6.3% increase is reflected inthe view of Kirk Garner, WirelessSolutions Architect in IBM’sNational Wireless Practice, whotold me in an interview: “In 2000and 2001, we were doing proto-types. No one was interested inrolling out anything. Now, about

50%-60% of the applications wedo are CRM, and most of thoseare enterprise solutions.”

According to AMR Research, theglobal CRM market will grow byUS $1 billion to $10.8 billion in2004, a growth rate of 10% [2].David Schmaier, Executive VP ofSiebel Systems, Inc., stated thatSiebel expects CRM to be thelargest part of the enterprise soft-ware market and believes the2004 global CRM market will be$23 billion, with only 13% attribut-able to packaged CRM softwareand 87% to custom-built CRM sys-tems [3]. As a conservative esti-mate, the CRM market is growingat least five times faster than ITspending as a whole and wirelessCRM is a major contributor to thatgrowth. From a base of $300 mil-lion in 2001, a figure that includedonly wireless CRM solutions that

by Brenda Lewis

High Payoffs Drive Growthin Wireless CRMBUSINESS INTELLIGENCEADVISORY SERVICEExecutive Report, Vol. 4, No. 6


VOL. 4, NO. 6 www.cutter.com

22 BUSINESS INTELLIGENCE ADVISORY SERVICE

The Business Intelligence Advisory Service Executive Report is published by Cutter Consortium, 37 Broadway, Suite 1, Arlington, MA 02474-5552, USA. Client Services: Tel: +1 781 641 9876 or, within North America, +1 800 492 1650; Fax: +1 781 648 1950 or, within North America, +1 800 888 1816; E-mail: [email protected]; Web site: www.cutter.com. Group Publisher: Kara Letourneau, E-mail: [email protected] Editor: Rick Saia, E-mail: [email protected]. Production Editor: Linda M. Dias, E-mail: [email protected]. ISSN: 1540-7403. ©2004by Cutter Consortium. All rights reserved. Unauthorized reproduction in any form, including photocopying, faxing, and image scanning,is against the law. Reprints make an excellent training tool. For information about reprints and/or back issues, call +1 781 648 8700 or [email protected].

access corporate systems throughWANs (wide area networks), Frost& Sullivan’s Katherine Shariq pre-dicted that the wireless CRM mar-ket would grow rapidly in 2004and 2005 as wireless technologymatured, experiencing an annualgrowth rate of 36% [4].

With IT spending widely believedto be growing at a rate of only 1%-3% in 2004, why is wireless CRMgrowing so much faster? I believeit is because enterprises havestopped thinking in terms of“alphabet soup” software (SFA,SCM, and ILS are all part of howCRM is implemented) and instead

are focusing on the customerdata and service requirements(why CRM is being implemented).Globalization, headcount reduc-tion, outsourcing, regulatory com-pliance, and business continuityrequirements have forced enter-prises to strive for real-time cus-tomer data visibility, embracingnot just customer sales and ser-vice contacts, but every interac-tion from first referral to contractcompletion. Enterprise wirelessCRM systems are not built for datamining experts in the back office;they are designed for active useby field sales forces and serviceand logistics personnel, including

functions outsourced to thirdparties. Many wireless CRM sys-tems are designed for data accessby the customer, at inception or inthe future, often in real time.

This Executive Report illustratesthe extraordinary returns andpowerful market advantage thatwireless CRM systems provideenterprises. It offers a counter-point to the terrible statisticsregarding failed wireline CRMimplementations, which, depend-ing on whose report you read,have failure rates of 70%-80%. Itpresents never-before-publishedenterprise wireless CRM systemcase studies to illustrate howenterprise wireless CRM systemsprovide benefits to a firm, its part-ners, and its customers, often bysharing collected data.

The case studies include compa-nies large and small, domesticand international, and from differ-ent industries: Yamas Controls,Inc. (construction/real estate ser-vices); Continental LaboratoryProducts (medical equipment);Parryware (consumer products);and Hitachi Global Storage Tech-nologies (electronic equipment).Each wireless application is differ-ent in structure: a traditionallicensed software model (Yamas/FieldCentrix); an integrated

CRM

Field services

LAN access

WAN access

0% 10% 20% 30% 40% 50% 60%

E-mail access

WLAN

SFA

VPNs

Fleet management

Percentage of respondents

Figure 1 — Wireless data deployment for Fortune 1000, by application(2001). (Source: [1].)





turnkey application (ContinentalLaboratory Products/Zumasys);a hosted solution (Parryware/Air2Web); and a customized, pro-prietary solution (Hitachi/IBM).Each utilizes one or more differentwireless transmission protocols,including Global System forMobile Communications (GSM),specifically short messageservices (SMS); Code DivisionMultiple Access (CDMA), specifi-cally Cellular Digital Packet Data(CDPD) and Evolution Data Only(EvDO); General Packet RadioService (GPRS); Time DivisionMultiple Access (TDMA); and Wi-Fi.

The case studies were developedfrom telephone interviews con-ducted with the business officerwho sponsored each project andwith the vendor representativeclosest to the customer solution.Interview questions were e-mailedin advance, and completed inter-views were e-mailed back to par-ticipants for accuracy checks andlegal review. The case studies aretold in the words of the partici-pants and detail the followinginformation: a profile of the cus-tomer’s business, the projectobjectives, selection of the ven-dor, implementation, and costs. Atthe end of the report are sectionsdescribing the metrics used, wire-less challenges, unintended bene-fits, and participants’ advice toothers, along with the conclusionsthat may be drawn from thisdiverse set of solutions. Here then,in their own words, are four wire-less CRM success stories.

YAMAS CONTROLS, INC.(www.yamas.com)

Participants

� Janey Kaster, VP, Service,Yamas Controls, Inc.

� Craig Burbidge, Director,Marketing, FieldCentrix

Company Profile

Yamas offers construction andfacilities management services,both mechanical and environmen-tal. The company was formed in1952 and is privately held. Total

revenues for 2003 were $60 mil-lion, with the services divisiongenerating $20 million in revenues.The firm has about 350 directemployees in seven Western USand six Eastern US locations. Theservice market historically hasexperienced growth of 25% peryear, which Yamas has exceededthrough expansion from controlsto mechanical and environmentalservices. In 2003, the companydoubled in size through acquisi-tion. Because customers increas-ingly want a single point of contact

©2004 CUTTER CONSORTIUM VOL. 4, NO. 6

EXECUTIVE REPORT 33

Asia/Pacific

36%

Europe/Mideast

24%

North America

34%

Latin America

6%

Figure 3 — Wireless CRM development activity, by region (spring 2004).(Source: [6].)

Asia/Pacific

22%

Europe/Mideast

17%

North America

57%

Latin America

4%

Figure 2 — Wireless CRM development activity, by region (spring 2002).(Source: [5].)

for services, this growth is antici-pated to continue. The marketis split between several largenational and international com-petitors and local or regional firms.

Objectives

Janey Kaster: Three years ago,Yamas acquired new eastern USlocations in the Carolinas. Twoyears ago, Yamas had reorganizedand adopted a new strategicdirection. To implement a nationalstrategy, the company was lookingfor best-in-class technologies — inparticular, a service managementtool. Although we were not ini-tially looking for a wireless sys-tem, the FieldCentrix solution metour three objectives: to automateour manual, paper processes; toprovide revenue assurance (cap-ture of unbilled services); and tocapitalize on customer leadsbeing lost. The system also hadto meet a specific IT requirement,which was to integrate withour financial system (MaxwellSystems).

Selection and Implementation

JK: We did not do an RFP [requestfor proposal]. We looked firstfor those that would tie in toMaxwell, and there were only two:FieldCentrix and a package fromMaxwell itself. However, wewanted to satisfy ourselves thatwe were not sacrificing a betterservice tool out there, so weevaluated DataBasis, Dexter +Cheney, SAS1200, Schaeffer’s,and FieldCentrix. After goingthrough this analysis, we selectedFieldCentrix. We were impressed

with its very clean, easy-to-navigate dispatcher board. Italso had a very complete catalog(a prepopulated database ofmechanical services). This is a bigadvantage. We have since createdour own catalog for controls,which is extremely labor-intensiveand time-consuming, so havingthis already done is a big plus.Finally, FieldCentrix had an excep-tionally good set of software tools,which allows us a high degree ofcustomization.

The time from when we got boardapproval in April 2002 to the pilotwas nine months. We signed thecontract in June and started thepilot in Las Vegas [Nevada] andReno [Nevada] on 1 December2002. At the end of March 2003,we brought up two more loca-tions and in the second week ofApril two more. We acquired ourLos Angeles [California] locationsin October 2003, and we broughtthem up in the week of 5 April2004. I think that process, withall we have learned, will be a lotfaster for our Carolina locations,helping us to integrate them morerapidly. We had a high level ofsenior management commitment.I was absolutely passionate aboutgetting this done. We had an inter-nal team with about 50 person-years of service experience. Thisconsisted of a database expert,the dispatcher and service leaderat the pilot location, a financialperson, and myself.

We did not use a systems integra-tor; FieldCentrix did the project

management. Their project man-ager was Gail Van Luit, and shewas extremely organized. We hadmany meetings, status reports,and teleconferences weekly. Shedid an excellent job orchestratingthe rollout of the application.FieldCentrix installed the wirelessdevices and the servers. Locally,Harris Business Systems is the repfor Maxwell Systems. We got theminvolved because, although an APIhad been written, it was not spe-cific to our system.

This is the first wireless projectYamas has ever done. We havethree types of devices, each witha different user interface. Ourautomation technicians werealready carrying laptops, so weequipped them with a SierraWireless AirCard. We have Itronixfex21 handhelds for our mechan-ics service, and we are using [HP]iPAQs in Los Angeles. We will useonly the iPAQ in the Carolinas roll-out. So far we have had no badfeedback on any of these devices.However, in early 2003, we had20% failure rates on both fex21and Sierra AirCards.

Craig Burbidge: We have animplementation methodology thatis an ordered, repeatable process.We formed a team composed ofa FieldCentrix engineer, a trainer,and Gail as project manager. Weused our “discovery” process,which takes place prior to billableactivity, in which we go out to theclient site for a day or two in orderto develop a statement of work.This actually becomes part of the




contract and includes things likethe scope of work and the integra-tion points. We also provide ahardware and software selectionguide for the client based on pre-determined load and stress test-ing. We do not resell hardware,but we introduce various vendorsas a courtesy to the customer.Populating the database is typi-cally — I’d say 95% of the time —done by the customer, but we willdo it if necessary. We cover thatin our statement of work. In thiscase, we provided one of twodatabases to Yamas. Somecustomers use the CRM systemas an opportunity to start fromscratch and create a database,and all use it as a chance to cleanup existing data.

For security, we use a passwordand user ID at log-in. Remoteadministration in the server allowsremote disabling of a device. Wehave a wireless enterprise appli-cation that can take control of adevice and remotely launch appli-cations. We created that in orderto do large-scale deployments.You need to be able to do “globalreplace” to update the softwarefor a large mobile field force inreal time.

JK: Everyone did the FieldCentrixonline training, and in addition,they ran two half-day hands-ontraining sessions. We substitutedour own hands-on sessions forsome of the locations, and whatwas startling to me was that these

users do not have the same atti-tude about the system as thosewho got the hands-on trainingfrom FieldCentrix.

CB: The online learning systemis role-based for office and fieldpersonnel. This takes eight to 12hours to complete. It consists ofvideos, documentation, exams,and access to a test server withlive data. By the time our on-sitetrainer came in, the users werealready well versed in the system.For post-implementation accountmanagement, we provide amanned help desk and maintainremote access to the customerserver.


EXECUTIVE REPORT 55

Equipment

requires

servicing Maintenance

Repair

E-mail WebPhone

Request for service or status

FX eService

Call center

• Call management

• Contracts

• Schedule and dispatch service orders

• Real-time job information

• Customer portal for service updates

• Operational analytics

FX Service Center

FX Mobile

ServiceFlow

• Job site details

• Tasking framework

• Work/asset history

• Materials

• Signature capture

Worldwide communications

• WAN, dialup, LAN, Wi-Fi,

satellite, sync using cradle,

USB port

• Push and pull information

transfer

FX Wireless Infrastructure

Third-party ERP

• Billing

• Payroll

• Business analytics

FX Interchange

• Time sheet

Figure 4 — Real-time capture and wireless transmission of Yamas’s service work order data reduces unbilled revenuesand increases lead referrals. (Source: Yamas Controls, Inc.)

Costs

JK: Our fixed costs were fordesign and integration. Ourongoing costs are for the wirelessservices from AT&T Wireless andVerizon Wireless. We elected togo with a lower activation fee anda fixed flat rate per month; unit-based rather than usage-based.Given our need to eventuallymigrate to another wireless net-work, that has turned out to be agood decision. The other operat-ing cost is annual maintenance.

CB: We utilize a standard licens-ing model with software upgradesand help desk included in main-tenance, which is 18% of thesoftware. In addition, we priceservices on the statement of work,including installation, training,technical support, project man-agement, and business processanalysis (we map all field servicefunctions during the discoveryfunction). We select three to fivekey performance indicators (KPIs)in order to measure the systemfrom an ROI standpoint. We installthe systems needed to configurethose KPIs. In the last 24 months,all projects have come in on timeand on budget.

CONTINENTAL LABORATORYPRODUCTS (CLP)(www.clpdirect.com)

Participants

� Scott Cranford, VP, Sales,Continental LaboratoryProducts

� Paul Giobbi, CEO, Zumasys,Inc.

Company Profile

Scott Cranford: We are a pri-vately held firm that manufacturesand distributes laboratory supplyproducts to general and molecularresearch labs. We have been inbusiness for over 15 years andhave two US locations and about50 employees. Most of our prod-ucts are manufactured at ourplant in Tijuana, Mexico, whichis ISO certified and FDA certified.We sell through a direct salesforce in the US and throughnumerous stocking distributorsin over 40 countries. Our productline includes thermal cyclers,reagents, pipette tips, pipettors,plates, tubes, gloves, and otherproducts used in molecularresearch. Our marketplace israpidly evolving into an oligopoly.We differentiate ourselves byoffering our products directly asthe manufacturer to the end user.Our goal is to make the cus-tomers’ buying experience easy,problem-free, and fun.

Our market can be segmentedinto university, hospital and insti-tute research labs, biotechnology,pharmaceutical, and medicaldevice companies. The personplacing an order is typically a per-son working in a lab. Since no onegets a Ph.D. to become an expertat ordering lab supplies, we tryto expedite the ordering processso they can get back to theirresearch. We strive to ship theirproduct within a 48-hour periodafter receipt of the order.Researchers tell us they prefer

to place their orders direct fromthe vendor. Buying direct avoidshaving central purchasing sub-stitute products from a “primevendor” for those ordered, whichis commonly done against theresearchers’ wishes.

I joined the firm in August 2003,having been in the business 18years and having been CEO of alocal biotech firm. My charter forthe first 90 days was to performa needs assessment and developa strategic plan. After 30 days, Ilearned that the majority of ourcustomers viewed our products asexcellent in quality and liked thefact that we valued their business.The negatives were related to alack of integrated systems to sup-port our service to the customer.We immediately began to planour 24/7 Service One program.

Our solution is an integrated Web-based customer support interface.We deployed a wireless CRM sys-tem to allow our field personnelto access company informationwhen they needed it, whetherfrom customers’ offices or hotelsand airports while on the road.We have already seen significantimprovements in our sales activityand customer satisfaction perfor-mance since we started.


Paul Giobbi: We met ContinentalLab Products three years ago at atrade show. In September 2003,we invited them to one of ourseminars to learn about the bene-fits of wireless. We always have a




drawing, which includes threeSierra Wireless AirCards, a laptop,and a fixed number of hoursaccess to our Citrix server.Continental won the drawing,started using the tools, and wentnuts with it.

SC: One of our objectives was toavoid any headcount increase.We especially did not want tohave a $3-billion ERP [enterpriseresource planning]-type systemwith systems integrators campedout for seven years on site. Thesystem solution had to be compat-ible with our current ERP system.We called Paul and set up a meet-ing to discuss our needs. Duringour initial contact, it was veryclear that Zumasys brought a freshperspective and understood theins and outs of various solutions.Paul had a candid approach to thepros and cons of wireless andwhat was needed to make thesolution a practical idea that per-formed consistently. Paul didn’tgive us “happy talk,” and he hasgiven us the support we hope togive our customers. Zumasys’sapproach was to focus on devel-oping a relationship with us firstand not to be singularly focusedon getting the order.

PG: [CLP] decided to go forward.We installed Citrix, which neededto interface with Dataworks, theirEpicor ERP system. The beauty ofCitrix is that you do not have tomake any modifications to theuser application. A companycalled AdvanceWare Solutionsdeveloped their API. We then

migrated the profile of two users(one was Scott) over to a demoserver to use as beta testers. Fromthe completion of the beta test, itwas 30 days until we put up theproduction server. We believe thatthis is the first CRM applicationdeployed over EvDO (EvDO is a3G digital broadband protocolrunning over CDMA cellularnetworks).

In working with the customer, ourprocess is well established. Wehad three different visits with thecustomer. In the pre-sale meeting,we spent two to three hours set-ting up the demo server. Oncethey had bought the server, wespent a half-day to install it. Wethen transferred the data to theCitrix server, set up cards, andloaded the clients. We have apoint of contact to provide tele-phone support. Five months intothe project (March 2003), Scottsent an IT guy to be certified asa Citrix administrator.

Citrix is the best-kept secret inthe market. Zumasys has 60 cus-tomers we have installed using it.For 95% of those 60, it was theirfirst enterprise wireless solution.Citrix designed two things. First,it designed Windows NT to multi-task by essentially creating a pri-vate workspace on the server,which uses no resource until akeyboard stroke or mouse click.This was MultiWin and wassold to Microsoft and renamedTerminal Services. The secondwas a protocol called CitrixICA (Independent Computing

Architecture), which sits on aclient device but is actually run-ning on the server. It has a screenimage of the keyboard, audio, etc.It is optimized to run on narrowbandwidth. It needs as little as 20kbps to run faster than a fractionalT-1 connection at a desktop. Wehave even used a dialup line witha fat client. We have run at 50-70kbps, 90% of the speed of a land-line, on 1xRTT (one-time radiotransmission technology, the firstevolutionary step available tooperators of wireless CDMA net-works toward 3G digital broad-band services).

To run the Citrix application, youneed Windows 2003 on a serverwith Terminal Services loaded,and then you layer on Citrix.You could use Microsoft RemoteDesktop, but it is six to eight timesslower than Citrix. Citrix has opti-mized the system for the userin the field. Standard featuresinclude echo keystrokes, autodisconnect and reconnect, textanticipation, and caching of key-strokes. We have 128-bit security,not unlike a VPN. Citrix was opti-mized to improve the user exper-ience on a small device, sosecurity was added as they wentalong. The software VPN can beupgraded to SSL (Secure SocketsLayer) for free by going on theCitrix site. Citrix allows you to runICA through a browser, which pro-vides increased solution security.This is done through two prod-ucts: Citrix Secure Gateway andNFuse Classic. By running yourclient through the site, you can


EXECUTIVE REPORT 77

get triple DES (Data EncryptionStandard) security for use atkiosks or if you were goingoverseas.

Costs

PG: Our model relies on com-modity economics. The PanasonicToughbooks (lightweight laptopsthat have gained favor with fieldoperatives for their rugged con-struction and durability) are pro-vided for 2%-3% over cost; theSierra Wireless AirCards arebelow cost in quantity throughthe cellular carrier; and we makea 10% margin on Citrix. A single20-user server lists for $5,800 (notload balanced); a five-user serverfor $1,950. No one pays list pricefor servers. We have very lowlabor costs on these projectsbecause we have very little sitetime — on this project, less than aday in total. We do all the stagingand configuration at our ownZumasys lab.

The services in the lab are soldat a fixed price. On-site labor isbilled at $150-$270 per hour. Wedo offer an incident-based supportcontract, and if a client needsmanaged services, we have amonthly retainer structure. Weprovide a continuous remote linkto the user server. Using CitrixAdministrator, we can see theusers logged in, and remote ses-sion access allows us to terminatea user or shadow their keystrokes.

The Continental CFO was the ini-tial buyer. When Scott came intothe project, we worked with him.

[With] every wireless installationwe’ve done, you have to havebuy-in from the business officerwho owns the potential productiv-ity gains. IT and finance just can’tgive you that.

SC: By using a Web interface, wehave been able to maximize theuse of our concurrent ERP seatlicenses and reduce the need formore. By being able to customdesign our interfaces to the cus-tomer, we can significantly reducethe amount of time we spend intaking and fulfilling orders. On thehardware side, we spent approxi-mately $2,100 for each PanasonicToughbook W2, each equippedwith Centrino (wireless connectiv-ity built into Intel chips for lap-tops) and DVD. In addition to theCitrix server, other costs includeEvDO cards ($149) and Verizon’sfixed (unlimited) monthly dataservice for a charge of $80 peruser. I can honestly say that ourROI to date has already coveredour costs.

PARRYWARE(www.eparryware.com)

Participants

� K.E. Ranganathan, GM of Sales,Parryware

� Ravi Ramaswamy, CTO,Air2Web Asia Pacific

Company Profile

K.E. Ranganathan: Parryware isa business unit of Murugappa, aconglomerate that has $150 mil-lion in annual sales. Parrywarehas $35 million in annual sales.

In India, it is the number onebrand in bathroom equipment:washbasins, tubs, commodes, andaccessories. Started in 1952, wewere a pioneer in the ceramicsindustry. We celebrated ourGolden Jubilee in 2002, and wethink of ourselves as 52 yearsyoung! We have 1,500 employeesand three factories: one each inthe north and south and anotherin central India. We were foundedin Madras, which is our headquar-ters today. We also have 14 depots(warehouses) throughout thecountry in major centers like Delhiand Mumbai. We have 600 dealersto whom we ship products; theseare our customers, and they han-dle over 1,800 SKUs. They, in turn,supply over 3,500 retail shopsacross the country. Our overallmarket is growing at 8%-9% ayear, but we are growing at 15%per year and have a 38% marketshare. This is our share of whatwe call the “organized” market.There are many small kilns (usedto make porcelain bathroomproducts) operating around thecountry; we consider this the“unorganized” market.

Objectives

KER: We run our business on anSAP ERP system. I had 40 sales-people traveling all over thecountry and 600 customers whoneeded access to data trapped inthat system. I never bothered tojustify the project on an economicbasis. We spent millions on theSAP system, and to extend its use-fulness was intuitive. The salesforce needed to have access to




order status data and to actualversus planned or budgeted saleson a daily basis. They needed toknow the status of their orders inthe plant.

Ravi Ramaswamy: The salesteam sells to the dealers, and inthe past, order verification wouldtake one to three days, requiringmany costly phone followups toParryware from the field to deter-mine status. The wireless systemhas resulted in a much shorterturnaround.

KER: We also wanted to providetimely shipment information.Logistics are very tough in ourcountry: sometimes it takes six

days to get the product from theplant to the customer. Becausethe terms of the contract requirepayment upon delivery, this repre-sented a cash management issuefor [customers]. The wirelessCRM system has taken the guess-work out of delivery: they get anSMS indicating the lorry (truck)and an estimated time of arrival(ETA).

RR: There is actually a third user(after the sales force and manu-facturing personnel): Parrywaremanagement. MIS updates theSAP system between 7 am and8 am, and there is a standing10 am meeting for all the seniormanagers to go over these

numbers. The system has given[management] visibility into SAPand information about their cus-tomers they never had before ona real-time basis.


KER: I read about the compati-bility of SMS with ERP in a trademagazine. We did not do an RFP,we only approached Air2Web.They were Chennai [India]-based.They were responsive, they under-stood our business, and they hadexcellent reference companiesfor us.

Data collected in both the fieldand the plants is resident in theSAP system. It is updated by 8 am


EXECUTIVE REPORT 99

P

L

A

T

F

O

R

M

Message gateway +

Air2Web remote component

Carrier Premises

Air2W

eb d

ed

icate

d p

ort

Carrier ICarrier n

PARRYWARE

SSL/HTTPS

SMPPSMPP (Short

Message

Person

to Person)

SMSC(Short

Message

Service

Center)

SAP

Air2Web

client

application

Message gateway +

Air2Web remote component

SSL/HTTPS

Figure 5 — Both customers and sales personnel at Parryware were able to eliminate order status inquiriesthrough access to wirelessly updated SAP data.

every morning. The wireless sys-tem allows us to extract it in astandard form and “push” it to thesales and manufacturing peopleusing SMS messaging. We startedwith two or three on the salesforce. We now have about 250people in both manufacturing andsales using the system. The sys-tem is simple to use, and unlike inthe US, people here are used tousing SMS. (It’s cheaper than land-based telephone and also servesas an alternative where there is noland-based service.) We did notinvest in new wireless devices; allthe staff have mobile phones withSMS capability. As a result, fromthe time we decided to investigatethe system until it was deployedwas 45 days.

RR: Air2Web handled the projectfrom concept to installation. Wecreated an API to link the wirelessinterface to SAP, and Parrywarewas up and running in 30-40 days.We then had a user acceptancetest that ran for 15 days. So westarted 30 March 2002 and werelive 1 May 2002. We were so suc-cessful with this that, six monthslater, [Murugappa] brought us intoits sugar division (Parryware isone of Murugappa’s 10-15 diver-sified product divisions).

Costs

RR: The interface with SAP costabout $2,000 to complete. In addi-tion, Parryware pays $100-$125per month for the hosted service.We provide connectivity throughabout 10-15 cellular carriers

across the country (in India, carri-ers seldom sell services directly toenterprises). This covers roughly100 devices averaging 10 mes-sages a day. It works out to aboutthree cents per message. We alsohave an annual maintenance feethat is 15%-20% of the softwaredevelopment cost and that coversany system upgrades. We do pro-vide documentation, and we have24/7 customer support availableas backup for their IT folks whenthey are on vacation or sick leave.In choosing the system, the eco-nomics were less important thanhaving easy access to the cus-tomer around the clock. We findthat is the most important benefitfor the enterprise.

HITACHI GLOBAL STORAGETECHNOLOGIES (HGST)(www.hgst.com)

Participants

� Mike Pastor, Senior LogisticsProfessional, Financial Planningand Worldwide Logistics, HGST

� Kirk Garner, IBM, WirelessSolutions Architect, NationalWireless Practice

Company Profile

Hitachi Global StorageTechnologies was founded in 2003and was formed as a result of thestrategic combination of IBM andHitachi’s hard disk drive busi-nesses. Storage is a Hitachi corebusiness; the company will extendthe world-renowned R&D heritageof its founders and build on theircombined 80 years of hard diskdrive expertise. Hitachi Global

Storage Technologies employs24,000 people worldwide, withheadquarters located in San Jose,California. It has manufacturingsites at seven locations, fourdevelopment sites, and salesoffices throughout the world.Hitachi offers customers a com-prehensive product portfoliounsurpassed in the industry —including 1-inch, 1.8-inch, 2.5-inch, and 3.5-inch hard disk drivestorage devices and solutions for abroad range of market segments.

Objectives

Mike Pastor: The objective in thefirst phase was simply to get accu-rate inventory data. Before weimplemented the CRM system,the data had to be entered inboth SAP terminals and our 3PL’s(third-party logistics provider)warehouse management system,resulting in double data entry forevery “pick, pack, and prepare”order! In implementing the sys-tem, we were excited about elimi-nating dual entry and reducing thelevel of transactions fees we paid.Another benefit was inventoryvisibility. Clint Dyer, our VP ofsupply chain management, ownssupply/demand planning andreplenishment. The strategy thatDyer has set links upstream anddownstream planning and replen-ishment tools that rely on theaccuracy and visibility of inventoryin real time. The wireless solutionhas brought us significantly closerto that goal. In our JIT [just-in-time] hubs, transactions had beenmanually transmitted via fax or




e-mail. The wireless tool imme-diately brought us accuracyimprovements and reduced cycletime in processing goods receiptsand issues by 24 hours or more.


Kirk Garner: There was no RFP.Hitachi was an existing IBM cus-tomer. In fact, most of our projectscome to us through existing rela-tionships. We had a project team,which ranged from four to 12 IBMfolks depending upon where wewere in the process. We managedthe project for Mike Pastor, whocoordinated the launch of wire-less PDA technology worldwide.He actually had to present it to hisdivision’s budget committee to getapproval for the project. We thenhad a contract for each phasewith a budget.

MP: The early phase of the projectwas a collaborative venture withKirk Garner’s unit, PervasiveComputing. Executive discussionswithin IBM led to a joint effortunder contract, which has contin-ued through the present time. Asa startup project, this was a learn-ing experience for everyone.Funding requests grew as weextended the scope of this projectto be worldwide.

KG: We started with a prototypeto eliminate paper-based trackingin their JIT hubs. These are largeoutsourced warehouses locatedliterally next to OEMs [originalequipment manufacturers] thatare Hitachi’s customers. For

example, you might have 3PLsmanaging inventory for HGST’scustomers. Hitachi also wanted toeliminate double entries of data— once into the warehouse sys-tem and again into the SAP sys-tem. Shrinking the delay createdby double entry and a paper sys-tem would reduce the time totrack inventory from days or hoursto real time, with bar codes on thepallets entered directly.

MP: JIT hubs are managed bythird-party vendors. Most of theJITs are customer-specific. A feware shared between customers.There are no Hitachi employeesin these locations. Often, our cus-tomer selects these third-partyhub vendors, and if the customeris unhappy with a JIT manager’sperformance, they can replacethem.

The four large LCs (logisticscenters) in Taiwan, Singapore,California, and the Netherlandsare not customer-centric and arerun for us by a 3PL vendor. Theyserve smaller OEMs, distributors,and customers without a dedi-cated JIT. There are three to fourHitachi employees at each ofthese locations.

The project actually had twophases. The objective in the firstwas simply to get accurate inven-tory data. We were using faxesand e-mail to obtain data oninventory from our 40 JIT hubs.In phase 1 of the project, we useda PDA (we experimented with

many; I have a drawer full ofthem) to gather scanned data atthe warehouses, which was thentransmitted via wireless (GSM) toan application server. An operator“screen-scraped” the data intoSAP. In this phase, we had no“automatic” wireless confirma-tions, but we cleaned up the dataentry, which was a huge step.

In phase 2, we created the linkagebetween the PDA input at thehubs and SAP. It has been up andrunning about a year now andgives us a direct interface to SAP.In real time, we get return codesindicating data received or errormessages if there is a problem. Byhaving the PDA system, there is noreinstalling vendor-specific termi-nals and installing new leasedlines. This provides huge flexibilityto our customers and us. We havemultilevel security using WECM(IBM’s WebSphere EveryplaceConnection Manager), whichauthenticates the PDA (see side-bar on WECM). We also requiresign-on at several different levels.

In the logistics centers, we utilizea slightly different method. Theselocations have 802.11b LANs, anddata is collected on PCs and sentvia a VPN tunnel to SAP. We havea few JIT hubs that also use802.11b transmission via VPN.For example, there is one hub inChina where the cellular servicewas too unstable to rely on andone in Sioux City, Iowa [USA],where cellular wasn’t available,so we piped the data through the


EXECUTIVE REPORT 1111

wireless access points into DSLand then on into SAP.

KG: The design issue, which wasthe hardest, was the simultaneousintegration of the transactions forboth SAP and the warehouse: theserver software, global goodstracker, and SAP. It required a fail-safe rollback over two differentnetworks: Hitachi’s and the 3PL’slogistics network. Because thesystem had to update SAP imme-diately, we had a continuousconnection to 802.11 within thelogistics centers. IBM imple-mented intermittent connectivityfor the JITs, meaning the ware-house worker would connect tothe WAN (cell connection) tosend over the updates at varioustimes throughout the day. Ourscreen refresh time target wasunder five seconds, and we haveexceeded that in the logisticscenter with the 802.11 link. Theremay be a little more latency inthe JITs. But it is bursty data;there are only about 10 elementsin pallet identifiers.

IBM bought the wireless devicefrom Symbol Technologies andwrote a custom application, ini-tially in C++ and later in Java, putit on the device, and deployed itto the warehouses. It took eightmonths from the decision to startuntil we were in full production.We could have used more time,but the reaction was “Hey, this isgreat,” and enthusiasm got aheadof the hardening process [arrivingat a stable final configuration ofthe software on the device thatpermits deployment with com-mon procedures and training]. Wetook a step back and did a phasedrollout to 22 locations, includingfacilities in Taiwan and Singapore.

In the US, we use AT&T WirelessTDMA; and in Asia, GSM. Thecommunications protocol doesn’tmatter to us; it’s whatever net-work the customer wants to use.Because we had to accommodatedifferent wireless transmissionprotocols, we separated the userinterface, the communications,and the business process connec-tions in the implementation. Each

function is a separate component,so not only can we utilize anywireless transmission medium,we also can support differentback ends (PeopleSoft, SAP,Oracle, etc.).

MP: We are using GSM as the airinterface, and we are evaluatingother options, especially 802.11b.On the device side, the users arenot technically oriented, so propertraining is critical. Connectivity istheir major issue, and so we haveactually stressed that more in ourtraining be based upon the hotlinecalls. We have also created “superusers” within HGST. IBM trainsthem intensively, and then theytrain our team. From a deviceselection standpoint, we focuson input from the user communityand incorporate their experienceswhen making GSM versus 802.11bimplementation decisions.

KG: We undertook an intensivetwo-week “train the trainer” pro-gram. That involved one logisticscenter and two JIT locations. Afterthat, we provided demo anddocumentation support training,which probably took a week.

MP: We consider our 3PL vendora long-term partner, and we knewthat whatever system we imple-mented had to benefit them aswell. They have their own ware-housing system at the LCs. Theirsystem has more specific func-tionality than SAP in that it candrill down to an actual storagelocation. Our partner was excitedabout the potential cost savings by



WECM (WEBSPHERE EVERYPLACE CONNECTION MANAGER)

WECM, middleware available from IBM, has been awarded the FederalInformation Processing Standards (FIPS) 140-2 level of certification, widely viewedas the most stringent security standard internationally. Developed by the US andCanadian governments, FIPS 140-2 defines the requirements for commercial cryp-tographic products that may be procured by US and Canadian federal agencies.It is becoming a standard throughout federal, provincial, state, and local govern-ments as well as security-insistent enterprises, to validate the degree of security“robustness” of enterprise networking products. Some WECM features includesecure access to e-business applications to mobile users over wireless and wirednetworks, mobile access, messaging and WAP services, a Java technology gate-keeper to set up and configure users across multiple platforms, and secureroaming among dissimilar wireless transmission media.


having this technology simultane-ously update their system with ourSAP system. I have been told thatthey basically halved their ware-house staff in one location.

Hitachi OEMs have access tocertain modules of SAP, as doHitachi GST’s 3PL and the otherthird-party warehouses. Wehave a firewall and utilize a stand-alone security component fromWebSphere, which is WECM.WebSphere manages sessions onthe server so that if a cellular linkdrops off, the session is reestab-lished. WECM also managesroaming between dissimilarwireless transmission media. Forexample, in the logistics centers,Hitachi had 802.11 LANs butneeded to link to GSM for wire-less in Europe and Asia.

Most JITs have the system today;all will by December 2004. Theprimary 3PL was in the processof upgrading their warehousemanagement system, and, exceptfor the California location, wedecided to wait to implement oursystem at the LCs until their newversion was online. Our goal isto have every distribution pointonline with “inventory visibility”by 31 December 2004. This tech-nology solved the problem ofbeing unable to “see” the inven-tory in SAP. To give you an idea, ifone of the JIT hubs is using fax,and the fax came in signifying theproduct had arrived but had notyet been entered in SAP, wecouldn’t see it. If it turned out

we had the material for the cus-tomer, we would put a sale at risk.

Costs

KG: Hitachi owns the solution; itis customized for them. We havesince developed the Global GoodsTracker software (with wirelessCRM), and it is purchased ratherthan licensed. For the customerwho buys it, we provide the Javasource code. Other cost elementsinclude the servers, which we sellat a flat rate per processor. Wealso have a per-device charge forthe wireless units, which declinesas the quantities purchased rise.

MP: What we have spent on thissystem is relatively small as a por-tion of Hitachi GST’s overall ITbudget. IBM knows the technol-ogy: When we were going toinstall the Japanese hubs inDecember and January, weneeded a Kanji [Japanese charac-ter system] version of the PDAinterface. IBM did it in 45 days,including a field test with aJapanese employee who turnedit around in 48 hours. They alsobrought it in under budget!

I do have some hardware coststhis year: I plan to replace ourfour-year-old primary and devel-opment AIX servers. We are con-sidering a hosted solution that willallow us to focus less on hard-ware and software, so we canspend our time in our primaryfunction, SCM. Cost containmentis a way of life in our business,and one of the reasons we have

been able to do this in such acost-effective way is that we werewilling to invest some of our ownresources. We had a willingnessto learn the technology and makeit ours. We didn’t want an ERP-likemultiyear IT consultant campoutwith millions in cost. We probablyhave saved $500,000 over thecourse of the project, and we ownand run it. By investing in superusers, we have planned for inter-nal knowledge transfer and suc-cession on the system.

METRICS

Kaster (Yamas): We had threemetrics: 1) time processing (theseare the time sheets for payroll); 2)gross margin on time and materi-als; and 3) number of recom-mended repairs per hundredwork orders (a quality measure aswell). In addition, we are perform-ing some “soft” measurementsusing surveys of field personnel.On the gross margin, we havegained four points, which is dou-ble our expectation. As far as therecommended repairs, we are at42% of our target in the first sixmonths (June-December 2003).Our time processing was wherethe biggest bumps came: it actu-ally went way up initially, but weexpect to see that smooth out. Wenever actually calculated ROI asa percent and that’s probably agood thing, because we endedup leaving out so many costs.We believed our payback periodwould be 4.3 years without includ-ing any additional revenue cap-tured. However, counting the



captured revenues, the payback isrunning at 2.5 years.

Cranford (CLP): How fast doesthe order get into the system? Wewere moving from a “paper/fax/phone/multiple database/slip-through-the-cracks” system, com-pletely dependent upon operatorproficiency and knowledge. Weshipped 94% of orders within a 72-hour period, but often customersdid not receive the product fortwo to three weeks. Our systemsdidn’t provide us enough informa-tion to determine the cause. Wediscovered that shipments endedup stalled at a freight hub ormisplaced in the customer’swarehouse. Unfortunately, ourcustomer’s perception that it tooktwo to three weeks to get theirproduct from Continental ledto overstock of our products,excessive spending on expressshipping, and lost business tocompetitors. With the new sys-tem, 96% of all orders are shippedwithin 48 hours of receipt. Thecustomer receives order and ship-ment confirmation and can trackorders online. Another metric weused was back orders. They haveimproved 2% to date. Under theold system, we had to run specialreports and manually check themfor accuracy. We were not pro-active in our approach to backorders, which has caused frustra-tion for our sales force, dealers,and customers. Now we canquickly check status and takeaction.

Ranganathan (Parryware):Before, the sales force spent a lotof time worrying about past ordershipment and payment status.Now, they have that data first thingin the morning; it is pushed out tothem as an SMS message. I esti-mate this has saved 20% of thetime of our salespeople; nowthey have more time to sell newaccounts. Before we implementedthis system, customers used tocall the factory two to three timesa day to check on shipment sta-tus. The immediate benefit of thewireless system is that their tele-phone costs have dropped tozero. It is a 1,000% return!

Pastor (HGST): In phase 1, wherewe replaced faxes and e-mail withscreen-scraping, the number onemetric was reducing the error rateto zero. When we started, weknew that three out of five datatransmissions were not received,were blurry and had to be resent,or required followup of some sort.At that time, it took 24 to 48 hoursto get into SAP from the JITs. Inphase 2, the real-time interfacewith the PDAs allowed us toimprove days’ sales outstandingimmediately for invoicing byrecording good issues in real time.That meant collections were oneday faster and that we had cashone day faster. This provided uswith several million dollars ofsavings.

Garner (IBM): Initially the objec-tive was to reduce inventory cycle— there was sometimes as much

as a 30-day lag — and to eliminateerrors introduced through thedouble entry at the warehouseand into SAP. The JIT hubs dataentry involved five to 10 screens.You would scan and then enter15 keystrokes per screen. Com-pression of the user interface hassaved a lot of data entry.

UNINTENDED BENEFITS

What unintended benefits didCLP, HGST, Parryware, and Yamasrealize?

Cranford (CLP): The discoveryof the true cost of our servicepromise. We offer free shippingfor orders meeting minimum pur-chase requirements. We hadnever quantified the cost of thisservice by customer and itsimpact on our bottom line. Now(through the use of real-time data)we can easily see the cost andadjust our minimum orderrequirements accordingly. Cus-tomers are beginning to consoli-date their orders, which has savedthem money and helped us tomeet our goal to triple the averageorder size.

Pastor (HGST): Our customersknow what we are doing. We arestill in implementation mode andevaluating performance improve-ments. We are paying close atten-tion to how we can link thistechnology to other back-end sys-tems for our customers or their JITvendors. Introduction of the tech-nology has opened discussions




about this and other EDI-typeopportunities.

Ranganathan (Parryware): Thissystem has helped us to get closerto our customers. Sharing the datawith them is an important com-petitive advantage. We have alsoused this for immediate “all pointsbulletins” to personnel. For exam-ple, when India recently went toPakistan to play cricket, it was ahistoric event and we wanted ourstaff to see that game, so we sentan SMS message and told them totake time to watch it.

Kaster (Yamas): We are reallybeginning to see the power ofknowledge management, andit is allowing us to customizeour service business. With newcustomers, it is a big plus. Itreally binds the customer to us.We never anticipated how itwould help the customer withregulatory compliance. (There aremany safety and environmentalregulations in the industriesYamas serves.) Customers wantperformance-based maintenance,and the system gives us the per-formance metrics. We haven’timplemented this as yet, butwe have the capability to do it.And downstream, we will add e-services. It will be a hybrid;using wired access, the customerwill be able to query the database.And one of the options we havein the future is to create a servicebureau to implement the cus-tomer’s desire for one-stopshopping.

ISSUES SPECIFIC TO WIRELESS

Garner (IBM): Wireless is socomplex. In the Hitachi solution,our initial goal was to map theinformation flow directly intoSAP. But the “low-hanging fruit”was to eliminate the paper sys-tems to allow automatic updateinto SAP instead of being typedinto an SAP terminal a week orso after the inventory had left theJIT hubs. Once that phase wasaccomplished, we moved toupdate the larger warehousemanagement systems in the fourlogistics centers in California,Europe, and the Far East thatreceive storage devices directlyfrom the factories. The challengewas to send a single transaction tomultiple systems, a warehousemanagement system for the 3PLs,and SAP for Hitachi’s supply chaininventory. We had to maintaindata integrity in a wireless envi-ronment where two disparateapplications had to be updatedsimultaneously.

Kaster (Yamas): The biggestproblem was the wireless side.Our system runs on CDPD, andwe had no idea it was to beobsoleted by the FCC [US FederalCommunications Commission].It meant we rolled out systemsknowing we would have tomigrate them. We are on theAT&T Wireless system in northernCalifornia, Utah, Nevada, andIdaho, and with Verizon Wirelessin Los Angeles. FieldCentrix wasblindsided as well, and they sup-ported us very aggressively after

the announcement. We just didnot appreciate the complexity ofwireless: we didn’t realize howmany things we didn’t know, andthat is a continuing issue for us.

Burbidge (FieldCentrix): Oursolution uses a smart-client archi-tecture, which is a message-basedsystem. We are not accessing theserver via a Web-based browser.We are sending only data, highlycompressed and encrypted. Theaverage usage per month perservice worker is 1MB. In extremecases, it might get to 5MB. Every-thing is resonant: it can be com-pleted whether the worker is in orout of coverage. The system hasa queuing mechanism on bothends, so that if a transaction fails,it is resent. Our system supports12 different wireless air interfaces:among them, Wi-Fi, GPRS, 1xRTT,EvDO, and satellite. Our patentedsystem uses a protocol that allowssingle-server simultaneous accessto multiple devices in real time.Part of Yamas’s system is currentlyrunning on CDPD, but because ofour system, we have the optionsto migrate [Yamas] readily to adifferent air interface as [CDPD]is phased out.

Ramaswamy (Air2Web): We hadno wireless issues. SMS is ubiqui-tous in India, and all the usersalready had wireless phones,so there was no real trainingrequired. Our message trafficlatency is pretty low, perhaps 20seconds, and I am being conserv-ative in my estimate. It may be15%-20% lower than that. SMS



messages are standard at 160characters and are intelligentlysplit when they exceed that, but Iwould say 99% of the messagesdo not exceed that.

Cranford (CLP): We have beenconsistently characterized as anearly adopter. The problem withthis approach is the unknownsthat come with new technology. Ibelieve we were the first companyto roll out a wireless CRM pro-gram using 3G cellular technology.Initially, we experienced signifi-cant issues with transmissionspeeds and latency issues.Frankly, our initial assessment ofthe technology was not positive,and we came very close to kill-ing this part of the program.Fortunately, Zumasys quickly iden-tified the problems we were expe-riencing and suggested that weuse a Citrix server. After some duediligence, we invested in a newCitrix server, which adequatelybridged the gap in speed betweenthe host and the wireless device.We were firm about maintainingdevice independence. Our cur-rent field device is a PanasonicToughbook, but our new systemwill allow almost any device thathas an Internet connection.

ADVICE TO BUSINESSOFFICERS

Cranford (CLP): Understand andhave consensus on the project’sgoals and objectives. Be clear onwhat is needed and necessary,and measure the practicality ofeach tool, otherwise you will

end up buying expensive toys.Second, create a comprehensive,multiphase plan, implementslowly, and keep an eye on thebig picture.

Kaster (Yamas): Setting up thedatabase and getting feedback onit from the field took the longest;in fact, it is ongoing. My advice toothers is to do a lot of inspectionand do it frequently. We couldhave done a better job if we haddone more. In the pilot, we wereall focused on the integrationissue, not the database. Weneeded to get the system installedimmediately, because the costof delay far outweighed the costof having a perfect database.Remember, we were moving off apaper system with no metrics. Wewould still do this over again in aheartbeat. When you implementnew technologies — and wirelessdata is new — you are going tohave problems. I am not sure youcan anticipate all of them.

Pastor (HGST): Ask questions,ask questions, ask questions!Functional-area managementmust be engaged with the ITexperts. If you don’t partner withyour IT team, you may envision amousetrap but misdirect theminto building you a doghouse. Wefound clear communications ofour goals to be key in a successfulengagement.

Choose your vendor wisely. Wehave built up tremendous trustwith IBM. We were fortunate in

already having a relationship withthem, but we have certainly beenfree to select others at any point.

Ranganathan (Parryware): Makesure the solution is suited to yourbusiness. It was a wonderful fit forus because of the SAP software.

ADVICE TO CIOs

Ramaswamy (Air2Web AsiaPacific): Start with the final pointof use in designing the system. Ifyou define the scope for the homeoffice, the sales guys will comeback with 20 questions. I also ama big believer in a fixed-cost con-tract. Finally, in choosing a vendor,stay focused on credentials: thereferenceable customers and thewireless experience of the teamwho will manage the project.

Burbidge and Gail van Luit(FieldCentrix): You really need tochoose a vendor who understandsthe technology. That means verify-ing that they have had successfulcustomer applications. There area lot of “newbies” out there withgreat Web sites and no reference-able customers! It’s important tounderstand the customer’s busi-ness process and to establish KPIsthat are geared to it. Technologycannot “fix” an inefficient busi-ness process. Some of the CRMsoftware companies have tried totake a back-office process andpush it out to the field users.Finally: don’t try to eat the wholeelephant at once.




Giobbi (Zumasys): Do it withsomeone that’s done it before. Ofthe 125,000 systems integrators inthe US, very few have ever imple-mented a wireless solution, letalone a wireless WAN solution.Do not put the project in thehands of the carrier. You have gotto pick the right infrastructure soft-ware. Everything should be testedand optimized to run over lowbandwidth, because that’s whatcellular is.

Garner (IBM): Don’t under-estimate the complexity of wire-less. Start small with a prototype.It will dovetail into other opportu-nities created by the availabilityof untethered data.

OBSERVATIONS ONTHESE SOLUTIONS

1. Each of the vendors had in-depth experience in deployingwireless enterprise solutions.

2. None of the customers usedan RFP; all relied on referrals.

3. Each of the customers wasundertaking its first wirelessproject.

4. Each of the customers movedfrom a paper system directlyto wireless inputs, using theproject to clean up databasesand streamline data collection.

5. Each of the customer solutionswas designed from the end-user perspective.

6. Each of the customers testedits system in pilot or beta tests.

7. Each of the customers hadan operational managerwho owned the productivitygains actively involved in theimplementation.

8. All of the customers relied ontheir wireless carriers only fortransport medium.

9. Each of the customersachieved returns in excessof expectations.

10. Each of the customers usedbenchmarks and had definedmetrics, but all achievedunintended benefits.

LESSONS LEARNED

As a veteran in the implementa-tion of greenfield enterprise wire-less data applications with newtechnologies, I was not surprisedto see the striking similaritiesamong these diverse solutions.The strong involvement of anexecutive sponsor, well-definedbenchmarks and metrics, phasedapproaches using trials and pilots,and engaging vendors with in-depth wireless experience haslong been acknowledged as criti-cal to successful implementation.To these I would add four obser-vations for future wireless CRMprojects that were triggered bythese cases. They center on:

1. Air interface independence

2. Security

3. Regulatory compliance benefits

4. Customer performance metrics

Air Interface Independence

All of the cases in this ExecutiveReport used cellular networks forwide-area transmission. However,as we learned from the 9/11attacks and the massive poweroutage on the US East Coast in2003, cellular systems are notredundant. Therefore, for mission-critical systems, some kind ofbackup to cellular transmissionshould be provided. I believe thatmanaged satellite services, whichpreviously have been extremelyexpensive, are emerging as rea-sonable options for disaster recov-ery. Managed satellite services areup and running today that provideubiquitous coverage of NorthAmerica and cost about five centsfor short transmissions (for exam-ple, monitoring a location orsending an inventory bar code).In addition, Ka-band spot beamsatellite services (which carrydata at high speeds) are alreadyavailable in Europe and are slatedto be launched in North Americain the summer of 2005. Since CRMapplications are often mission-critical, IT officers should havethese options for wireless trans-mission on their radar screens.

Security

Since it has long been cited as abarrier to wireless CRM, I waspleased to see security applied inthese cases in proportion to thesensitivity of the data transmis-sions. For its sensitive customerdata, Continental chose CDMA, atransmission protocol based onspread spectrum technology



developed for and used by the USmilitary. Yamas also used CDMA,as well as CDPD, a wireless trans-mission protocol developedspecifically for the enterprise witha security protocol that has neverbeen broken. Neither Hitachi norParryware was transmitting sensi-tive customer data: pallet identi-fiers and order status could besent with normal corporate secu-rity. A caution about the use of Wi-Fi networks is in order, though.If you intend to use Wi-Fi for anypart of your wireless CRM systemand you anticipate transmissionof sensitive customer data, youshould conduct a propagation testto make certain that the range ofthe Wi-Fi signal does not exceedthe secured perimeter of yourcampus, warehouse, or officebuilding. Radio signals at 2.5GHz,commonly used in so-called“hot spots” (public access 802.11binstalled in coffee shops, airports,and hotel lobbies) extend wellbeyond the confines of the servedarea. You may wish to investigate5.2GHz (802.11a), which has ashorter radio signal. There arealso a number of proprietary secu-rity solutions available for Wi-Fi(802.11a and 802.11b).

Regulatory Compliance Benefits

Because of the ability to capturereal-time data at remote locationsand (sometimes) directly from thecustomer, wireless CRM systemsoffer a viable method for publiccompanies in the US to track con-tract compliance in order to meetSarbanes-Oxley Act requirements

such as contract termination orreduction in business relationship.Costs of service related to con-tracts and compliance with con-tract terms can be captured on acontinuous basis. For those in thebiomedical and pharmaceuticalindustries, wireless CRM offers anopportunity to track processessubject to FDA (US Federal DrugAdministration) audits. OSHA(Occupational Safety and HealthAdministration) requirementsfor workplace safety and EPA(Environmental ProtectionAgency) standards for environ-mental testing are other examplesof compliance data readily cap-tured by wireless CRM systems. InAustralia and New Zealand, wire-less CRM offers an opportunity tocapture compliance data requiredfor Standard AS/NZS 4360:1999risk management. This standardcovers occupational health, safety,and the environment. WirelessCRM systems also offer a vehiclefor data capture to address emerg-ing standards for risk manage-ment in the UK and the EuropeanUnion. For example, the Instituteof Chartered Accountants inEngland & Wales provides“Turnbull guidance,” a risk-basedsystem of internal controls that islinked to its Combined Code onCorporate Governance to theListing Rule for the London StockExchange. Whatever your industryor geographic location, if you arethinking about a wireless CRMsystem, incorporating capturemechanisms to address regulatorycompliance data is a good invest-ment for both the company and

its customer. However, if compli-ance data capture is anticipated,I strongly recommend includinga business intelligence (businessanalytics) capability in the wire-less CRM design. If there are notools to organize and evaluate iton a timely basis, reams of trans-actions data can easily end upuseless in a data warehouse.

Customer Performance Metrics

The holy grail in customer serviceis to be proactive rather thanreactive. Just as wireless CRMhelps to create visibility into thesupply chain, it can help exposeways to improve service delivery.Wireless CRM gives your com-pany the opportunity to designperformance-based service con-tracts with confidence in what itwill cost to deliver that service.The measurements you build into evaluate CRM benefits may beturned to good use in developingcustomized service programs.Janey Kaster of Yamas Controlsreported her customers’ desire forsuch tailored programs. WirelessCRM gives you the real-time datato refine service pricing, sharpenresponse time, add service vari-ables, and develop early warningsystems for status changes. Indesigning your wireless CRM,think ahead to how you mayuse the audit trail for measuringyour ongoing service effectivenessand the data you capture forenhancing service to your cus-tomer. Much as Scott Cranfordof CLP discovered, real-timedata captured may change your




understanding of the actual costof service to your customer.

Finally, what is common to all fourcases is the sense of urgency; theunderlying need to get these CRMprojects done. That urgency gaveeach of these early adopters thewill to utilize still evolving wire-less transmission protocols anddevices, in spite of the inevitabledifficulties encountered in usingnew technology.

I extend heartfelt thanks to thereport participants and theirsupport teams for their time andgenerosity in sharing their experi-ences. I hope that these successstories will inspire other success-ful projects.

ABOUT THE AUTHOR

Brenda Lewis is President ofTransactions Marketing, Inc.(www.transactionsmarketing.com)in Greenwich, Connecticut, USA.Beginning with her 15-year corpo-rate career in international energy,bulk shipping, and metals, she hasbeen continuously active in thedesign and development of pio-neering data communicationsservices, including the first inter-active, real-time, wireless globalvessel communications and con-trol system in 1974. She formedTransactions Marketing in 1982 tomanage new ventures in real-timeenterprise services for digital com-merce, mostly in wireless datacommunications. Pioneeringapplications that she has man-aged include PDQ for Telerate,

the first wireless quotation servicein the money markets (1984); thefirst financial services trial of AT&TPocketnet (1996); the first wirelessInternet conference (1998); andthe first private wireless logisticsservice in China (2001). A cumlaude graduate of Smith Collegein economics, Ms. Lewis holdsan MBA from the University ofConnecticut, graduated fromHarvard Business School’s Pro-gram for Management Develop-ment, and earned a certificate inTelecommunications Managementfrom New York University. A char-ter member of the Wireless DataForum, she sits on the advisoryboard of Polaris Wireless, Inc. andis an advisor to Shanghai-basedZero Global, Inc. She can bereached at [email protected].

REFERENCES

1. Bucher, John. “Wireless Datain the Enterprise.” Gerard KlauerMattison, November 2001.

2. Preslan, Laura. “InvestmentPriorities for CRM in 2004.”AMR Research Alert Highlight,8 January 2004.

3. Schmaier, David. Keynotepresentation, DCI’s CustomerRelationship ManagementConference, 25 May 2004.

4. Shariq, Katherine. “Global CRM,Interactive CRM, and Mobile CRM:Initiatives and Forecasts.” Frost &Sullivan, July 2002.

5. “Wireless Developer: Spring2002.” Evans Data Corporation,2002.

6. “Wireless Developer: Spring2004.” Evans Data Corporation,2004.

APPENDIX

Information on Vendors

Here is some additional infor-mation on vendors mentionedin this report.

Air2Web (www.air2web.com):Founded in 1999, Air2Web is a pri-vate wireless applications serviceprovider (WASP) based in Atlanta,Georgia. The company targetsFortune 1000 companies, provid-ing productivity solutions thatenable ERP, SFA, CRM, and EAIapplications. Customers includeUPS, InterContinental Hotels,Société Générale, Telefonica,and AXA. Partners include Nextel,BellSouth, and Cingular Wireless;OEM solutions partners includeDigital Insight and IBM GlobalServices. Air2Web Asia Pacificwas founded in August 2000 andemploys 25 people. It has about20-25 blue chip customers, includ-ing large banks like Citibank andABN AMRO, and it has alsodeployed wireless CRM in manu-facturing environments such asIndia Cement.

FieldCentrix (www.fieldcentrix.com): FieldCentrix is a privatelyowned company that deployedits first wireless application in1998. Headquartered in Irvine,



California, FieldCentrix targetsFortune 1000 companies with ser-vice organizations that dispatchpersonnel. Customers includeHoneywell, Ingersoll-Rand,Praxair, and Atlas Copco. Thecompany offers a licensed soft-ware solution. Enterprise partnersinclude Maxwell Systems andJ.D. Edwards.

IBM Corporation (www.ibm.com): There are about 100 practi-tioners in IBM’s National WirelessPractice, about 40 of themfocused on handheld develop-ment and 60 on telematics, tele-phony, smart cards, and otherdelivery means. The NationalPractice serves very large cus-tomers (those with more than20,000 employees) and may dofive to 10 handheld mobile com-puting projects per year. Theyhave completed about 60 — asmall subset of the thousands of

wireless solutions IBM has com-pleted outside of the NationalPractice. IBM also offers a low-cost wireless solution — IBMData Collection — for the small-to-medium-sized business market,which has been successfullyimplemented at more than 1,000customers in the past eight years.

Zumasys, Inc. (www.zumasys.com): Zumasys was founded inOctober 2000 and currently has 14employees headquartered in LakeForest, California. The companyfocuses on wireless WAN applica-tions for small-to-medium-sizedbusinesses (those defined as firmswith 50-1,000 employees). Thetypical Zumasys customer has$20 million in sales and 200employees of which 30-50 willbe wireless system users. Thecompany works with threeprimary partners: Sierra Wireless,Microsoft, and Citrix.

Other Vendors

Siebel Systems (www.siebel.com)and Salesforce.com (www.sales-force.com) distinguish wirelessCRM customers on their Websites. Other vendors of CRMsystems who may have wirelesscustomers include the following:

� Microsoft Corporation:www.microsoft.com

� Onyx Software: www.onyx.com

� Oracle Corporation: www.oracle.com/mobile

� PeopleSoft, Inc.: www.peoplesoft.com

� Pivotal Corporation: www.pivotal.com

� SAP: www.sap.com




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High Payoffs Drive Growth in Wireless CRM - Transactions Marketing