New mobile computing applications - automating the workforce
- 10 July, 1996 14:20
One thing you can be sure about with technology is that it never stays constant, and portable computing is definitely in this category. Laptop computers were born more than 10 years ago and are now well and truly dinosaur class. Notebooks have progressed to the point that technology, for example processor performance, is no longer a key inhibitor to market acceptance. Miniaturisation continues to take its course with powerful subnotebooks and hand-held devices (PDAs or Personal Digital Assistants to the technically correct) making greater impact in the market. The end-user profile also continues to evolve.
Initially, mobile computers were largely purchased by government organisations and technical people who needed mobility. The next major phase of usage was by senior managers in corporates who were not necessarily experienced computer users but had access to budgets and liked the idea of a notebook for business use (no prestige involved).
As the technology matured and prices fell, many new corporate and SOHO users were drawn into the market. Most portable computer use is basically a subset of desktop function. However, market growth is starting to come from new users driven by a need to communicate, irrespective of time or location. This concept of information anytime and anyplace requires a new communications technology, specifically one that is not constrained by physical aspects such as wires.
Futuristic it may sound, but consider this: the competitive pressure of the '90s requires executives to identify new ways of building competitive advantage. Business process re-engineering has been the catchcry of academics, consultants and business people over the last few years. The basic premise is to review all procedures and processes within an organisation and work with employees to increase efficiency in order to reduce costs.
The Quality Assurance program (ISO 9002) is one of the ways that organisations undertake this process. During this not insignificant task, it is possible to identify many opportunities for improvement particularly in areas where tasks are of a repetitive nature, such as administrative and production environments. However, businesses are, or should be, continually evolving and once these areas are exhausted, where are the new opportunities going to come from?
If personnel costs are analysed, often the most expensive people in an organisation, in terms of salaries and revenue generation, are executives and sales people. Technical and service staff may also fall into this category, especially when training costs are taken into consideration.
It is important to look at costs in terms of salary as well as opportunity costs. Where do the productivity increases for these people come from? It seems that the technology to aid productivity has almost been limited to pagers and mobile phones. If I had a dollar (terrible cliché but effective nonetheless) for every time a computer salesperson told me that their customers could not justify a mobile computing solution for these people . . . Given that a 10% increase in productivity for a $50,000-per-year person would pay for such equipment in 12 months, why is the justification of automation such a problem?
The application of mobile computing technology for sales force automation projects provides opportunities to improve productivity, save costs and increase customer service levels by having access to information at the point of contact with the customer. Take an example from the building products distribution industry, which could also apply to many distribution or manufacturing organisations. At present, the sales people visit their customers on-site to identify their requirements and take orders. Once or twice a day, depending on the proximity of the territory to head office, the salesperson takes the orders back to the office for processing. These are then manually entered into the computer by an order entry clerk after a credit check on the customer. The goods are picked from stock at the warehouse and duly delivered to the customer. You might say, this is a normal way of doing business and if your sales people are good how can you make the process any better.
However, in this competitive environment it is important to make each interaction with the customer as satisfying as possible and there are several opportunities for problems to occur:
What happens if the order is incorrectly entered and the incorrect goods are delivered? What happens if the goods are not in stock or the order is misplaced? What happens when delivery times are not fast enough to meet the customer's urgent requirements? The customer is on credit hold so the goods required could not be shipped. But they were very urgent and as always, required yesterday, so they called the competition to supply. Are any of these scenarios familiar? None of these are unique situations and I am sure they happen to people every day. Imagine the changes to the process if the salesperson used portable computing, such as a notebook with wireless communications. The rep visits the customer and connects to the head office computer system. Business is discussed, inventory levels and the customer's credit situation are checked and an order is raised. This is approved by the customer and transmitted to the head office computer system guaranteeing processing of the order. A picking slip is automatically produced for the goods to be packed ready to be delivered to the customer. Should anything be out of stock, there is an opportunity to sell a substitute product rather than force the customer to buy from someone else. This implementation of mobile computing should help to reduce lead times and increase customer satisfaction.
There are also a number of cost savings to be gained. Transactions that were previously handled by the order entry department have been directly entered into the computer system by the salesperson. Consequently, fewer personnel will be required for this function and can be used in other areas of the business. Keying errors leading to product shipment errors will also be reduced. It takes 10 times as much effort to solve a problem than to avoid one and productivity savings will apply to several different parts of the business, including accounts, warehouse, sales and order entry. In addition, sales people can spend more time with customers, as there is less reason for them to visit the office.
The customer satisfaction benefits and cost savings to an organisation by now should be obvious but there is also strategic benefit to be gained. Automation provides the opportunity to exceed anticipated industry service levels. Providing accurate information about product availability and expected delivery should help to simplify the management of the customer's own business, and adds value. A supplier who can deliver vastly improved service levels which are difficult to duplicate has an opportunity to win business from other organisations. Customers may even be prepared to pay a premium for the same products, allowing the supplier to change his pricing model. This leads to real competitive advantage and, typically, increased bottom lines for both organisations. At the very least it should protect an organisation's position within the market.
The customer service improvements should also apply to organisations where timely information delivery is the product. Industries, such as banking and insurance, are already successfully using mobile technology. Utilising mobile computers enables lending officers to handle most issues directly with customers at their homes rather than having to schedule a second meeting to firm up loan details. This not only improves the effectiveness of the salesperson but also makes it more convenient for the customer to deal with the organisation. Similar opportunities exist in service organisations where real-time job scheduling (or rescheduling in emergency situations) and immediate parts requests can help increase customer satisfaction.
So with the significant benefits to be gained, why isn't work-force automation the killer application? Firstly, it's a little like Automatic Teller Machines. One bank thought it could achieve an advantage over its competitors by allowing customers the flexibility to bank outside normal business hours. The idea worked and worked well. The other financial institutions were forced to follow suit and now we have ATMs on nearly every street corner. The technology adoption cycle typically starts with major corporates, who normally have budgets to trial new applications. Once the technology is proven, it then filters down through the market and its use becomes widespread. Who is selling the concept of wireless-based automation to the major corporates?
The expectation was that PC dealers would embrace wireless communications in order to sell more application-based solutions to customers. However, due to margin pressures, the major focus of the industry is very much on supplying existing customer requirements. To a certain extent, this is understandable as fulfilling customer orders is a lot simpler and less time consuming than selling complex integration projects. While there is risk associated with long-term projects, the rewards are great. Most workforce automation projects generate significant revenue, both services and hardware, and as these projects are typically complex, there is normally protection from competitively price based bids.
Another factor is that most dealers' relationships are with technical groups. As they provide support to the whole organisation, Information Systems departments normally have more work than they can handle. The workload factor tends to limit willingness to actively seek new projects, especially if there is no established business requirement. Consequently the automation concept has to be sold in at a business level, perhaps the sales or service director. While these managers may not have a great understanding of technology, they certainly can identify how potential solutions may help them cope with increasing competitive pressure. Once the business case has been established then these projects will receive higher priority within Information Systems.
The technology to implement mobile workforce automation solutions is now available and pilot projects are happening at some key corporate and government sites. The opportunity to sell solutions is increasing but the spoils will go to those dealers who can provide full integration services; project management, applications design, prototyping and roll-out. What also will be required is a change in business approach as initially much of the selling and perhaps even the pilot implementation will need to be done at the business level. Computer industry people who can focus on the application of technology for business benefit rather than the technology itself will be successful.