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Location-Based Services Are Finding Their Place
GPS and similar technologies' versatility and power will help the segment see significant growth, despite slow consumer and business adoption.
Posted May 11, 2005
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Location-based services (LBS) will grow nearly six-fold over the next six years as more organizations deploy GPS and other location services for mobile resource management (MRM), field force management (FFM), field service, and field sales. Revenue for enterprise LBS will grow from the current $160 million to about $1 billion by 2010, with the total market growing from a current 390,000 users to more than 1.6 million by 2007, according to a report by Frost & Sullivan. "U.S. Location-based Service (LBS)--Defining the Enterprise Opportunity," comes amidst signs of expansion in LBS, with Sprint and Verizon each set to announce products for summer 2005. Competition is expected to be high among vendors, with 20 to 30 LBS software providers vying for position with wireless carriers. Major players in the LBS product and service space currently include @Road, HP, IBM, Intrado, Microsoft, and TCS, according to Daniel Longfield, telecommunications industry analyst at Frost & Sullivan. Businesses that rely on MRM will present the greatest opportunities for LBS. "There has already been considerable penetration in the shipping and transportation industry," Longfield says, "though private consumers mainly use vehicle navigation. The relatively weak consumer uptake of LBS is because there are so few applications integrated with service providers." As with the consumer segment, though, "the major obstacle for business adoption is that there isn't very much product yet." Hardware solutions are becoming more versatile and powerful, according to the report, moving away from vehicle-mounted systems. The ability to locate remote personnel regardless of their proximity to their vehicles is a major advantage of handheld devices like BlackBerries and cell phones and is also more cost-effective for the SMB segment. "Nextel push-to-talk has been very popular in blue-collar businesses, and workers have already learned that they can't fudge reporting their locations--you can be tracked," Longfield says. As more products and services become available, Longfield sees government and security becoming major implementers of LBS.
Frost & Sullivan predicts that customized FFM applications will join navigational and tracking aids as the highest-value services. Current deployments show concrete improvements in customer service, asset utilization, and overall productivity. For customer service, one need only consider the Geek Squad, Best Buy's mobile force of PC troubleshooters, to see the value of LBS for rapid response on service calls. Microsoft offers the bread bakery Pechter's as an example of improved asset utilization; the case study notes that MapPoint "enabled Pechter's to track and dispatch existing route drivers to solve customers' emergency orders via a base-station Internet solution tied to drivers' cell phones. The result is up to 50 percent reduction in costs representing an estimated annual savings of over $250,000. Customer satisfaction also increased as response times dramatically improved." Related articles: Wireless Conference Highlights Security and Opportunity The needs of the field force will continue to drive wireless CRM solutions. BlackBerry Devices Get Instant Messaging Field sales and service agents stand to benefit from RIM's partnerships with AOL and Yahoo!
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