Time to Cut the Cord?
It was not that long ago when many thought the wireless revolution was going to bring CRM to the next frontier. But technology snags in bandwidth and the lack of development in universal applications-not to mention price-has resulted in a stagnant market still waiting for a push. And while publicly hoping for a growth spurt during the next year or so, many industry experts are privately concerned that a pipeless CRM market may be just a pipe dream.
Just a few months ago several industry experts groaned that wireless has consistently failed to emerge as a viable area for CRM applications. In fact, stamford, Conn.-based research firm GartnerGroup expects less than 2 percent of 2002's $3.6 billion in CRM software spending to go towards wireless projects. Even with a projected 72 percent compound growth rate, the difference between where we are and where we were supposed to be is striking.
Considering that CRM strategies live and die by how well they get the right information to the right people and places, it seems an inexcusable oversight. While CRM vendors have tried to keep up with what they initially saw as strong demand for wireless technology, they have few explanations.
"Yeah, it's been pretty much a nonevent," says Jeff Scheel, general manager and vice president at Siebel Systems, in San Mateo, Calif. "People liked the idea, but they either can't cost-justify it, or they can't use it as the primary mechanism for running their business today."
That may in part explain why companies like power-tools manufacturer DeWalt have deliberately stalled their wireless CRM projects at the completed-pilot stage, citing concerns over functionality and return on investment (ROI). Or why the number of CRM vendors touting wireless functionality outstrips the number of interesting success stories they offer. Some developers are at a total loss to point to proven success; others point to such eyebrow-raising candidates as their own reseller channel.
"It's still the exception and not the rule, but that doesn't mean the technology isn't out there that a lot of companies, large, medium, and small, can't employ to good effect," says Warren Wilson, practice director at Summit strategies, of Boston.
The Old Forms Are Best
The contention is not that wireless has completely failed as an enterprise software infrastructure, but the areas in which wireless has proven successful continue to absorb most of the enthusiasm-and development budgets. "Traditional uses of wireless for material tracking and handling is really where the value is today," says Louis Columbus, senior analyst at Boston's AMR Research. It's a trend he expects will continue for the next three to five years.
Some firms are expanding on the traditional tracking and reporting theme by tying it in to a customer-focused CRM application. PDG Domus, a Columbus, Ohio-based prefabricated home manufacturer, is currently piloting a system that attaches a wireless device (an Itronix fex21 handheld running an iAnywhere database application) to the entire sales cycle, from the presentation through the in-factory construction and on-site assembly. In the field PDG sales staff can check factory utilization to provide accurate available-to-promise quotes to neighborhood developers, and begin the order process. In the factory the fex21 records the dozens of entries on the quality assurance (QA) checklist. When the manufacturing team travels to the job site to piece together the nine discrete components of the home, the final assembly and quality checklists are recorded, and the completed job report is transmitted to headquarters to generate a bill and customer record of any discrepancies.
PDG Domus Chief Executive Nate Pingel is pleased with the way the process has tightened his operations. "Now, we have tracked from the very beginning to the finish of the house the entire operation-QA, purchasing, all the materials, the design and the location, and if there were any difficulties or oddities in the installation," he says. "The result is higher quality from start to finish, and less callbacks, which is where you lose your money in the manufacture and installation of a house."
Not all potential users for wireless CRM are as clear on the prospects for making or saving money with the technology, however. In a June 2001 research note Gartner predicted that over the next four years fewer than one in 20 enterprises with horizontal wireless applications like field sales would be able to establish a positive ROI. According to Summit strategies' Wilson, that should not be a surprise. "Just in the sense that wireless technologies are relatively new, the solutions tend to be tailored very closely to an individual company, so it's hard to apply standard [ROI-measuring] procedures," he says.
ROI is not so acute a problem for service and infrastructure-minded organizations that are accustomed to making the accurate balance between time and money into an art form. "Our [wireless] applications are justified through many means, but one is called customer-minutes-minutes that a customer is out [of power]-and for large outages that can be a rather large figure," says Andrew Kasznay, a software engineer for Northeast Utilities. NU's wireless vehicle location, tracking, and dispatch system became a priority simply because getting the proper crew to an outage site faster meant smaller losses and less customer resentment.
Among the numerous challenges facing wireless CRM is choosing the right equipment to help achieve that ROI. Although sullying the reputation of four-line LCD wireless phones is popular, a few hundred dollars buys substantially more computing power and real estate than it used to. "Five or six years ago a [company] may have had to supply custom devices at $1,000 each, and now can get a more powerful, ruggedized [off-the-shelf] unit for $400 to $500," Wilson says. "That's a significant opportunity." Some companies still shell out for special-purpose devices-the rugged, larger-screen Itronix units used by PDG Domus cost more than $2,000 each with the wireless modem add-on-but thrifty buyers do not have to make due with consumer-grade cell phones.
PDAs and other handhelds are not as cramped in the storage department as they once were, either. With cards like CompactFlash data storage and IBM's tiny Microdrive, most PDAs can access at least 1 gigabyte of data locally. Synchronizing major portions of that data at typical wireless speeds would be an entirely different matter, however.
still, short of the expensive and bulky route of rigging laptops for wireless, Gartner research director Beth Eisenfeld says that succinct applications like field service will continue to dominate the wireless space, because smaller devices cannot provide the rich information other CRM users demand. "Letting a b-to-b sales rep know about a hot new opportunity is not [a business proposition]...a salesperson is not going to tap over [on a PDA] 15 times to read what this new opportunity is so he can go pursue it right now," she says.
Blame the Software?
Eisenfeld's concerns do not end at the hardware platforms. "The applications aren't there yet. They're there for contact management, to-do/calendaring, wireless e-mail on the run-but until they provide real depth of functionality by industry, enterprises are not going to see return on investment," she says.
Exploiting the full potential for wireless applications may have to wait until the competing digital wireless standards shake out further. "There's still not a ubiquitous type of 'dial tone' when it comes to wireless [data] right now," says AMR's Columbus, and reluctance to choose the wrong network or data structure could be chilling both customers and developers.
Vendors counter that their customers' eyes might be bigger than their appetite for committing to rebuilding their business processes around wireless CRM functionality. "Wireless capability is an important 'checklist' feature for an enterprise CRM system, but people aren't moving very aggressively to implement these," says Paul Rodwick, vice president of market development for E.piphany.
"Given the state of the macroeconomic environment, the thing companies are most interested in is not the next big thing but the way to get the most possible value out of systems already in place," Rodwick says. "For CRM, that means being able to pull together the various CRM systems they had deployed, or acquired as they bought companies."
While thin-client wireless technologies relying on shortcuts like wireless application protocol (WAP) to alleviate network uncertainty have often been discounted as too limited, some companies continue to use the technology when only simple user input is required. Northeast Utilities uses WAP to provide management with timely, systemwide outage and utilization data so it understands how well the company is executing on its service goals.
It's the Network
The easiest target of all to blame is the wireless network itself. Until recently, public and even most private wide-area wireless networks offered fewer than 20 kilobits per second of bandwidth-less than half the speed of a humble and already slow modems.
According to AMR Research's November 2001 report on wireless CRM, the 2.5G networks being frantically deployed by the carriers tend in practice to deliver a disappointing 43 kb/second-still slower than a five-year-old desktop modem. The limitations have real impact on CRM vision. PDG wants to expand its wireless platform to include the ability to show prospects a real-time representation of a requested house configuration. But current transfer speeds do not lend themselves to smoothly delivering crisp, high-resolution images in a short period of time. Software developer Clayton IDS, of Dublin, Ohio, says the final solution may require preloading a large RAM card with the necessary files, rather than retrieving the designs on-demand from PDG's servers.
Most analysts and observers have scaled back their estimates for the hyped cure-all, 3G wireless networks, to 2004 or later, despite the fact that the slick marketing materials once told us it would be here by now. "It's at least three years off before even the technical infrastructure [for 3G] is there," Columbus says. Other more aggressive technologies, such as the strong-signal, superfast ultrawideband (UWB), are primarily aimed at public safety and short-range wireless communications, rather than large-scale data deployments, and the frequencies are creating a regulatory soup of restrictions and conditions.
In the meantime, using short, succinct interactions to trigger more complex processes may be the best workaround. For example, PeopleSoft's CRM 8.4 application supports using a canned message sent from a RIM Blackberry e-mail pager to launch a workflow process to perform tasks like obtaining and properly recording a deal discount from higher management.
"Ideally, these carriers are going to deliver a single packetized voice and data network so when you request something [to a person or voice recognition portal], you can get data coming back to you," Siebel's Scheel says. Although early adopters can cobble together a more-or-less synchronized voice and data transaction over wireless, there is considerable room to better automate the process. "I push stuff to my Blackberry so I can see it while I'm on the phone, and that's useful, but it's not a solution that is widely deployed even within Siebel [corporate.]"
While self-service is a strong component of many CRM strategies, the case for customer-facing wireless CRM is muddled. Various projects designed to establish wireless sales and service initiatives for consumers have failed. "Lo and behold, not everyone wants to buy pots and pans on a cell phone," says Arun Baheti, director of e-government in the governor's office of the state of California. Even so, the automotive industry continues to push in-car wireless/GPS systems like Onstar and Wingcast as eventual solutions that will combine a captive consumer with enough profile and location data to make a viable offer.
AMR names self-service, as opposed to purchasing or brand-building activities, as the most promising customer-facing application for wireless CRM. The potential flaw in this reasoning is that by and large, most customer-owned wireless access devices are telephones. With wireless Internet airtime at least as expensive as voice, there is often little disincentive to making a traditional voice contact, particularly given the cramped text window on a combination device that would tend to further reduce the efficiency and utility of self-service from the customer's point of view.
Wireless is also touted as an ideal platform to reach customers with appropriate, just-in-time offers, particularly if a customer can be pinpointed as well as profiled. However, since customers pay for the airtime to receive those messages, wireless marketing communications face the same rejection hazards as e-mail. The news is not all bad: As with e-mail, wireless customers are showing a willingness to sign up for regular messages that carry significant value. Many European banks offer weekly updates with a customer's account summary, as the value of the data outweighs the miniscule hit for receiving the ping.
Finding the Frequency
"Government has, perhaps, an advantage. A lot of information we have are things that make sense for wireless," Baheti says. "A lot of interaction with the state is updates-the status of my business license, do I owe, do I need to renew a professional license, emergency service alerts."
That reasoning led California to establish a range of wireless access and notification options for its my.ca.gov information portal, which transmits everything from lottery drawings to traffic updates to power-outage warnings. Although the complete portal can be browsed live in a special PDA or wireless phone format, according to Baheti, the public has spoken. "We're not seeing that niche market where people want to do [wireless] interactivity," he says. He notes that for some applications the one-way notification may expand to a notify-and-reply system, whereby users could ask for an available DMV appointment and accept a proposed slot with the press of a button.
Currently the California portal, powered in part by software from Kana, is a free service. "We are not necessarily averse downstream to seeing if there are niche markets where it doesn't make sense for the entire tax population to pay for some things, rather than the people using it," Baheti says.
Certainly, some in the private sector have become believers as well. PDG Domus has, to date, committed just $10,000 for its year-long, two-device pilot to improve its building and delivery workflow, but Pingel expresses willingness to commit the $36,000 investment and $800 per month in wireless network fees to expand the project tenfold. With expansion to additional plants planned for the next year (currently PDG sells many of its homes within a two-hour radius), he expects it will alleviate the start-up pains in the new facilities.
Northeast Utilities has deployed wireless applications beyond dispatch and management views, into environmental reporting, self-directed work crew ticketing, and mapping. But, with each wireless project costing as much as $60,000, NU's Kasznay says that each individual proposal will always be evaluated on its own merits, rather than deployed simply to keep up appearances.
Some successes will not come as easily, as both the wireless networks and the CRM applications to serve them take time to evolve and develop greater focus. Meanwhile, adopting wireless CRM requires a dedication to power through the obstacles, lest the business process becomes a low-bandwidth, unwieldy mockery of itself. "The device and the network are very inconvenient today, which makes the information that can be provided to me not very valuable," Eisenfeld says. "When the value of the mobility and the immediacy of the data you're getting through this application is greater than the inconvenience of the current technology, that's when you're going to see the bigger takeup."
Wireless, More Wireless, Most Wireless...
FedEx has been an avid consumer of wireless data technologies for the better part of two decades. So perhaps a bit of confident exuberance can be forgiven. "Wireless is an infrastructure technology that permeates our CRM experience," says Winn Stephenson, senior vice president of IT for FedEx. And it is spreading.
Internally, FedEx uses wireless at the delivery-truck level to beam package delivery information back to the company's servers. That is no longer good enough. The company's PowerPad project, which will replace the familiar tracking wands with a PDA-style device, moves the point of wireless connectivity to the device level. Stephenson indicates that this will make couriers a richer source of information for customers, helping them answer complex service inquiries on the spot. In addition to direct wireless access to FedEx's databases, PowerPads will be Bluetooth-enabled for local wireless networking. Portable label and receipt printing will likely be one of the first applications, but more are planned. "Eventually, we may have it talk to a customer's computer if we needed to interact with that computer for [shipping] information," Stephenson says. The first domestic PowerPads will show up on FedEx belt clips later this year, with a more substantial rollout in early 2003.
FedEx is not stopping with the PowerPad. Although the courier upgrade project has a higher priority and will be rolled out sooner, the company also plans to equip its field sales force with a wireless laptop connection, enabling full access to FedEx's application suite and intranet data. "Salespeople want to be in front of the customer, they don't want to be back in the car on the phone," Stephenson says. The laptop-based system, due in 2003 or 2004, will make for more intelligent and informed conversations. "When the customer starts asking about features, service, or pricing options, the salesperson can key things in and get an instantaneous response on the customer's history, on a pricing request, just get a variety of transactions in front of the customer."
While some companies struggle to identify good opportunities to use wireless as a customer channel, FedEx has taken steps to make common customer inquiry tasks, such as package tracking or drop-off locating, easy for the most humble wireless traveler. Partnerships with both AT&T PocketNet and Nextel Online give FedEx prime location on those carriers' WAP portals, minimizing the amount of typing or tapping on the user's part. While wireless inquiries represent a tiny sliver of overall service activity, Stephenson hopes that it will contribute to the company's overall self-service goals, which have been able to hold traditional call center volume flat even as package volume increases. "The Internet and wireless applications are siphoning off a significant number of calls that would have gone to customer service," he says. That's important, because a tracking inquiry costs the company more than $2 on the phone, but 10 cents through the Internet or by wireless.
FedEx declined to identify how much of its $1.5 billion annual IT investment was being used for wireless projects. Because wireless standards and network capabilities still vary from country to country, the bitter pill for a global enterprise like FedEx to swallow is that an elite, successful application in one market may not solve problems for the entire company. "The endgame is that we have to accommodate various wireless infrastructures around the world," Stephenson says. "We're working on that."