E-Business Strategy Topic Nine: M-Business
According to Okhrin and Richter (2005: 17), 'the development of mobile-business was caused by the emergence of wireless [communications] technology'.
Early wireless systems all had several important characteristics in common. Firstly, they were broadcast systems so that anyone within range with an appropriate receiver could listen to the conversation. Secondly, they were analogue rather than digital. Therefore, communications were limited largely to speech, rather than digitised data. The first issue was solved by the introduction of cellular services in the 1980s, when communications were point-to-point between individual devices. The second issue was solved by the introduction of digital cellular services in the 1990s. This added the capability to exchange computerised information as well as speech.
A key issue for PDAs and mobile PCs (tablets, notebooks and wearables) is that they don't always have to communicate wirelessly in real time to be effective mobile devices. Because they have useful storage capabilities, users can load relevant data onto them, use and update the data in the field, and then synchronise updates back at the office (or at home) as required. In fact, this was the primary value proposition of PDAs when they were first launched—and largely still is, though wireless synchronisation is becoming more common.
Telemetry is literally the remote measurement of data. While it includes the broader concept of gathering data to measure the quantities of things, we use it specifically in this topic to mean wireless position-tracking services.
Businesses can use mobile telemetry for five fundamental functions:
* Location: Determining the basic position of a person or thing (e.g. car or boat). For example, this can be used for mobile advertising, as we will discuss later.
* Tracking: Monitoring the movement of a person or thing (e.g. a package or vehicle).
* Navigation: Plotting a route from one location to another.
* Mapping: Creating a map of a specific geographical location.
* Timing: Determining the precise time at a specific location (e.g. for service billing).
m-Business: "Any computer-mediated business activity conducted where the user (with device) is able to move freely from place to place. Connection with other computerised systems may be wireless in real time, or by ad-hoc wired or wireless synchronisation."
Research into consumers' mobile consumption habits by Carlsson et al. (2005) found that most consumer applications on offer are used by a small minority of consumers. For example, regular use of SMS at around 95% of users is the only application to exceed the 50% (regular usage) mark. By far the greatest single barrier to increased use of mobile services by consumers was financial cost. Problems with usability, functionality, security and lack of useful services were less important barriers.
In addition to these services, there are a number of different types of portals that mobile users with web-browsing capability can use (Steinbock 2005), such as:
* Communications and community: such as email, calendar and chat
* Information: such as news, weather and directories (rather than direct phone subscriptions which may cost more)
* Lifestyle: such as listings of events, restaurants, movies and games
* Travel: such as hotel listings, direction assistance and timetables
* Transaction processing: such as banking, stock trading, purchasing and auctions.
So far, there has been little advertising on mobile devices. This is in part due to the devices being personal communication channels that are, collectively more expensive to use for advertising than are broadcast media such as TV, radio and print. It is also laborious to collect a significant database of relevant telephone numbers. According to Duryee (2006), ads will finally make it into mobile simply because the opportunity is too large to pass up. While ads that are highly personalised and relevant to the consumer could work well, there is also the risk that the consumer will feel that their privacy is being invaded.
The special characteristics of mobile advertising are personalisation and interactivity, with the following value model and limitations.
Value model of advertising:
* Message content: entertainment, informativeness, low irritation, credibility
* Message exposure: frequency of exposure
* Consumer: attitude towards privacy, age.
* Limitations of mobile advertising:
* Usability: How customers prefer to receive and interact with advertising messages is, as yet, not well understood and it may change over time.
Technology: Small screen size affects the composition of messages. Colour rendition is sometimes poor. Computational power is limited, as is battery life. Transmission bandwidth is limited compared with broadband on computers, and digital TV.
There is a wide range of mobile-business applications an enterprise can consider. The most popular uses are for sales force automation (SFA), field workforce automation (FWA) (Chiu et al. 2005), and distribution management. While most mobile-business activity has so far been in B2C opportunities, growth of B2E mobile applications is expected to exceed B2C soon (Barnes et al. 2006).
Mobile sales force automation (m-SFA) promises to improve enterprise performance on the income side of the financial statements (as well as modest improvements on the expenses side). The benefits companies seek from m-SFA include (Walker et al. 2005):
* Improved accuracy of information: less re-keying
* Improved communication of information: between sales people and organisational systems (e.g. order fulfilment and customer support)
* More effective management of customers: better prospect targeting, time management and call planning, and increased time actually spent with customers
* Improved communication with customers: communicating data in real time
* Increased closure rate of sales: better communication and interaction allows more prospects to be converted and existing customers to be retained.
For logistics companies, the use of m-business is somewhat different. While logistics companies widely use m-business for office applications such as email and organisers (as do other businesses), they use it extensively for order processing as well as field sales (61%), transport and distribution management (59%), and warehouse management (43%) (Okhrin & Richter 2005). The kinds of information being transmitted include delivery dates, client
data, stock information, demand forecasts, product details, order placement and delivery route suggestions.
Logistics enterprises that have deployed m-business initiatives have shortened response times (85%), accelerated business processes (82%), improved quality (71%), improved efficiency (68%), lowered costs (68%), misplaced fewer orders (46%) and improved their market position (43%). The main problems experienced in deploying mobile technology were technological (security, lack of standards, etc) (56%), costs exceeding the benefits (52%), resistance of employees, suppliers or customers (32%), and problems with migrating to the new system (32%).
When considering B2B m-business strategies, there are certainly many alternatives for managers to consider. Mobile adaptations for sales force automation, logistics, customer relationship management and field workforce automation provide many opportunities to create enhanced value. In particular, it is helpful to plan for integration of m-initiatives where possible. For example, are there cost-effective opportunities to deploy m-FWA solutions at the same time as m-SFA solutions, as they may use the same kinds of technology and tap into the same data sources (at least in part)...
Having looked at a range of issues for B2B and B2C m-business, we will now turn our attention to the implementation of mobile-business initiatives.
Trasewich et al. (2002: 44–56) suggest asking the following questions when developing a comprehensive strategy. Mobile client issues., Communications infrastructure issues., Technology issues., Application issues., Global issues., Mobile device limited power issues., Maintenance issues
There are two broad categories of risk for m-business opportunities. The first is market risks associated with operating the m-business systems (Okhrin & Richter 2005: 22–23):
* Lack of standards: wide variety of hardware, software, middleware, transmission standards
* Security: authentication and data integrity issues
* Technology limitations: limited navigation, small screens, slow connection, short battery life, insufficient memory capacity, low processing power, unreliable network connections
* Acceptance: employees and customers unwilling to accept changes in practices or perceived invasion of privacy
* Integration expenses: high complexity of mobile solution development and integration with existing systems. High start-up and running costs make many mobile projects unprofitable.
* Speed of obsolescence: high rate at which technology and solutions can become superseded.
* Start with—or acquire—appropriate infrastructure.
* Pick an appropriate architecture (e.g. some users do not need persistent connection).
* Use a small pilot for experimentation, rather than starting a full-scale implementation.
* Talk with a range of users—some experienced and some not—about usability issues.
* Users must be involved; hold bi-weekly meetings if possible.
* Employ wireless experts.
* Wireless is a different medium from other forms of communication. Remember that people are not used to the wireless paradigm so you need to make it easy and convenient.
Implications for managers
To create, implement and use an effective m-business strategy, managers should keep the following points in mind:
m-Business is about being mobile. Initiatives that simply use wireless communications but are stationary, are not m-business. Mobile-business may be wireless real-time, or by periodic wired synchronisation.
Technology for m-business is still relatively new and rapidly evolving. Strategies that rely heavily or exclusively on m-business initiatives are higher risk than those that initially use it for support or modest enhancement.
While the technology is a key driver, it is not the only driver. Avoid getting caught up in the 'exciting' technology lifecycle just for the sake of it.
Creating new, improved value for stakeholders should be at the head of any m-business strategy.
Improvements may be in any area, such as B2C, B2E and B2B.
There is a wide range of mobile devices in use. Some—like notebook PCs—have characteristics quite similar to existing business infrastructure. Others, however, have very different characteristics such as tiny screens, low processing power and storage capacities, and finite battery lives. Real applications and usage must consider these differences.
There are many advanced, innovative m-business applications in use by both consumers and business. Keep in mind that current successes for businesses are at best mixed. Consumers may be trialling new applications, but indications are still that the majority use their mobile phones only for SMS. Adoption of other applications is vastly lower, though it is likely to increase in coming years.
Before developing and implementing an m-business strategy, your strategy planning process should include answering a wide range of 'issues' questions.
Like any business initiative, m-business projects are subject to risks. Be aware of the most common risks such as technology limitations, speed of obsolescence and limited acceptance by marketplace users. Develop steps to address these in the strategic plan.