It's the Transaction, Stupid
It's the Transaction, Stupid
Mar. 14, 2001 04:42 PM
Red lights flash in my mirror. I can't believe it - another speeding ticket and I'm already late for my morning meeting. As I wait 45 minutes for the police officer to
copy my license, registration, and insurance information, my mind begins to wander - isn't this what our customers complain about? Their field workers are in the
dark ages, manually processing multiple data sources like licenses, insurance forms, and registrations while pressing hard on carbon forms latched to steel clipboards.
And while there are plenty of esoteric reasons to adopt mobile technology, every businessperson knows that it's the irrefutable, tangible return on investment that
drives corporate adoption. So in spite of receiving four points on my driver's license and a $55 fine, I appreciate the insight - automating transactions will drive
corporate adoption of the mobile Internet.
Wherever I go, it's the same story: "Bob, our field reps record activity on a paper form and at the end of a shift they drop it off at headquarters. That's when the
nightmare begins - illegible handwriting, incomplete forms, sold-out inventory, and bundling options that don't exist. The result? Dissatisfied customers, lost
momentum, and an unproductive field. And the hard dollar cost - we're paying $10 to $100 to process every transaction."
Whether it's sales, service, inspection, workflow, or public safety, there are plenty of paper forms to eliminate. With a mobilized process, imagine a different
scenario of the traffic ticket that took 45 minutes:
- Need to copy my license, registration, and insurance? How about scanning the bar codes on my car window and my driver's license and add a
real-time query to see if my
insurance is up to date? Better yet, with an automatic vehicle identifier (AVI), the police car could wirelessly read this information and indicate if I am a friendly
citizen or a stressed-out salesperson on the verge of road rage.
- Need my location, speed, and the time of day? A Global Positioning System (GPS), Bluetoothlink from the radar gun, and a real-time clock could
provide all of that information.
- Send in the ticket or appear in court? How about allowing me to provide you with my credit card on the spot to pay the fine and receive a reduction
- First day on the job, officer, and you forgot to check if I have any outstanding warrants? No problem. Like every quality mobile application,
exceptional conditions and alerts are part of the package. And no, you can't arrest me today.
This is a simple example, but based on other industries, the cost involved in processing a traffic ticket totals at least $30. This $30 includes the time it takes to
write the ticket, enter the data, schedule a court date, enter the data again into the insurance system, process the fine, and record the points on the driver's license.
These same costs are present in many field forces, whether it's sales, service, inspection, or operations. By mobilizing your workforce, you can build a
rock-solid return on investment with as few as five transactions per field worker per month while dramatically increasing the speed of doing business and creating a
positive experience for your customers.
Isn't This a Technology Magazine?
Okay, I know what you're thinking - another "business" guy waving his hands over all the hard stuff. It's just a paper form, right? Wrong. It's actually
multiple-legacy back-end information systems that don't talk to each other, communicating over a low-bandwidth, unsecured, intermittent network to a thin-client
device operated by a nontechnical user. It's also business logic to generate alerts and support and maintain the solution while it's in the field. In fact, there are six
major technical issues that need to be addressed:
- Business logic
- Network and client device limitations
- User experience
- Total cost of ownership
Since it's impossible to cover all of these areas in one article, over the next several months we'll discuss each topic in detail. For now, let's look at the highlights
of each area.
While the major focus is on handheld devices and wireless networks, the real mobility issue is the complexity of integration across multiple legacy information
systems. For example, the system used to issue a traffic ticket will have multiple information-system "silos," including the home state's driver's license and vehicle
registration system, similar systems for the other 49 states, insurance systems from multiple carriers, a court scheduling application, an arrest warrant database, and
commercial credit authorization. Not only must data be extracted from these systems, but separate data models need to be integrated as well. For example, suppose
one insurance system derives the state from the driver's zip code, the home state license and registration system has a dedicated field, and a neighboring state
prepends the two-character state abbreviation to the license number and places it in one field. How do we integrate the data from these separate systems?
What we need to do is extract the data in real time and dynamically transform the data items into one common data or business model. The solution is best
thought of as Dynamic Business Modeling, or DBM. The DBM is able to point to data in its original legacy location and transform it on demand to present a
common model to the world.
This DBM approach also has the advantage of insulating mobile applications from underlying sources because the DBM acts as an abstraction layer between
applications and data. For example, if a neighboring state switches to a new license and registration system, the DBM allows the modification of the business model
to occur in minutes instead of months, which keeps the traffic ticket system operational.
In addition to extending corporate information systems, the mobile Internet enables business practices that were never before possible. For example, when a
police patrol car pulls up behind a stopped vehicle, it makes sense to give the police officer a real-time alert of a dangerous situation. To do this, databases need to
be queried for arrest warrants, stolen vehicles, and all-points bulletins. In most cases this business logic hasn't been written. Therefore, not only must any mobilization
effort extract legacy data, it must also apply new business logic against the legacy data.
Imagine the fun a teenager would have getting hold of a lost traffic-ticketing device. It wouldn't be surprising if an entire high-school teaching department lost its
driver's licenses. Mobility solutions need to address four security considerations:
- Authentication: Validating the identity of the user. Potential solutions range from simple password-based systems to smart cards and
- Encryption: Ensuring that nobody can eavesdrop on a data conversation. Potential solutions use the native encryption of each network
segment or overlay an end-to-end solution.
- Access control: Ensuring that users see only the information for which they are authorized. Access control needs to be built into every
mobile application, and ideally should integrate with existing systems like LDAP or the Microsoft NT Security architecture to minimize administrative costs
- Theft and employee termination: Both are major security issues. IT organizations must be able to centrally disable mobile devices, and in
applications that are very security sensitive local file systems must be encrypted.
To meet the needs of mobile workers, mobile applications have to work with or without network coverage - that is, online or offline. Offline application
functionality may be restricted, but mobile workers still have to do their jobs inside buildings and outside major urban areas and traffic corridors. And limited
bandwidth implies a different architectural approach in which the mobile device is best used for command and control of headquarters-based servers on high-speed
networks that can carry out operations on behalf of the field worker. For example, a salesperson can use a handheld device to request that sales literature be
e-mailed to a prospective client. There's no need for the handheld device to store the literature locally if it can "command and control" a central literature server.
Small screens, limited keypads, hands-free operating environments, and end users with limited computer literacy can be barriers to the effectiveness of a mobile
application. Applications that are designed, tested, and piloted with a deep understanding of the end-user environment will overcome these obstacles.
Total Cost of Ownership
Gartner estimates that the total cost of ownership (TCO) of a handheld device is three times the purchase price. This TCO estimate considers only call-center
support and break-fix replacement. If mobile commerce is going to be widely adopted, the real driver behind TCO will be how well mobile applications integrate
with existing systems.
For example, when providing secure access control, we have to ask whether we want to introduce a separate security environment or integrate with the existing
LDAP infrastructure. It's critical that IT pays careful attention to such ongoing maintenance issues.
* * *
The bottom line is that where paper transactions exist, there are ROI and IT challenges. Companies that address these challenges by deploying mobile solutions
within the next 12 to 18 months will have significant competitive advantages. Those companies that are late to market will cease to be competitive. The call to action
for mobilizing the enterprise can be compared to the familiar story of evolution - businesses will either "mobilize or die."
Transactions that make the cash register ring always get the most attention. So what are the business drivers behind mobilizing commerce transactions from the
Where Are the Transactions?
- Order entry: Most field commerce transactions are paper-based and cost anywhere from $5 to $50 each to process. Mobilization reduces
the same transaction cost to pennies.
- Rejected orders: Whether it's inventory that doesn't exist, misconfigured options, or incomplete information, the average business
experiences a 20 to 30% order-rejection rate. This problem is expensive to rectify, and it kills customer satisfaction.
- Inventory: When it takes one week to process an order, companies are forced to fulfill sales out of their local inventory. By mobilizing the
"demand chain," inventory can be centralized, and inventory costs will be dramatically lowered.
- Dynamic pricing: As was the case with e-commerce, the mobile Internet promises to fundamentally alter pricing. A mobility solution can
dynamically adjust price based on inventory levels, test spot promotions, and set prices regionally.
- Sales momentum: Conducting business in the twenty-first century means that customers expect immediate response and fulfillment.
Customer satisfaction is difficult to quantify, but it's perhaps the most important long-term mobile commerce business driver.
The greatest needs for mobility exist in four areas:
- Field sales: Mobility needs include checking price and inventory, validating credit, and booking orders.
- Field service: The process of issuing original work orders, authorizing return merchandise, and closing out work orders creates a great need
- Warehouse and delivery: Workflow can be mobilized to track the process, identify areas in need of improvement, and enable real-time
customer status information.
- Inspection: Buildings, elevators, safety systems, and other structures and systems are inspected on a regular basis. Mobilization can
organize and track the inspection processes.