Mobile Enterprise CIO Q&A - The Case for Mobile ROI
By Pat Brans
LAWA already uses mobile technology. What’s more, they are thinking about vastly expanding its use both as a way of improving internal business processes and as a way of offering new services to passengers. We managed to get some serious face time with Dominic Nessi, the busy CIO of LAWA, and he shared some of his thoughts for us and our readers.
Mobile Enterprise: Considering the relatively short life cycles of mobile hardware, operating systems, and applications, how do you decide the period over which to amortize an investment in a mobile solution?
Dominic Nessi: At present, we aren’t thinking along the lines of amortizing the cost. The hardware and software to support mobile users is just part of our normal IT infrastructure. The devices themselves aren’t that expensive - even ruggedized devices.
Where we might incur a relatively large expense, specifically for mobility, is applications and support. Here we have - or I should say we are looking at - a variety of cases that pay for themselves in different ways. Let me give you a few examples.
The first example is baggage handling. Airlines take care of baggage handling in most of our terminals. However, we do have some common baggage systems, owned by LAWA, which we handle. We have equipped our baggage handlers with mobile scanners to smooth this business process, but that was a no-brainer. The devices are inexpensive; and the wireless infrastructure is a soft cost, in that it’s already there. The software for baggage handling required little or no customization, so it too wasn’t a big cost.
Similarly, we have common use on wheels. We call them COWs. When a ticketing queue gets too long, the agents can wheel out the COW and process passengers without them having to wait.
The second example is a new approach to converging a variety of media for our passengers. Using the smart phone as the mobile device, we are looking at blending a variety of social media with informational and commercial opportunities. I believe we will be on the leading edge of using the wireless medium in the air transport industry. We are looking at different kinds of partners who might have a natural stake in such a holistic media approach. Advertisers are just one of the types of partners we’re considering. We are just beginning our planning for this initiative and we hope to have it in place with the opening of the new Tom Bradley International terminal expansion.
ME: What do you include in the total cost of ownership of a mobile solution?
Dominic Nessi: As I mentioned, the infrastructure is already there. We don’t bother to assign percentages of those indirect costs to specific projects.
That leaves the devices themselves and their corresponding data plan, if there is one. Then there’s software. Sometimes we develop in-house, so there’s cost associated with that. In other cases, we buy an application off the shelf. Finally, for really innovative solutions, we look outside of our own organization.
We provide first-line support ourselves; and like the infrastructure, we consider that a soft cost. When deeper issues come up we have support contracts with the hardware and software providers; and those contracts are part of the total cost of ownership of a mobile solution.
ME: What are some examples of tangible benefits of mobile solutions - measures that you can assign a dollar value to and count directly into your return?
For the common baggage handling, we see three tangible benefits: fewer people process more luggage, baggage gets through the system quicker, and fewer items are lost. But in most other cases, it’s hard to discern a specific benefit to which a dollar value can be attributed.
ME: Do you factor intangible benefits into your return? If so, can you explain how that works? If not, why not?
We are looking at the intangible benefits now. These include immediacy in reporting inspections, convenience to staff and partners, and passenger satisfaction.
One solution we expect to implement in upcoming months involves a combination of geographical information systems (GIS) and context sensitive input forms. We will equip staff with a tablet and when they spot a bathroom that needs cleaning or a water spill in a hallway, they can click on a selection. The software will pinpoint the location and context, transmit the information to our Airport Coordination Center and have somebody sent in to clean it up.
The devices are cheap enough that we can consider the investment as part of normal operating improvements. We have a strong belief that mobile devices will soon become a common part of the daily office “tool palette,” and will not require special justification.
ME: How do you assign risk in your ROI computation?
We aren’t investing on the basis of ROI or payback. We see mobility as strategic, and something we must do to move our business in the right directions. We therefore don’t assign a financial value to the return.
Nothing we are looking at is very risky. Besides, we aren’t doing anything on our own. We are looking at different partners to help us develop and deploy new services with mobile technology, so there is the notion of shared risk.
ME: When evaluating projects to potentially implement, many program managers use models that go beyond strictly analyzing payback. For example, they might use a checklist or weighted criteria. Do you and your CFO look beyond just finance when considering a mobile technology?
Absolutely. For the reasons I’ve already mentioned, our focus is on utility to the organization and not necessarily the dollar cost, so we rely on a checklist model to make sure all solutions meet certain criteria.
Our first criteria when considering wide-spread adoption at Los Angeles World Airports is that, as a government entity, we avoid the appearance of being wasteful, of proliferating gadgets just because they are the “hot item” for staff to have. We are careful about whom we assign devices to and under what conditions. We make sure devices are used for business purposes.
Another criterion is whether the technology moves us forward strategically. The holistic media idea and solution that I referred to earlier in the conversation will be built in conjunction with the new Bradley Terminal at LAX. Passengers will go to it for flight information, concession information, cultural events, and so on. This is a strategic project that will help us move in the directions we want.
Pat Brans is a mobile technology and productivity consultant and author of the book Master The Moment: Fifty CEOs Teach You the Secrets of Time Management.