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Show Me The ROI: Nine Views On Mobility's Advantages In Hard Times
By Susan Nunziata
In Part Three of our four-part series, we polled members of the Mobile Enterprise Editorial Advisory Board -- which is made up of enterprise executives, industry analysts and consultants -- to get their views on how the current economic crisis will impact mobility in the enterprise.
(Read Part One to get their views on what will be the biggest enterprise mobility flops of 2009.
And find out what they predict will be The Next Big Thing for enterprise mobility.)
A Time For Re-Evaluation
VP Enterprise Applications & Mobile Solutions
Mobility, like all technologies, will inevitably be affected by the economic downturn.
Companies are evaluating all areas of I.T. spending, including mobility, to find areas in which to save costs.
This could mean re--evaluating simple things like wireless voice spending to ensure mobile users are adhering to corporate policies and are on the optimal rate plans.
This could force other companies to implement new policies to shift users to corporate-liable plans that provide discounts on monthly spend.
It's unlikely that companies will heavily cut back on existing mobile email deployments, except where layoffs have reduced staff. However, new initiatives -- such as mobile CRM deployments and wireless data-card deployments -- will be re--evaluated and delayed as businesses hold back spending on new projects.
All is not bad news, however: applications that provide clear ROI and reduce costs -- think field service, mobile resource management, fleet management, and some M2M solutions -- may actually become more attractive in this environment.
Tasty Baking Company
Even the economic trouble we are experiencing now will have little impact on enterprise mobility initiatives. Mobility offers such compelling benefits and opportunities that companies will continue to invest in this area. Our company is continuing to build out our mobile sales application adding new features like signature capture and Scan Based Trading Support. These capabilities enable new processes that save money and allow us to provide better service. Those are capabilities that companies need to focus on now so they are ready when the economy rebounds.
There's Power In Productivity
Andrew M. Seybold
Andrew Seybold, Inc.
When I worked for Motorola during the recession of the 1970s, the business sales staff was very concerned that their sales would be down. However the reverse happened. Because of lean times, companies bought more radios in order to be able to work more efficiently. As an example, a company with four service trucks on the road, instead of adding a fifth, chose to invest in two-way radios that made their four existing service vehicles that much more efficient.
So I suspect many businesses will do the same thing.
The down side to the economy is that consumers will probably hang onto their existing phones for longer and they will not be as willing to spend money on added services.
All About The ROI
Supervisor I.T. Audit
You will see an increase in the number of devices being used. Companies will look for ways to save money; allowing employees to work remotely or from the road more often will help with this along with the increased mobility and productivity. This may be the year companies realize the soft ROI on mobile devices.
Research Director--Global & Wireless Practice
There's no question that organizations are facing some of the most uncertain times we have ever experienced in the United States. A virtually non-existent liquidity market, coupled with decreasing revenues and mounting financial losses are forcing organizations to cut back on human resources as well as other resources.
Inevitably, budgets will be cut, regardless of which department one is in. However, the question is to what extent I.T., Telecom and mobility budgets will be reduced elative to all other budgets.
So far, mobility budgets don't appear to be affected any more than other I.T./Telecom projects. This is most encouraging because of the benefits that organizations can achieve from mobility -- whether increased flexibility or productivity. That said, the most forward-thinking organizations will actually increase their mobility investments as a way to prepare themselves for the eventual economic rebound.
Immediate ROI Wanted
S.C. Johnson Graduate School of Management, Cornell University
Subscription-based mobile devices and services will come under greater scrutiny [than ever]. Only those items which can provide an immediate return on investment will have funds allocated to them. Other projects will be killed or shelved for the next six to 12 months while the companies see what long term impact is in store for their revenues.
Adding To The Bottom Line
Information Security Researcher & Practitioner
Pure mobility initiatives will be scaled back or put on hold. Technology and process improvement initiatives that utilize mobile technologies as a component will continue to be funded. Individuals and groups that work in the mobility space will need to work with the business functions to create efficiencies and add to the bottom line.
Do Your Due Dilligence
Well, assuming they're not jumping out of windows because their stock portfolios tanked, expect I.T. to spend more time doing needs analysis and tech due diligence to build ironclad business cases since there's no other way they'll get funding. So you're likely to see fewer projects, but much better ones with higher ROI. Long term, this is really good because when the economy turns around these successes will make it easier to launch a lot of new deployments.
Ask The Right Questions
The economic downturn will have three main impacts on enterprise wireless:
and consolidation/concentration of vendors.
Enterprise wireless is no longer discretionary, so smartphone and laptop growth will continue, albeit at a slower rate. I.T. departments are already under travel restrictions, hiring freezes, trade event cutbacks and new project moratoriums. That means they will have to do more with less. More pooled-minute agreements, more shared devices (laptops), more managed and outsourced service contracts and continued displacement of wired access by wireless. Cable has waged a relentless marketing campaign for triple play services (voice/video/broadband) and is now pushing to add wireless. In select markets, I.T. officers may opt to realize savings through this type of service consolidation.
Wireless innovation is going to take a big hit in this recession. After a promising first quarter, enterprise wireless venture capital investment was down 35% in 2008 compared with 2007. In addition to reduced investment, the size of existing venture funds is shrinking as limited partners renege on their unpaid commitments. Angel funding has all but stopped as wealthy individuals rebalance their own hard-hit portfolios (remember even Warren Buffet's company stock is down 36%). Finally, just as we saw after the dotcom bust, pilot and Beta funding of new wireless offerings by enterprises themselves has dried up, as have the merger-and-acquisition and the IPO markets. The one positive for 2009 is that strategic investors with strong cash positions (Microsoft, Cisco, Oracle, Sybase, Intel, Qualcomm) will be able to buy existing wireless ventures with proven offerings at very good valuations.
Finally, we will see some enterprise wireless vendors disappear, so vendor viability has never been more important. The credit crunch has put even excellent suppliers at risk. For example, as of January 19, 2009, American Express terminated its credit-line business. This has an impact on 100% of its small business customers, irrespective of years in business, payment history, credit score or revenues.
I.T. officers should require full financial statements as part of their RFPs: a big name and previous excellent reputation is NOT a substitute for due diligence on vendor financials. RFPs should include questions about concentration:
Is the vendor reliant on a single customer for more than 10% of its revenues?
What percent of vendor revenues are underwritten by vendor financing?
If so, how much is outstanding and what is the age of those receivables?
These are key measures of exposure to financial risk.
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