Business Process Management Journal Emerald Article: B2e mobile internet: an exploratory study of Italian applications Andrea Rangone, Filippo Maria Renga
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Andrea Rangone and Filippo Maria Renga Department of Management, Economics and Production, Politecnico di Milano, Milan, Italy Abstract Purpose – The paper presents an exploratory study to investigate the impact of B2e MI applications and, in particular, an empirical analysis of the main features of Italian B2e MI applications for automating sales- and field-force activities. Design/methodology/approach – The study has been carried out with 16 case studies of B2e MI applications employed in different Italian companies. Findings – The paper describes the main features and impacts of the applications, showing how the network is utilized, how the device and the usage mode (online or offline) affect these applications and indicating the major opportunities for improvement. Practical implications – Some indications for management regarding B2e mobile applications are the need: to develop simple applications; and to start mobilizing the sales-force, because this provides faster pay-back and easiest implementation. Originality/value – The paper provides material to illustrate the current situation and serve as a starting point for scientific analysis. Findings regarding the use of mobile phones and mobile networks as compared to fixed-line solutions are presented and explained. Differences in the use patterns of the applications are also discussed with real case examples. Keywords Italy, Mobile communication systems, Automation Paper type Research paper
Business Process Management Journal Vol. 12 No. 3, 2006 pp. 330-343 q Emerald Group Publishing Limited 1463-7154 DOI 10.1108/14637150610667999
Introduction Over the last years, there has been an inter-linked evolution of the internet and the wireless telecommunications world, resulting in the coining of the term “mobile internet” (MI), which is also used here. The convergence of these two worlds has presented a wide range of new opportunities that can improve companies’ current business and develop new areas. Mobile data applications are playing a major role in new mobile services in the business to consumer (B2c), business to business (B2b) and business to employees (B2e) areas. Despite substantial interest from all the parties involved (telecom operators, software integrators, software vendors, consulting firms), there are only a few examples of B2e MI applications in European companies (Accenture, 2001; Air 2 Web, 2002; Carnevale Maffe´ 2001; Deloitte Consulting, 2001b; Synchrologic, 2001, etc.). Moreover, little is known of the impacts of mobile B2e applications on companies. Literature concerning work automation (Speier and Venkatesh, 2002; Swenson and Parella, 1992) and mobile technology is broad. Nevertheless, there are few contributions concerning the main features of B2e MI applications. Just a small number of academic papers (Rodina et al., 2003; BenMoussa, 2003; Kumar and Zahn, 2003) focus on this topic from a managerial view, all providing little empirical data.
Finally, the companies that developed these projects used a bottom-up approach without a clear vision of the main features of the applications or the overall impact on the enterprise. Against this background, the present paper reports a study carried out by the Mobile Internet Observatory of the Associazione Impresa Politecnico – Politecnico di Milano that sought to investigate B2e MI applications. More precisely, the objective of the empirical study was to analyse the main features of the Italian B2e MI applications for automating sales- and field-force activities. Given this objective, the following section explains the methodology utilized in the study, while the third section gives the main results obtained from the empirical analysis using various case studies (as reported in the Annex) as examples.
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The methodology The empirical study was divided into the following two steps (as shown in Figure 1): (1) identification of case studies; and (2) interviews with company CIOs who have developed and use the MI applications (in 14 cases the system integrator was also interviewed). The search for case studies was undertaken through direct interviews with consulting firms (e.g. At Kearny, Deloitte Consulting, etc.), system integrators (e.g. CAP Gemini Ernst & Young, Accenture), application developers (e.g. J.D. Edwards), and mobile telecom network operators (Vodafone, TIM, Wind), etc. Some other sources, i.e. press search, reports, meetings, web sites, consulting firm reports, were also monitored. At this stage of the research and in order to focus on the mobile services, the potential cases had to fulfil several requirements: . the devices had to be “easily portable” so only PDA, smartphones and mobile phones are considered, while laptops are excluded;
Figure 1. The methodology
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applications had to use the TCP/IP protocol to transmit data (so excluding SMS); users had to be “mobile workers” (e.g. sales- or field-force); applications had to be used in structured processes (excluding so-called mobile office applications not used in such processes); and companies had to be Italian.
Of the identified 28 potential cases, only 16 applications were analysed, because many have not yet been used (they are in the prototyping or testing phase). The features explored during the case studies were selected from those indicated as most important in the literature. Consequently, the information collected for each application was: . types of application and main functionalities (Rodina et al., 2003; Accenture, 2001, Booz Allen & Hamilton, 2001; Fuhrer and Mentrup, 2002; IBM, 2001); . impacts on processes and people (BenMoussa, 2003; Deloitte Consulting, 2001a; McKinsey & C., 2002); . architectures and technologies (devices, networks, etc.) (Speier and Venkatesh, 2002); and . costs and revenues (Swenson and Parella, 1992; Evans, 2002; BenMoussa, 2003; Deloitte Consulting, 2001a, b; McKinsey & C., 2002). Main results The main results of the analysis refer to the following three features: (1) types of application used and processes enhanced; (2) technology choices: network (wired or wireless), devices (PDA or mobile phones, as no applications using Smartphones were found), operating mode (online or offline, as indicated in Kumar and Zahn, 2003); and (3) benefits. Types of application Looking at the case studies analysed and the literature, two categories of application may be defined (Rodina et al., 2003): (1) Sales-force automation (SFA) applications; and (2) Field-force automation (FFA) applications. The general features for these applications are to automate data collection, to provide mobile employees with all the information they need wherever they are, and to reduce the time needed to update the information available for all the company. SFA applications started to develop before other applications, because the sales-force is mobile by nature and performs a data intensive activity, thus exploiting the opportunities of mobile technologies. These applications facilitate tasks such as order entry and transmission, as well as other activities, e.g. data collection for merchandising, or sales-force monitoring to report errors or anomalies immediately (e.g. the “Ipa Sud” case in the Annex).
FFA applications are used by employees such as field service teams, technical teams, or, more generally, staff that do not carry out any sales activity (the term “work” force automation has been discarded in the literature (Rodina et al., 2003), because the sales-force are also workers, which would confuse this category with that above). The case studies reveal that these applications have four major benefits (e.g. the “Gas distribution company” case in the Annex): (1) allowing access to large amounts of information that staff need for their work (increasing productivity in the field and the quality of service delivered); (2) minimizing paperwork; (3) automating data collection (increasing in-house productivity and information accuracy); and (4) optimising communications by reducing the time to deliver the service.
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Most of the cases are of SFA applications used in different sectors (the companies positioned in lower quadrants in Figure 2 operate in food and beverages, banking, distribution, pharmaceuticals, etc.). This category includes both those applications that support a real selling activity (order acquisition and transmission) and those concerning data collection at the point-of-sale in support of marketing and merchandizing or to monitor the activity of agents/sellers (product surveys, product positioning on shelves, price checks, collection of data on competitors, etc.). In two cases, B2e applications have been “extended” outside the company to customers (so becoming B2b applications), in order to allow the latter to see their orders. Only four FFA applications were identified: (1) one allows company technicians responsible for the maintenance of thousands of thermal systems scattered around the country to send data collected in the field immediately to the centre (“Dalkia” case); (2) another has been implemented by a gas distribution company and seeks to plan technicians’ everyday work effectively (the “Gas distribution company” case detailed in the Appendix);
Figure 2. The types of application analysed
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Figure 3. The types of network utilized
(3) the third supports the updating of order and delivery data from the van fleet of an online grocery business (“Volendo” case); and (4) finally, the fourth case is that of an IT company that uses the application to give its professional staff faster and more complete access to useful information during customer visits (the “Guttadauro” case, again detailed in the Appendix). Technologies Networks. In many cases, a fixed or wireless LAN and not a cellular network is used for the transmission of data and the updating of archives. Often different networks are used, as shown in Figure 3 and the “Ipa Sud” case in the Annex. For example, in SFA, the mobile network is used to send the customer orders to the central system at different times during the day, while the fixed network (or the business LAN) is used once a day to update the archives (an activity that generally demands the transfer of a significant amount of data) (e.g. in the “Mascagni” case). In three cases, only the fixed LAN is used and never the cellular network. The most important reason for these choices is that performance is inferior and the costs are still higher in the mobile networks compared to other systems (as partially pointed out by Kumar and Zahn, 2003). The fact that in all cases except two the PDA does not have an integrated SIM card, but must be connected to a (mobile) telephone or SIM card (device) results in the decoupling of the mobility of the applications (see below, for further details) into “operating mobility” (i.e. carrying out a single, given activity in any place at any time) and “transmission mobility” (i.e. transmitting in any place at any time). Devices. In the SFA applications, the most common device is the PDA (the companies on the left in Figure 2). There are several reasons for this:
. .
.
data is easier to insert and read (in particular, when it is complex); many peripherals can be integrated (printers, barcode scanners, etc.) (in the “Rovagnati” case reported in the annex a barcode scanner is integrated); and the device can be used with any type of network (fixed LAN, wireless LAN, cellular) and can operate both online and offline, because it has its own memory and processing power.
The mobile phone is only used in three cases, two of SFA and one of FFA. In all these examples, the application is relative.041255simplee.041222.5(an)-7.8(424260d8(t)0(7)-9.8(i)0(42-395n8(t)0(7)-9t0(42a)-7.equiree.044)-9t9(the)-43
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Benefits In the majority of cases, the application has involved only limited investments, both in terms of software and hardware, and it has not demanded particular organisational changes in processes or user habits. To understand these results, it should be remembered that most of the applications are relatively simple (in terms of the application software and the integration with the business information systems), and are developed to automate processes that are already mobile (e.g. the sales process). Consequently, there have not been particular, marked difficulties in implementation, except for some problems with the reliability of terminals and the integration with the information systems. Generally, the total benefits derived from the implementation of the application are estimated as high (Table I reports interviewee responses with fuzzy variables). The main benefits are increased process efficiency as a result of increased job productivity. Productivity gains are potentially one of the greatest benefits of MI applications, since staff can complete the same operation in less time than before. An example is the order entry operation. Before using the MI application, the sales-force had to compile orders and transmit them by fax, then another member of staff collected the data. With the MI application, the sales-force needs less time to input the data (e.g. using a barcode scanner), and the data is transmitted directly to the information system, thus not involving additional, central staff. Further benefits of the same example are increased data accuracy and, therefore, superior process quality. To explain the benefits of increasing process quality, the costs generated on the sales cycle by a potential transcription error can be quantified. The automation of order entry is one of the greatest value-added factors, because is allows digital data collection directly in the field. In this way, companies can increase: . In-field productivity. The same activity takes less time for mobile employees (e.g. using barcode scanners to select the products to order). . In-house productivity. Some tasks, such as data entry, can be eliminated, since the data is transmitted directly from the device to the corporate information system without any additional work or human error. . In-field process quality. By reducing input errors (increasing data accuracy) or giving high value information, e.g. stock out products (eliminating stock out costs). . In-house process quality. By removing additional data entry tasks and notifying mobile employees. Nevertheless, the evaluation of productivity gains requires attention to real savings, because the time saved could have no economic value if it is not used for value-added activities. An efficiency driver is the reduction in process lead-time. Using mobile technologies it is possible to reduce delivery lead-time through order transmission by the GSM/GPRS network, so bringing forward the next tasks in the process. In various industries in which delivery time is a real competitive factor, this is a considerable advantage. In a limited number of cases, the reduction in the process cycle time (food companies appreciate the opportunity to reduce the delivery cycle of frozen goods) has also been considered significant.
35 250 12 300 120 7 10 25 70 36 20 15 25 100 . 100 10
2
Number of users
7 18 42 15 42 7 7 7 16 30 12 15 2 15 10
Application life (months)
A
B A A 0 A C A 0 A A 0 0 C 0 0
Revenues
Notes: 0, no impact; A, low impact; B, medium impact; C, high impact
Guttadauro Dalkia Volendo Partesa SPA IPA Sud Banca Reale Prinz Fercad Rovagnati Confruit G Mascagni Montebovi Scar Gas distribution company Rossi industries
Cases C B 0 B A B 0 A 0 A A B A 0 B 0
A
In-field quality
A 0 0 B A B A B A B A A A A C
In-field productivity
A
C A 0 A A A 0 B C B A C B A B
In-house productivity
Process cycle 0 0 0 A C A 0 C 0 0 C 0 0 0 B 0
In-house quality B A 0 A A A 0 B 0 A A C B 0 0 B
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Table I. The qualitative benefit levels obtained from MI applications as indicated by companies
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Finally, a few companies have seen some effect on revenues as a result of: . improved customer service giving a competitive advantage; and . new services. Additional revenues from improved customer services are difficult to quantify and measure, even if the increased value could be substantial. It is also difficult to sell new services through the mobile application. An example could be field data delivered to customers, e.g. real-time information about maintenance services completed by field technical teams. The value of the information could be the price of this information (the customer pays for this specific service), or it could be included in the overall price of the maintenance service. Although many companies have obtained good benefits, the opportunities offered by the MI (e.g. the promptness of information provided by the mobile networks) are not fully exploited in some cases. This is often due to the unavailability of frequently updated information (e.g. the stock level), which would require more profound changes in company information management and operations (see the “Mascagni” case, where stock information is not frequently updated because the lead-time for order fulfilment is a number of days). Conclusions The analysis reveals that, at present, there are only a few, very simple B2e MI applications, but the sector is developing very quickly. Looking at the case studies analysed, the applications currently utilized by Italian companies are: . “simple” both in technological terms (little integration with the existing information systems) and at an organizational level (few changes in procedures and activities); . attract limited investment resources, but obtain good results; and . are sometimes used to support mobile activities (operational mobility), but not the mobile transmission of data (transmission mobility). Some indications for management regarding B2e mobile applications are the need to: . develop simple applications; and . start mobilizing the sales-force, because this provides faster pay-back and the easiest implementation. In the future, it could be possible that greater benefits from B2e MI applications will be derived from more complex applications that exploit “transmission mobility” and cause significant changes in company processes and organization. The next steps in the research could be to: (1) investigate in depth with quantitative analysis some of the preliminary findings of this study; (2) extend the analysis to other countries; (3) perform a more detailed, quantitative evaluation of the ROI in a significant case, utilizing the literature already available on process automation; and (4) monitor changes in management implications.
References Accenture (2001), “Will trends in the wireless world take your business by surprise?”, available at: www.accenture.com (accessed 17 April). Air 2 Web (2002), “Mobilizing the enterprise 2002”, available at: www.air2web.com (accessed April 2001). BenMoussa, C. (2003), “The effects of mobile commerce on salepersons performance”, The Second International Conference on Mobile Business, June 2003, Conference Proceedings, pp. 283-93. Booz Allen & Hamilton (2001), “The m-business opportunity: capturing value in the enterprise wireless market”, available at: www.bah.com (accessed October 2002). Carnevale Maffe´, A. (2001), “The business front cannot wait”, Il Sole 24 Ore Dossier TLC Mobili, 19 October 2001, XII. Deloitte Consulting (2001a), “Mobilizing for margin”, available at: www.dc.com (accessed 2003 January). Deloitte Consulting (2001b), “Mobilizing the enterprise”, available at: www.dc.com (accessed January 2003). Evans, N.D. (2002), Business Agility: Strategies for Gaining Competitive Advantage through Mobile Business Solutions, Prentice-Hall, Englewood Cliffs, NJ. Fuhrer, O. and Mentrup, C. (2002), “Emotion: eMobile test bed for interoperability of networks in e-logistics”, M-Business 2002, Conference Proceedings. IBM (2001), “Mobile office: La prossima rivoluzione nell’aumento della produttivita` professionale”, available at: www-5.ibm.com/e-business/it/components/wireless/library/ (accessed 2002 December). Kumar, S. and Zahn, C. (2003), “Mobile communications: evolution and impact on business operations”, Technovation, Vol. 23 No. 6, pp. 515-20. McKinsey & C. (2002), 1, “Facing disconnection, Hard Choices for Europe’s Telcos”, The McKinsey Quarterly 1, available at: www.mckinseyquarterly.com Rodina, E., Zeimpekis, V. and Fouskas, K. (2003), “Remote workforce business process integration through real-time mobile communications”, The Second International Conference on Mobile Business, Conference Proceedings, pp. 283-93. Synchrologic (2001), “The future of enterprise mobile computing”, available at: www. synchrologic.com (accessed 13 August 2002). Speier, C. and Venkatesh, V. (2002), “The hidden minefields in the adoption of sales force automation technologies”, Journal of Marketing, Vol. 66, pp. 98-111. Swenson, M. and Parella, A. (1992), “Cellular telephones and the national sales force”, Journal of Personal Selling and Sales Management, Vol. XII No. 4, pp. 66-74.
Further reading Berger, S. and Lehner, F.H. (2002), “Mobile B2B applications – a critical appraisal of their utility”, M-Business 2002, Conference Proceedings. Foong, K. (2001), “Wireless services: Japan”, Operational Management Report, Gartner Inc., Stamford, CT. Golvin, C.S., Schaeffer, J., Cooperstein, D.M. and Scaffidi, G.J. (2002), Winning Enterprise Mobile ROI, Forrester Research, Cambridge, MA.
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Goodman, D.J. (2000), “The wireless internet: promises and challenges”, Computer, Vol. 33 No. 7, pp. 36-41. Herath, H.S.B., Park, C.S. and Prueitt, G.C. (1995), “Monitoring projects using cash flow control charts”, The Engineering Economist, Vol. 41 No. 1, pp. 27-51. Kviselius, N.Z. (2002), “Swedish M2M industry case study”, M-Business 2002, Conference Proceedings. McKinsey & C. (2001), “Profit in wireless B2B”, The McKinsey Quarterly, 1, available at: www. mckinseyquarterly.com People Soft (2002), “The business case for mobile CRM”, available at: www.peoplesoft.com (accessed 2002 August). PricewaterhouseCoopers (2001), “M-business and the wireless world: understanding and exploiting the mobile revolution”, available at: www.pwc.com (accessed January 2003). Sceats, C., Smith, D., Meringer, J. and Nordan, M.M. (2001), “Winning enterprise mobile ROI”, Forrester Research, Cambridge, MA. Singureanu, I. (2001), “Clinical trial automation: new revolutionary therapies and fewer side-effects using mobile internet technologies”, Proceedings of the Tenth IEEE International Workshops. Appendix. Cases This section includes brief summaries of five case studies considered helpful in understanding some of the key messages revealed in the results.
Confruit G Confruit G operates in the food industry, producing and trading foods and drinks, in particular biological products. Confruit G is leader in the modern distribution of fruit drinks in Italy. Since, July 2001, the company’s agents (approximately 20) have been equipped with a PDA integrated with a GPRS SIM (Subscriber Identity Module) which they can use for the acquisition and transmission of orders. This application, developed by Tecla.it, supports various functions including the management of customer identity information and product features and order tracking. After a visit to a customer, the agents transmit the order via the cellular network and align the data on the PDA with the central information system prior to the next visit. Before the introduction of this application, orders were sent by the agents at the end of the day using a desktop computer. With this mobile solution, orders are now sent progressively during the day. The reduction of some hours in the process is a remarkable advantage, because the order fulfilment time (approximately three days) is a critical competitive factor in this field. The greater efficiency in the agents’ activity is a further benefit. The orders are entered directly into the device, so there is no duplication. This is an important aspect in terms of productivity (it avoids work at the end of the day) and data accuracy. Moreover, the company intends to use this application to increase the fidelity of agents that work for more than one supplier, by providing them with a smaller and better device for time management. Gas distribution company The company operates in gas distribution and sales to the Italian market. About 18 months ago, the 250 technicians began to control and maintain the gas distribution network and manage the activation and cessation of customer contracts using a mobile field-force automation application. The technicians are equipped with a GPRS cellular telephone with WAP browser on which they
receive the details of the jobs to carry out and where to record the data at the end of each single job. The WAP application is the indispensable element of a complete field-force automation system created and implemented by CAP Gemini Ernst & Young, which is integrated with the business ERP to provide the:
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(1) processing of customer activity forecasts; (2) planning of the daily maintenance schedule of each technician in order to minimise travelling time; (3) fixing of customers appointments by matching the real-time availability of the technicians; and (4) processing of reports on the level of service. The process of carrying out and managing the activities from reception to completion has been slimmed down remarkably and made simpler. Thanks to the mobile solution, a customer appointment is now defined online on the basis of the real-time availability of the technicians. Via WAP, the technicians can consult the job plans that are automatically drawn up by the scheduling system and updated during the day, as well as the progress of activities and the materials utilized. The implementation of the mobile application together with other managerial solutions and a parallel review of processes has had a strong impact on the corporate structure and has contributed to an effective re-design of the business model, realising important economic benefits. After one year of operation, the results are as follows: .
of the appointments, 97 per cent were kept (within the conditions imposed by the Gas Authority recommendations);
.
reduction in maintenance lead-time;
.
increased productivity of technicians (þ33 per cent) and customer service operators (þ100 per cent);
.
reduction in materials stocks thanks to better scheduling of the in-car warehouse (2 65 per cent); and
.
reduction in the number of buildings for customer service offices and warehouse (2 35 per cent).
Ipa Sud Ipa Sud operates the distribution centre of the Despar retail brand in two Italian regions, supplying approximately 150 supermarkets of various sizes. Tt support the sales agents in order management, IBM has implemented and integrated a SFA application. The technological solution uses a symbol device with an integrated optical barcode reader working offline to synchronise the central and remote database after each customer visit. Data is transmitted by the GPRS network (for real-time information updates), by the fixed telephone network (for non time-sensitive information) or by the WLAN when the staff return to company headquarters. The application has had two principal results: (1) an improvement in terms of completeness and promptness of the information available to the operational staff across the country (in particular warehouse information on product availability); and (2) a reduction in errors and time in printing orders as a result of automation through the barcode reader.
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This enhanced customer-perceived quality (reducing lost orders and offering prompt opportunities for special discounts) has improved staff productivity and the quality of the information process, because information is transferred directly to the central system (so avoiding data entry). Ipa Sud has extended its sales-force automation to some of the supermarkets it serves, realizing a B2b application by giving the supermarkets direct access on the mobile device to wide range of information. The technological solution adopted is the same as the B2e version (offline mode through synchronization of the database), except for the type of network used for the logon. In this case, the fixed telephone connection is preferred, since the area of mobility of the customer is limited to the given supermarket. The customer has a tool to re-order goods directly and access product information either of a commercial nature (e.g. discounts) or on availability, so avoiding the risk of re-ordering products already in stock. Mascagni Mascagni operates in two prominent fields: gifts (frames and furnishing accessories) and office furniture. To support the gifts sales-force, Mascagni has adopted a mobile sales-force automation solution developed for iPaq devices. The synchronization of archives on the device and on the central server is carried out in the evening when the PDA is connected to the fixed telephone network (the operating mode is, therefore, offline). The agents have a range of information regarding warehouse availability, customers (identity and accounting) and business intelligence (e.g. order history) directly on the digital device. With the introduction of this application, order acquisition and customer support has been automated. Previously, orders were collected on paper and sent via fax to headquarters, meaning that data entry was by the centralised back-office staff. The solution thus increases the productivity and quality of the in-house process (eliminating the non value-added activities and transcription errors), and helps agents in customer management. An important aspect in this case is the role of mobility. Here, the real-time data exchange possible with the cellular network would not have provided any advantage, because the lead-time for order fulfilment is a number of days. Real-time reception of the order would not have improved customer-perceived performance. Rovagnati Rovagnati is a medium-sized company supplying pork meat products. For approximately three years, the company has been selling packaged products to stores and supermarkets. In order to follow this new sales channel, a new figure (the merchandiser) has been created who monitors the presence of Rovagnati products on shelves in the points-of-sale. A mobile internet solution based on a symbol device with integrated optical barcode reader has been developed to support the merchandiser. With this device, merchandisers collect information at the points-of-sale and at the end of the day send this data to the central information system using the fixed telephone network to log on to the internet. From the functional point of view, the merchandisers see on the device an “ideal shelf” and all the information on the lines currently at the points-of-sale. The application collects data on the: (1) presence of products on the “real shelf”; (2) corrected positioning of the goods; and (3) prices that the stores charge for Rovagnati and competing products. This helps to provide comprehensive, simple and prompt information on respect of contracts by customers, trends in the company’s own sales, and competitors’ policy. The temporal gap of one day to align the database is tolerable, because information is only processed periodically. On the
other hand, reliability is a priority, and is ensured in this solution even in those situations in which a cellular network would not guarantee cover (e.g. underground warehouses).
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About the authors Andrea Rangone is Associate Professor of Business Strategy at the Politecnico di Milano. He is also Director of the Politecnico’s Executive Master in E-Business Management and of various Observatories dealing with e-Business (B2c, B2b, intranet, mobile internet, Asp, ICT and PMI). Filippo Maria Renga is a PhD student in the Department of Management, Economics and Production, Politecnico di Milano, Italy.
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