The M-Business Evolution
This is a sample chapter of Business Agility: Strategies for Gaining Competitive Advantage through Mobile Business Solutions (ISBN: 0-13-066837-0).
By Nicholas D. Evans
In this chapter, we cover the current state of the union within the mobile business community. This will provide a useful backdrop as we build from this starting point, the "as-is" situation, and explore enterprise strategies, case studies, and tactical action plans throughout the remainder of the book. It is important to note that the "as-is" situation has been driven in most part by the supply side of the equation: the wireless handset manufacturers, the wireless carriers, and the wireless infrastructure and software providers—i.e., those who stand to benefit the most from the market creation and adoption. The demand side has picked up mostly in unexpected consumer application areas such as text messaging and gaming. Meanwhile, mainstream enterprise patiently observes in the wings.
Mainstream enterprise adoption is most likely to occur in areas that provide strong business benefits and return on investment. Enterprise success stories around M-Business are appearing more and more frequently. Several success stories from early adopters of M-Business are covered in the chapters on Applications and Process Models for M-Business Agility and Industry Examples. Typical enterprise applications of M-Business have been within wireless enablement of employees: sales force automation and field force automation being two of the most prominent areas with strong returns on investment coming to light.
Of course, the current "as-is" state within the mobile business community is continuously in flux and continuously redefining itself. Analyst predictions for the growth of the wireless Internet and for M-Commerce are merely just that—predictions. They also vary widely between different analyst groups. But despite these variations in analyst predictions, we can still determine clear trends and plan our enterprise strategies accordingly.
Although markets can come and go, and in some cases never meet expectations in terms of potential size and ubiquity of products and services, the convergence of electronic business with telecommunications and other industries such as media, entertainment, and financial services will continue. The drivers toward adoption will become more powerful when compared to the barriers preventing adoption. As the market matures, innovative companies will create their own sub-markets within the industry; this will help to remove the current barriers to adoption for mobile business.
This chapter looks at some of the global trends behind wireless data adoption. In particular, the drivers and barriers to adoption, the telecom regulatory environment, the changes occurring within the telecommunications industry and within enterprise IT departments, the wireless Internet value chain, the wireless companies comprising the value chain, and finally some of the key applications of M-Business within the enterprise.
Many books have been written on the content of this single chapter alone. The aim here is to provide a high-level summary of some of these forces and then to move on to the strategy and implementation plans for leveraging M-Business within the enterprise for business advantage.
Much has been written about the global trends in the M-Business world. The United States is often cited as lagging behind the Asia-Pacific region and even further behind Europe in terms of its adoption of mobile businesssometimes cited up to two years behind. Much of this is owing to the fact that there are a number of competing wireless communications standards in the United States, versus the single standards in the rest of the world. This is actually just one of the factors that has led to Europe and the Asia-Pacific region becoming the early adopters. Other factors include cultural aspects, geographic aspects, political and regulatory aspects, pricing factors for Internet access, and the penetration rate of the wired Internet within these countries.
To understand the global trends in wireless communications and the growth of the wireless Internet, we need to start by understanding the growth of the Internet itself. Figure 2-1 shows the Internet penetration by region from a study by the ARC Group.
Figure 2-1 Internet User Penetration by Region. Source: ARC Group.
It is clear that the United States has dominated and will continue to dominate the statistics for the highest percentage penetration by region. Japan and Western Europe follow closely behind with the Asia-Pacific region and the rest of the world being further behind in penetration.
If we now turn to the penetration rates in terms of mobile data penetration (Figure 22), we see a different picture. The United States clearly lags behind Western Europe and Japan. Mobile data in this case includes access to data by cell phones, PDAs, and interactive pagers. At the current point in time, Western Europe is clearly the leader.
Equipped with these predictions, the questions still remain as to what services will see the most demand and how often subscribers will use the wireless data features of their devices even if they are subscribed.
Beyond looking at penetration rates by region for the Internet and for mobile data, we also need to look at the number of mobile handsets being shipped, the number of users accessing various forms of mobile data, and the number of users conducting mobile commerce.
Figure 2-2 Mobile Data User Penetration by Region. Source: ARC Group.
According to the research firm Jupiter, there will be 1 billion wireless Web devices in circulation by the year 2003. They also go on to say that companies must enable wireless extensions during the next 12–18 months, or risk losing customers to competitors that do.
The wireless data market has really been ignited by consumers, but it is likely that the eventual winners will be enterprises that leverage the technology within their enterprise to create substantial returns on investment. Because of this consumer-based origin of the wireless data market it is important to look, at least briefly, at some of the consumer statistics before continuing our main enterprise focus throughout the course of the book.
Table 2-1 presents more data points in terms of predictions for the number of users and revenues generated via wireless devices and M-Commerce transactions.
The analyst predictions provide some good quantitative data around the adoption of wireless data services and M-Commerce applications throughout the world. Consumers will gain access to Internet capable devices, will then begin to subscribe and use these services, and finally will become true M-Commerce users generating M-Commerce revenues.
|Table 2-1 Predictions for Wireless Data and M-Commerce|
|Mobile Internet Devices (Worldwide)|
|Wireless Internet Users (Worldwide)|
|Enterprise Wireless Enablement|
|M-Commerce Users (Worldwide)|
|M-Commerce Revenues (Worldwide)|