Premier 100: Lack of coverage, ROI hinder wireless

Three wireless-savvy IT managers predicted Monday that the rollout of wireless applications in the U.S. would continue to be slow for the next few years because of a low return on investment, lack of wireless coverage in many areas and lack of standards among the carriers.

"The big problems with wireless are coverage, coverage, coverage," said Patrick Wise, a Premier 100 honoree and vice president of e-commerce at Landstar System Inc., a US$1.5 billion transportation firm in Jacksonville, Fla. Wise spoke on a panel at the Premier 100 IT Leaders Conference here.

Landstar uses a wireless application for the 9,000 independent truckers who haul loads for Landstar so that those contractors can check delivery schedules and decide what loads they want to carry (see story). But they can use the application only in highly populated areas where premium cellular service exists, he added.

Don't expect technologies like third-generation (3G), Bluetooth Software Inc. and 802.11 to ease the interoperability problems, the panelists said. That's because wireless suppliers would have to work together to adhere to the interoperability requirements of 3G, for example, said John Puckett, vice president and general manager for wireless and Internet technologies at Cambridge, Mass.-based Polaroid Corp. And that, he said, will take at least five years.

More likely adopters of wireless applications would be local municipalities, such as a police force that covers a small geographic area with a strong cellular infrastructure, according to Wise.

But even companies deploying localized wireless applications should take care of what they sink their money into. Hotels and airlines last year dabbled in local wireless applications only to pull the plug after six months, contended David Sjolander, a panelist from Carlson Hospitality Worldwide in Minneapolis.

Carlson Hospitality Worldwide, which is the parent company to hotels and restaurants including Radisson Hotels and T.G.I.Friday's restaurants, spent hundreds of thousands of dollars on a pilot to put high-speed wireless access into some of its hotel rooms. But it pulled the plug after six months because only 3% of guests used the service. "It's hard to justify spending $400 to $600 per room to retrofit it for wireless high-speed access, and then nobody uses it," he said.

But wireless devices have paid off in yet another hotel function: customer service. Hotel managers now have wireless devices to access customer information, contact airlines to check guest flights and handle myriad of other small details to make a customer's stay more comfortable, he said. The tools get the hotel managers out from behind their desks so they can accomplish this level of service while actually spending more face time with guests, Sjolander added.

In specific business cases like this, or in industries that lend themselves to remote roaming access like trucking and car rental return systems, wireless applications can help the bottom line. But even with strong business drivers to go wireless, Puckett suggested starting small.

"Everyone thinking of using wireless should start with a pilot to test the application's return on investment, but only if there's a good business proposition to do so," he said.

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