FRAMINGHAM (07/31/2000) - Wireless computing may be in its early days, but it's bearing down on enterprises like a tidal wave, say information technology managers and analysts. Smart phones, wireless laptops and wireless handhelds are pouring into Fortune 1,000 companies, whether IT shops are prepared or not.
Managing this change can be tricky, experts say. "We are still in the Model T Ford days of wireless," says analyst Gerry Purdy at Mobile Insights Inc. in Mountain View, Calif.
But there are enough large wireless applications deployed in the U.S. - such as wireless stock trading for consumers - to provide neophytes with some project management do's and don'ts.
Best practices for managing wireless, say pioneers, include assessing business needs before developing applications, launching small trials to work out the kinks and placing a magnified focus on security, safety and standards.
Wireless computing shows signs of taking off. Indeed, the number of users of all types of wireless devices in the U.S. is expected to climb from fewer than 10 million this year to 36 million in 2003, according to Gartner Group Inc. in Stamford, Conn.
A Computerworld telephone survey of 120 IT managers found that 42% of IT departments currently support wireless devices, while another 38% said they expect to support such technologies in the future.
Doubters and Adopters
While some IT managers are taking a wait-and-see approach to rolling out wireless applications, others are moving ahead briskly. "I have to confront the proliferation of cell phones that will be smart phones, but every time we have considered a wireless program, we decided the technology isn't ready yet" in the U.S., says Peter W. Burrows, chief technology officer at Reebok International Ltd. in Canton, Mass.
But because Reebok is a worldwide company, Burrows must juggle the needs of early smart-phone adopters in Europe and Japan while trying to judge which network standards will dominate in the U.S., where wireless adoption has been slower.
The predominant wireless network standards in the U.S. are split between Code Division Multiple Access, Time Division Multiple Access and Global System for Mobile Communications, which is the standard that Europeans rely on. The pathway for which standards will dominate in the U.S. in coming years is still unclear.
"If I install a wireless platform, who can make a prediction so we get five years' life from the investment? I [doubt] any vendor will retrofit the gear [for free] if it gets outdated," Burrows says.
Nevertheless, the potential that wireless applications hold in generating new sales or customer accounts in industries such as financial services is leading some companies to plow ahead.
At Fidelity Investments in Boston, the demand for wireless investing was so hot that the company launched a proprietary application in October 1998 that now boasts nearly 70,000 accounts and is adding thousands of accounts each month, says Joseph G. Ferra, senior vice president of Fidelity Online Brokerage.
At Best Buy Co. in Minneapolis, consumers in the near future will be able to buy retail products such as CDs and software over Wireless Application Protocol phones and wireless handhelds from Palm Inc., says Mark Ebel, the company's director of digital communications.
"We think wireless is going to be big and we want to be a part of it," Ebel says (see "Making Savvy B2C Connections," above).
Outsource or In-house?
One of the first concerns IT managers face is whether to hire third-party developers or try to build wireless applications with existing staff.
Fidelity saw little choice but to move on its own, given the paucity of hardware, software and integrators available in 1998, Ferra says.
However, analysts say there is so much interest in wireless applications that traditional network service providers have begun providing integration services. Best Buy, for example, wanted to accelerate its consumer wireless rollout and decided to do so through a long-term relationship with GWcom Inc. in Santa Clara, Calif., Ebel says. Though not well known in the U.S., GWcom has set up wireless trading for 20 Chinese brokerage houses in the past two years.
Analysts say many IT managers neglect taking the seemingly obvious steps of assessing business needs and understanding the limitations of wireless technology before launching a project. For example, one analyst points to a U.S. manufacturing customer who bought wireless LAN hubs but didn't buy enough of them to support his company's office space.
While wireless projects are hot in the business-to-consumer space today, corporate IT departments are "not even close to being prepared" for building business-to-business and business-to-employee wireless systems, says Mark Zohar, an analyst at Forrester Research Inc. in Cambridge, Mass. That's because many IT professionals are skeptical about the security of wireless connections for vital functions, as well as lack of bandwidth and reliability.
But for many organizations, a sales team might need only a daily update on product pricing or inventory levels. That kind of information wouldn't require a constant wireless connection for a pager or smart phone, but could be handled instead by handhelds with local storage capabilities that are connected for just a few minutes a day, Zohar adds.
Analyst Alan Reiter at Wireless Internet and Mobile Computing in Chevy Chase, Md., says standardizing on one device "might not be appropriate" for all companies, which implies that the IT shop could end up managing more than one wireless network.
In fact, Gartner Group predicts that one-third of knowledge workers will rely on three or more devices (i.e., a laptop, a mobile phone and a personal digital assistant) through at least 2003. The range of devices needed will drive technical support costs 70% higher than for those workers who carry just two devices.
Wireless pioneers and analysts say trial runs are more critical to the success of wireless rollouts than the applications themselves.
"The trial has to be a statistically meaningful sample, say 10 to 15 users, but not so many you can't manage it," says Craig Mathias, an analyst at Farpoint Group in Ashland, Mass.
"Run a trial with reasonable expectations," Purdy advises. In addition, managers should build in technological wiggle room for application changes that allow for tremendous wireless bandwidth growth, going from today's 9.2K bit/sec. up to 384K bit/sec. within five years (and much sooner in Japan and Europe).
Metro-Goldwyn-Mayer Studios Inc. in Santa Monica, Calif., is running a pilot with 15 salespeople who have been using smart phones from Sprint Corp. for three months as a "complete device replacement for their laptops," says Ken Spenchian, CIO at the movie studio.
The pilot could expand to 60 salespeople nationwide, allowing them to use smart phones to check inventory of recently-released videotapes for their retail store customers.
One adjustment MGM's end users have had to make is getting used to a 1.5-by-1.5-in. screen for reading e-mail, "which is not as bad to read as you'd expect," Spenchian says. "At first, we thought the phone would be way too user-nasty" because of screen size and the need to use a small keypad to input data, he says. But user reaction to the devices has been better than expected.
Still, MGM is also looking at Palm 7 wireless handhelds with bigger screens because "usability is the biggest concern."
The overriding reason to consider using smart phones, Spenchian says, is that the "phone is the most pervasive device out there." Palm Inc. has about 7 million devices installed worldwide, but there are nearly 100 million wireless phone users in the U.S. alone, analysts say. On top of that, smart phones could integrate many devices in coming years and they're already able to take advantage of voice recognition technology.
Security has also become a key issue with wireless rollouts since most of the devices are small and can be easily lost or stolen. And because they are easy to hide, wireless devices pose a greater threat of grabbing vital data over far-reaching networks than, say, laptop machines.
"The best approach to wireless computing security is to be as paranoid as you can be," says Mathias. "Look for every single hole and ask your staff and vendors how it is being addressed, whether it is the threat of somebody grabbing a signal out of the air or overhearing your voice conversation in an airport."
Because encryption software for wireless applications is immature, Reiter warns users to carefully evaluate product claims. One of the worst security oversights a manager can make, Reiter says, is to assume a wireless network carrier has provided more security than it really has.
For example, some encryption over wireless networks protects only portions of the total pathway. "Encryption should be end-to-end," Reiter says.
Spenchian says the simplest and best technique for securing smart phones is to turn them off. That way, even if a lost phone falls into an outsider's hands, it can't be used without a password, he points out.
At Pacific Coast Building Products, a building materials maker in Sacramento, Calif., workers are using 50 AT&T Corp. smart phones to access e-mail and browse the Internet. The service is supported by a server from Wireless Knowledge LLC in San Diego.
"We would not have gone forward at the start of the project if there weren't guarantees of encryption and password protection," says David Matteoli, a Windows NT administrator at Pacific Coast.
One of the security benefits to using smart phones is that they can be set up as dumb terminals on a network and not store data that might otherwise be accessible, Matteoli says.
A necessary ingredient for any wireless deployment, say experts, is setting formal policies for use.
These include establishing the same rules for wireless devices as those for laptops or PCs, such as making users realize that corporate data is the property of the company. Gartner analysts recommend that companies provide employees with devices, rather than allow them to use machines they purchase on their own to avoid any conflicts over who owns the data.
Setting personal safety standards for wireless users might also be a good idea, say experts, who advise IT managers to find ways to nudge users to avoid typing messages on a smart phone, pager or handheld while driving or even while walking through a busy warehouse.
Matteoli says a Pacific Coast executive recently got into a car accident while using a smart phone. Fortunately, he was unhurt.
Handing Telecom to IT
Gartner analysts and other experts say IT shops need to control telecommunications policies and operations with the advent of smart phones.
"It would have been much easier setting up our smart-phone service if IT and telecom were one and the same department," Matteoli says. Because the AT&T service includes a $20-per-month data charge separate from the voice service charges, Matteoli had to evaluate how the wireless project at Pacific Coast would be paid for.
"It got very complex very quickly," he says.
Having an IT group control cell phones for voice and data helps provide "economies of scale for purchasing and usage," says Tom O'Connor, director of knowledge management systems at BG Group PLC, a natural gas distributor in Redding, England.
Managing wireless innovations "is not a quick process," O'Connor adds. "It is a really fundamental change in the way businesses work."