The vast majority of CIOs interviewed for this article hadn’t calculated a hard ROI for their wireless initiatives and, in fact, there are cases where project benefits don’t lend themselves to objective measurement.
For his latest project, Jim Olson, CIO of Waterbury Hospital Health Center in Waterbury, Conn., has outfitted rooms with wireless devices that allow nurses to monitor patients from nursing stations, rather than making rounds. The data is also captured in a central repository. The wireless standards and dedicated spectrum necessary to support this technology are new (and one of the reasons you can’t use a cell phone inside a hospital). Olson can’t assign a number to the nurses’ productivity?they’re doing the same amount of work; it’s just easier?but, he says, “It’s a quality-of-care issue. You can be quicker to react. It comes down to helping your critically ill patients.”
Wireless afficionados often claim that as the investment in wireless is typically small and the increased efficiency big, a hard ROI isn’t really necessary. A wireless production monitoring and warehouse inventory system deployed by the Lancaster, Pa.-based plastics packaging manufacturer Kerr Group was deemed such a project by Vice President of IS Megan Petry. She rigged up a system where wireless scanners (at $3,600 a pop) keep track of what’s produced, what’s moved and what leaves each warehouse. The system, costing approximately $100,000, has allowed Kerr to cut staff and has provided better insight into operations. Asked for the hard ROI, Petry says only that the staff reductions it allowed easily paid for the capital expense.
But for every low-budget success story there’s a failure. Tom McLain, vice president of IT and e-business for Old Mutual Asset Managers in the United States, thought that if field agents had real-time information they would be able to respond to service requests more quickly, which in turn would lead to more business for the Boston-based financial services company. McLain spent $50,000 (out of a $2 million to $3 million IT budget) to make the company intranet accessible to PDAs. McLain admits that the information?sales leads and a company directory?is not mission-critical, but he thought that if it led to just one new sale per user the system would pay for itself.
It hasn’t. The application works, but there isn’t enough bandwidth. “It takes too long and people don’t have the patience,” says McLain. And since the projected benefit derives from real-time information delivered in the field, it doesn’t do users any good to dial up from home at the start or end of a day. “From a pure ROI, we probably can’t justify this,” McLain concedes.
In order to make the system work with current technology, McLain would have to invest a lot more money, and at this point he has no plans to do so.