When Fidelity’s Joseph Ferra imagines how U.S. customers will do business with the investment services giant in the not-so-distant future, he has no doubt that most will be doing it through a mobile device. As the company’s chief wireless officer, he’s naturally bullish about mobile services.
And with good reason: Worldwide research and Fidelity’s own data show the number of mobile users and devices—such as cell phones, smart phones and handhelds—are exploding. Market researcher In-Stat reported more than 2.6 billion mobile subscribers worldwide in 2006; according to the 451 Group, several vendors estimate there are some 600 million global mobile office users.
Fidelity itself has more than 1 million U.S. customers wirelessly accessing Web-based tools through its Fidelity Anywhere product, allowing customers to receive market data (including real-time stock quotes or alerts), access their 401(k) accounts, make trades or check portfolio balances, among other things. “And people want to do more,” Ferra says. “‘I do this on Fidelity.com,’ they say. ‘I want to do this on my mobile device.'”
In the United States, Fidelity is at the forefront of mobile device use because it has incorporated mobile-specific design and functionality into its Web-based products since 1998. “We got in this space very early,” says Ferra. Fidelity has also created a device-agnostic environment: BlackBerry 8800, Motorola cell phone, HP PDA, even the iPhone—all are welcomed by Ferra’s systems.
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That’s not to say there haven’t been speed bumps. Early on, mobile customers “were typing in Fidelity.com, and they were just getting the upper left corner on their screen,” Ferra recalls. “That’s not a great user experience.”
That problem has been fixed, but when it comes to serving mobile users, most U.S. companies “have been able to get away with miserably designed software applications,” says Web usability expert Jakob Nielsen, a principal of the Nielsen Norman Group.
In fact, when it comes to mobile devices, mobile services and the infrastructures that support them, the United States trails the rest of the world. And that may cause trouble—big trouble—for American business in the not-too-distant future.
Why We’re Out of Step
BlackBerry addicts aside, corporate America’s lack of enthusiasm for mobile stands in stark distinction to the rest of the developed world, particularly Japan, India, South Korea and most of Europe.
“I hesitate to call the U.S. a laggard, but it’s a different cultural environment,” says Bill Hughes, a principal analyst at In-Stat. In Asia, for example, companies aren’t overly concerned when their employees bring mobile devices into the workplace. It’s just a part of the mobile device culture, says Tony Rizzo, research director of mobile technology at the 451 Group. “There’s very little enterprise control,” he says, “especially not from the top down.”
In the United States, however, security-conscious CIOs have tried to keep device proliferation and network vulnerabilities in check by limiting which devices can access corporate networks.
Those differences in culture and adoption may become more, not less pronounced in the future. By 2009 more people on the Asian continent will have made their first phone call on a mobile device than on a land line; by 2010, more of those same people will initally access the Internet on a mobile device and not a PC, says Scott Cooper, senior vice president of mobility for Nokia Enterprise Solutions.
“In India and China, they completely skipped the wired Internet,” Cooper says.
If America wants to do business in Asia (and, of course, it does), it will have to go mobile, and savvy U.S. CIOs recognize that. They understand that the global business is a mobile one.
But for CIOs, getting to that future involves multiple challenges. On the customer-facing side, they need to design products and services tailored to the mobile world, and enable new kinds of connections (such as text messaging and video) to their constituents.
On the internal user front, CIOs need to overcome security concerns, figure out how to manage a plethora of devices, reduce exorbitant wireless costs, manage integration and business continuity challenges between wireless and HQ networks and prepare for new user demands such as unified messaging. (“Consumers are driving enterprises to adapt to and adopt mobile technologies,” says Rizzo. “And in that way, mobility in the enterprise is really following consumers.”) IDC (a sister company to CIO’s publisher) estimates that by 2009, 878 million workers will be accessing corporate networks via a rainbow of mobile devices, and uploading and downloading a mix of data, voice and video.
Doing all this won’t be easy, but as Fidelity’s Ferra notes, there’s not really much choice. Companies will have to offer lots of mobile options to their customers and users if they expect to remain competitive. “Once customers get hooked [on mobility],” Ferra says, “it becomes contagious.”
The question for CIOs, therefore, is not if they should make their enterprises mobile-ready, but when. And how.
A BlackBerry Doesn’t Make You Mobile
The seeds of mobile business were planted in the 1980s with the appearance of large cellular radio phones used mainly by the rich and famous (think of Gordon Gekko on the beach in 1987’s Wall Street). Cell phones started shrinking just as 20-pound laptops entered the market in the 1990s—the next status symbol for the corporate elite. As mobile phones and laptops kept slimming down, the BlackBerry blew in from Canada in 1999.
The CrackBerry’s sticky and addictive nature, its ease of integration on the back end and its robust security features contribute to its meteoric rise (9 million users and counting). “Businesspeople see it as a requirement just as they do a desk phone,” boasts Mike Lazaridis, president and co-CEO of Research In Motion, BlackBerry’s maker. But not everyone saw the BlackBerry’s potential in the early days.
“I was the first in my firm to have a BlackBerry,” says Steven Sommer, CIO and CTO of law firm Hughes Hubbard & Reed, which has 330 lawyers worldwide. “I tried to give one to my boss, and he said, ‘Get out of here. I want to carry around my 20-pound laptop.'”
A 2007 Economist Intelligence survey of 532 global executives (more than 80 percent from outside the United States) found that the top mobile device inside their companies was a conventional mobile phone (62 percent). Lagging in second place was a Wi-Fi-enabled laptop at 44 percent. The survey suggests that the mobile phone is king and the way in which international business “gets done.”
In the United States, however, the laptop is still considered essential. “I would like nothing better than to not have to carry my laptop [on business trips],” says Steven McIntosh, senior vice president and CIO at Jackson Enterprises, which has 20 wineries worldwide. Like many businesspeople, he uses his PDA whenever possible, but connectivity issues mean he carries his laptop as a backup.
The laptop flourished in the United States in part because it cost less here than in other parts of the world. Ten years ago, laptop prices in Europe were double the U.S. price. Mobile phones emerged as a way of life in Europe and Asia because they were much cheaper and demand for service pushed those countries—which were less geographically dispersed than the United States and easier to blanket with wireless signals—to invest heavily in their mobile networks.
In addition, since Asians typically spend one to three hours per day commuting to and from work on a bus or train, a big laptop is impractical, says Brian Bonner, CIO of Texas Instruments, which has operations in Asia and Europe. Bonner points out that devices such as Nokia’s N95 offer Asian users e-mail and music services, DVD-like video, a 5 megapixel camera and support for Web browsing and GPS mapping, “all in one device.”
But Stateside, by not provisioning their workers with integrated mobile devices—and by not managing or standardizing them—business has created a culture of mobility in multiples: Overburdened knowledge workers may carry a laptop, cell phone, PDA, MP3 player and digital camera at the same time. Which raises the question: How untethered are you if, on a business trip, you have to lug a laptop, have your BlackBerry in hand, a mobile phone attached to your belt and whatever other device you might need?
In the United States, the typical corporate “policy” has been: “Let the employees buy their own phones and use their business judgment, and we’ll reimburse them for their itemized business calls.”
“I like to say that they’re pursuing a strategy of trying to save money no matter how much it costs,” says In-Stat’s Hughes. His recent report signaled a dangerous inflection point if wireless mismanagement continues: U.S. corporate spending on wireless voice and mobile data services will exceed spending on all wired voice and data services by 2010.
Devices at I.T.’s Door
Knowledge workers are eyeing more multimedia-capable devices. Here’s the skinny.
||Lots of multimedia functionality all in one device; GSM- and Wi-Fi-ready; touch keyboard
||Security concerns; cost; touch screen is made of glass
||AT&T; $499, $599 (depending on model)
|BlackBerry Curve 8300
||Multimedia features (audio and video); user familiarity with RIM; IT policies can be hardwired into each device; full qwerty keyboard
||No support for 3G services and Wi-Fi; no GPS capabilities
||Windows Mobile 5.0; EV-DO; full qwerty keyboard; all-digital network; removable memory card slot
||No Wi-Fi integration
||Sprint and Verizon Wireless; $99.99 and $174.99 (respectively)|
||Windows Mobile 5.0; full qwerty keyboard; simultaneous voice and data capabilities; 3G-ready
||No Wi-Fi integration; tight design and some navigation issues
||AT&T; $74.99 |
|Palm Treo 750
||Windows Mobile 5.0; full qwerty keyboard; simultaneous voice and data capabilities; 3G-ready
||Short battery life concerns; non-MS Exchange shops can have setup headaches
|SOURCES: Company websites; CIO.com device reviews (www.cio.com/article/106306); CIO reporting|
The Problem With Your Carrier
For most U.S. businesspeople and consumers, the difficulty of simply making the wireless connection with each other and the home office network has been a significant and limiting factor of mobile adoption. In this sense, the wireless carriers have been the elephant in the mobile room.
Most of the frustration with carriers stems from three areas: inconsistent networking standards among competitors, the two-year customer lock-in agreement (which is unique to the United States), and the slower speeds and smaller bandwidth connections on those networks. “Mobile networks are incredibly bad in the United States compared with Europe and the more advanced countries in Asia,” says Nielsen.
In Japan, for example, they’re pushing fourth generation (or 4G) speeds, says the 451 Group’s Rizzo. “But here in the U.S., we’re patting ourselves on the back for 3G.”
It’s a different story in most of Asia, Rizzo says. There, demand for new devices and the latest content has fostered better, faster networks as well as new types of service providers. Hughes Hubbard & Reed’s Sommer hears about the differences between U.S. and Japanese wireless technology from the firm’s Japanese attorneys. “Their screens are always better than ours,” he says. “And the phones are so fast.”
Until recently, there hasn’t been as much demand in the United States for multimedia mobile services, so the carriers haven’t been as quick to upgrade networks and service offerings.
Businesses have also been lukewarm to partnering with the mobile operators. “In the U.S., enterprises hate the carriers,” says Rizzo. “They think that the wireless carriers and land line carriers are nothing more than dumb pipes.”
But change is on the horizon. Early this year, Verizon Wireless launched its EV-DO (or Evolution-Data Optimized) 3G service, which delivers data and multimedia services at much faster speeds than before. Other wireless carriers have followed suit and increased their network capabilities (although not to all areas of the country). According to Rizzo, there’s been a noticeable uptake in demand for EV-DO-enabled services from consumers but also from enterprises.
But even with all of the latest bells and whistles, “dead zones” in U.S. mobile coverage areas and dropped calls are still pervasive. “It’s not that Americans are less mobile than anyone else,” explains Nielsen. “But even now, with just making a cell phone call, we don’t have a stable resource. And that one thing explains it all.”
Your Customers They Are a-Changin’
Athough the song “The Times They Are a-Changin'” was written for the generation on its way out of corporate America right now, it also applies to the generation making its way in. And nowhere is there more demand for faster, better and cheaper mobile services than with the millennial generation (those born between 1977 and 1994) now banging on business’s front door.
“The rate of mobile adoption [among millennials] has been nothing short of spectacular,” says Rizzo. “They’re demanding that enterprises provide a mobile capability.”
He describes the technological needs of this group as a “mobilized social networking environment.” Their world is one of constant connection (IM, voice, text messaging, Bluetooth and location-based technologies), lots of sharing of documents and photos, as well as significant end user adoption of services like mobile banking (all of which give security-conscious CIOs a huge migraine).
Another emerging area receiving a lot of attention by millennials is unified messaging, which means that any handheld device can act as a universal inbox for all communications: wire line and wireless voice mail, e-mail, IM, text messaging, and location-based services. With this new generation of office workers, unified messaging will be viral in its spread, says Richard LeVine, a senior manager at Accenture. “It’s pointless to know how you send or receive the message; it’s more important just to know that they got it.”
Not only will these “prosumers” (power technology users and consumers) be your employees, but they’ll also be your customers. UPS has been a wireless pioneer in the shipping industry, offering such equipment to its drivers and package sorters for years. It made its first foray into the wireless space for its customers in 1999, enabling Palm VII organizers to view tracking and drop-off location data. Now, of the 40 services UPS offers through www.myups.com, it boasts four wireless services to its customers and business partners. Customers can wirelessly track packages, find UPS drop-off locations, calculate shipping rates and determine transit times for shipments. UPS also expanded its wireless tracking program in 43 countries and ensured that any wireless device can link to UPS shipping data.
Jeff Reid, UPS’s director of customer technology marketing of wireless services, says a big push has come from the millennials and from working with business partners that have a younger customer base. Businesses that use UPS products can offer their customers package-tracking updates as text messages (or SMS, for short message service) on their mobile devices. “The millennials are driving a lot of the SMS usage; it’s become an expectation with them,” says Reid.
For example, Moosejaw, an outdoor equipment retailer, is a UPS customer with a predominantly Gen Y customer base. Moosejaw customers who want to know the status of their package can opt in and receive text message updates on their mobile devices. The goal of the service, according to Moosejaw, is to create the least amount of “friction” for its customers.
Though he doesn’t serve as many millennials, Hughes Hubbard & Reed’s Sommer has plenty of users who want the “latest and greatest” devices. His mobile device plan dictates that every attorney and qualified employee receives a new BlackBerry every two years. “We want to keep our attorneys up to date to match what the clients need and have,” he says.
In addition, because the firm has offices around the globe and attorneys who regularly travel to Paris and Tokyo, those attorneys “definitely need the best and fastest in the world that’s out there,” he says. “We don’t want to be stuck in a 2G world when the 4G world is coming up.”
In the United States overall, there has been a recent increase in the number of multimedia devices sold. But even if more people are starting to buy mobile services from the carriers, it doesn’t mean they’re actually using them. According to a recent In-Stat report (“Will Stingy U.S. Multimedia Phone Users Turn Japanese?”), there has been a rapid increase in the number of multimedia phones purchased in the United States that play MP3 tracks and video files (from 15 percent in 2005 to 36 percent in 2007), but the report goes on to say that “the growth in multimedia handsets has more to do with operators pushing multimedia handsets to the market, rather than a strong desire by consumers to adopt multimedia handsets or use multimedia services.” For example, the report discovered that more than 80 percent of users with handsets that have these capabilities rarely, if ever, use the features.
That could all change, however, if the much-hyped iPhone jump-starts the market as the iPod did for the MP3 market. In-Stat’s Hughes is hedging his bets for now. “I believe the iPhone will be moderately successful,” he says, “but I don’t believe they’ll get 1 percent of the phone market.”
What’s a CIO To Do?
CIOs trying to fix their existing mobile environment have lots of work ahead of them. According to Rizzo’s estimates, less than 5 percent of the Global 2000) have been early deployers of customer-facing applications and Web tools for mobile devices. Around 20 percent are moving ahead with “serious levels” of mobility, and another 25 percent are “thinking about it but are going to sit back and move in 2008,” Rizzo says. The other 50 percent are not doing much of anything. Rizzo’s advice: “Get mobility religion. If you don’t, you’re going to find yourself even further behind than you are today.”
Looming on the horizon are 4G services, including WiMax, the broadband wireless technology that allows faster transmissions of voice, data, music and video. And devices are changing as well. Smaller, cheaper handsets and the new ultramobile PCs will soon find their way onto the CIO’s network.
At UPS, Reid says that while customers are demanding more wireless services, “the business case has to be there.” His rule of thumb: every enhancement to the wireless services should drive additional packages and, thereby, increase revenue. In addition, each decision is made on a country-by-country basis.
“There are services being introduced in certain parts of the world that won’t be offered here,” Reid says. For example, Asian customers want to receive billing information on wireless devices. So far, that’s not the case in the United States.
To make sure the right UPS services are targeted, the company surveys customers about wireless preferences, asks its sales force about trends they are seeing, consults with research companies like Forrester and eMarket, and works with the wireless carriers that provide the services.
“Our customers are starting to demand much more flexibility with the information,” Reid says. And whether they’re at home, at the office or on the road, “they want to be an arm’s length away from the tracking and wireless capabilities.”
Fidelity’s Ferra is also feeling that same level of mobile demand, especially the need for speed. He says the attention span of a mobile customer is far less than someone on a PC. “I like to say that we need to deliver the information before the light turns green,” he says.
In the future, Ferra wants to ensure that when Fidelity customers access its services from a mobile device, their experience will be as seamless as possible. Three new features (which aren’t quite ready for prime time just yet) are indicative of his future plans.
The first is what he calls device detection. New technology will let Fidelity’s systems know the type of mobile device a customer is using—including keyboard layout and screen size—so they will be able to provide a customer experience tailored for each device. GPS capabilities will enable customers to find the nearest Fidelity branch office. Lastly, new wireless devices will allow customers to complete asynchronous voice and data functions at the same time. As an example, Ferra says a customer can be checking account balances on a device while simultaneously talking to a Fidelity customer representative. “That’s really advanced,” says the 451 Group’s Rizzo.
Of course, Ferra notes, there are a limited number of handsets that can carry out those tasks today. But that hasn’t slowed him one bit.
“I’m a firm believer that the predominant way that people will access Fidelity will be through a mobile device,” Ferra says. “And we will offer them the best experience.”
Because if he doesn’t, someone else will.
Senior Writer Thomas Wailgum can be reached at firstname.lastname@example.org.