SMBs on the Road to a New Economy

“The possibility of transporting data via high bandwidths to mobile terminals, regardless of location, opens up completely new ways of doing business,” wrote Roland Meier as early as 2001 in a study on the subject of the “Mobile Economy”. He concludes that “the mobile company is knocking at the door.” To update this picture, the mobile company is now no longer knocking at the door, but is already on its way through. There are several reasons for this. The logical consequence of the rapid development of the two key technologies – the Internet and mobile communications – has been for them to converge in mobile business, a new form of e-business. The greatest advantage that mobile terminals, such as PDAs or notebooks, have over PC-based use of the Internet is that they can be used absolutely anywhere, not just at any time.

Varied application scenarios

Applications for mobile business support different business processes. As well as the relationships between companies and end customers (B2C), the focus is increasingly shifting towards relationships between companies and their business clients and suppliers (business to business, B2B), and also mobile internal communication (business to employee, B2E). In a white paper, the Detecon analysts Timo Bauer and Andreas Burkart identify the following three areas for the deployment of mobile technologies in the B2B segment:

  • m-CRM (Customer Relationship Management) covers all mobile services (marketing, sales, support) that take place between company and customer.
  • m-SCM (Supply Chain Management) covers planning, execution, and monitoring of procurement processes from suppliers.
  • m-ERM (Enterprise Resource Management) covers all internal company processes that are made more efficient by mobile applications.

Thorsten Wichmann, CEO of the analyst company Berlecon Research, views the concept of B2B in the context of mobile business with some skepticism, however. “These solutions don’t support collaboration between companies, but rather processes within companies. The data is first fed into companies’ backend systems before it can be passed on, so strictly speaking we are dealing with internal company solutions,” is how Wichmann justifies his reservations.
Leaving aside concept definitions, however, a whole raft of scenarios opens up for using mobile technologies. In the field of transport and logistics, they enable more efficient fleet management by means of location-based services, for instance. This reduces transport costs and avoids deadheads as delivery orders can be accepted and actioned at short notice. Sales staff in the field also appreciate the benefits. They can use mobile terminals while on the move to access up-to-date customer data and business processes in the company software (for instance from ERP and CRM systems), such as contact addresses, current orders, and warehouse inventory. Business processes are speeded up by the ability to access and edit master data from outside the office, or to import and manage new business contacts, for instance. Further, mobile applications (PDA, cell phone) can be used to manage technical customer services from company headquarters, as for instance in SMB engineering companies. This means that mobile access to company and project data not only enables companies to react more quickly to changes in the market, but they can also save time and money.

Speeding up processes, exploiting advantages

According to Berlecon Research, mobile corporate solutions improve processes in a variety of ways. Data no longer needs to be recorded twice (in writing on site and then electronically when input into the backend systems), and this reduces redundancy and improves data quality. Further, process steps that were only required for transferring data between the backend systems and field staff, such as the collection and allocation of order data, are rendered superfluous. These leaner processes also help to reduce the number of changes between different media and minimize sources of error. Mobile applications further speed up the exchange of data between field staff (sales, service) and headquarters.
SAP offers a comprehensive solutions portfolio based on SAP NetWeaver with SAP Mobile Time and Travel, SAP Mobile Sales, SAP Mobile Service, SAP Mobile Asset Management, and SAP Mobile Procurement to enable companies to exploit all the advantages of mobile business to the full. SAP Business Partners such as Unirez and Teufel Software have developed mobile add-on solutions for SAP’s SMB software specifically for SMBs who deploy SAP Business One. Thorsten Wichmann recommends that small companies use mobile solutions in ASP operations, “as this keeps investment costs down.”

Competitive advantages via mobile staff

According to a study by business consultants Techconsult which surveyed 800 companies, 12 percent of these companies’ staff spend more than 20 percent of their working time away from their normal place of work. “To work efficiently, staff must be able to fulfil important tasks when they are on the move,” Techconsult analyst Frank Heuer sums up. Experts are therefore looking particularly to B2E communication to point the way forward. According to Austrian business consultants Inset Research & Advisory, increasing mobility requirements are actually initiating a structural shift towards new organizational forms within the companies. As mobile information and communication applications will play a key role in future, mobile and flexible working models will have to be developed and implemented. Such models are also in line with employees’ increasing desire for greater autonomy in managing their own work and for recognition of their abilities to organize themselves. This in turn will increase companies’ organizational efficiency and competitiveness.
Mobile communication between companies and their employees boosts productivity, while investment costs are recouped quickly. According to Berlecon Research, a distinction needs to be drawn here between collaborative (horizontal) mobile solutions and process-specific solutions. While the former enable employees to access standard applications, such as groupware systems, in line with the concept of the mobile office, the latter aim to optimize company-specific processes. Mobile staff are integrated into the process flow in order to avoid switching between different media when capturing and transferring data.

New technologies generate new stimuli

“The introduction of new smart phones and improved HSCSD- and GPRS-capable terminals in particular has generated new stimuli for the m-business market,” says Thorsten Wichmann, CEO of Berlecon Research. “These devices enable mobile staff to access their company’s IT network quickly and conveniently.” A view essentially shared by Techconsult analyst Frank Heuer. In his opinion, powerful wireless technologies such as GPRS and W-LAN will “gain ground and thus enable permanent real-time access to company data.” The Kassel-based consultancy firm forecasts that corporate expenditure on mobile solutions will increase to €2.1 billion by the end of 2004.
According to a META Group study, the market for mobile solutions and services in Germany is expected to rise from €2.9 billion at the end of 2003 to over €4.4 billion in 2006. This is the equivalent of an annual increase of 15 percent. Experts anticipate increasing sales of applications for field staff, logistics, and mobile office solutions, particularly in the business customer segment. “Looking at specific industries, the service sector and companies in the energy, logistics, and telecom services industries and discrete manufacturing have been particularly active,” is how Wolfram Funk, Senior Consultant at META Group, explains an important result of the study.

Good prospects for SMBs

In the business customer segment, mobile business applications open up promising opportunities for smaller companies in particular. The analysts from Berlecon Research expect that in the next five years most large companies and many small ones will provide their staff with mobile access to their IT systems. However, SMBs need not “wait for the mobile communication technologies or mobile terminals of the future to start exploiting the benefits of m-business,” Thorsten Wichmann explains. “SMBs can achieve real competitive advantages today, provided that the projects are well planned, professionally implemented, and take account of users’ needs.”

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Dr. Andreas Schaffry
Dr. Andreas Schaffry