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 / Summer 2003 / Issue 31(originally published by Booz & Company)


Rational Exuberance: The Wireless Industry’s Killer “B”

Other organizations from our study that are attempting to use m-business to improve operational efficiency and performance include:

• The McKesson Corporation, which armed 1,300 warehouse workers with strap-on computers and rigged 31 distribution centers with wireless local area networks. This has resulted in an 8 percent increase in productivity, an 80 percent drop in incorrect items shipped, and a 50 percent drop in product shortages over two years.

• Ohio’s Hamilton County police department, which has launched project COP-SMART, a program that enables officers to generate and transmit electronic reports, as well as access federal, state, and local databases for vehicle records, wanted persons lists, and criminal history information. The efficiencies of this system equate to the addition of 500 patrol officers.

• Trinity Development and Construction Services, based in Columbus, Ohio, which is generating a cash-flow windfall by leveraging wireless technology. For example, when $300,000 of materials arrive on the site of a state highway project, a worker transmits the receipt to headquarters, which in turn generates a bill to the Ohio Department of Transportation. Speeding this part of the procurement process has helped generate savings equaling 3 percent of revenue. Trinity believes that the system paid for itself in about nine months.

Industries that are emphasizing improvement of their range of and reach to customers include banking, transportation, telecommunications, and entertainment and media. Companies in these sectors are implementing mobile payment systems and trying to generate revenues by providing more content-based services to subscribers.

Many businesses, such as British Airways PLC, also see a significant opportunity to leverage mobile technology as a means of differentiation. In 2001, British Airways began to offer a variety of mobile Internet services to travelers. The airline views the wireless channel as one of the most useful service-centric components of its coordinated customer relationship management (CRM) strategy.

The wireless system at British Airways goes beyond simple access to real-time flight arrival and departure information (probably buoyed somewhat by the ubiquity of the wireless standard GSM, Global System for Mobile Communication, in Europe). The British Airways system was the first in the world to give passengers the ability to check seat availability, check in, and select a seat via a graphical seat map on their wireless application protocol (WAP)–enabled device. Time-constrained travelers can check in using the pictorial seat selection tool on the phone, arrive at the airport, collect their boarding pass from a self-service kiosk in a matter of seconds, leave their baggage at the “Fast Bag Drop,” and go straight to the boarding gate, saving minutes or even hours. Despite the low-key marketing of its WAP services, British Airways has experienced positive monthly growth in usage of the mobile channel.

In the B2B context, companies’ major focus on supply chain tracking and procurement applications is in the transportation, telecommunications, and manufacturing industries. International Paper Company and Motorola Inc., for example, joined forces to create “smart packages” — shipping boxes with embedded radio frequency (RF) tags that emit signals that allow tracking. Smart packages take risk out of shipping valuables. The same RF tags can be used to notify suppliers when retailer inventories are low and to alert distributors if boxes are tampered with. Wal-Mart Stores Inc. has piloted an asset-tracking wireless application using RF tags. The company says it has been encouraged by the results of the pilot study and expects wireless to improve supply chain efficiency in four areas: global supply chain visibility, on-shelf product availability, theft detection, and self-checkout at retail stores. Wal-Mart must still work on implementation hurdles, such as transmission problems with the tag, the cost of the tag, and the quality of the readers, before it can roll the system out.

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  1. Caroline Junqueira, Sajai Krishnan, and Gregor Harter, “Capturing Value in the Wireless Enterprise Market,” s+b enews, 12/19/01; Click here.
  2. Raul L. Katz, Maximilian E. Weise, and Daniel H. Yang, “Consolidation: The Wireless Way,” s+b, Fourth Quarter 2002; Click here.
  3. Venkatesh Shankar and Tony O’Driscoll, “How Wireless Networks are Reshaping the Supply Chain,” Supply Chain Management Review, July/August 2002; Click here.
  4. Venkatesh Shankar, “Wireless Internet: Growing Pains vs. Gains,” working paper, University of Maryland, 2001; Click here.
  5. Pooneh Fooladi, Ned May, and Euan Davis, Understanding Client Needs: Succeeding at Wireless Professional Services, IDC (2001); Click here.
  6. Ravi Kalakota and Marcia Robinson, M-Business: The Race to Mobility (McGraw-Hill, 2001)
  7. Falk Müller-Veerse, Mobile Commerce Report, Durlacher (November 1999); Click here.
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