e-Query with PwC: 'The Power of M-business'


Q: Besides e-business and e-commerce, another term that's cropped up recently is m-business. What exactly is m-business and the technology behind it? How will it impact the current business environment and what should a corporation do to move towards implementing m-business?

A: Mobile business, mobile e-business or m-business are simply extensions of e-business. This means using electronic information - via wireless mobile devices - to improve business and communication performances and information availability through connectivity to improve services, reduce costs and open new channels, thereby transforming the competitive landscape.

However, m-business is not confined to just wireless, mobile e-business. It is an entirely new way of designing and deploying a wide range of systems and solutions that are personal, convenient, easy to use, always available, accessible in real time and location-sensitive.

While it may share many of the applications available to e-business, such as communications, 'infotainment', consumer transactions and corporate services, the uniqueness of m-business is that these applications are not limited to just one particular type of relationship, for example business-to-consumer (B2C). They will include business-to-business (B2B), business-to-employee (B2E), consumer-to-consumer and device-to-device relationships. For this reason, m-business has been dubbed A-A commerce: anytime, anywhere.

M-commerce is the use of wireless mobile devices for marketing, selling and buying products and services over the Internet, mobile networks or other supporting technologies. However, m-business is a far greater and more complex phenomenon - one that will build on organisations' e-business transformations and capabilities and provide the backdrop for a further qualitative shift in business operations.

Driving forces behind m-business
The increasing popularity and proliferation of wireless devices such as mobile telephones, personal digital assistants (PDAs) and hand held PCs over the past decade have been the most significant factor driving this revolution forward. These devices enable its users to conduct transactions anywhere.

According to analyst predictions, penetration of wireless devices in the next five years will outpace that of televisions. With more users having mobile devices, they will demand more services.

The falling cost of mobile devices has also been one of the driving forces for m-business. Gone are the days when mobile phones are considered a status symbol, reserved for the gadget-savvy and rich. With the availability of easy-payment schemes, subsidies and lower production cost, the cost of owning such devices have dropped to within the reach of the mass consumers. It is also becoming an intrinsic part of everyday life for millions of people worldwide.

The cost of operating these devices has also dropped. The cost of basic airtime services such as voice and short messaging service (SMS) have plummeted. In Malaysia, consumers have seen access fees for mobile services drop as much as 80% in order to attract more customers.

Advancements in network technologies
Mobile network operators are investing large sums of money in licences and building a new generation of network that can support always-on connectivity that will allow users to immediately send and receive voice and data services.

Concurrently, advancements in other levels of the network, particularly wireless devices are being pursued. Device manufacturers are continuously creating new prototypes of products consumers might see in the future. Meanwhile, the race is on to create new standards for operating platforms such as creating the ability to link elements in different value chains, in real time, to provide a dynamic, personalised service.

Businesses that link services, many of which already exist independently, will streamline their customers' transactions. For example, linking airplane ticket purchases, car rental bookings and hotel reservations, then communicating all the information via messaging to mobile devices, would make travel planning easier.

In order to offer these new services, businesses are beginning to enter into new alliances and partnerships, both within and outside their industries. This process in itself creates new possibilities and new business opportunities.

Technology: Behind the scene

One of the driving factors in m-business is the advancement in technology in both network systems and wireless devices. Let's take a closer look at the advancements made in both network systems and wireless devices that enables m-business to operate.

Network technology
The technology used by mobile network operators has advanced significantly since the days of analogue networks. Mobile network standards have evolved from first generation networks such as the Nordic Mobile Telephone (NMT), Advance Mobile Phone System (AMPS) and Total Access Communications System (TACS), to the current second generations (2G) networks such as the Global System for Mobile communications (GSM), Code Division Multiple Access (CDMA) and Personal Communication System/Network (PCS/PCN).

The emergence of the Wireless Application Protocol (WAP) in early 1998 has enabled wireless users to access e-mail and voice mail, send and receive faxes, make stock trades, conduct banking transactions, and view Web pages on a wireless terminal's screen. WAP is a specification designed to work across wireless technologies including GSM and CDMA. It makes it easier for mobile users to view Web pages by defining the Wireless Markup Language (WML).

The next generation of network technology or popularly known as 3G, has the capability to not only support voice, but also data and images at a considerably higher speed of at least 300 kilobits per second to potentially 2 megabit per second. This is significantly higher than predecessor 2G networks which operate at a maximum speed of only 9.6 kilobit per second.

Examples of 3G networks currently available are Europe's universal mobile telecommunication system (UMTS), Japan's wideband code division multiple access (w-CDMA) and the United States' CDMA2000. Such networks allow for always-on connectivity.

In Asia, with the exception of Japan, the emergence of a 3G network is highly unlikely in the near future. This is due to the extremely high cost in obtaining a 3G licence and the high capital expenditure required to replace the existing network.

We are however more likely to see upgrades of the existing 2G network such as the GSM-based General Packet Radio Service (GPRS). Also known as 2.5G, such technologies are capable of speeds up to 100 kilobit per second, allow for always-on connectivity and are significantly less expensive to implement. Leading mobile operators in Malaysia have or are in the process of upgrading their network to provide GPRS services to its subscribers.

Wireless devices
The emergence of mobile network standards is spurring development of e-business and m-business applications for hand-held devices, particularly towards the consumers.

WAP-enable handsets began to appear on the market in early 1999, enabling users to browse the Web, albeit in a limited capacity. This is due to the fact that hand-held devices present user-interface challenges: screens are small, poor backlighting, hard-to-read fonts and limited memory capacities. Coupled by the limited rate at which data can be transferred due to bandwidth restrictions, combined with poor caching facilities, WAP has not been received well by consumers.

Vendors and manufacturers alike are constantly developing new devices and software in order to resolve the initial issues faced by WAP users. Hand held devices, which combine mobile phone and PC, are emerging in the market. PDAs with Web capabilities are also introduced. The emergence of smart phones, which combines wireless voice, wireless data and Internet access, are beginning to rival PDAs as a hand-held form-factor. Such devices have larger display and memory capacities, gearing for the next generation of network standard, 3G. The combined data and voice functionality of 3G technology is expected to alter the interactive capability of wireless devices significantly.

How will m-business affect the business environment?
M-business will not only change the way businesses compete but also the way businesses operate. It affects all levels of their value chain, from marketing to procurement. In Malaysia, several businesses have embraced m-business, or rather m-commerce. For example, Celcom (Malaysia) Sdn Bhd, a leading mobile network operator, have commercially offered its customers the ability to purchase canned drinks from vending machines via their mobile phone where users "call" the vending machine to make the purchase. Major cinema chains in the Klang Valley are also allowing patrons to make ticket reservations through WAP-enable mobile phones.

M-business raises critical questions about strategic adaptation for every organisation. It will herald the emergence of entirely new value chains and business models, not to mention new levels of personalised service. It will lead to new business alliances and a wave of convergence between industries. At a fundamental level, it will enable organisations to dynamically reconfigure their value chains and develop new relationships with employees, suppliers, customers and competitors.

The ability to tailor services for end-users' various needs - taking one-to-one marketing to a higher level - will become a new source of competitive advantage. By changing the nature of communication and interaction, customer relationship management will take on a new dimension.

M-business will also facilitate efficiency gains through workforce management. Mobile technologies offer the potential for tasks to be scheduled for the right worker, with the right set of tools, at the right location and at the right time. They also increase the likelihood that customer enquiries can be resolved at the first port of call.


How to get started
M-business is set to make a major difference in all aspects of operations and management, and it opens up a whole avenue of major top-line revenue growth opportunities and bottom-line productivity gains for organisations in all industries.

Organisations will need to re-examine their value chain to identify where prospects for efficiency gains and improvements to customer service lies. This means anticipating changes in all areas of their value chains.

Imagine an energy company's typical mobile workforce, for example. Armed with mobile devices and access to the corporate network, they could consult customer records to resolve questions, check the status of work orders and bill customers - all at their job sites.
Parallel scenarios exist for every industry, with tremendous benefits for consumers and suppliers.