In-Depth

It's true: Location is everything

Kirk Talbott, president of Talbott Electric, an electrical contractor in Pasadena, Calif., faced a problem that is common for any manager with employees in the field. That is, verifying where his employees were at any given time in the working day.

"The time cards didn’t always get filled out in the field the way you’d like," Talbott says. "They tended to get filled out the Monday before they were collected, and the employees tended to, let’s say, maximize their potential." Then there also was the occasional "he said, she said" dispute with customers.

"If the customer called and said that my guy wasn’t there when the invoice said he was, I really just had to take their word for it," Talbott says. "You can’t accuse your customers of lying and keep very many of them."

In June, Talbott found the solution in a software application called WorkTrack, a field service tracking application launched by San Francisco-based Aligo in January 2004. The product is designed to generate time, job, and location reports from GPS-enabled mobile phones. It’s a simple-to-use, menu-driven application that Talbott hopes will allow him to eliminate paper time cards from his operation. The feature that really sold him was the app’s ability to provide location information.

"It gives me a tool for settling payroll and billing disputes," he says. "Now, I can go back to a specific date and tell where my people were and when. It gives me this third party verification that I can print out and show to anyone who’s interested."

WorkTrack is an example of an emerging type of low-cost, hosted, location-enabled applications that are now boosting enterprise adoption of location-based services (LBS), providing what Forrester Research analyst Carl Zetie calls "the long-promised breakthrough" of LBS.

Meaningful information on the spot
The term "location-based services" generally refers to hardware, software, and communications technologies that, together, react automatically to geographic triggers, and then slice and dice the resulting location data to deliver meaningful information to end users. Current versions of location-enabled applications are giving managers the ability to track time spent on jobs, to dispatch based on location, and to generate a range of reports that include location information. The readily identifiable business value is coming from applications targeted at employees, Zetie says. "Even relatively simple and very cheap enterprise LBS applications are proving their value in improving employee productivity, eliminating paper-based data collection and associated errors and delays, and increasing utilization of assets while decreasing service response times."

This effect is magnified when a simple, low-cost mobile front end can leverage a large, existing back-end investment, Zetie says. For instance, that’s often the case when worker tracking is added to an existing scheduling and dispatching operation. "Consequently, LBS can address both sides of the value coin: reducing costs and increasing revenues," he says. Cheap, portable devices The advent of low-cost, feature-rich mobile hardware, the growing establishment of mobility standards, and the introduction of software architectures better suited to widely distributed integration (such as serviceoriented architectures) have paved the way for a kind of LBS renaissance. The result has been a sharp rise in enterprise exploitation of LBS.

"GPS boxes have been on boats and trucks for decades," says Yankee Group analyst Marina Amoroso. "What providers of location services are doing now is moving that capability from the big black box to a new form factor: the cell phone. In fact, the next-generation GPS devices are cell phones. And that change is opening up new opportunities for developers on the business side of things."

The scope of those opportunities is hard to overestimate when you consider some of the raw numbers. David A. Limp, senor vice president of corporate and business development at PalmSource, the Sunnyvale, Calif.-based maker of the Palm OS operating system for wireless devices, points to the staggering proliferation of mobile devices as a key driver in the LBS space.

"When you start talking about mobile devices, the numbers are almost mind boggling," Limp says. "This year alone, around 600 million brand new cell phones will be sold. To put that into perspective, one in nine people on earth are going to buy a brand new cell phone this year."

In the next two to five years, Limp predicts, GPS functionality on smart mobile devices will be ubiquitous. "Like having a camera on your cell phone," he says, "it’s just going to be there. And so, consequently, are location- based services."

Cheaper handsets may well be a key enabler of enterprise LBS, but the cost of the devices isn’t the only market driver, says Scott Petronis, senior product manager at MapInfo, a provider of location-based software services based in Troy, N.Y. When it comes to location-enabling mobile devices, one of the most important influences, he says, is the refinement of device form factors. The look and feel of the handset or PDA is more than just a style issue, because device usability directly affects productivity.

"From a business perspective," Petronis says, "if I want an application that’s going to improve productivity, I can’t have someone sitting there punching in a numeric keypad."

Knowledge and services on hand
A wide range of location services aimed at consumers and enterprises are streaming in to handsets today, ranging from driving directions and emergency 911 services, to inventory tracking, and locating stolen vehicles and handsets. Right now, companies interested in location-enabling their employees generate the most heat in the LBS market. The leading provider of location services to business right now is Nextel, according to Amoroso.

"It’s not surprising that Nextel leads in this market," she says. "The company has a lot of small and medium business partners who were already using GPS technology. It was only natural for them to go to these customers and say, ‘You’re using our GPS services now; how about trying it out on a mobile device?’ They’ve marketed to people who already use this stuff and understand its value."

Talbott Electric, for example, implemented the Aligo WorkTrack solution on Nextel’s i58SR mobile phones, which the company’s 14 employees were using already.

"That was really the easiest part," Talbott says. "People these days know how to use cell phones and send text messages, and we deployed on devices they were very familiar with. The hardest part has been training them to bring their radios to work every day. That’s the human element; that, and training them to make sure that they clock in and out."

For manager Brian Tlustosch of Delta Drywall in Placerville, Calif., LBS capabilities promised more efficient deployment of his field-service workers. Of Delta’s 300-plus employees, approximately 20 are "patch men" responsible for selling, delivering, installing, and maintaining drywall at production builder jobsites in the greater Sacramento area. One-third of his company’s business is unscheduled, he says, and the ability to locate, deploy, and route these field employees is critical.

In March 2003, Tlustosch equipped eight of his patch men with Nextel GPS-enabled mobile phones, running the GPS TimeTrack service from Xora, a Mountain View, Calif.-based firm that offers hosted and enterprise GPS/location- based mobile solutions. Delta uses Xora-generated maps to pinpoint workers nearest to new job sites.

"Our workers appreciate we are taking steps to make their jobs easier," Tlustosch says. "No one likes to be pulled off a job to spend 45 minutes in traffic, only to find out he had a colleague who was closer to the customer location." Tlustosch also found the product invaluable for validating timesheets. "When we first introduced [TimeTrack] to our patch men, it was met with resistance by a few workers," he says. "We had suspected that these persons were guilty of fudging hours on their time cards. Instead of having to make accusations, these workers outed themselves."

"Location information can provide invaluable analytics that help our customers to run their businesses," says Rob Consolazio, Nextel’s senior director of business solutions. "The location component in the credit-cardswipe application, for example, allows them to say, ‘I’m spending all my advertising money on the west side, but I’m getting all my credit card payments from the east side.’"

Consolazio says Nextel’s enterprise customers are now calling for mobilized CRM applications, and he expects to see location capabilities in future versions of those types of applications. "We anticipate seeing a lot of different enterprise applications in the future with location capabilities baked in," he says.

Location, location, location
That expectation points to one of the most significant trends in the LBS space, says Amoroso: the evolution of two approaches to providing location-based services. One is software that Amoroso identifies as "single-minded" LBS applications that focus on location. "It’s all about the location information in these apps," she says. "They identify where the user is, another thing is, and then does something to route the user to the thing. The location information is in the forefront of the application, and the user interacts directly with this information."

This type of LBS application is most appealing to users for whom location is the primary concern, Amoroso explains. For example, a parent might be willing to pay a monthly fee for the ability to find a child who gets lost. Similarly, an SOS-type help service installed on a cell phone might appeal to an elderly user.

It’s fair to say that the most successful consumer LBS offering to date has been some version of this type of application: the GPS-based, in-car navigation system. However, standalone location applications are already giving way to LBS-enabled apps, the second approach, which move location into the background. These applications apply location information to enhance other services (and exemplify Zetie’s notion of a "killer capability").

A restaurant locator, for example, might use location information to scout an area’s weather conditions, and then advise the user to get an indoor table. According to Amoroso, Zetie and others, the once-vaunted potential of LBS is likely to be most fully realized in the form of applications that simply include location capabilities. Nextel employs location information to enhance a range of traditional enterprise applications, such as location-enabled bar-code scanning, handset-based time sheets that provide time and location stamping, and payment applications that allow credit-card-swipe devices to include location information.

Carriers like Nextel are well positioned in LBS application development, Amoroso says, because the carriers have the network that contains the location information. LBS developers need access to that data, and these companies are expending considerable resources to encourage the growth of carrier-centric developer communities. The developer uses, say, Nextel’s network and infrastructure to get the location information, builds an application on top of that, and then provides that capability to the subscriber by partnering with Nextel, Amoroso explains.

"A lot of these applications are delivering value because they can get location info from Nextel’s network," Consolazio admits. "We’re not an application developer ourselves, for the most part, so we rely on partnerships. We’ve got folks who do nothing but think all day long about how to make it easier for developers with J2ME to write to our devices and make money on those applications. We want to become a vehicle that they see as a path to monetization."

The demand for mobile-phone-based LBS capabilities is rising, but what might be thought of as traditional LBS implementations in specialized hardware for vertical markets is also thriving, and are yielding unexpected returns on investment, Zetie says.

When Fox Valley Fire and Safety, a Chicago-based provider of fire extinguishers, alarm systems, and other safety systems, implemented a truckmounted, GPS-based tracking system from @Road four years ago, the company was looking for a better fleet-tracking system, says Zetie, who cites the company in his LBS market study. Founded in 1996, @Road is a hosted "mobile resource management" provider with offices in the U.S. and India. The company offers location-enhanced services, mobile content delivery, and mobile business intelligence to enterprise customers using in-cab hardware, PDAs, and handsets. Fox Valley deployed the @Road solution primarily to implement a system that would allow its fleet of 60 trucks to be more responsive to emergency outages. The company opted for a cabmounted system instead of phones or PDAs because the screens are larger and less susceptible to damage. Along with the improvement in emergency response times Fox Valley originally sought, the @Road system’s LBS features yielded much of what Zetie calls "indirect savings," including better communication with customers about what calls took place, and when; a decrease in wear and tear on trucks because of reduced personal use; and the virtual elimination of inaccuracies in timesheet reporting.

Fueling fires
The emergence of services that host mobile, location-enabled clients externally while integrating with existing enterprise back ends for things like scheduling and billing is "one of the most intriguing drivers in enterprise adoption," Zetie says. Hosted services dramatically lower the cost of entry for basic LBS applications, he says, and the combination of reduced complexity, the lowered risk associated with operating expenses over an outright capital expenditure, and ease of adoption has made "a business benefit that was once limited to large companies with large vehicle fleets and deep expertise" now available at moderate cost to many more organizations. Hardware trends are also adding fuel to the LBS fire.

Companies like @Road, Xora, and Aligo provide hosted applications that exploit cheap and readily available devices at a modest monthly subscription cost. In particular, the advent of GPS-capable, J2ME-enabled handsets that run simple client applications that are readily connected to enterprise back ends has proved to be a critical driver in the LBS market, Zetie says.

J2ME handsets provide all the essential client features in an off-the-shelf package: the standards-based application environment (J2ME), integrated network connectivity, built-in GPS, long battery life (at least one working day), and low purchase price. To be truly effective, LBS applications often require the integration of numerous sources of information, some of which are external to the enterprise. Consequently, the hosted- LBS model benefits from the growing acceptance and implementation of Web services and SOAs, Zetie says. They reduce the complexity of integrating something like, say, an externally provided mapping service. The hosted model "is most readily exploited by companies that have embraced SOA, he says.

Another, less obvious driver of LBS rollouts may be a reaction among carriers to government-mandated Enhanced 911. Phase I of that program required carriers to report the telephone number of a wireless 911 caller and the location of the antenna that received the call; phase II requires the carriers to provide far more precise location information — within 50 to 100 meters in most cases. Carriers are already looking for ways to recover some of the expenses associated with their implementations of phase II, which is supposed to be in place by the end of 2005. They are expected to pass along some of the expense to subscribers, but the LBS market presents other opportunities, says George Moon, chief technology officer at MapInfo.

"Now that the carriers have their E911 strategies either rolled out or well under way," Moon says, "they’re looking at strategies to recover some of their investment. Some of them are looking to LBS applications as a new revenue source."

Hurdles: weak signals and privacy
The momentum of these market drivers may be slowed by some technological hurdles that remain to be cleared in the location services space. The current crop of LBS applications often uses location information derived from cell phone networks, which is not precise. Services that use GPS information, which is more precise, face weak signals that can make location detection unworkable inside buildings, in cities, and even in dense woods.

Challenges also remain in security and privacy. "Lots of people don’t like the idea of others knowing their location," Schiller explains. "Maybe you want to access certain location-based services, but you aren’t particularly interested in letting Starbucks know where you are. This is not really solved today, from my point of view. For now, at least, privacy remains an open issue when it comes to location-based services."

However, these obstacles are unlikely to drastically slow the growing momentum of location-based services in the enterprise. Data traffic is driving much of the growth in wireless generally, according to industry watchers at In-Stat/MDR, who expect the number of U.S. data subscribers to more than double from about 35 million today to more than 73 million by 2007.

Moreover, Zetie says, the early adopters in this space have already demonstrated the ROI.

Talbott agrees: "The best advice I can give to anyone looking at location- based services is to make sure that you know what problem it is you want them to solve. There are a lot of products out there now, and you’ll have to hunt through them, but you’ll improve your chances of getting it right if you take the time to make sure that you match the application to your specific needs."

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