Communications of the ACM

Communications of the ACM

The Value of Mobile Applications: a Utility Company Study

By Fiona Fui-Hoon Nah, Keng Siau, Hong Sheng
Communications of the ACM, February 2005, Vol. 48 No. 2, Pages 85-90
10.1145/1042091.1042095
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Mobile and wireless devices are enabling organizations to conduct business more effectively. Mobile applications can be used to support e-commerce with customers and suppliers, and to conduct e-business within and across organizational boundaries. Despite these benefits, organizations and their customers still lack an understanding of the value of mobile applications. Value is defined here as the principles for evaluating the consequences of action, inaction, or decision [4]. The value proposition of mobile applications can be defined as the net value of the benefits and costs associated with the adoption and adaptation of mobile applications [2].

Although mobile applications present tremendous opportunities to companies, their proliferation is still limited. The advantages of using such applications include [9]:

• Mobility. Users can conduct business anytime and anywhere.
• Flexibility. Data can be captured at the source, or point of origin, and "reverse wireless" services can be provided, including problem area alerts. Since mobile devices are inherently portable, users can engage in other activities, such as traveling, while conducting business or transactions via their Internet-enabled wireless devices.
• Dissemination. Some wireless infrastructures support simultaneous delivery of data to mobile users within a specific geographical region. This functionality offers an efficient means of disseminating real-time information to a large user population, thus providing another avenue to enhance and improve customer service.

Companies including UPS, Wells Fargo, and Cerner Corporation have noted these advantages and have embraced mobile applications. UPS, the world's largest package delivery company, offers wireless solutions to its customers for tracking packages and verifying delivery. Wells Fargo, a major U.S. financial institution, uses wireless applications to provide customer banking services and employee access to corporate applications. Cerner Corporation, a major developer of health care information management systems, has developed wireless solutions that allow nurses and physicians to access secure clinical information at the point of care.

To better understand the value of mobile applications, we studied a major public utility company in the initial phase of adopting mobile applications. We interviewed key personnel from various departments, including those undertaking the mobile applications implementation effort, in order to ascertain different perspectives on mobile applications. Based on the data collected during the interviews, we developed a means-ends objective network depicting the value structure of mobile applications to the company. The results provide important information about the fundamental values that mobile applications offer, as well as the means to achieve these values. The utility company we analyzed has 425 employees, about half of whom work in the field. The company serves approximately 115,000 customers and owns about $687 million worth of electric plant assets. Its 2001 revenue was approximately $159 million.

The company adopted an Enterprise Resource Planning (ERP) system from SAP in 1998. Currently, Blackberry wireless handheld devices support field workers who are always on the move. However, the current implementation is primarily limited to email. The IT department has begun to explore the possibility of making a major investment in wireless devices and services and implementing a series of mobile applications through a three-phase plan. First, it plans to install wireless access in meeting rooms; second, it will provide wireless communication within the main building; and third, it will provide wireless access across the different buildings and to personnel in the field. Despite the potential and promise of mobile applications, there is a need to justify their viability, usefulness, and values to the stakeholders.

To identify the values of mobile applications, we conducted interviews based on Keeney's [4] value-focused thinking approach, which fundamentally involves deciding what is important and how to achieve it. It provides a systematic approach for articulating and organizing values, which leads to a more complete set of alternative solutions and a clearer understanding of how each alternative contributes to the achievement of objectives.

Values are made explicit by the identification of objectives, which are statements about what one desires to achieve [4]. There are two kinds of objectives: fundamental and means. Fundamental objectives, as the name implies, refer to the objectives underlying the essential reasons for the problem/situation on hand. Means objectives are those whose attainment will help achieve fundamental objectives. Using the value-focused thinking approach, we acquired these values from interviews with key personnel, including the CIO, ERP supervisor, customer service supervisor, IT security coordinator, and several field workers and technicians. We continued to interview employees from different divisions until we could not identify additional new values or objectives. We interviewed a total of 10 employees, although the "saturation point" was reached after the seventh interview. This is a standard approach for determining the stopping point in data collection in qualitative research. Each interview lasted approximately one hour. The interview procedure involved the following steps, which are summarized in Figure 1.

Identify employees' wishes, concerns, problems, and mobile application values. A value may be expressed or implied in various forms such as desired traits, characteristics of consequences that matter, guidelines for actions, and priorities. We asked interviewees questions such as "What are the mobile application functions you wish to have?" and "In what ways can mobile applications be used to achieve your company's objectives?" From the interviews, we collected a list of values that apply to mobile applications.

Convert user input into objectives. A value is expressed in various ways and must be converted to a common form representing its corresponding objective. An objective consists of a decision context, an object, and a direction of preference that one wants to strive toward. For example, if one states that "I want mobile devices to be easy to use," this value can be converted to "Maximize ease of use of mobile devices."

Distinguish between fundamental and means objectives. Keeney [3] suggested that means objectives can be differentiated from fundamental objectives by using the "Why is that important?" (WITI) test. If one objective is important because it will help achieve another objective, it is a means objective. Otherwise, it is a fundamental objective.

Build a means-ends objective network. The purpose of this step is to link means objectives to each other as well as to fundamental objectives. For example, if an objective such as "Maximize coverage area" influences the "Maximize accessibility of mobile services" objective, we draw an arrow from the first to the second objective. By linking the objectives, we derived the cause-effect relationships of these objectives.

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Research Results

The means and fundamental objectives derived from our study are shown in Tables 1 and 2, and the means-ends network is depicted in Figure 2. The overall objective for mobile applications is to maximize the overall benefits to the company. Six fundamental objectives are considered most important: efficiency, effectiveness, customer satisfaction, security, cost, and employee acceptance.

Efficiency and effectiveness. Efficiency can be improved by minimizing delay and saving time in retrieving, updating, and communicating information. This company has a large number of field workers, who often lack access to needed information when in the field or on the road. For example, if field workers want to check inventory information on specific parts, they must call the office and request the office staff to run the check for them. Also, they must carry large collections of maps and blueprints with them while on the move in order to have access to essential information, such as the design information and locations of electrical connections and generation stations. Further, changes made in the field (such as fixing electrical problems and installing new parts) are noted by the field workers on paper and are updated into the system in batch mode by office staff. Because data is not updated at the source, the information in the system is not always accurate.

These problems pose challenges to the company because they not only result in additional paperwork, but also in delays and potential inaccuracies. With more extensive implementation of wireless applications, field workers could access and update information in real time, thus improving the quality and accuracy of information, and enabling tasks to be carried out more accurately and quickly.

Customer satisfaction. Real-time access to up-to-date customer and utility service information helps improve the quality of services and customer communication. As the company policy is to terminate electricity supply to a residence or business when payment is not received on time, the payment status should be updated immediately upon receipt to ensure the customers can have their power quickly switched back on. For example, a customer may be paying his bill in one of the offices when a service representative in the field terminates the customer's electrical supply. With wireless applications, an alert will be automatically issued to the field worker and an unfortunate incident will be avoided.

Security. This is a major concern for the company. One such concern is the theft or loss of mobile devices, which are easily misplaced or stolen, and likely contain sensitive or confidential data that can be accessed by unauthorized persons. Wireless data transmission poses another problem for data security. During transmission, data can be intercepted or tampered with. To maximize security in mobile applications, various security options must be provided, including powerful encryption, restricted access, password protection, and customized default settings, in order to assure user and data authentication, confidentiality, and integrity.

Cost. To implement mobile applications, the company must invest in mobile devices, pay service fees for wireless access, and train employees. On the other hand, mobile applications can help to lower operating cost by reducing paperwork and eliminating redundant work. A cost-benefit analysis may be needed to justify the investment.

Employee acceptance. Not every employee is willing to embrace new technology. Personality traits may determine whether an employee is willing to try something new—some employees accustomed to standard operating procedures will resist change. Because of the current limitations of mobile devices and their interfaces, employees may perceive mobile devices as difficult to use [7]. Therefore, the selection of appropriate form factors (such as size, configuration, and functionality) is important. The input interface must be user friendly and the input mechanisms must be simple. Screen size should be large enough to ensure a readable display. Also, employees need adequate training to adopt mobile devices and become proficient in their usage.

These fundamental objectives highlight the benefits and costs of mobile applications that are most essential to a company. There are similarities between the fundamental objectives we have found and those discussed in the literature. For example, UPS adopted mobile applications to provide better tracking and delivery services to its customers, in order to improve customer satisfaction (fundamental objective). Wireless applications developed by Cerner Corporation enable hospital personnel to manage their time more efficiently and improve the quality of patient care, thus improving efficiency and effectiveness. Although Wells Fargo planned to use wireless applications to "gain new operating efficiencies" [6], its mobile initiative failed because of the lack of customer satisfaction with the (limited) services provided and the lack of acceptance of the technology for m-banking [5]. Banks are now prioritizing cost cutting rather than cutting-edge technology [5]. M-banking will become a priority again only if mobile technology can support a cost-cutting priority, which is a fundamental objective of mobile applications in most organizations. Further, security is a major concern in wireless applications—it is important to ensure confidential information is not compromised [1, 11].

The results obtained in this study of just one organization are applicable and useful to other companies embarking on or in the midst of mobile application projects. The findings not only provide a more in-depth understanding of the benefits of mobile applications to organizations, but also highlight the principles for evaluation of mobile applications.

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Implications for Managers and Practitioners

Some of the means objectives provided by the electric company are directly related to mobile devices or services. Such examples include "maximize battery life," "maximize connectivity," "maximize accessibility," "maximize coverage area," and "maximize mobile service speed." These are some of the basic requirements for mobile applications. They contribute toward the achievement of other means objectives. The highest level of means objectives (those with arrows pointing into fundamental objectives) helps to achieve the fundamental company objectives. Without these basic requirements, mobile applications would not be beneficial to the company.

We also identified three necessary conditions that were emphasized by almost all interviewees—accessibility, real-time access and updates, and integration with existing systems. Accessibility is a key requirement for wireless applications: being able to use them anytime, anywhere, and while on the move are important criteria. The company we studied has several offices, many substations, and field workers who are constantly traveling. In addition to personal computers and traditional office equipment, the company needs mobile and wireless devices to provide its employees with access to information whenever the need arises and regardless of location.

Real-time access and updates refers to the ability to access and update data, including maps and blueprints, while on the move. One employee articulated this perspective as follows: "This is very important for field workers because they don't have to drive back to the main office just to check some minor detail, and they don't need to carry a huge deck of maps or blueprints with them to the field. Everything can be displayed on these small devices."

Integration with existing systems is also crucial. The company wants to use mobile devices to access and update data in the ERP system and other existing systems. Hence, the implementation should complement and integrate with existing systems to maximize its overall value to the company. With an integrated implementation, workers could retrieve information, maps, and blueprints in the field or on the move, thus increasing the application value.

Although mobile applications can provide significant value to companies, some limitations hinder their widespread adoption. Two main obstacles concern the current limitations of mobile devices and the quality of mobile services. Some researchers [8, 10, 12] have noted that mobile devices suffer from major drawbacks, including: small screen size and key pads; limited computational power, memory, and disk capacity; shorter battery life; complicated text input mechanisms; higher risk of data storage and transaction errors; lower display resolution; unfriendly and cumbersome user interfaces; and graphical limitations. These limitations have prevented companies from rolling out full implementation of mobile applications. Such limitations were highlighted by the interviewees and were described as some of the main obstacles in implementing wireless and mobile applications. The interviewees were also concerned that the existing limitations of mobile devices would make it difficult for employees to learn, use, and adopt them. Also, the small display screen and poor resolution prevent certain forms of information, such as maps, blueprints, and drawings, from being displayed fully and clearly. The limited battery life constrains the length of operations of the devices and the mobility of the users.

There are some technical restrictions and limitations related to mobile services, which add new challenges to widespread adoption and diffusion of mobile applications. They are: limited bandwidth, unstable connections, low predictability, and lack of a standardized protocol [8]. Users expect stability and responsiveness when using these applications; however, current mobile connections cannot satisfy these two requirements. Mobile services have limited coverage area and lack a standardized protocol. Thus, when users travel out of the area, they cannot access the mobile services they need. This drawback poses potential problems for companies whose employees travel frequently. Another problem with mobile services is the low speed. A typical cellular data transfer speed is approximately 10Kbps. Such low speed is not suitable for displaying rich information that contains graphics, audio, or other data-intensive material.

The limitations of mobile services and mobile technology have posed challenges for companies planning to adopt mobile applications. Other issues associated with mobile applications must be considered. Security issues were mentioned in most interviews. Security and privacy risks are greater with the wireless medium [1]. Mobile applications must provide more and better security options to protect confidential and sensitive data stored in the mobile devices. Cost of mobile devices and mobile services were also indicated as investment concerns.

Mobile applications, however, are advancing by leaps and bounds. Most of the technical limitations and constraints will be alleviated in the near future, making mobile applications more usable, friendly, and financially worthwhile for companies.

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Conclusion

In this study, we interviewed employees across the various departments of a company to understand the values of mobile applications. A means-ends network that depicts the causal relationships among the objectives was developed and discussed. The network is useful to researchers as it highlights the issues, concerns, and values of mobile applications. For managers and practitioners, the network presents a road map that can help them achieve their companies' objectives of implementing mobile and wireless applications.

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The Digital Library is published by the Association for Computing Machinery. Copyright © 2005 ACM, Inc.

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