Chapter 16

Chapter16: Integrating Wireless Technology in Business

Chapter Openerp. 216

LEARNING OUTCOMES16.1 Explain the business benefits of using wireless technology.16.2 Describe the wireless trends that benefit consumers and businesses.

Business Drivers for a Mobile WorkforceDr Pepper/Seven Up Inc., of Plano, Texas, monitors the operation of its vending machines via wireless technology. Dr Pepper/Seven Up Inc. has installed specialized hardware and software along with wireless technology in vending machines. The software collects inventory, sales, and “machine-health” data at each vending machine, and then, on a daily basis, the Dr Pepper/Seven Up Inc. network operations center polls each machine. A dome antenna atop the vending machine allows broadcast and reception via a wireless network. The data are aggregated and stored at a separate facility. With client software installed on their PCs, managers and sales personnel at Dr Pepper/Seven Up Inc. can access the data via a secure website. Management at Dr Pepper/Seven Up Inc. is excited about the business value of the data being collected, both for daily operations and because of the potential for data mining. Information like this is helpful when considering new placements of vending machines or locations where multivendor machines might be warranted, such as in front of a Target store or high-traffic supermarket. Dr Pepper/Seven Up Inc. can use the data to plan loading of trucks and truck routes.

Rapid and widespread growth of mobile technology in the 21st century has shaped one of the largest technology markets after the PC revolution in the 1980s and 1990s. Untethered connectivity, anytime, anywhere, has fueled a major market and technology disruption, which has permeated almost every consumer market worldwide. The domino effect of the success of mobile technology has resulted in opportunities for innovation and creativity in technology, marketing, and business strategy.

Companies worldwide are going mobile to increase productivity, speed delivery to market, and reduce operating costs. Retail, distribution, and manufacturing businesses are no exception. Wireless transmissions rely on radio waves (e.g., cellular technology), microwaves, and satellites to send data across high-frequency radio ranges that later connect to wired media.

United Parcel Service and FedEx have been using mobile technologies for years, making it possible for information about dispatching and deliveries to travel between couriers and central stations. FedEx's famous tracking system, which can find a package's location from its

tracking number, uses a wireless courier-management system.

The terms mobile and wireless are often used synonymously, but actually denote two different technologies. Mobile means the technology can travel with the user, but it is not necessarily in real-time; users can download software, email messages, and web pages onto their personal digital assistant (PDA), laptop, or other mobile device for portable reading or reference. Information collected while on the road can be synchronized with a PC or corporate server.

p. 217FIGURE 16.1

Wireless Drivers

Wireless, on the other hand, refers to any type of electrical or electronic operation that is accomplished without the use of a “hard wired” connection. International Data Corporation expected nearly two-thirds of handheld devices to include integrated wireless networking by 2010. Figure 16.1 displays the factors inspiring the growth of wireless technologies.

State government agencies, such as transportation departments, use wireless devices to collect field information—tracking inventory, reporting times, monitoring logistics, and completing forms—all from a mobile environment. The transportation industry is using mobile devices to help determine current locations and alternate driving routes.

Mobile technologies are transforming how we live, work, and play. Handheld devices continue to offer additional functionality, and cellular networks are advancing rapidly in their increased speed and throughput abilities. These enabling technologies fuel widespread adoption and creation of new and innovative ways to perform business. The big changes that will re-create workplaces, industries, and organizations are coming from mobile and wireless technologies. Figure 16.2 displays a few common examples of mobile technologies that are changing our world.

FIGURE 16.2

Mobile Devices Changing Business

The retail industry is fiercely competitive. With the advent of the World Wide Web, nontraditional companies such as Amazon.com have emerged and have made brick-and-mortar companies like Barnes & Noble rethink their strategy. Competition is also driving profit margins down. The success of a retailer depends on inventory management, cost control, and proactive customer service. To gain the competitive advantage, more and more retailers are turning to mobile applications to enhance worker productivity, operational efficiencies, and anytime, anywhere customer service. On the sales floor and in the warehouse, mobile solutions can help track materials and shipments from suppliers and distributors to the customers,

manage inventory, and support point-of-sales activities. Since vast amounts of data can be collected in an automated fashion, analysis can be done much faster and the results can be used continuously to improve operations and customer service. Figure 16.3 briefly describes several important steps companies should take to formulate an effective mobile strategy.

Mobile Workforce Trendsp. 218

Airplane seats. Car dashboards. Digital cameras. Kiosks at shopping malls, school campuses, and hotels. Stadium bleachers. Handheld calculators. Kitchen appliances. These are just a few of the mobile devices and locations that are being wired for wireless. The visionary images of yesterday are giving way to a reality in which connectivity is nearly ubiquitous. Real-time information is now the currency of business and the enabler of groundbreaking innovations in education, entertainment, and media. The predictions help identify emerging mobile trends and indicate ways that consumers and businesses will benefit. These trends include widespread use of mobile social networks, greater choice in multifunction devices, and more wireless home entertainment options.

FIGURE 16.3

Steps to Take for Deploying Mobile Strategies

■ p. 219

Social networking gets mobilized. Mobility is added to existing Internet business models, services, and behaviors, driving traffic for wireless operators. Those in their teens and twenties accustomed to constant connectivity and habit-forming websites, such as MySpace and Facebook, lead a wave of membership in mobile social networks. Location social networking including friend and event finder services are gaining popularity, even in the professional and over-50 segments. Google, Yahoo!, and Skype are more compelling for users than wireless brands, which are hard-pressed to compete. Social networking applications initially are preloaded on many mobile devices sold and later become downloadable.

■ Mobile TV. In the short term, wireless users are unlikely to plunk down $5.99 to $9.99 per month for mobile TV service. Instead, look for per-view or per-minute pricing for “sneaking,” a consumer tendency to watch key minutes of a sports event or drama while engaged in another activity. Sneaking leads to more regular viewing, and within three to five years, mobile TV will become an indispensable service. Broadcast TV is the primary driver of revenues and consumer adoption, but peer-to-peer video is gaining interest, too. Operators are squaring off with content providers over control of the subscriber

relationship and user experience. ■ Multifunction devices become cheaper and more versatile. Intense competition and

margin pressure will continue in the handset market, forcing prices of third-generation (3G) handsets below $90 and making them affordable for a wide range of users. Seeking to replicate the success of camera phones, device manufacturers will produce more multifunction units with music-playing, location, video and other capabilities. Twenty percent of all handsets sold in North America are application specific—built for a usage proposition, such as music or video consumption or business productivity.

■ Location-based services. GPS is the location technology of choice for the wireless industry. Handset manufacturers will continue to push GPS-enabled handsets as the technology evolves from popular in-car satellite navigation systems like TomTom to a broadly accepted feature in wireless phones. With Nokia having launched its first GPS-enabled handsets in early 2007 and bandwidth available to support new multimedia services, location-based service providers are building critical mass. Since there are 10 to 20 times more mobile phones sold than any other consumer electronics device, wireless is a huge driver for GPS adoption.

■ Mobile advertising. Major brands are shifting from basic SMS marketing to more sophisticated multimedia advertising. RBC Capital Markets expects mobile marketing revenues to balloon from $45 million in 2005 to $1.5 billion by 2010. With the technological ability to target and measure the effectiveness of mobile advertising, brands are more strategic in their approach. Rich 3G content and video services and accuracy advancements in GPS-based location services deliver further value to brands targeting existing and potential customers in innovative ways.

■ Wireless providers move into home entertainment. Mobile makes headway against fixed broadband operators, which have dominated Internet and cheaper voice service provision in the home. Wi-fi will remain the primary wireless access technology. The fixed operators may be strengthened by wi-fi capabilities in consumer electronics devices (set-top boxes, game consoles, and MP3 players) that enable cost-effective content downloads.

■ Wireless security moves to the forefront. There is a monumental need to put strong security measures in place. This could be the year that hackers really start paying attention to millions of wireless devices, the growth in mobile data usage, and vulnerable points between mobile and fixed networks. CIOs consistently cite security as their number one concern in extending network access to wireless devices. Attacks, viruses, and data security now exceed device loss or theft as concerns. Emerging services, such as VoIP and mobile payments, provide additional challenges. Vulnerabilities directly affect the bottom line, corporate image, regulatory compliance, and competitive advantage.

■ p. 220

Enterprise mobility. Enterprises can't resist the convenient, reliable, attractively priced, bundled mobile solutions entering the market. Corporations switch from phones to mobile computers for transactions, data collection, and messaging for a wide variety of employees. Many voice communications processes, such as order placement and delivery notifications, dispatch operations, and remote asset monitoring, continue to shift to wireless data to increase information access and field transaction volume across organizations. Many corporations will completely replace their cellular handsets with a

combined voice/data device or a data-only device.

Opening Case Study Questions

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OPENING CASE STUDY QUESTIONS

1. Why is real-time information important to the Ironman championship?

2. How is WTC using wireless technology to improve its operations?

3. List the ethical and security dilemmas that WTC faces in using the various forms of wireless technology.

Chapter 16 Case: Wireless Electricity

Imagine a future in which wireless power transfer is feasible: cell phones, MP3 players, laptop computers and other portable electronics capable of charging themselves without ever being plugged in, finally freeing us from the power cord. Some of these devices might not even need their bulky batteries to operate.

Scientists have known for nearly two centuries how to transmit electricity without wires, and the phenomenon has been demonstrated several times before. But it was not until the rise of personal electronic devices that the demand for wireless power materialized. In the past few years, at least three companies have debuted prototypes of wireless power devices, though their distance range is relatively limited. Thanks to wireless technology, researchers at MIT extended the wi-fi concept to allow the beaming of power to anything that uses electricity. The MIT scientists successfully powered a 60-watt light bulb from a power source seven feet away. The team called their invention WiTricity, short for “wireless electricity.”

The first wireless powering system to market is an inductive device that looks like a mouse pad and can send power through the air, over a distance of up to a few inches. A powered coil inside the pad creates a magnetic field, which induces current to flow through a small secondary coil that's built into any portable device, such as a flashlight, a phone, or a BlackBerry. The electrical current that then flows in that secondary coil charges the device's onboard rechargeable battery. Although many portable devices, such as the iPhone, have yet to be outfitted with this tiny coil, a number of companies are about to introduce products that are.

The practical benefit of this approach is huge. You can drop any number of devices on the

charging pad, and they will recharge—wirelessly. No more tangle of power cables or jumble of charging stations. What's more, because you are invisible to the magnetic fields created by the system, no electricity will flow into you if you stray between device and pad. Nor are there any exposed “hot” metal connections. And the pads are smart with built-in coils which know if the device sitting on them is authorized to receive power, or if it needs power at all. So car keys won't be charged or the flashlight overcharged.

p. 221

One of the dominant players in this technology is Michigan-based Fulton Innovation. Fulton's new pad-based system, called eCoupled, will be available to police, fire-and-rescue, and contractor fleets—an initial market of as many as 700,000 vehicles annually. The system is being integrated into a truck console to allow users to charge anything from a compatible rechargeable flashlight to a PDA. The tools and other devices now in the pipeline at companies such as Bosch, Energizer, and others will look just like their conventional ancestors. Companies such as Philips Electronics, Olympus, and Logitech will create a standard for products, from flashlights to drills to cell phones to TV remotes.

Applications

■ Wireless power transfer technology can be applied in a wide variety of applications and environments. The ability of the technology to transfer power safely, efficiently, and over distance can improve products by making them more convenient, reliable, and environmentally friendly. Wireless power transfer technology can be used to provide:

■ Direct wireless power—when all the power a device needs is provided wirelessly, and no batteries are required. This mode is for a device that is always used within range of its power source.

■ Automatic wireless charging—when a device with rechargeable batteries charges itself while still in use or at rest, without requiring a power cord or battery replacement. This mode is for a mobile device that may be used both in and out of range of its power source.

Consumer Electronics

■ Automatic wireless charging of mobile electronics (phones, laptops, game controllers, etc.) in home, car, office, wi-fi hotspots while devices are in use and mobile.

■ Direct wireless powering of stationary devices (flat screen TVs, digital picture frames, home theater accessories, wireless loud speakers, etc.) eliminating expensive custom wiring, unsightly cables and power supplies.

■ Direct wireless powering of desktop PC peripherals: wireless mouse, keyboard, printer, speakers, display, etc., eliminating disposable batteries and awkward cabling.

Industrial

■ Direct wireless power and communication interconnections across rotating and moving “joints” (robots, packaging machinery, assembly machinery, machine tools) eliminating costly and failure-prone wiring.

■ Direct wireless power and communication interconnections at points of use in harsh environments (drilling, mining, underwater, etc.) where it is impractical or impossible to run wires.

■ Direct wireless power for wireless sensors, eliminating the need for expensive power wiring or battery replacement and disposal.

■ Automatic wireless charging for mobile robots, automatic guided vehicles, cordless tools and instruments eliminating complex docking mechanisms and labor intensive manual recharging and battery replacement.

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Transportation

■ Automatic wireless charging for existing electric vehicle classes: golf carts, industrial vehicles.

■ Automatic wireless charging for future hybrid and all-electric passenger and commercial vehicles, at home, in parking garages, at fleet depots, and at remote kiosks.

■ Direct wireless power interconnections to replace costly vehicle wiring harnesses.

Other Applications

■ Direct wireless power interconnections and automatic wireless charging for implantable medical devices (pacemaker, defibrillator, etc.).

■ Automatic wireless charging for high-tech military systems (battery-powered mobile devices, covert sensors, unmanned mobile robots and aircraft, etc.).

■ Direct wireless powering and automatic wireless charging of smart cards.

■ Direct wireless powering and automatic wireless charging of consumer appliances, mobile robots, etc.

Questions

1. Explain the fundamentals of wireless power transfer technology.

2. Describe the business benefits of using wireless electricity.

3. Identify two types of business opportunities companies could use to gain a competitive advantage using wireless electricity.

4. What are some other creative uses of wireless electricity not mentioned in the case?

5. How would a wireless power distribution network operate similar to cell networks?

Unit Summary

p. 223

In a remarkably short time, the Internet has grown from a virtual playground into a vital, sophisticated medium for business, more specifically, ebusiness. Online consumers are flooding to the Internet, and they come with very high expectations and a degree of control that they did not have with traditional bricks-and-mortar companies. The enticement of doing business online must be strengthened by the understanding that, to succeed online, businesses will have to be able to deliver a satisfying and consistent customer experience, building brand loyalty and guaranteeing high rates of customer retention.

Strategic alliances enable businesses to gain competitive advantage(s) through access to a partner's resources, including markets, technologies, and people. Teaming up with another business adds complementary resources and capabilities, enabling participants to grow and expand more quickly and efficiently.

Key Terms

Application programming interforce (API) 196A set of routines, protocols, and tools for building software applications.

Brick-and-mortar business, 194A business that operates in a physical store without an Internet presence.

Business-to-business (B2B), 194Applies to businesses buying from and selling to each other over the Internet.

Business-to-consumer (B2C), 194Applies to any business that sells its products or services to consumers over the Internet.

Business wiki 208Collaborative web pages that allow users to edit documents, share ideas, or monitor the status of a project.

Click-and-mortar business, 194A business that operates in a physical store and on the Internet.

Collaboration system, 203An IT-based set of tools that supports the work of teams by facilitating the sharing and flow of information.

Consumer-to-business (C2B), 195Applies to any consumer that sells a product or service to a business over the Internet.

Consumer-to-consumer (C2C), 195Applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet.

Content management system, 207Provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment.

Core competency, 203An organization's key strength or business function that it does better than any of its competitors.

Core competency strategy, 203When an organization chooses to focus specifically on what it does best (its core competency) and forms partnerships and alliances with other specialist organizations to handle nonstrategic business processes.

Database-based workflow system, 209Stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document.

Digital asset management system (DAM), 208Stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document.

Digital Darwinism, 184Organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction.

Digital divide, 188When those with access to technology have great advantages over those without access to technology.

Disruptive technology, 184A new way of doing things that initially does not meet the needs of existing customers.

Document management system (DMS), 208Supports the electronic capturing, storage, distribution, archival, and accessing of documents.

Ebusiness, 183The conducting of business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners.

Ebusiness model, 192An approach to conducting electronic business on the Internet.

Ecommerce, 192The buying and selling of goods and services over the Internet.

Electronic marketplace (emarketplace), 194Interactive business communities providing a central market space where multiple buyers and suppliers can engage in ebusiness activities.

Emall, 195Consists of a number of eshops; it serves as a gateway through which a visitor can access other eshops.

Eshop (estore, etailer), 194A version of a retail store where customers can shop at any hour of the day without leaving their home or office.

Explicit knowledge, 206Consists of anything that can be documented, archived, and codified, often with the help of IT.

Groupware, 211Software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing.

Hypertext transport protocol (HTTP), 187The Internet standard that supports the exchange of information on the WWW.

Information partnership, 203Occurs when two or more organizations cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer.

Information reach, 188Refers to the number of people a business can communicate with, on a global basis.

Information richness, 188Refers to the depth and breadth of information transferred between customers and businesses.

Instant messaging (IM or IMing), 213A type of communications service that enables someone to create a kind of private chat room with another individual in order to communicate in real-time over the Internet.

Internet, 186A global public network of computer networks that pass information from one to another using common computer protocols.

Knowledge management (KM), 205Involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions.

Knowledge management system (KMS), 205Supports the capturing, organization, and dissemination of knowledge (i.e., know-how) throughout an organization.

Mashup editor 197WYSIWYGs (What You See Is What You Get) for mashups that provide a visual interface to build a mashup, often allowing the user to drag and drop data points into a web application.

Messaging-based workflow system, 209Sends work assignments through an email system.

Protocol, 187A standard that specifies the format of data as well as the rules to be followed during transmission.

Pure-play (virtual) business, 194A business that operates on the Internet only without a physical store.

Semantic web 190An evolving extension of the World Wide Web in which web content can be expressed not only in natural language, but also in a format that can be read and used by software agents, thus permitting them to find, share, and integrate information more easily.

Structured collaboration (process collaboration), 204Involves shared participation in business processes, such as workflow, in which knowledge is hard coded as rules.

Sustaining technology, 184Produces an improved product customers are eager to buy, such as a faster car or larger hard drive.

Tacit knowledge, 206The knowledge contained in people's heads.

Unstructured collaboration (information collaboration), 204Includes document exchange, shared whiteboards, discussion forums, and email.

Videoconference 211A set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously.

Web 2.0, 189A set of economic, social, and technology trends that collectively form the basis for the next generation of the Internet—a more mature, distinctive medium characterized by user participation, openness, and network effects.

Web conferencing 212Blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected website.

Web content management system (WCM), 208Adds an additional layer to document and digital asset management that enables publishing content both to intranets and to public websites.

Web mashup 196A website or web application that uses content from more than one source to create a completely new service.

Wiki 209Web-based tools that make it easy for users to add, remove, and change online content.

Workflow, 209Defines all the steps or business rules, from beginning to end, required for a business process.

Workflow management system, 209Facilitates the automation and management of business processes and controls the movement of work through the business process.

World Wide Web (WWW), 187A global hypertext system that uses the

Internet as its transport mechanism.

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Core competency strategy, 203When an organization chooses to focus

specifically on what it does best (its core competency) and forms partnerships and alliances with other specialist organizations to handle nonstrategic business processes.


















Information richness, 188Refers to the depth and breadth of information

transferred between customers and businesses.
















Web conferencing 212Blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a

password-protected website.






World Wide Web (WWW), 187A global hypertext system that uses the Internet as its transport mechanism.

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Business wiki 208Collaborative web pages that allow users to edit documents,

share ideas, or monitor the status of a project.
















































Search eBook...



































Mashup editor 197WYSIWYGs (What You See Is What You Get) for mashups

that provide a visual interface to build a mashup, often allowing the user to drag and drop data points into a web application.


















Search eBook...














































Web conferencing 212Blends audio, video, and document-sharing

technologies to create virtual meeting rooms where people “gather” at a password-protected website.







Search eBook...























Emall, 195Consists of a number of eshops; it serves as a gateway through

which a visitor can access other eshops.

















Structured collaboration (process collaboration), 204Involves shared participation in business processes, such as workflow, in which knowledge is

hard coded as rules.













Search eBook...


































Knowledge management system (KMS), 205Supports the capturing, organization, and dissemination of knowledge (i.e., know-how) throughout an

organization.



















Unit Closing Case One: Highway Safety through Collaboration

p. 224Improving Highway Safety through Collaboration

Information on traffic-related deaths and accidents is two to three years out of date in some states, making it difficult to devise new safety regulations, rebuild unsafe roads, develop safer automobiles, and improve emergency services. Systems used by federal, state, and local agencies to collect and share information need to be overhauled, and the U.S. Department of Transportation's National Highway Traffic Safety Administration said it would ask Congress for $300 million over the next six years to upgrade them.

The goal is to eliminate antiquated paper-based reporting systems and implement a nationwide initiative to automate and synchronize the collection and sharing of information. The information will include vehicle-related injuries, associated health care costs, safety stops, driver licenses, vehicle registration, and adjudicated violations.

Safer Driving

Federal highway safety officials want $300 million to finance:

■ Wireless communications equipment to facilitate electronic information collection and transmission during traffic safety stops.

■ Real-time information transfer and editing processes to update driver's license or vehicle

registration information from traffic stops or crash sites.■ Centralized access to query all traffic record databases.■ Standardized search capabilities on common queries and information transmission using

XML formats.Few states have the capability to capture and transmit traffic record and crash information electronically, and those that do are limited, said Joseph Carra, director of the National Center for Statistics and Analysis at the highway safety agency. “Today, the information is written and stored in files. It's a paper process. The files are sent to the state office, whose clerks input the information into proprietary computer systems. And there it sits.”

Collaborating

Better information will save lives and money, says the federal highway safety administration. About 43,220 people were killed on the nation's highways in 2003, and another 2.9 million suffered serious injuries. Traffic accidents in 2000, the latest year for which information is available, cost the U.S. economy about $230 billion, the agency says.

The wide-ranging proposal calls for standardized formats to improve information sharing among various government agencies and private groups, more sophisticated sensors in cars and along highways to gather detailed information on crashes, and wireless handheld devices to let police officers check for outstanding warrants on drivers, among other ideas. Federal funding will encourage states to adopt federal standards. Many states, suffering from a slow economy and declining tax revenues, have not been able to fund upgrades themselves. Some, however, have projects under-way.

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Revamping Texas

Texas is about halfway done with an IT project to build a crash-records information system, a joint initiative between its Department of Public Safety and the Texas Department of Transportation. When completed, police officers will be able to file accident reports via the Web, and other state agencies will be able to electronically link their systems with it and share information.

Texas has been working on the crash-records system for several years. The state has a $9.9 million contract with IBM to build an information warehouse using a DB2 Universal Database, WebSphere Application Server, Tivoli Storage Manager, and MQ-Series, its message-queuing product. IBM says Florida, Arizona, and New Mexico are considering similar systems.

The Texas system is replacing a decades-old one that is “archaic and in need of many changes,” said Carol Rawson, deputy division director for the traffic operations division with the state transportation department. The old system requires time-consuming manual entry of around 850,000 accident forms a year, as well as manual cross-checking and validation to

ensure the information is correct. Because the process took so long, the state's accident information is backlogged some 30 months. “This is all about safety,” Rawson said. “The way you tell if a road is safe is you look at accident information. So that information is critical.”

Questions

1. How are collaboration tools helping to save lives in Texas?

2. How could a police department use groupware to help with collaboration on accident reports?

3. Describe how a police department could use workflow systems to help with accident reports and health-care-related issues.

4. What would be the impact on lives if a state fails to implement collaboration tools to help track and analyze highway accidents?

5. How could police departments use wireless technologies to operate more efficiently and effectively?

Unit Closing Case Two: Social Networking

Social Networking

Not long ago, it seemed that four companies would forever dominate the web in traffic and ad dollars. Each of the Big Four—Google, Yahoo!, Microsoft's MSN, and Time Warner's AOL—attracts more than 100 million unique visitors a month. Collectively the group accounts for roughly 90 percent of gross ad dollars online. But now those companies are facing a threat to their dominance. Today's massive social networking systems are rapidly becoming webs within the web—one-stop shops for a wide range of services (from content to communications to commerce) that were once the unique province of the Big Four.

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Facebook, MySpace, LinkedIn and other social-networking sites have been the rage of the tech industry lately. Following investments by Microsoft, News Corp. and Goldman Sachs,

the companies are valued in the billions of dollars and are considered blueprints for how to build a website. Facebook has become the Web's largest social network as measured by active users, which offers bread-and-butter portal services like email and instant messaging as well as photo posting and video sharing. In addition, Facebook has partnered with Amazon.com to produce a shopping application that lets users buy items at Amazon without leaving Facebook's site, while using opt-in “news feeds” that broadcast activities on Amazon, such as product reviews and wish list updates, to Facebook friends. Additionally, Facebook now uses a chat feature that automatically populates itself with a user's Facebook “friends,” that may render older instant messaging services, such as AOL's AIM, defunct.

Jumping on the wireless apps mega-trend, Facebook uses mobile alerts to deliver mobile services for traditional styled cell phones and more intelligent smartphones. Applications for popular devices, such as the iPhone or BlackBerry, deliver even richer social experiences. Video has taken off, too, with 45 million clips uploaded on Facebook including higher-resolution video formats allowing Facebook users to send video messages from the site and from mobiles devices.

Launched in 2003, MySpace became one of the most visited websites in the world within a few years. With almost a billion visits per month, MySpace is considered the most popular social network (by traffic volume). The site was originally started by musicians as a tool to help users discover new music and engage with bands. Today, MySpace members leverage the service to discover people with similar tastes or experiences. Utilizing a system of adding friends to your network, the ability to customize your profile, write blog entries, play favorite MP3 tracks, join groups and enter discussions, MySpace allows users to interact in a way unparalleled before its emergence. However, the most compelling reason to join MySpace is for fun. There are many avenues toward entertainment on the social network including browsing through musician profiles and exploring areas dedicated to television shows or movies. But MySpace isn't just for fun, as many businesses maintain MySpace profiles in order to use the social media site as a form of marketing. For musicians, actors, authors, entrepreneurs, and others that maintain a public image, a MySpace profile can be a very important connection to fans.

Since it scored a $900 million, three-year deal with Google in 2006, MySpace has been profitable. And it has given News Corp. a nice turn on its $650 million acquisition in 2005. MySpace has recently formed partnerships with major record labels Sony BMG Music Entertainment, Warner Music Group, and Vivendi's Universal Music Group to offer its 117 million members tickets, ring tones, and artist merchandise. Driving a good chunk of sales is a project launched last summer called HyperTargeting, software that mines the profiles of MySpace users to deliver ads tailored to their interests. Hundreds of advertisers are part of the program, including Toyota and Taco Bell. Another income source is the sale of mobile ring tones and ads.

When it comes to enterprise collaboration and social software, LinkedIn rules the roost. LinkedIn is more effective at meeting the requirements of social computing the enterprise environment demands. With more than 30 million users representing 150 industries around

the world, LinkedIn is a fast-growing professional networking site that allows members to create business contacts, search for jobs, and find potential clients. Individuals have the ability to create their own professional profile that can be viewed by others in their network, and also view the profiles of their own contacts. While MySpace and Facebook are tailored to keeping members in touch with friends and family, LinkedIn is perceived as being “more professional” for business users.

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Social networking sites are also growing at exponential rates and attracting users of all ages. Facebook's fastest-growing segment is users over 25 years of age. LinkedIn, the business-oriented social networking site, claims more than 30 million active members with an average age of 41. The social networking websites are typically divided into three categories: general interest, niche sites with a specific theme, and international sites. The following are the top sites in these three categories:

General Interest■ MySpace: Started in 2003, MySpace was a driving force in popularizing social

networking and still maintains the largest userbase.■ Facebook: Founded by Mark Zuckerberg, Facebook was designed as a social networking

site for Harvard students. After spreading from Harvard through the university ranks and down into high school, Facebook was opened to the public in 2006.

■ Hi5: A fast-growing social network with a strong base in Central America, Hi5 has over 50 million users worldwide.

■ Ning: A social network for creating social networks, Ning takes the idea of groups to a whole new level.

Niche Sites■ Flixster: With a tagline of “stop watching bad movies,” Flixster combines social

networking with movie reviews.■ Last.fm: Billing itself as a social music site, Last.fm allows members to create their own

radio station that learns what the person likes and suggests new music based on those interests. In addition to this, you can listen to the radio stations of friends and other Last.fm members.

■ LinkedIn: A business-oriented social network, members invite people to be “connections” instead of “friends.” LinkedIn is a contact management system as well as a social network, and has a question-and-answer section similar to Yahoo! Answers.

■ Xanga: A social blogging site that combines social networking elements with blogging. Members earn credits for participating in the site and can spend credits on various things such as buying mini-pictures to post in the comments of a friend's blog.

International Sites■ Badoo: Based in London, Badoo is one of the top social networking sites in Europe.■ Migente: A social networking site targeted at Latin America.■ Orkut: Originally created by Google to compete with MySpace and Facebook, it has

mainly caught hold in Brazil.■ Studivz: A German version of Facebook with a strong audience in students.Corporate Use of Social Networking

Corporations and smaller businesses haven't embraced online business networks with nearly the same abandon as teens and college students who have flocked to social sites. Yet companies are steadily overcoming reservations and using the sites and related technology to craft potentially powerful business tools. Recruiters at Microsoft and Starbucks, for instance, troll online networks such as LinkedIn for potential job candidates. Goldman Sachs and Deloitte run their own online alumni networks for hiring back former workers (called boomerangs) and strengthening bonds with former alums. Maintaining such networks will be critical in industries like IT and health care that are likely to be plagued by worker shortages for years to come. Social networking can also be important for organizations like IBM, where some 42 percent of employees regularly work from home or client locations. IBM's social network makes it easier to locate employee expertise within the firm, organize virtual work groups, and communicate across large distances. As another example of corporate social networks, Reuters has rolled out Reuters Space, a private online community for financial professionals. Profile pages can also contain a personal blog and news feeds (from Reuters or external services). Every profile page is accessible to the entire Reuters Space community, but members can choose which personal details are available to whom. While IBM and Reuters have developed their own social network platforms, firms are increasingly turning to third-party vendors like SelectMinds (adopted by Deloitte, Dow Chemical, and Goldman Sachs) and LiveWorld (adopted by Intuit, eBay, the NBA, and Scientific American).

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Questions

1.Are Facebook, MySpace, and LinkedIn using disruptive or sustaining technology to run their businesses?

2. What are some of the business challenges facing social networking sites?

3. What are the characteristics of a social network?

4. What security issues do social networking sites create?

5. What are some current social networking trends?

6. How can social networking sites generate revenue beyond selling banner and text ads?

Making Business Decisions

1. Everybody Needs an Internet Strategy

An Internet strategy addresses the reasons businesses want to “go online.” “Going online” because it seems like the right thing to do now or because everyone else is doing it is not a

good enough reason. A business must decide how it will best utilize the Internet for its particular needs. It must plan for where it wants to go and how best the Internet can help shape that vision. Before developing a strategy, a business should spend time on the Internet, see what similar businesses have, and what is most feasible, given a particular set of resources. Think of a new online business opportunity and answer the following questions:

a. Why do you want to put your business online? b. What benefits will going online bring? c. What effects will Internet connectivity have on your staff, suppliers, and customers?

2. Searching for Disruption

Scheduler.com is a large corporation that develops software that automates scheduling and record keeping for medical and dental practices. Scheduler.com currently holds 48 percent of its market share, has more than 8,700 employees, and operates in six countries. You are the vice president of product development at Scheduler.com. You have just finished reading The Innovator's Dilemma by Clayton Christensen and you are interested in determining what types of disruptive technologies you can take advantage of, or should watch out for, in your industry. Use the Internet to develop a presentation highlighting the types of disruptive technologies you have found that have the potential to give the company a competitive advantage or could cause the company to fail.

3. Leveraging the Competitive Value of the Internet

Physical inventories have always been a major cost component of business. Linking to suppliers in real time dramatically enhances the classic goal of inventory “turn.” The Internet provides a multitude of opportunities for radically reducing the costs of designing, manufacturing, and selling goods and services. E-mango.com, a fruit emarketplace, must take advantage of these opportunities or find itself at a significant competitive disadvantage. Identify the disadvantages that confront E-mango.com if it does not leverage the competitive value of the Internet.

4. p. 229

Assessing Internet Capabilities

Hoover's Rentals is a small privately owned business that rents sports equipment in Denver, Colorado. The company specializes in winter rentals including ski equipment, snowboarding equipment, and snowmobile equipment. Hoover's has been in business for 20 years and, for the first time, it is experiencing a decline in rentals. Brian Hoover, the company's owner, is puzzled by the recent decreases. The snowfall for the last two years has been outstanding, and the ski resorts have opened earlier and closed later than most previous years. Reports say tourism in the Colorado area is up, and the invention of loyalty programs has significantly increased the number of local skiers. Overall, business should be booming. The only reason for the decrease in sales might be the fact that big

retailers such as Wal-Mart and Gart Sports are now renting winter sports equipment. Brian would like your team's help in determining how he can use the Internet to help his company increase sales and decrease costs to compete with these big retailers.

5. Gaining Efficiency with Collaboration

During the past year, you have been working for a manufacturing firm to help improve its supply chain management by implementing enterprise resource planning and supply chain management systems. For efficiency gains, you are recommending that the manufacturing firm should be turning toward collaborative systems. The firm has a need to share intelligent plans and forecasts with supply chain partners, reduce inventory levels, improve working capital, and reduce manufacturing changeovers. Given the technologies presented to you in this unit, what type of system(s) would you recommend to facilitate your firm's future needs?

6. Collaboration on Intranets

MyIntranet.com is a worldwide leader in providing online intranet solutions. The MyIntranet. com online collaboration tool is a solution for small businesses and groups inside larger organizations that need to organize information, share files and documents, coordinate calendars, and enable efficient collaboration, all in a secure, browser-based environment. MyIntranet.com has just added conferencing and group scheduling features to its suite of hosted collaboration software. Explain why infrastructure integration is critical to the suite of applications to function within this environment.

7. Finding Innovation

Along with disruptive technologies, there are also disruptive strategies. The following are a few examples of companies that use disruptive strategies to gain competitive advantages:

■ Circuit City, Best Buy—These two disrupted the consumer electronics departments of full-service and discount department stores, which has sent them up-market into higher margin goods.

■ Ford—Henry Ford's Model T was so inexpensive that he enabled a much larger population of people, who historically could not afford cars, to own one.

■ JetBlue—Whereas Southwest Airlines initially followed a strategy of new-market disruption, JetBlue's approach is low-end disruption. Its long-range viability depends on the major airlines' motivation to run away from the attack, as integrated steel mills and full-service department stores did.

■ p. 230

McDonald's—The fast-food industry has been a hybrid disrupter, making it so inexpensive and convenient to eat out that it created a massive wave of growth in the “eating out” industry. McDonald's earliest victims were mom-and-pop diners.

There are numerous other examples of corporations that have used disruptive strategies to

create competitive advantages. In a team, prepare a presentation highlighting three additional companies that used disruptive strategies to gain a competitive advantage.

8. Communicating with Instant Messages

You are working for a new start-up magazine, Jabber Inc., developed for information professionals that provides articles, product reviews, case studies, evaluation, and informed opinions. You need to collaborate on news items and projects, and exchange data with a variety of colleagues inside and outside the Jabber Inc. walls. You know that many companies are now embracing the instant messaging technology. Prepare a brief report for the CIO that will explain the reasons IM is not just a teenage fad, but also a valuable communications tool that is central to everyday business.

Apply Your Knowledge

1. Everybody Needs an Internet Strategy

An Internet strategy addresses the reasons businesses want to “go online.” “Going online” because it seems like the right thing to do now or because everyone else is doing it is not a good enough reason. A business must decide how it will best utilize the Internet for its particular needs. It must plan for where it wants to go and how best the Internet can help shape that vision. Before developing a strategy, a business should spend time on the Internet, see what similar businesses have, and what is most feasible, given a particular set of resources. Think of a new online business opportunity and answer the following questions:

a. Why do you want to put your business online? b. What benefits will going online bring? c. What effects will Internet connectivity have on your staff, suppliers, and customers?

2. Searching for Disruption

Scheduler.com is a large corporation that develops software that automates scheduling and record keeping for medical and dental practices. Scheduler.com currently holds 48 percent of its market share, has more than 8,700 employees, and operates in six countries. You are the vice president of product development at Scheduler.com. You have just finished reading The Innovator's Dilemma by Clayton Christensen and you are interested in determining what types of disruptive technologies you can take advantage of, or should watch out for, in your industry. Use the Internet to develop a presentation highlighting the types of disruptive technologies you have found that have the potential to give the company a competitive advantage or could cause the company to fail.

3. Leveraging the Competitive Value of the Internet

Physical inventories have always been a major cost component of business. Linking to suppliers in real time dramatically enhances the classic goal of inventory “turn.” The Internet provides a multitude of opportunities for radically reducing the costs of designing, manufacturing, and selling goods and services. E-mango.com, a fruit emarketplace, must take advantage of these opportunities or find itself at a significant competitive disadvantage. Identify the disadvantages that confront E-mango.com if it does not leverage the competitive value of the Internet.

4. p. 229

Assessing Internet Capabilities

Hoover's Rentals is a small privately owned business that rents sports equipment in Denver, Colorado. The company specializes in winter rentals including ski equipment, snowboarding equipment, and snowmobile equipment. Hoover's has been in business for 20 years and, for the first time, it is experiencing a decline in rentals. Brian Hoover, the company's owner, is puzzled by the recent decreases. The snowfall for the last two years has been outstanding, and the ski resorts have opened earlier and closed later than most previous years. Reports say tourism in the Colorado area is up, and the invention of loyalty programs has significantly increased the number of local skiers. Overall, business should be booming. The only reason for the decrease in sales might be the fact that big retailers such as Wal-Mart and Gart Sports are now renting winter sports equipment. Brian would like your team's help in determining how he can use the Internet to help his company increase sales and decrease costs to compete with these big retailers.

5. Gaining Efficiency with Collaboration

During the past year, you have been working for a manufacturing firm to help improve its supply chain management by implementing enterprise resource planning and supply chain management systems. For efficiency gains, you are recommending that the manufacturing firm should be turning toward collaborative systems. The firm has a need to share intelligent plans and forecasts with supply chain partners, reduce inventory levels, improve working capital, and reduce manufacturing changeovers. Given the technologies presented to you in this unit, what type of system(s) would you recommend to facilitate your firm's future needs?

6. Collaboration on Intranets

MyIntranet.com is a worldwide leader in providing online intranet solutions. The MyIntranet. com online collaboration tool is a solution for small businesses and groups inside larger organizations that need to organize information, share files and documents, coordinate calendars, and enable efficient collaboration, all in a secure, browser-based environment. MyIntranet.com has just added conferencing and group scheduling features to its suite of hosted collaboration software. Explain why infrastructure integration is critical to the suite of applications to function within this environment.

7. Finding Innovation

Along with disruptive technologies, there are also disruptive strategies. The following are a few examples of companies that use disruptive strategies to gain competitive advantages:

■ Circuit City, Best Buy—These two disrupted the consumer electronics departments of full-service and discount department stores, which has sent them up-market into higher margin goods.

■ Ford—Henry Ford's Model T was so inexpensive that he enabled a much larger population of people, who historically could not afford cars, to own one.

■ JetBlue—Whereas Southwest Airlines initially followed a strategy of new-market disruption, JetBlue's approach is low-end disruption. Its long-range viability depends on the major airlines' motivation to run away from the attack, as integrated steel mills and full-service department stores did.

■ p. 230

McDonald's—The fast-food industry has been a hybrid disrupter, making it so inexpensive and convenient to eat out that it created a massive wave of growth in the “eating out” industry. McDonald's earliest victims were mom-and-pop diners.

There are numerous other examples of corporations that have used disruptive strategies to create competitive advantages. In a team, prepare a presentation highlighting three additional companies that used disruptive strategies to gain a competitive advantage.

8. Communicating with Instant Messages

You are working for a new start-up magazine, Jabber Inc., developed for information professionals that provides articles, product reviews, case studies, evaluation, and informed opinions. You need to collaborate on news items and projects, and exchange data with a variety of colleagues inside and outside the Jabber Inc. walls. You know that many companies are now embracing the instant messaging technology. Prepare a brief report for the CIO that will explain the reasons IM is not just a teenage fad, but also a valuable communications tool that is central to everyday business.

Business Driven Best Sellers

The Power of Mobility. By Russell McGuire (John Wiley & Sons, 2007).

Over 80 percent of Americans above the age of five own a cell phone, most with digital cameras built in, and bundled with an email service specifically designed for sending those captured moments to friends and family. These consumer applications are just simple

examples of mobility being built in to everyday products to create tremendous new value. From a business perspective, a new technology can introduce radical changes—changes so dramatic that they fundamentally shift the nature of the business, the nature of the product, and the reasons customers buy the product. When this happens, the rules of competition change. It is happening now: The age of mobility is upon us. How will it impact you and your business in the months and years to come?

The Power of Mobility shows you how to look forward, envision the power of mobility in your business, and implement the steps required to turn vision into reality. Russell McGuire, one of the telecom industry's leading strategists, details the specific actions you must take to deliver the tremendous value that mobility adds—and win customers' hearts and wallets. He presents a powerful framework for capturing the power of mobility: the seven steps. If you can digitize, connect, evaluate, limit, position, protect, and learn, you will capture the power of mobility in your products, your services, and your processes. He further clarifies the power of the seven steps with illustrative case studies of seven companies that have successfully implemented this framework and redefined the rules of competition in their industries.

The mobility age represents a great opportunity for businesses large and small to capture the power of mobility to create competitive differentiation and to take market share. Stories of businesses that have been crushed by the competition because they have denied the changes brought by technologies in the past will likely be repeated. You have a choice. You can wait for a competitor to lead and define the rules to his benefit and your demise. Or you can lead and set the rules—if you capture the power of mobility now.

The Innovator's Solution. By Clayton Christensen and Michael Raynor (Harvard Business School Publishing, 2003).

Roughly one company in every 10 is able to sustain the kind of growth that translates into an above-average increase in shareholder returns over more than a few years. Once a company's core business has matured, the pursuit of new platforms for growth entails daunting risk. To put it simply, most companies have no idea how to grow, and pursuing growth the wrong way can be worse than no growth.

In The Innovator's Dilemma, Clayton Christensen displays how companies that focus on high-end products for profitable customers can be blindsided by “disruptive technologies” from new competitors—innovations that target low-end customers seeking cheaper products. In The Innovator's Solution, Christensen and co-author Michael Raynor show how established companies can create disruptions rather than being destroyed by them and how to turn innovative ideas into new disruptive products that will lead to long-term profitable growth.

p. 238

Purple Cow. By Seth Godin (Penguin Group, 2003).

Following the traditional rules of marketing is not enough anymore. Consumers are simply inundated with information channels from newspapers and magazines to blogs and email. In today's competitive market, companies must create a remarkable new product to make customers take notice. According to marketing guru Seth Godin, such a product is a Purple Cow, a product or service that is worth making a remark about.

The impact of advertising in newspapers and magazines is fading as people are overwhelmed with information and have stopped paying attention to most media messages. To create a Purple Cow product, Godin advises companies to stop advertising and start innovating. Godin recommends that marketers target a niche, and he explains different ways to spread an idea to consumers who are most likely to purchase the product. Godin claims there is not a shortage of remarkable ideas—every business has opportunities to do great things—but there is a shortage of the will to execute those ideas.

Into the Unknown: Leadership Lessons from Lewis and Clark's Daring Westward Expedition. By Jack Uldrich (AMACOM, 2004).

Latching onto the idea that everything old is new again, Jack Uldrich, a former naval officer and author of The Next Big Thing Is Really Small, puts forth Lewis and Clark as two shining examples of all that is right with leadership and management. Spotlighting the pair's many strong points, from people skills and future-thinking capabilities to optimism and an ability to see the forest as well as the trees, Uldrich (drawing on what has obviously been years of extensive research) points to modern-day companies such as Coca-Cola, General Electric, and DaimlerChrysler as entities that could all learn something from Lewis and Clark.

Whether the “project” is a westward expedition or a hostile corporate takeover, Uldrich makes the case that the past is not so different from the present—or from the future—especially when concerning new technologies. The parallels between these men and today's leaders are intriguing and well thought out. For corporate types looking for tips, there are certainly plenty to digest. The overriding messages are clear: mentor and be mentored; find a way to balance the task at hand with the overall future vision; maintain a confident and optimistic approach from the beginning.

Chapter 16

Documents

audio transmissions

distinctive

dynamics including

private chat

supply chain

reduce inventory

direct wireless

integrated