OVERVIEW
BY INDUSTRY
EDUCATION
With Wireless LANs in place, respondents cited a more efficient use of
space, and more in-class productivity. At most education sites, the
access point was located directly in the wiring closet or in a lab.
With a wireless LAN, only the access point needs a wired network
connection. Classroom or lab computers were connected to the access
point via radio frequency.
K-12 schools needed a way to save money
on network and computer costs. The Education Rate (E-rate) with 10% to
90% savings was available, but they needed even more ways beyond this
to save. With wireless LANs they were able to save money by buying
fewer computers. The solutions ranged from using cart-mounted
computers wirelessly hooked to the wireless LAN. The carts could be
moved to the classrooms where they were needed. The schools saved
money by buying fewer computers as well as wiring to a central hub.
Wireless LANs turned out to be very
inexpensive on a per-student basis. Wireless infrastructure costs for
the educational sector averaged $2308. In this study 1345 students
benefited from the wireless solution which in an average configuration
included 25 access points and 112 computers equipped with wireless
adapters. The savings can be attributed to the utilization of
cart-mounted computers and fewer network drops as a result of the
wireless LAN. With carts, fewer rooms would have been required to be
networked and populated with computers.
Also, since many of the schools had a
mandate to get students on the Internet to access more or better
learning activities and since the wireless system served as a tool to
make this happen, a very fast and easy installation was required.
Wireless LANs met their needs as well. In this study students in the
university setting demanded access to LAN resources from dormitories,
classrooms, and throughout campus. Wireless LANs were being used to
help students be more mobile and the schools to reduce network costs
and connect remote locations to central buildings and servers. In the
university environment providing a wired connection was extremely
expensive, especially when it involved historical buildings running
cable through ceilings and walls was cost-intensive. Running wire
through ceilings and walls in buildings at one site was going to
potentially disturb asbestos insulation, forcing a removal process
estimated to cost over $90,000.
HEALTHCARE
With fast-rising healthcare costs, reimbursement and ROI are key to
the requirements of IT investments in the medical industry. Healthcare
spending in the U.S. has grown from $280 billion in 1981 to more than
$1.5 trillion in 1997 and currently accounts for about 14% of the
total gross domestic product.
With healthcare costs increasing at a
rate of about 5% per year, cost containment is an important issue.
Hospitals are centralizing laboratories, reducing costs, and
increasing their use of automated technology. The wireless LAN has
shown to meet the technology and organizational needs of healthcare
companies today by decreasing the length of hospital stay, speeding
diagnostic and case analysis time turnaround, reducing hospital labor,
procedural costs, documentation, and scheduling time.
MANUFACTURING/WAREHOUSE
Warehouse workers are increasingly demanding mobile scanners or
pen-based computing tablets for inputting and accessing data in
real-time. These devices are linked to mainframes or servers that
usually have a software application running on them such as inventory
collection, order fulfillment, and shipping/receiving applications. By
connecting to inventory records and purchase orders, companies reduce
the inefficiencies of transferring numbers through paper forms.
Wireless LANs connected to automated,
handheld computers on manufacturing or factory floors are a viable
alternative to wired LANs. Laying cable in these environments proved
cost prohibitive, or not feasible because of the size of the
warehouse. Also changes in assembly lines are frequent and many
employees do not work in any fixed location for one straight month. In
this study, we have seen that workers and management in the
manufacturing environment need instantaneous access to accurate
information so they can better track orders, production runs, and
production quantities in real time.
PRODUCTION
Wireless LANs automated the production, maintenance, and
troubleshooting (repair) process at production bays of a foundry,
production lines of an automotive manufacturer, and the outside work
area of an aircraft manufacturer. The use of production planning and
control software combined with wireless LAN technology illustrates the
positive effect of this specific IT on an organization. A typical
medium-sized to large manufacturing firm must stock, control and
ensure the availability of thousands of items (end products, parts,
and raw material). Further, production of the parts and raw material
must be coordinated to ensure that the firm meets order commitments
and production plans. Using manufacturing software with automated
inventory status reporting, order processing, production scheduling,
and invoicing features, made it possible for companies to control
complexity. But in this study, we found that having a wireless LAN
connected to this software enabled operators to go beyond
second-guessing the age of the information coming over the wire. It
appeared in real-time or near real time. This combination of hardware
and software reduced the control and coordination and associated
costs.
RETAIL
The retail industry category in this study comprised a collection of
segments from diverse businesses, such as restaurants, specialty
stores, prepared food stores, and military stores that vary in the
types of items they sell and the market size for the items. But, they
all sought faster rates in getting customers through checkout and
totaling orders, and faster receipt of goods, and taking inventory. In
retail establishments considerable effort is taken to attract
customers, and reduce long lines.
Wireless LANs also contributed to the
good health of retail establishments. Wireless POS cash registers and
bar code client devices provided access to store inventory and pricing
information. Scanning had a high impact on productivity at checkout
through improvements due to easier price changing, and price removal,
price identification. For example, price changes can be recorded in a
central database at the store rather than on each item.
The wireless LAN infrastructure
provided critical decision-makers in retail with real-time information
on the ordering, collection, distribution, and sale of goods. The
wireless network offered them a higher initial purchase price, but
reduced support costs and increased checkout productivity and
flexibility.
FINANCIAL
The financial/office automation category in this study comprised a
collection of segments with varying businesses, such as banking, stock
trading, consulting, auditing, and the office areas of a technology
firm. Office automation was a goal for the consulting, auditing, and
technology firm. All of these firms face come under considerable
competition. Keeping up with the competition as well as offering new
services are paramount.
In almost every instance the cost
conscious system manager chose not to standardize exclusively on this
new technology. This is because doing so required a large investment
in changing the nearby network infrastructure. Many system managers
were attracted to the wireless LAN for its flexibility, easy
installation and, in the case of the stock exchange participant,
mobility.
In the case of banking, the wireless
LAN enabled account representatives and tellers to provide better
service to customers and has been used to support a plethora of new
transaction processing services. The auditing and stock trading
organizations were just as, if not more data-intensive environments,
characterized by volumes of accounting, analysis, and statistical
data. The auditing firm was concerned about the quality of business
generated by auditors, as measured, for example by the level of
engagements handled by the company. But all these companies must be
able to predict risks and risk factors and facilitating group
collaboration is critical for reaching that goal. In the financial
area, the wireless LAN saved hundreds of hours because group
collaboration was easier. Individuals within these organizations are
increasingly turning to portable computers to communicate with the
home office or master server for various functions. The auditor tied
to the home office through a portable wireless LAN can serve a
customer much more effectively than by dial-up lines, as can sales
people and consultants working or collaborating in a conference room.
SCOPE
OF STUDY
The cost of owning a wireless LAN consists of infrastructure and
software costs, client device costs, monthly costs, power costs,
downtime costs plus all of the related management and support costs.
Identifying management costs is a complex task. Management costs can
include network infrastructure planning, training, troubleshooting and
repair, and hardware management.
There are various types of criteria
used to determine the cost savings of wireless networking equipment.
We looked at business benefits and economic benefits. The main way in
classifying technology benefits is to analyze how it assists in
measuring and monitoring them, with a perspective to controlling and
maximizing any positive effects of the change. There are criteria for
measuring the benefits on a new system or a system already in place
with an upgrade.
The measuring techniques in this study
varied slightly depending on the benefits sought and the application
that used the wireless LAN. Wireless LAN total cost of ownership must
be derived from across a range of applications. However, there is
always the one constant, that there is a history dating back to a time
before the system was implemented. Meaningful analysis of the effects
of the change is undertaken here.
This study focuses on
radio-frequency-based systems. These wireless RF LANs compliment wired
LANs, providing installation flexibility in difficult cabling
situations, and user mobility. The wireless technologies used to
support data transmission over short distances in buildings and
without physical connections include radio waves and infrared light.
The radio frequency (RF) in-building wireless LAN products are
designed around radio technology and protocols using spread spectrum
modulation techniques (Direct Sequence or Frequency Hopping).
This study looks at the cost of
ownership of in-building RF LAN products that operate within 100 to
3000 feet of an access point.
The study involved in-depth interviews
with wireless LAN customers. Note: This study involved WLANA
customers, as well as customers of several other wireless LAN vendors
who are currently not in the WLANA organization.
The Cost of Ownership study encompassed
a phone-administered interview. Tech Research asked participants about
the costs and benefits of wireless LAN ownership and the difference it
is making in end-user and IT staff work and within the organization.
Each participant was interviewed over
the phone at his or her office. The interviews generally lasted
between 40 and 60 minutes. The length and quality of answers coming
from the interview depended on the participant's experience/contact
with the wireless LAN system and/or contact with people using the
wireless LAN.
Respondents were knowledgeable
individuals regarding the subject matter. The administrator probed for
detailed information and/or clarified questions at times to maximize
respondent understanding and yield complete answers for the study. The
questionnaire contained no questions leading to one conclusion or
another. The questioning allowed end-users to speak in their own words
and reveal their thoughts surrounding the purchase process, ideas of
ROI of the wireless LAN, costs and the benefits associated with
wireless LANs.
After the phone interview answers were
documented and faxed or mailed to the participant for confirmation. We
told participants that by answering the phone interview/faxed/mailed
questions about their experiences with wireless LANs that it will help
in influencing the generation of a report on Cost of Ownership of
Wireless LANs that will address the cost savings and benefits of
wireless LANs. The faxed/mailed questionnaire was usually returned
within 2 to 10 working days.
The faxed/mailed questionnaire was easy
for participants to understand and mark up. In the case of 85% of the
respondents the faxed questionnaire forced them to do research into
their notes or invoices on the subject.
The WLANA organization provided a gift
incentive for participation-in this case it was a Palm Pilot
Organizer. After the interview process was over it was clear the
incentive was not only the gift, but also the ability to see their
costs and economic benefits written out for them, a tool they could
use at a later date for cost justification of more equipment. Both
provided incentives to participate, answer more questions and/or
answer questions more thoroughly.
Because the sample size is small (n=34)
the possibility that inadequate information and the probability of
error is high. However because the feedback during the phone
interviews and from faxed questionnaires were consistent in nature,
they provided an adequate indication as to what general trends were.
Due to data collection techniques at the personal interviews we were
able to get higher quality data than anticipated.
Not every cost savings derived from
using the wireless LAN was quantifiable for participants. They are
real however, and no less important. Many of these are related to
organizational efficiency and network availability.
Standard editing and coding procedures
were utilized. Simple tabulations and cross tabulations were utilized
to analyze the data.
We are grateful to all participants for
their time. We value their participation and thank them for their
cooperation. We hope this study will provide information that is
useful to current and future wireless LAN technology adopters.
COO Survey Respondents
Our research was based on the experience of small, medium, and large
enterprises in the Healthcare, Manufacturing/Warehouse, Retail,
Education, and Financial/Office Automation industries. The results
should be interpreted as reflecting viewpoints indicative of a part of
the larger wireless LAN installed base. Our intention to deliver a
broad cross-section of the representative industries with applications
conducive to wireless LANs was generally successful, although not
equal to the population represented. Survey findings should be
interpreted accordingly. The breakdown of participants by industry
was:
- Education: 23% (8)
- Healthcare: 23% (8)
- Manufacturing/Warehouse: 21% (7)
- Retail: 15% (5)
- Financial/Office Automation: 18% (6)
This study primarily features customers
who have wireless LANs installed at one or more sites and had
completed deployment or were still in the process of upgrading.
ABOUT
WLANA
The Wireless LAN Association (WLANA) is a non-profit industry trade
association formed to increase awareness and encourage the adoption of
wireless LANs products and technologies.
The Association maintains an
educational web site at www.wlana.org with industry white papers,
end-user case studies and links to related topics and member web
sites.
Contact Information
Anthony Armenta
Executive Director
Wireless LAN Association (WLANA)
P.O. Box 9097
San Jose, CA 95157
Phone: 650-352-4709
Fax: 650-649-2305
email: anthony@wlana.org
website: www.wlana.org
