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Wireless LANs

Business Case for Wireless LANs

With standards, higher data rates and continually  decreasing cost of wireless LAN hardware, it has become much easier to justify wireless LAN. Business case for wireless LANs depends on the specific application for which wireless LAN is being employed. You may be able to justify installation for one or more than one benefits out of the following list:

Mobile Professionals in public hot spots
Where mobility of users is an absolute requirement, wireless LAN is an absolute requirement as well. This is true of professionals who need to connect their personal devices to corporate e-mail systems or enterprise CRM systems. Wireless LANs in public hot spots in airports, shopping malls, coffee houses and others is justified on the basis of highly-mobile professionals trying to utilize their dead time and keeping themselves connected wherever they are. now that the cost of installing such a functionality has come down a great deal (with wireless access points in $300 range and wireless adapters in $75 dollar range, business case is fairly straight forward. 

Shop floor, Retail and Warehouse Applications
For labour-intensive applications in retail (price marking and inventory tracking), shop floor (parts identification, movement and tracking) and warehouse management, Symbol and Intermec have been able to show a good ROI (12-18 months) for wireless LANs even with somewhat more expensive hardware of late 1990s. Now the business case is much better (6 to 12 months).

Difficulty of Cabling
In some factory or office environments, it is very difficult and therefore expensive to pull fixed wireline cables through conduits and walls. Labor cost of pulling this cable may be prohibitive - up to $150 to $250 per drop. Even after allowing for higher cost of the wireless adapter, there is a net saving with wireless LANs wherever you have to lay new cable. Of course, you have to include the cost of the backbone network.

Temporary Locations - Project Sites
In temporary locations like construction sites, fixed line wiring is not feasible - General Motor's wireless LAN project is a strong endorsement.

Meeting & Class Rooms
In executive conference rooms, meeting rooms and university class rooms where users vary from time to time, it is very difficult and aesthetically unattractive to pre-wire notebooks. It is the productivity gain. Even a 5 minute productivity gain per day at $50 per hour bundled cost for a mobile professional, gives you significant savings ($75 per month, $900 per year) to justify a wireless LAN connection.

Handheld Devices with 802.11b or Bluetooth
Users of small handheld devices (PDAs, communicators  and smartphones) as well as traditional notebooks are highly mobile. Dynamic wireless LAN connection is the only feasible solution.

Wireless LAN for SOHO ( Small Home and Office) 
More and more homes have multiple computers in the house that need access to the Internet through a single cable or DSL connection. An inexpensive wireless LAN (as low as $400 for 3 users) can provide this capability in a couple of hours. 

A 15 minute productivity improvement per worker (30 minute is more reasonable figure) for a small business with 20 users (bundled wage cost of $50 per hour) will generate a saving of $250 per day or 60,000 per year. With a wireless LAN cost of $40,000 (function of area and the fact whether you already own handheld devices or notebooks), you will see a payback in less than a year.

Benefits and Cost - Dollars & Cents

Benefits in terms of productivity improvement for mobile professionals have been estimated at a minimum of 15 minutes to half an hour per day. An average incremental cost of $200 per user for giving him/her wireless LAN capability can be justified by as low as 5 minute productivity improvement per day over a period of two to three months. 

Payback Period - Can be as low as 3 months. It is generally in 12 to 18 months range. 

Case Studies for Business Case :

  • University Setting -  In one recent case, law school at Hofstra University in Hempstad, NY, USA quoted savings with wireless LAN this way. In 1997, the law school spent $50,000 for 120 Ethernet ports; in 2001, it installed 30 access points and associated wiring for $12,000 only. 30 access points seemed to give the students the same coverage as did the original installation. Something to think about!
  • General Motors Case Study (2001)



Related Resources:
> Developing Business Cases for Wireless and Mobile Applications 

> Wireless Wide Area Networks
Bluetooth Topics
> HomeRF Site
> Broadband Topics - Connecting Fixed Wire LANs through Wireless Links


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