Simply SMS

The Noida based New Holland Tractors (India) (a 100% subsidiary of CNH
Global) like any other company has its sales force regularly traveling across
the country, including to some very remote locations, to touch base with the
dealers. The company relies on something as simple as a high-end PC for an SMS
server with a database engine installed in it and an SMS engine (which is
essentially a Nokia modem with a SIM card connected to the SMS server) at the
back-end, to keep the moving sales force on track with the latest information.
With the SMS system, integrated with its ERP and Commercial Business Units (CBUs)
application, tracking information on dealer position, the entire CBU status,
collections, outstanding, dispatches, stocks, etc., from the remotest locations,
is just an SMS away.

LG Electronics India, on the other hand, has reported a 50% reduction in
service response time and 20% reduction in journey cost-all this through an
SMS based system, which keeps the field service people updated on the new
service calls.

It's cheap, simple, effective and it comes with the inherent advantage of
mobility-the SMS technology has all the makings of a powerful enterprise tool.
The adoption may not be widespread at the moment, but there is a keen interest
among enterprises. Aviva, Lilly, ICI Paints, BALCO, LG, Escorts Agri Machinery,
Allianz Bajaj Life Insurance, ICICI Lombard, Modicare, Amway, Dish TV, Whirlpool
India and a number of banks are few of the early adopters. Many of those who
haven't adopted the SMS technology are at least considering it-an indication
that SMS is right on its way to becoming the new enterprise tool. Vijay Shukla,
Country Head, ValueFirst, a provider of mobility solutions with focus on SMS
messaging, estimates the potential market size at around Rs 50 crore in the next
one year. But, enterprises feel that relevant applications beyond B2C and Sales
Force Automation will need to be discovered before SMS becomes a mainstream
enterprise tool. Till then, it will serve well to fulfill niche requirements.

Indian Market Drivers

The US hasn't really pioneered this technology, though many European
enterprises have successfully started using SMS as a business communication
tool. So, then what makes SMS a really effective enterprise tool in the Indian
market? The fact that it is economical, easy to use, and provides a higher
footprint and higher level of penetration, even to the remote areas where
internet connectivity is a problem, are some of the factors that work in its
favor with respect to adoption among enterprises in India. As Anand Sengupta,
head of I.T, Information Technology Department, Daikin India, points out, "SMS
is flexible, easy to use and cost effective and requires nil capital investment
with mobile communication costs coming down. The fact that the mobile telephony
costs in India are constantly falling and, from what it seems, are likely to
continue to do so, makes the technology even more attractive to the enterprises.

Apart from bringing down the overall communications costs, what makes SMS an
interesting enterprise tool to Vinay Mehta, IT Head of Escorts Limited's Agri
Machinery Group (AMG), is the benefit of mobility and remote access. Escorts AMG
sells agricultural tractors and most of the customers are located in smaller
towns, where communication infrastructure is weak. Through this technology, the
company's sales representatives can access critical information even while on
the move, as long as they are within reach of the mobile service area. At the
same time, the company can broadcast messages regarding promotional schemes,
price revisions, product availability, etc. This brings to light another
argument in favor of the technology—reach. Presently, India's mobile phone
penetration is much higher than internet penetration, thereby promising the
enterprises a wider reach with easier access in the remote areas.

Adoption by verticals

While SMS is undoubtedly emerging as the new enterprise tool, it still hasn't
found relevance for all industry verticals. FMCG, consumer durables, banking
& finance and sales & services driven verticals, with operations spread
widely across geographical locations, are some of the segments where the
adoption of enterprise SMS systems makes for good business sense. As a result,
these are the verticals where one is going to spot most of the early adopters.
Shukla foresees the fastest adoption in the financial vertical owing to the fact
that the investment in IT systems is the highest in this segment, and also the
need to dynamically send and receive information to and from a wide
cross-section of stakeholders.

Applications

Presently, there is a whole plethora of B2C applications based on SMS
technology abounding in the market. Service organizations are using it for
sending reminders for payments and acknowledgement of receipts. Airlines are
experimenting with it for providing information regarding flight delays,
reminders regarding reporting/check-in time, etc. Businesses are also doing
direct business promotions like selling ring tones and advertising, besides
directory services. However, as far as the B2B and Business to Employee (B2E)
applications are concerned, the market is still in its infancy.

How the applications evolve in the B2B and B2E domains and the nature of
these applications, will make or mar the success of SMS as an enterprise tool.
Some of the existing and emerging B2B and B2E applications for enterprises to
look out for are field force automation (sales, stock, enquiry, service call
closing, alerts in case of emergencies and breakdowns), early warning system for
high stocks and overdues, asset tracking, automatic vehicle location, fleet
dispatch, instant messaging, inventory management, itinerary confirmation, query
services, sales MIS and sales order processing.

According to Arindam Bose, head IT, LG Electronics India, between the B2B,
B2E and B2C, B2E will emerge as the main application. However, experts feel that
for another few years a majority of the applications based on SMS will continue
to be in the B2C space, followed by B2E and then B2B. In terms of
functionalities, the growth envisaged will be mostly in the areas of
dissemination of information and query processing. But, Shukla is optimistic of
a multitude of applications emerging to drive all the three segments
exponentially.

Hurdles

While the SMS based system packs in all the benefits of simplicity and low
cost, there are a few inhibitors that the enterprises will need to consider
before jumping into it full force. These include limited memory, cumbersome when
typing lengthy messages, difficulty in storing pre-formatted templates,
remembering key words and query formats and small screen size, in case of most
mobile phones.

Another aspect that will need to be considered is one of security.
Provisioning security of the SMS system will involve developing business logics
that do not allow anyone to pull out and push in the information without the
authentication from the server. Furthermore, by allowing information to be
accessed through an intermediate database (also secured) rather than directly
from the main database or the business applications, the security threat can be
brought down substantially. Some enterprises are also looking at systems which
require validation from the user.

There is no doubt that the technology will have to evolve to take care of
these issues to ensure faster adoption among enterprises. Meanwhile, the balance
seems to be tilted well in favor of adopting SMS as a viable enterprise tool.

Team DQ