Thrive In The Utilities Market

ICM (International Computer Marketing Corp.) is not a newcomer to the channel. The mobile computing and wireless solutions VAR has been in business for 20 years. For the past two years, it has experienced 15% annual sales revenue growth selling wireless solutions. Several factors are contributing to the 50-employee VAR's success. Many of these factors are seen in ICM's focus on the utilities market, where it earns 25% of its annual sales revenue. In particular, by forming strategic partnerships, ICM is able to offer utility companies total field service solutions, including rugged mobile computers, rugged mounts, software applications, peripherals, installation, training, and service contracts.

The Utilities Market Is Ripe For Mobile/Wireless Solutions
An October 2004 study conducted by analyst firm IDC revealed that 33% of utility companies (which includes regulated and deregulated water, gas, electric, oil, and telecommunications companies) were just beginning to roll out mobile or wireless field service solutions. The report also noted that within the next 12 months, utility companies would implement more mobile and wireless solutions than any other vertical market. According to analyst group Venture Development Corporation (VDC), the utilities market will invest approximately $700 million in mobile hardware, software, and professional services in 2005. "We estimate the overall enterprise mobility adoption within this market to grow between 10% and 12% annually through 2009," says David Krebs, an analyst at VDC.

"We've seen a major shift in the way utility companies view mobile computing solutions," says Tom Briones, general manager at ICM. "In the past, we saw a lot of pilot tests and some very basic uses of mobile computers. Nowadays, utility companies are extending their office applications to the field and equipping field techs with personal information management applications, remote field service applications, and inventory and distribution management systems." It's becoming apparent to these companies that enabling field workers to capture data at the point of work, access information in real time, and complete business transactions can save a bundle of money. One of the primary challenges of the utilities market, which has grown via mergers and acquisitions, is putting field workers on unified mobile platforms. And, that's where VARs can help out by providing consulting, installation, and postimplementation services.

ICM has seen firsthand that vehicles have become the offices for many of its utility customers whose field technicians spend the majority of their work days reading meters or checking wells or power lines. It makes good business sense for these customers to capture data electronically on the job rather than transcribing handwritten notes after they return from the field. Or more risky, passing their notes to someone else to interpret and transcribe.

The availability of broadband wireless is another factor contributing to the acceleration in mobile computing and wireless adoption among utility companies. Previously, some utility companies used proprietary wireless radios to exchange small text-based messages. More often, field workers used mobile computers to capture data and then upload it via a docking station at the end of a their shifts. Nowadays, high-speed data networks such as Verizon Wireless' EV-DO (evolution data only) and Cingular's EDGE (enhanced data rates for global evolution) enable VARs to resell applications capable of exchanging PDF, audio, and even video files in real time.

Don't Sell Only Mobile Hardware
ICM's forte has always been on the hardware side of mobile/wireless installations, including acquiring the rugged notebooks/handhelds and mounts, prepping the equipment, coordinating the tracking and installation of the hardware, and training customers on how to use the hardware. "Our core business runs on a tight margin with little room for error," says Briones. However, ICM knows utility customers are ultimately looking for total wireless field service solutions, and there are higher margins to be made if ICM can be a part of providing customers with additional components of a mobile/wireless installation such as software and wireless connectivity services. To that end, ICM has sought out wireless broadband and mobile software providers — primarily via word of mouth — and in the past couple of years it has developed partnerships with four ISVs (independent software vendors). Finding ISVs that sell mobile software applications isn't tricky, but knowing which ones will make strong partners is another story altogether.

Let Utility Customers Try Your Wireless Solution … And Be Patient
Depending on the size of a utility customer, the decision maker could be a director or a VP. In many cases, the decision makers are knowledgeable about technology, so the VAR keeps the PowerPoint presentations brief and focuses on hands-on selling. For example, ICM might present a utility customer with a rugged Panasonic CF-29 Toughbook configured with a remote field service application and a Verizon Wireless EV-DO connection. Prior to the meeting, ICM educates the customer about device ergonomics, safety, product failure rates, and the total cost of ownership of using a rugged wireless solution. This helps the customer avoid the tendency to look at only the initial cost of a solution when making its buying decision.

ICM also demonstrates how rugged wireless solutions can bring efficiencies to dispatch operations. For example, many utility companies use dispatchers and radios to contact field workers with job assignments. Once a field worker completes an assignment, he radios the dispatcher for the next assignment. This form of communication leads to bottlenecks in dispatch centers, in addition to crowded radio networks. With a high-speed data network and mobile application, on the other hand, assignments can be sent via mobile devices and completed without requiring field workers and dispatchers to directly contact one another. Using a wireless broadband-enabled mobile solution enables utility companies to support more than 10 times as many field workers with the same number of dispatchers.

After the initial demonstration, ICM invites the IT director to give the solution to field technicians and let them try it out. This phase can last up to 60 days. The remaining part of the sales cycle can last anywhere from one month to two years. "The timeframe to close the deal depends on whether the customer has created a requirements document, which details its business needs and budget," says Briones.

What Utility Companies Need Next: Asset Management
Even though there are thousands of utility companies that still haven't made the move to wireless mobile computing solutions, ICM is already anticipating the next trend within the utilities market, which it believes will be asset management. "Utility companies spend a lot of money managing hardware in the field and vehicles," says Briones. "If they can more accurately predict when a vehicle will need to be pulled off the road for service, they can significantly reduce their operating expenses."

Once a utility has mobile devices and broadband service in place, the next step is to attach sensors to various parts of a vehicle (e.g. brakes and engine) and monitor metrics such as brake wear, engine temperature, and electrical systems. That way companies can respond to problems before they result in vehicles breaking down. ICM is currently working with one of its partners to develop an asset management solution that includes vehicle sensors. Sometime in 2006, it expects to release a beta vehicle monitoring solution. ICM already has several utility customers interested in trying the solution, and the VAR expects this additional value-add to help continue its trend of 15% sales revenue growth.