New Study Points to Substantial Financial Returns from Broad-Based Wireless LAN Deployments

November 12, 2003

By Stacy Williams, News@Cisco

Wireless LANs (WLANs) have been around long enough that the "gee whiz, they're cool" reaction has started to dim. Now, organizations are going beyond the "wow factor" and realizing that WLANs are resulting in substantial productivity increases and financial returns.

One of the main reasons for increasing efficiencies is that WLANs are an effective medium for mobile workers, whether they are on the manufacturing floor, in a hospital emergency room, in the classroom, or waiting in an airport lounge. Think of the convenience of a doctor doing the paperwork for a patient in the examining room instead of going back to an office for a wired connection. While this may seem like a small thing, this convenience-in dozens of instances a day-creates substantial efficiencies for the entire organization.

A custom study released this November, "2003 Wireless LAN Benefits Study," conducted for Cisco Systems by independent research firm NOP World Technology confirms that WLANs substantially increase productivity, especially for organizations that deploy them across a wide spectrum of functional roles and departments.

The study queried end-users and IT network administrators from more than 400 medium and large organizations in the United States using wireless LANs. Most notably, end-users in the study reported that using WLANs increased their productivity by as much as 27 percent, largely because they have the ability to stay connected to the network on average 3.75 hours more hours per day.

Productivity is also on the rise because users to do their work when and where it is convenient-at work, from home or while traveling. The 2003 study points to increasing business implementation of wireless networks in employees' homes, as well as significant hot spot usage while on the move in areas such as airport lounges, coffee shops and hotels. On average, end user respondents report that this increased flexibility to work when and where it's convenient results in almost 90 minutes in time savings per workday.

Study results also show that organizations realize greater financial returns as wireless LAN technology is rolled out to more users and departments within organizations. Almost 25 percent of employees within mid-size and large organizations access the wireless LAN today, up from 16 percent in 2001. This increase in deployment, plus the reported additional time savings, resulted in the rise in annual dollar value of time saved per employee to almost $14K today, up from just over $7K in 2001. With IT respondents in this study predicting that 50 percent of their employees will have access to the wireless LAN in the next two years, their organizations can expect to realize even greater financial returns in the very near future. For large organizations, this savings could amount to millions of dollars per year in savings.

Increased connection time and flexibility to work when it's convenient are two components comprising the rise in productivity and cost savings due to WLANs. Another factor is increased accuracy. More than 50% percent of end users say that WLAN technology minimizes potential errors. As many as 70% percent of healthcare staff believe that their accuracy is significantly better, a crucial benefit of being able to access and record patient information at the point of care. In the manufacturing sector, 60% of end users cite increased accuracy due to the ability to track inventory and work-in-progress in real-time via automated data capture.

As in previous studies, the results of the NOP World Technology study indicate that wireless LAN adoption is tied to the use of portable devices. According to the study, more than 80 percent of organizations with wireless LANs are using notebook or laptop computers as the primary network access platform. And, as these devices increasingly come with an embedded wireless LAN capability, it will be easier for organizations to deploy this technology. Results from the study indicate that 50 percent of PDA users access the wireless LAN using embedded 802.11 technology, and one in five IT respondents say that all of the notebooks they purchased in the past year came with an embedded wireless LAN capability.

"While technology was once viewed as 'a must' in order to maintain competitive advantage, there is now a real sense that investment must be justified-and that benefits must be more clear-cut than they have been in the past," says Richard Jameson, CEO of NOP World Technology. "This study provides concrete evidence of cost savings and myriad other benefits associated with the deployment of wireless LAN solutions."

Quick setup, untethered employees, networking flexibility and relatively low cost of implementation were the first obvious benefits of wireless LANs. As the technology matures and an increasing number of organizations widen wireless solution deployment across more departments and functional areas, the financial returns of wireless LANs are becoming increasingly clear.

Stacy Williams is a freelance journalist based in Dutch John, UT.