Business Report

Apps that Deliver a Competitive Edge

How companies are developing mobile applications that cut costs and improve employee efficiency

A few years ago, senior managers at the South San Francisco-based biotech pioneer Genentech were growing more and more frustrated that pharmaceutical salespeople were taking so long to record the results of the sales visits they make to physicians. With so many of them neglecting to enter their transactions into a laptop or desktop computer at the end of the day, 56 percent of the roughly 40,000 monthly sales calls in the United States were being logged more than a week after the fact.

A store of its own: Biotech pioneer Genentech is one of a growing number of corporations that have bypassed Apple’s iTunes . Its own apps store distributes business applications to more than 8,000 employees with iPhones.

Chris O’Connor, an information technology manager at Genentech, suggested that mobile phones might offer a better way, allowing the sales reps to enter transactions at the point of interaction or during the downtime between visits. But his first attempt to develop mobile software was a failure. “I took the application developed by Salesforce.com for the Web and jammed it onto the small screen size of the iPhone,” says O’Connor, who is the company’s associate director for mobile and cloud solutions. “It wasn’t intuitive and required too many steps.” O’Connor went back to the drawing board, hired an expert on user interface design, and built a mobile version of the application from the ground up. He named it On the Road.

This time he was a lot more successful. Since it was introduced in January 2010, On the Road has doubled the share of calls being logged the same day, from about 20 percent to 40 percent. And if reps on a sales call get questions from the physicians, they can submit those questions directly to the right department within Genentech, in real time. That feature, which O’Connor calls “unique in the pharmaceutical industry,” has led to faster orders from doctors.

On the Road is only one of 16 apps that Genentech has developed internally; others include an employee directory called Peeps and a regulatory-compliance app called iComply. Distributed through the company’s own app store, they are available to more than 8,000 mobile workers on company-issued iPhones.

More and more companies are developing their own apps to gain a competitive edge, increase revenue, or cut costs. The consulting firm Frost & Sullivan estimates that companies will spend $1.76 billion this year contracting out the development of apps for internal use—and it expects that figure to rise to $6.85 billion by 2015. The explosion is due to the smart-phone revolution, which has made it possible to use mobile technology for much more than just e-mail. Apple, Google, BlackBerry, and other providers of phone software have released developer kits that make it inexpensive and quick for a company to create its own apps.

For example, Apple’s iOS Developer Enterprise Program allows companies to create iPhone and iPad apps and distribute them without going through iTunes, so they stay in-house. Recent mobile software releases from Apple, Google, and Nokia have also addressed some of the key concerns of corporate IT managers, such as security, privacy, and support for corporate e-mail setups.

At Genentech, now that the apps have proved viable and the development platforms are maturing, usability is becoming a key area of focus, says O’Connor. “We started treating employees as consumers, involving them extensively in the design and creating a tight feedback loop,” he says. One redesigned app, for procurement, has reduced the number of steps in the work flow by 36 percent and shaved 80 seconds off the time required to complete a transaction, cutting it roughly in half.

Because mobile devices are always with you and know where you are, applications designed specifically for these devices can do much more than just replace desktop apps. To see how businesses can use such technologies to increase revenue, look at OpenTable, a San Francisco-based company that provides free, online restaurant reservations for diners at 15,000 restaurants worldwide. In the 18 months since the launch of its mobile site, the company has seated more than five million diners through mobile reservations, generating $250 million in revenues for its restaurant customers.

Building mobile applications for enterprises is not the gargantuan project it was a decade ago, when “mobile middleware” companies burned through hundreds of millions of VC dollars. Boston-based Apperian, for example, has raised just $1.5 million to create and launch a simple set of development tools. Founder Chuck Goldman says many enterprise apps can be developed in less than a week. One client, Progressive Insurance, created mobile apps for accident and claims reporting in roughly that time.

The streamlined app development process is a boon for Genentech, which has been forced to cut costs since being acquired by Swiss pharma giant Roche amid the global business slowdown of early 2009. In the early going, a team of six people spent about one-third of their work time over five months developing the On the Road app, for a total cost of more than $100,000. But as the company has developed more of its own apps, the process has gotten faster and cheaper. An application it built for booking conference rooms, integrated with Google Calendar, took just two weeks and $13,000.

Mark Lowenstein is managing director of Mobile Ecosystem, a Boston-based consulting and advisory services firm.

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