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June 2008 |
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Wireles Economics 101
Many early adopters of wireless at processing plants have already realized that industrial wireless applications add value and long term benefits, both economic and technological, to an industrial facility.
As pioneers of wireless adoption, these managers have learned through the wireless implementation process how to determine a strategic wireless roadmap, to develop a framework for justification of the expense of implementing a wireless network, and how an open infrastructure approach changes how one should think about the Return on Investment (ROI) and how this return continues for many years into the future if done properly and not in an ad hoc fashion.
Developing the Business Case for an Open, Integrated
Wireless Infrastructure
The cost-savings and operational improvements of going wireless at industrial plants have been proven by the hundreds of wireless applications that are already operational. These implementations were often led by visionary operational managers who chose to adopt wireless before it was widely accepted. Often these wireless champions found it difficult to sell their wireless ideas to upper management or other departments and managers within the plant. Proposing the move to wireless and clearly mapping out the short and long term benefits both financially and operational requires a strategic approach.
- Determine the goals and operational improvements for implementing wireless at your facility gathering a cross-functional team together to compare priorities is essential.
- Gather the supporting data what would it cost to implement a wired solution to accomplish the same objectives? In some cases, there won't be a wired alternative.
- Choose which wireless approach will work best for your plant: Proprietary, Point-Solution or Open.
- Choose a trusted partner to help you map out a site plan and wireless strategy, gather business case data and vendor selection.
- Research economic benchmarks for industrial wireless implementations at similar environments to help you build a realistic cross-functional model.
- Select your wireless product, systems and vendors.
A good start is to understand your options. First, whenever possible, start by developing a business model and project plan using wired technologies. This is usually required to answer an inevitable question when justifying wireless investments. If you can produce an project estimate based on wired technologies, established metrics can help you determine an approximate cost for implementing the same project with wireless technologies. Here is your first benchmark a project done with wireless technology will usually cost about 60% LESS than the wired option.
One of the economic metrics for any project is usually its return on investment - ROI. There are three ways to improve your ROI:
- Lower your investment costs without compromising the value you expect to receive in return;
- Increase the value you receive, without increasing your investment costs; or
- Simultaneously increase the value returned AND lower your costs.
We have seen how wireless can accomplish the first objective over wired alternatives. Once you look at wireless technologies, selecting an open, integrated wireless infrastructure allows you to achieve the second objective by allowing you to support many best of breed applications for the same investment as proprietary or point solution approaches. By combining this with a comprehensive wireless network management ensures that you will be able to achieve the unusual situation where you can both increase the value returned and lower your investment costs and be able to sustain this level of return for many years to come.
Our "Wireles Economics 101" white paper provides you with some best practices, core economic benchmarks and performance metrics that you can use when developing your strategy and plans for deploying wireless at your plant. We include a case study that provides a real-world example of one plant's experience with wireless and the return they saw on their investment. We encourage you to take a look, download it and begin building a business case for wireless at your plant.
» Read more about Building a Business Case for Wireless at your Plant – Download the free white paper "Wireless Economics 101"
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Open Industrial Wireless Solutions: Realizing the Full Potential of Wireless
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