Psion takes business on internet to new frontiers

Next month, one of the more venerable names in British technology will start field tests of its latest device, the product of a complete overhaul of the company and another test case for a new way of doing business spawned by the internet.

The newest handheld computer from Psion is based on individual modules which resellers and buyers can configure and even add to, in order to meet their own specific needs. Rather than relying on the traditional one-size fits all model or its expensive alternative, making bespoke products for each customer Psion is actively encouraging its customers to adapt its products. It is also encouraging its customers to then share their experiences as well as get involved in research, development and after-sales care, by using the internet to completely open up its business.

"We opened up an online community and customers and partners [resellers] are starting to talk to each other," according to John Conoley, Psion's chief executive. "At first, frankly, it was frightening. We are in there too and we are learning, we make mistakes and get flamed occasionally ... but at other times you see a customer with a problem and one of our resellers often from a completely different market will chip in and deal with their issue."

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The idea of using the internet in order to interact openly with all users of a particular product or service is becoming increasingly popular in business, with executives talking about "mutualising" their businesses. For many companies it makes financial, rather than purely philosophical, sense.

Mobile phone company GiffGaff funded by O2 gives money to users who help others with their technical problems, meaning it saves on customer support costs.

Google is trying a similar route with its Nexus One mobile phone device. The search engine group has essentially created the sort of online messageboards and discussion threads which, in the past, would have migrated to specialist web publications or blogs. It has co-opted and centralised a support community that would have sprung up in disparate places across the web, again reducing its own customer service overheads.

The idea of mutualisation has even been embraced by political parties with both Labour and the Conservatives talking about devolving more power to grass roots level and getting the electorate more closely involved in decision making. Whether this will translate into anything concrete once they are in power, of course, remains to be seen.

For Psion, mutualisation mixed with its decision to produce modular products, could be the key to it recapturing some of its former glory, when the name Psion was a byword for British innovation.

Its handheld Organiser computers were snapped up by gadget fans in the 1980s and 1990s, but it quickly found itself overtaken by American rivals and has spent the last decade focused on creating rugged handheld computers for use in airports and ports for everything from inventory tracking to stock taking.

But when Conoley took over two years ago the company was, he freely admits, a "basket case" stuck between competing for big business customers with main rivals Motorola and Intermec, and trying to offer bespoke solutions to hundreds of small companies. Losses spiralled, while its website was getting a paltry 600 hits a month.

He axed a third of the workforce and centralised a lot of the company's systems individual country managers had so much autonomy they were working on their own branding. One of the products he discovered in Psion's portfolio was actually already modular, allowing third- party developers to create add-ons. Using it as a template the first of the company's new "modular" products will be tested next month before a "soft launch" in June.

"Our own research and development teams used to come up with one or two products a year, but we realised that if we went to a modular platform we could have many, many more," he said. Psion has actually reduced the number of different parts it produces from 600 to 400, yet it is able to generate 14,000 product variations out of kit. Its time to market, meanwhile, has dropped from between 15 and 24 months to as little as six months.