Physical Changes Needed for Implementing Telecommuting - Case Study Example

? CONSULTANT’S REPORT TELECOMMUTING AT IBM INDIANA (The Case Study) Submitted Submitted By: Submitted On: CONTEXT OF THE CASE: The makers of the ever famous MAINFRAME computer IBM are renowned for their achievements in the computer world. The pioneers in computing, IBM can be termed is known as “Big Blue” after the color of its logo. After years of successful endeavors in the computer industry since its inception IBM enjoyed 70 percent hold in the computer market during 1970s. Worth being followed and exemplary performance of IBM at that time increased its reputation in the market. The name was recognized for trustable products with half of its business volume spread out worldwide. Unfortunately IBM started to face a plunging decrease in its profit margins around mid 1980s. Some of the concluded reasons by analysts are, Bureaucratic and slow-moving setup. Reluctance in revamping of old business strategies. Wrong assessment of business risks etc. According to study conducted by Drucker (1993), The fourth of the deadly business sins is slaughtering tomorrow's opportunity on the altar of yesterday. It is what derailed IBM. IBM's downfall was paradoxically caused by unique success: IBM's catching up, almost overnight, when Apple brought out the first PC in the mid-1970s. This feat actually contradicts everything everybody now says about the company's "stodginess" and its bureaucracy." But then when IBM had gained leadership in the new PC market, it subordinated this new and growing business to the old cash cow, the mainframe computer. This stage came after a career IBMer John Akers took over the charge of the company in the year 1985. In his tenure several downsizing attempts from the administration of the company came as a result. The statistics related to downsizing can be observed in Table 1. Table 1: The IBM Timeline from 1970 to 1994. YEARS PROGRESS AT IBM. 1970s IBM owns about 70% of the computer market share. 1980s IBM continues to grow but at a slower rate. 1985 Profit margins begin to slip. 1985 – 1993 Downsizing resulted in employee number moving from 405,000 to 300,000. 1987 – 1992 Stocks dropped from $176 to $ 49. 1991-1992 Unprecedented losses. 1994 Employee number decreases to 225,000. After stock turndown during 1987 – 1992 and unprecedented losses in 1992 (as seen in Table 1), Akers resigned in 1993. Louis V. Gerstner an outsider took over the control of the company after him as per the IBM board’s decision. Despite various attempt at downsizing the company was still going in loss. It had become essential that further downsizing of employees be done in order to secure the income of the company. The Gerstner early years witnessed a mild rise in the income but the trend was not consistent. The same is evident in Figure 1. KEY POINTS AND ISSUES: An account of the issues and problems facing by the company can be evaluated by reviewing its establishment in the State of Indiana. During the year 1992 Indiana reduced the number of its employees about 30%. The declining states of the company’s economy made Michael W. Wiley (General Manager Operations for the state of Indiana) foresee another cut in the number of employees at the organization. This however was not affordable, as the threshold of downsizing was already achieved and loosing competent workforce would cause bigger losses to the company. In 1993 John Frank, then operations manager for IBM’s Indiana offices came up with the idea of substituting the reduction of personnel with the downsizing of real estate holding of the company at the state of Indiana. He proposed the idea of furnishing employees with the technology so that they can work from home. The idea was termed as TELECOMMUTING. TELECOMMUTING The idea of Telecommuting was new to the firm. While every other country office of the IBM was reducing staff Indiana was trying their hands at a new technique. The executive Vice president for Indiana Operations was the first one to empty his office from the Bank One Tower in Indianapolis. General Manager Operations Frank decided that the employees who spent more than 50 % of their working day out with their clients did not need dedicated office spaces for themselves. Their needs would suffice by the availability of a general space that housed all the employees’ needs into it. So for the little span of time that they would be in office they could make use of the collective resources entitled to them. PHYSICAL CHANGES NEEDED FOR IMPLEMENTING TELECOMMUTING For their homes each employee was given their own computer system, a set of two phone lines that was embedded into their homes, software installed into the computer system, a cellular phone and a pager and whatever furniture could be transferred from their office in to their home-offices. The overall result of the telecommuting drive was overwhelming. By the end of the year 1994 more than 20,000 workers at the IBM were telecommuting. Nationwide implementation of the telecommuting model took place by the IBM. Being termed as the ‘Father of Telecommuting’ Frank’s incentive resulted in the company saving $45 million in the first two years only by cutting the real estate in half. This mode of work was so convenient that even after IBM had attained financial stability most of its workers decided to stay with this convenient mode of work. INCENTIVES OF TELECOMMUTING FOR EMPLOYEES The commuting time of the employees was expected to get eliminated completely. The following of the office dress code also got eliminated. Employees could spend more time at home and still work. Men who would barely see their kids for an hour or two in an entire day when working at their offices would be able to eat breakfast with their kids now. The freedom of being able to dial into the company’s network while sitting at home and that too at anytime was the foundation of telecommuting. Modern technically equipped computers enabled employees to connect to their office network from anywhere just the way they would do so from within the office itself. Checking e-mail, sharing and retrieving files, sending jobs to printers located inside the office were just a few of the numerous facilities that remote access to the offices’ network enabled the workers with. For people whose jobs permit them to at least occasionally work from home, it may come as no surprise that a new study of more than 24,000 IBM employees in 75 different countries finds that workers who telecommute are generally able to strike a better balance between work and family life compared with those who must always schlep to the office. Yet this new research, published in the June issue of the Journal of Family Psychology, also reveals something that may surprise both employees and employers: workers who have a flexible schedule and are given the option to telecommute can put in significantly more hours per week before confronting conflicts between work and family life. (O’Callaghan, 2010) The connectivity with which a worker is connected to the office’s network is of key importance for a telecommuter. If the connectivity is fast and reliable then only is it possible for a worker to telecommute timely and accurately in line with the requirements of the situation. Fast and reliable connections means such as the ‘ISDN’ and then later on the ‘ADSL’ lines were used to provide fast and reliable connectivity to the offices’ network. DISADVANTAGES OF TELECOMMUTING FOR EMPLOYEES Various apprehensions exist about workers who telecommute. Several people think that workers are not working at all if they are telecommuting. Since a worker is not easily accessible as he would be if he would be present in the office, colleagues and managers often got irritated and considered as one of the disadvantages of telecommuting. Lack of timely communications served not only as an irritant for the management but also worked as a drawback for the telecommuter himself. Various issues might be resolved merely by peer level discussions or merely by taking a timely tip from your experienced manager in the old office structure. This provision would be absent when telecommuting. Office’s automated call answering system seldom found any manager ‘in office’ to be able to answer a timely query and resolve an issue. Absence of socialization was also termed as a major drawback of telecommuting. Indulging into gossips with colleagues at lunch time gatherings often revitalized workers. Moreover, working from home made employees work more hours on an average than they would work while being at office. ROLE OF WILEY’S LEADERSHIP The General Manager of operations in the state of Indiana in the year 1992 was Michael W Wiley. He came when IBM was in the middle of extensive downsizing. Being an old IBMer the last thing on the manager’s list was cutting down any more of his employees. The company was still going in losses even though extensive downsizing had been done. He fully backed the proposition of cutting down real estate and save the head count of employees as a result. He worked extensively in getting the proposition of telecommuting into its practical stage. Being the first one to leave his office he led the way to the onset of successful implementation of telecommuting. This implementation proved to be very fruitful and ended up getting implemented at all the IBM offices nationwide. After the successful implementation Wiley continued to motivate his managers and employees by troubleshooting any problems they had with the execution of the telecommuting procedures. TELECOMMUTING VERSUS MOBLITY Present statistics analyzed by a New York research firm named Find/SVP state that more than 11 million people telecommute in today’s world. The concepts of mobility have revamped the telecommuting concerns a lot. With the commonality of laptops, netbooks, palmtops, PDA’s and other hand held devices the traditional contemporary methods of telecommuting that restricted an employee to a pc and a fixed wire internet connection have become obsolete now. Though these methods may still be used if need arises the wireless internet connectivity enabled devices such as those mentioned at the initiation of this paragraph enable connectivity to the central network at office from just about anywhere and that too without the restriction of having a computer at hand. Employees can log on to the internet via wireless connections in their hand held devices and can see their mailbox at frequent regular intervals even if they are away from home. The dominance of mobile phones and their widespread use have enabled the employee and his customer from being in contact whenever the customer requires. This has eradicated the necessity of the employee to be in his office whenever the client calls him. This in turn has strengthened the relationship of trust and confidence between the employee and his customer. CONCERNS AND RECOMMENDATIONS The modern day technological advancements are evolving at a very rapid rate. Both hardware and software changes are occurring at unprecedented rates. These changes require regular up gradation of telecommuting resources. These up gradations require a constant expenditure on the end of the company. Customer requirements also may vary from time to time. These factors may hinder the profits with unexpected results Recommendations: The recommendations for the current telecommuting services being executed at IBM Indiana are that long term risk assessment and feasibility analysis should be conducted at regular intervals throughout each financial year. The risk assessment should preferably be conducted by a third party. The recommendations of the risk assessment exercise should be strictly followed. This should be accompanied by taking care of the risks that the report mentions are associated with the telecommuting process at a said period of time. Regular Feasibility analysis study should be conducted about the telecommuting process. The Economic feasibility, Operational Feasibility, Technical Feasibility and The Schedule Feasibility of Telecommuting at IBM should be conducted. The outcome of these feasibility analysis techniques determines whether the current operational methods of the process under consideration are proving to be fruitful or not. It is essential that each and every process be feasible in order to enable profit generation and minimize losses. Regular expenses should be taken into account. These include hardware, software, premises maintenance expenses along with some other hidden costs that incur. Importance of office environment cannot be ignored. The organized and disciplined office environment turns on most of the workers enabling them to perform their tasks with concentration and efficiency. Not very much preferable for small businesses. The task structure of the telecommuting process and its implementation details are designed for systems that are extensive in magnitude. Implementation of telecommuting in small businesses does not prove to be very feasible. It is required that Regular training programs and counseling be conducted for telecommuters. These are necessary after every induction into the company and also after every software/hardware revision. REFERENCES: New World Encyclopedia. Chart showing IBM’s revenue and net income history. Retrieved from http://www.newworldencyclopedia.org/entry/IBM Drucker, Peter F., (2005). The Five Deadly Business Sins. The Wall Street Journal Online. Retrieved from http://www.bmacewen.com/blog/pdf/WSJ.2005.11.29.DruckerFiveDeadlySins.pdf. O’Callaghan, T., (2010). Telecommuting, flex-time decrease work-life conflict. TIME Healthland: A healthy balance of mind, body and spirit. Retrieved from http://healthland.time.com/2010/06/03/telecommuting-flex-time-decrease-work-life-conflict/ Read More

 

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