Telecommuting: A Case of IBM

1 Telecommuting: A Case of IBM Introduction The information technology sector is a dynamic area which continues to experience improvements and advances that aim at optimising flexibility and effectiveness. Telecommuting and telework is one example of a phenomenon that is supported by the capabilities of the present day technology in information. Many companies are targeting to implement telecommuting mainly because it enhances customer satisfaction, improves on employee productivity and most importantly, it cuts down considerably the cost of running business thus maximising on the profits.

More inventions are being witnessed in this field and this means there are more capabilities and more benefits that telecommunicating will be offering to companies that embrace this IT. However, telecommuting also requires proper management just like any other functions in the organisation if the trickle down effects of its benefits is to be felt across the entire organisation.

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Research results carried out by Telework Research Network indicate how the US economy would be affected annually by telecommuting. The table below shows the results.

Productivity

Real estate

Man hour per

Total estimated

Greenhouse gas

Gains by

expenses saved

person saved

savings to

emissions cut

from commuting

American

American companies $200 billion

businesses $190 billion

100

$700 billion

50 million tonnes

Source: Chafkin (2010)

Why IBM should maintain its use of Telecommuting Telecommuting has the advantage of increasing a firm’s productivity by cutting down considerably the cost of running business (Kurland & Bailey, 1999, p.1). Prior to implementation of telecommuting in IBM, the previous management had attempted to downsize the company’s global workforce as a remedy for improving its weak financial performance then. Although the corporation realised its plan of cutting down the size of its staff by 30% in 1992, the profit margins kept on shrinking. Reducing workers at that time was not the best solution for the company since more workers were in fact needed to service their huge number of clients.

The adoption of telecommuting technology enables companies to improve their profit margins. With the overhead costs maintained at very low figures, much of the company’s revenues that would have otherwise been spent on paying such bills as office rents, electricity,

3 water and other fixture bills is instead maintained as part of the net profits by the firm (Kurland &Bailey, 1999, p.1). A lot of office space was being occupied at IBM before implementing telecommuting so as to be able to accommodate all the staff at the firm. This translated to high real estate costs. Once it was possible for workers to telecommute from their homes and other locations apart from the office, the company managed to save up to $3.2 million in the year 1993. This was against the backdrop of the company’s worst financial year as posted in 1992.

The company is set to rip more from workers’ increased productivity due to fewer interruptions present in an office environment. There is reduced daily commuting to and from work since workers are working from home. If a worker wakes up at 6 in the morning, there are no traffic challenges as he travels to work wasting a lot of time. Instead, he or she just pulls a chair at his work station right within the comfort of his house. The office environment often has other activities like hosting corporate visitors or having internal meetings of other staff members which could affect a worker’s concentration through interference. In a home environment, such interference is definitely unavailable thus according a worker full concentration (Green et al., 2009).

Additionally, telecommuting increases productivity by reducing cases of absenteeism by staff. Workers are afforded the advantage of planning their time appropriately such that it does not clash with their private life and activities and can comfortably carry out their duties in any remote location including in a hotel, in an airport lounge, while travelling or while on holiday. If a staff member needs to accomplish other non-related errands, he will plan his time schedule appropriately such that he does not miss duty without making up for the lost time (Madsen, 2003). There lacks such bureaucratic processes like filing for leave of duty or physically availing oneself at a specific workstation in order to work. This flexible capability of telecommuting has

4 also contributed positively in IBM’s improved profit margins because in a way, workers tend to give more (Kurland & Bailey, 1999, p 2).

Workers currently also have their morale boosted and they are more willing to work than was the case while working from their offices. Morale is an important aspect in any worker’s productivity. Since telecommuting has reduced that close supervision that is witnessed in office environments, workers feel they have self-motivation to work without necessarily having someone standing behind them, monitoring their production and general performance. They are close to their families as they expend their duties and they feel they are maximally utilising their time productively than was the case during their office performance (Hochberg, 2009).

Turnover rates are also put to check by this mode of operation. Due to increased staffmotivation resulting from the flexible nature of working, workers will have very little reason to move in search of other employment opportunities. This eventually enables the company to maintain healthy profits since staff hiring, training and development related costs will remain intact instead being channelled to other needy sections of the organisation (Madsen, 2003).

Greater openness on the side of staff is also most likely to be realised as a result of telecommuting. It is easier to track down performance of workers using this mode of operation and therefore workers will be open in their daily operation. If a company employs telecommuting directly as a means of interacting with its clientele base, this will have the positive impact of increasing customer satisfaction. With an increased customer satisfaction, the rate of repeat business will improve eventually increasing the overall company productivity (Kurland & Bailey, 1999, p.3).

The company also adheres to national and international regulations that aim to cut down on carbon dioxide emission and general compliance to policies that aim to regulate

5 environmental degradation. By enabling staff to work from their remote locations without necessarily commuting to offices daily, the company reduces the number of vehicles travelling to and from the office on a daily basis. Carbon dioxide that would have otherwise been emitted to the atmosphere by these vehicles is therefore reduced thus maintaining a clean environment (Madsen, 2003).

Challenges of Telecommuting Even though telecommuting provides numerous advantages to an organisation adopting its use, there are a horde of challenges that come with it which, if not properly managed, might prove costly to such a firm. A perfect working strategy is needed in order to ensure the company maximises its use of this technology. The challenges include the following: Performance monitoring Checking and tracking on workers general performance is difficult. Telecommuting enables workers to perform their duties away from the physical presence of their immediate supervisors. It therefore becomes a bit difficult to analyse general performance of such workers particularly when it involves tasks that the worker is needed to be trained while on the job (Green et al, 2009, para 4).

Performance measuring It is also challenging for an organisation to measure directly the performance of its employees. Workers are performing their duties at different times and from different locations and therefore it become difficult for the management to measure their individual output.

Measuring employee output is important as it helps the management to discover weaknesses and plan on how to rectify the shortcomings (HRhero, n.d). Failure to measure employee output might lead to general poor performance of the entire organisation.

6 Managerial control One other challenge that comes with an organisation that operates through telecommuting is the lack of managerial control (Madsen, 2003). Workers are not operating from a central location and therefore the managers find it challenging to control their behaviour. If a worker has a private issue that negatively affect his performance, it becomes difficult for his supervisors to know it early and offer him a solution. The barrier created by distance that separates the two of them means even finding a solution would require some time (HRhero, n.d).

Mentoring Workers need to be mentored in order to maximise on their productivity. Mentorship is easily achieved if people work together physically in an enclosed environment for a period of time. People tend to emulate better qualities in their colleagues that make them be exceptional in their daily performance of duties. However, telecommuting eliminates completely the chances of colleagues working together and encouraging each other through their daily performance (Madsen, 2003).

Virtual culture Organisations have their own unique cultures that distinguish them from each other.

These cultures are introduced and nurtured within organisations by the constant interaction that takes place on a daily basis. Organisational culture is important as it helps workers to have a common stand and objective which eventually is needed for the attainment of the overall organisational mission, vision and objectives. In a telecommuting organisation, workers lack that common shared norm since they hardly meet physically to exchange any ideas and learn from each other (Madsen, 2003).

Synergy

7 Combined effort from a team often is a contribution made by different individuals of that team. Cooperation and interaction of individuals in a team produces a combined effort that eventually makes it easy to attain an objective. This synergy lacks in a telecommuting organisation because chances are minimal that the workers will physically meet on a regular basis to share their varied experiences, skills and talent (HRhero, n.d).

Informal interaction Although telecommuting makes it difficult for members of an organisation to meet physically, it is much easier for them to communicate virtually using the numerous social platforms present on the internet. This posses a big challenge to the organisation because such internet social sites like Facebook, twitter and My Space are actually addictive and could consume more of a worker’s time than what he or she spends performing the official duties.

Workers also waste a lot of time discussing either their own personal issues between themselves or grapevine matters concerning their organisation. The total internet resource used by such workers on unofficial activity could also prove to be costly to the firm because there is little control (HRhero, n.d).

Schedule maintenance Telecommuting uses a lot of computer hardware such as PC’s, printers and modems which at some point in time will require repairs in order to maintain them at working condition.

Scheduling such repairs in a telecommuting organisation is demanding due to the geographical dispersal of workers. The costs incurred in terms of transport could be very high, thus reducing the company’s profit margins (Madsen 2003).

The table below summarises some of the advantages and challenges that companies face while implementing the various modes of telecommuting.

8 Mode of Advantages Telecommuting Home based Greater productivity telecommuting Reduced absenteeism Boosted morale Greater openness Less office interruptions Reduced overhead costs Wider talent pool Reduced turnover Regulation compliance

Satellite Office

Neighbourhood work centre

Mobile work

Challenges Performance monitoring Organisation culture Performance measuring Interpersonal skills Managerial control Availability Mentoring Schedule maintenance Jealous colleagues Work coordination Synergy Internal customers Informal interaction Communication Organisation culture Guidelines Virtual culture Technology

Greater productivity Better morale Wider pool of talent Reduced turnover Proximity to customer Compliance to regulation Corporate culture intact Improved productivity Improved morale Wider pool of talent Reduced turnover Customer proximity Regulation compliance Intact corporate culture

Performance monitoring Performance measurement Managerial control Jealous colleagues Virtual culture Internal customers

Improved productivity Reduced absenteeism Customer proximity

Performance monitoring Organisation culture Performance measurement Organisation loyalty Availability Schedule maintenance Jealous colleagues Work coordination Virtual culture Internal customers Synergy Communication Informal interaction Guidelines Technology

Performance monitoring Organisation culture Performance measurement Organisation loyalty Mentoring Schedule maintenance Jealous colleagues Work coordination Virtual culture Internal customers Synergy Informal interaction

Source: Organisational dynamics Management Course of Action to Effectively Manage Telecommuting Organisations It is very vital for the management of a company intending to adopt telecommuting to address the question of who gets to telecommute and who does not. Not all the workers in an

9 organisation are suitable to work as telecommuters and therefore the selection mechanism should give consideration to disciplined self-starters (Alge et al., 2000, para 4).

The choice of home office equipment to be used in telecommuting also needs to be done keenly. It is very vital that a company invests on powerful computers and fast performing modems in order to ensure execution of work is not hampered unnecessarily. Technical help lines for telecommuters should also be set up in order to give telecommuters quick solutions in case they experience computer problems.

Employee evaluation needs to take a new approach that is based more on results. There is little physical interaction between workers and therefore evaluation should be based on objective, numerical as well as quantifiable evaluation (Alge et al., 2000, para 3).

There is need to organise regular meetings and also arrange for social events at least once in a while. This will help workers identify more with the goals of the organisation and commit to the set goals. This is the shaping of organisational culture.

Implementing telecommuting might not receive the blessings of the entire workforce.

Some workers will resist the transformation and therefore jeopardise the company’s operations.

It is therefore important that the management works on getting user acceptance for successful implementation to be achieved. This is achieved by redefining work in order that it conforms to the exact activities and operations of a worker and not the physical location from where he or she works from (Alge et al., 2000, para 5).

10 References Alge, B., Smith, K. A., Lillich, M. & Purdue News Service. (2000). Managing telecommuting demands policy, attitude adjustments. Purdue News. Retrieved 10 January 2012 from http://www.purdue.edu/uns/html4ever/0008.Alge.telecommuting.html Chafkin, M. (2010). Telecommuting by the numbers. Inc.com. Retrieved 10 January 2012 from http://www.inc.com/magazine/20100401/telecommuting-by-the-numbers.html Green, A., Lopez, M., Wysocki, A. & Kepner K. (2009). Telecommunicating as a true workplace. Retrieved 10 January 2012 from http://edis.ifas.ufl.edu/hr021 Hochberg, A. (2009). For telecommuters, it's not about working to work. Retrieved from 10 January 2012 from http://npr.org/templates/text/s.php?sId=123406526&m=1 HRhero (n.d). Telecommuting: Benefits and challenges for employers and employees. Retrieved 10 January 2012 from http://www.hrhero.com/topics/telecommute.html Kurland, N. B. (1999). Telework: The advantages and challenges of working here, there, anywhere and anytime. Organizational dynamics. Retrieved Jan 10, 2012 from eastmantech database Madsen, S. R. (2003). The benefits, challenges, and implications of teleworking: A literature review. Journal of Business Entrepreneurs, 4, 138-151.