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Getting Workers Up to

By Kim S. Nash  |  Posted 2002-08-09 Print this article Print

Savings from hot-desks, huddle rooms and other breakaway work spaces help Procter & Gamble in its fight to right sinking profits.

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Getting Workers Up to Speed Faster

Historically, it has taken several weeks for new hires at P&G to become fully productive. Getting PCs set up, passwords generated, offices assigned and other aspects of orientation were slow-going. But Workplace Services took over the "on boarding" service and now does it in six days.

But it's not free money. Flexible workplaces usually need more technology than traditional offices, with a stationary PC on a desk assigned to each person. If you want people to be able to pop in and out of satellite offices, or to access their specific applications no matter where they decide to work on a given day, an extensive communications infrastructure is needed. More routers, perhaps T-1 lines and port replicators, extra wiring or even a wireless infrastructure, maybe kiosks for quick e-mail downloads, applications for managing remote-access security and many other items are all required. It can be expensive. And then people must be taught how to use it all.

Fidelity Investments in Boston has begun to put in wireless technology to facilitate flexible work. "Over time, we may identify savings, but I wouldn't say we've done that yet," says Marty Anderson, manager of workplace research at Fidelity, which is another sponsor of the MIT/Gartner project. She declined to say how much the company has spent so far on the project.

Indeed, if a business manager said he wanted to get all the technology in place to give everybody in the company flexible work spaces and the ability to work outside conventional offices, the technology department would hand back a list of charges for expensive equipment and the personnel to install it. Fortunately, the cost of technology and training is just half the equation. The other half is the savings that comes from having to build or rent fewer buildings. There is less need to staff and run a cafeteria. Utility bills are lower. Janitorial costs are less.

Some companies, as part of agile workplace plans, now construct buildings differently. Fidelity, for example, designed a new building in Dallas last year with raised floors, rather than dropped ceilings, to give employees access to computer cabling that they may need to adjust as they roam among shared desks. Power and air-conditioning controls are also in the floors, so people don't have to call maintenance to make an office warmer or cooler. Raised floors required less ductwork than dropped ceilings, saving Fidelity about $1 per square foot in construction costs, Anderson says. Operational savings over time will be bigger, she says, in part because individual employees can do more for themselves now.

But the real gold is that more employees can make more efficient use of the same or less square footage.

A Sun Microsystems building outside of Chicago, for example, once housed traditional offices for 200 people. But since more than half of those employees spent most of their time away from the office, Sun revamped the space to allow for hoteling. It put in generic, reservable rooms with rolling file cabinets, height-adjustable furniture, plug-and-go network wiring and other services. Now 400 people can work there.

Sun has been able to save more than $40 million so far as a result of its flexible office project, which was started in 1995 and is now called iWork, says Mattias Bergman, manager of work telepresence at the technology vendor.

If real estate savings weren't figured into the overall cost-benefit equation, no business-line manager would sponsor this kind of technology expansion, Bergman says. "You need the two working together to make the business case," he says.

Gartner calls this formula the "enterprise total cost of ownership." It must include the initial and ongoing technology outlay but also the initial and ongoing real estate savings.

"The technology costs of doing this are clearly higher," says analyst Bell. "We know that. But you have such reductions in real estate that it overtakes the technology expense," he says. "If you looked at it purely from a technology point of view, you'd never do it."

Effects on worker productivity also should be considered, perhaps measured by how much faster a product gets to market or customer satisfaction increases. P&G measures employee productivity by revenue per worker in the flexible work program. Other metrics it uses to judge the job that Workplace Services is doing are the stability and speed of the technology in use, and user satisfaction. Reporting those measures quarterly keeps the group on track.

Says consultant Kane, who also is president of the International Telework Association and Council: "What Procter has done is probably above and beyond what we see in companies we deal with. A lot of companies aspire to be where P&G is."

Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.
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