telecommuting @ ibm-indiana case analysis is 628 – computer based information systems spring 2015...
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Telecommuting @IBM-IndianaCase Analysis IS 628 – Computer Based Information SystemsSpring 2015
BY ELFEGO CRUZ AND DANIEL BECERRA
History
Financial Situation: Expenses
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 $-
$2,000 $4,000 $6,000 $8,000
$10,000 $12,000 $14,000 $16,000 $18,000
IBM Historical Oper Inc & Its 2-Period Moving Average Trend Line
1983 1984 1985 1986 1987 1988 1989 1990 1991 1992
$(8,000)
$(6,000)
$(4,000)
$(2,000)
$-
$2,000
$4,000
$6,000
$8,000
IBM Historical NI & Its 2-Period Moving Av-erage Trend Line
• 1985-1993: John Akers, IBM’s CEO, downsized the company from 405,000 to around 300,000 employees worldwide.
• 1993: New CEO, Louis V. Gerstner, targeted IBM’s worldwide employment to be 225,000 by the end of 1994.
• 1992: Indiana reduced its head-count by about 30%
• 1993: Indiana was expected to reduce its head count by another 30%
Cost Saving Strategy
Cost Saving Strategy: Telecommuting
Employees who spend most of their time with customers and worked in their offices only 30-40 percentOf the time were to relocate their building-office to an in home office
Provide employees with the same working tools: hardware and software
Same desktop PCs from the building-office were moved to employee’ homes
Same software were moved within the desktop PCs
Same office furniture: desk, chair, and a two or four drawer filing cabinet
Employees could take a cash allowance for equipment but needed to use IBM softwares
Provide two telephone lines : one for data and one for voice
Pay for installation costs as well as monthly bills
Complications: Employees
Out Of300
Telecommuters150 75
Eager to Relocate Reluctant to Adopt50% 25%
20Mgrs Adopted At
After Wiley's Talk Introduction
1Mgr Transferred Out
37Converted to Supporters After
50% ImprovementsIn SupportTechnology
Good conversion rate overall
Resistance primarily came from Mgrs
prestige & Ego
Most Mgrs also converted after persuasion
Psychological dislikes from employees
Complications: Information Technology
Home Office Equipment
Communications Facilities
Shared Workspace at the IBM Locations
Reengineer Work
Support Process
Addressing Information Technology Complications: Mobile
Up-grading Printers: dot-matrix to Lexmark laser
Upgrading PCs to Thinkpad Laptops
Wireless Data Communication
Dial-in LANs
Alphanumeric pagers
Wireless Communication-special occasions
Employee Perspective: Advantages & Disadvantages of
TelecommutingAdvantages Included:
Flexibility—permitted time to spend with family and friends
Time Saved—commuting to and from work; parking
Efficiency—freed up time and office-related distractions
Discontent included:
Lack of social interaction—camaraderie
Lack of team cooperation
Difficult to obtain help-quickly
Lack of moral support
IBM Perspective: Advantages & Disadvantages of Telecommuting
Advantages:
Cost saving—reduction of real estate expenditures
Retention of its core competency—firm specific knowledge; human capital; employees
Disadvantages:
Limiting cooperation and potentially disrupting innovation
Decrease of corporate culture; emphasize individualism vs valued teamwork approach
Advantages to Society from Telecommuting
Economic perspective:
Freed-up resources to be allocated to their highest value; building office was vacated
Information System perspective:
Increase in productivity made possible by technology; mobile upgrades; positiveexternality to clients and society
General Manager, Michael W. Wiley’s Influence on Telecommuting
Modest Influence:
Frank made the key observation of paying for an empty building
Frank made financial estimates and reached out to Wiley
Wiley delegated responsibility to Frank; planning, scheduling, and implementation
Wiley’s main contribution was recognizing layoffs were to be used as a last resort
Helped put together an alternative plan to present to the Midwest area mgr
Expedited the implementation process by reducing Frank’s implementation time
Thank You
Q & A