- Business and Employment»
- History of Business
How Technology Impacts the New Worker
The Internet At Work
- Electronic Mail
- Overseas Outsourcing
- Software Agents
- Case Study: Oticon Holdings A/S
The past 50 years brought about rapid changes to our world. Technological advancement occurred at such an extent that non-scientific people found it hard to keep up. One segment of society that most people will fall into is that of the worker, and it is perhaps this group that is hit the most. A poll showed that, of the 260,000,000 population of the United States, more than 42%, or 110,000,000 works for a living. The result is a drastic change in the way a worker works. This paper attempts to bring to the forefront, the changes made to workers, the factors that brought about these changes, the impact (both of these changes and as a result of the new workers that emerged due to the changes).
It is now relatively cheaper to buy computers. With reference to Figure 1, the cost of owning a computer has dropped drastically from 1980.
Figure 1: Cost of machine vs. human worker
This paints a beautiful picture of computers as highly-efficient and graceful tools for increasing productivity. This is clearly not the case, as there are issues such as training, downtime and Total Cost of Ownership (TCO) to contend with.
Computers are machines and as such, require a certain level of competency to fully-utilize its functions. Many software companies incorporate hundreds of capabilities into their packages, marketing them as the sum of their parts, where in fact most workers use only the basic functionalities to complete their immediate tasks. As a result, companies are not getting their money’s worth, as further training is required for workers to familiarize themselves, and money is spent on functionalities that are not required.
Following the train of thought of computers as machines, they are prone to failure; too prone, some may add. The company has to factor in hardware (client-end, server-end) downtime into their forecasts, whether planned or not. Downtime also requires companies to spend (see fig. 2).
Figure 2: The Cost of Downtime
Despite the initial cost of incorporating information technology being routinely written off by the managers who want to purchase them, the cost of training and/or downtime has to be factored in, not to mention the constant need for upgrades. When training a worker, besides the cost incurred in the actual training process, the time the worker spends away from work, and the time taken to familiarize him to the new arrangement is costly as well. Downtime will cost, as the information system cannot be utilized and money has to be spent to rectify the cause of the downtime. All these add up to the Total Cost of Ownership. This is the bottom-line that finance managers have to contend with when deciding whether to provide an IT infrastructure for their companies.
As mentioned before, technology was a major driving force in changing the working landscape. However I believe it is not the ‘amount’ of change but the ‘speed’ of the advancement that made such a huge change in the employment landscape. Throughout history technological changes occurred at a leisurely pace; even if a particular invention was able to drastically increase the productivity of a worker - and hence his way of working – it took a long time for it to be applied.
Recent advancements like satellite communications and jet air travel helped make the world a smaller place, but it is the internet that really brought about a drastic step in changing the working landscape. It transcends borders and languages to help lubricate the process of globalization. Below is an in depth narrative of how the internet made changes to the various aspects of a workers life.
Firstly, electronic mail, or email, made one of the biggest impacts of all the internet-based technologies. The changes it brought about were both inter- and intra-organizational.
Among organizations, it allows for an almost-immediate, cheap and reliable means of communications. No longer is there a need to wait for a courier to arrive at a client’s place to deliver a letter on your behalf, nor is there any more hefty overseas phone bills to contend with. Workers may use emails to communicate a need with workers from another company. With the emails, companies can coordinate their communications effortlessly. Companies like Amazon use an email database system to automatically restock their supplies through suppliers they have intricate links with. This method of transaction is called electronic just-in-time or electronic data interchange. Secretaries may arrange via emails meetings for their bosses. A worker in Africa can send an enquiry to a company in Berlin. The ease of emails have made communications, whether formal or informal, less of a hassle, and thus generated an even larger volume of correspondences than necessary. While the inconvenience of unsolicited emails is widely documented, with proper planning it should not be a fundamental problem.
Intra-organizational email reduces the clutter that used to impede personal communications within corporations. No longer do workers have to hope a colleague is at her desk so that a call can be made. With emails, a thought can be sent quickly to the colleague, which will patiently wait in his/her inbox until it has been read. This primarily benefits large organizations, as they have the critical number of employees and thus require the requisite amount of space that can be prohibitive to walk around in. thus large offices like the Pentagon or Biopolis can be sustained. However there is the problem of a worker claiming he/she did not receive an email, and thus emails have not been made an ‘official’ form of communications. This may be an issue of the past though, with new emailing technologies that ascertain the sending of emails and algorithms that checks to see if a mail has been read, replying with a proof of receipts even, a read mail cannot be denied anymore. A company presently using such software is Becton-DickinsonSingapore. They use the Lotus Notes program which tracks every email from its source to destination and even if the mail has been read by the recipient. A directive passed by senior management states that emails must be read daily makes emailing in this company almost an official and unequivocal mode of communication.
Another internet technology with a huge impact on the working scene is telecommuting. Not so much a technology as it is but another use of the internet. It was heralded with the implementation of wide-bandwidth internet connection. By the end of the 20th century, homes with a computer in them had become ubiquitous. With the ability to do his/her work from home, and to send it to the office with ease, it is only logical that companies allow this form of working, or telecommuting, to be part and parcel of their work structure to save on costs.
However the IT infrastructure in a company may not be fully utilized. Although computers are getting cheaper (see above), they have been put to use performing menial tasks. Many computers purchased by big corporations do not even get switched on, such that they are nothing more than a hi-tech status symbol. Some companies have adopted ‘hot-desking’ as an alternative. Basically the worker has no personal space in the office, and uses whatever he/she requires as and when he/she requires it. In US advertising agency Chiat-Day, a worker is assigned his only personal space, a locker, in the office. Whatever else is required is shared. However, not everyone can be a telecommuter. Some attributes were required, and O’Connell reports that there are certain traits that are inherent in most good telecommuters (table. 1)
Table 1: Common traits of Effective Telecommuters
The Clinton administration approved a study which lists numerous advantages of telecommuting (IITF, 1994). In it lists improvements in the air quality due to the reduction in the number of cars roads, increased organizational productivity due to workers being more alert during their working hours (which are flexible as they can work any time they plan to). These all translates to a general improvement in the quality of the workers’ working life. However, Forester called telecommuting nothing more than romanticized. He notes the social isolation of workers as a main gripe. These workers maybe be less available for meetings due to them planning their own schedules, may be less exposed to their colleagues or direct superiors and hence easily-overlooked for promotions, and may be difficult to supervise unless they have a project-based working agreement.
A report by the Institute of Management shows that in the UK there is at least 400,000 registered teleworkers, and that figure jumps to 6 million for the US (Pancucci, D., ‘Remote Control’ Management Today, April, 78-80). This trend looks set to continue, as prices of networking equipment and services continue to fall more and more companies look towards telecommuting as a viable alternative to reduce employment overheads.
While the topic is still on employment overheads, a trend that is largely powered by the internet has to be mentioned. Overseas outsourcing is an increasingly-popular choice for companies worldwide. Seeing how outsourcing allows for much more flexibility to alleviate a company’s management burden while allowing for key strategic control to be retained, it’s no wonder that a study by Gartner Inc. expects the worldwide outsourcing market to grow by 7.9% annually to $429.2 billion by 2008.
However, overseas outsourcing is not without its problems. Common gripes include increased security risks, under-par work, and hardware problems. According to IDC, India has the largest slice of the global outsourcing pie. Overseas outsourcing is wholly dependant on the infrastructure the outsourced company has in place. There are so called ‘technology islands’ in developing countries, so companies looking to outsource will have to do their homework. According to International Telecommunications Union's Global Digital Access Index, out of 178 countries India ranks No. 119, so the risk of networking frustration is very real. There’s also the issue of plunging levels of quality, which is widely-documented. Outsourced companies may simply fail to live up to their promises, thus creating discontent in the outsourcing company.
Figure 3: Overseas Outsourcing Market Share
E-commerce is not new. In fact, companies have been using Wide-Area Networks (WAN) to communicate with suppliers for years already. However with the popularity of the internet and the easy availability of computers, e-commerce now reaches to a much wider audience and has more uses than before. From the consumer level (internet-shopping) to business level (stocks re-supplying), e-commerce has greatly benefited from the internet boom.
On the consumer front, there is the success story of Amazon.com. The advantages that selling books over the net have were many; customers could browse a catalog of over 3 million titles as compared to barely 40,000 at most in traditional bricks-and-mortar bookshops, each entry had an intensive inventory, books were delivered promptly to customers’ doorsteps so they can shop without even leaving the house once. All these are done with an employee population of only 9000. These combined to allow Amazon.com to garner stock prices which makes it worth more than real-world competitors Barnes & Noble and Borders combined.
With the advent of information technology followed an overload of information as well. The sheer volume of data available is simply staggering, and too tedious for human beings to traverse. Enter software agents. In Bill Gates’ keynote address to COMDEX Fall 1996, he singled out agents as the main issues that will characterize the coming years in the industrial and business use of computers. These helpful pieces of codes are simply software codes that acts like a personal assistant and does whatever its programmers wants it to, usually to automate an otherwise tedious process. Software agents have been used to route emails and other online messages, trawl the network to mine databases, keep its users schedules organized and synchronized, and automate network diagnostics and other routines. Research (Chorafas, 1998) has shown that the applications for software agents are on the increase.
Table 2: Software agents in order of importance
An example of software agents in use is in place at CISCO. An equipment supplier, they have developed status agents to ease their burden in ordering and scheduling of their customer’s orders. The agent will be assigned to individual orders, and follows through it till the customer receives the equipment. Even if scheduling changes by-the-minute, the customer can get complete information about the status of the product. Statistics show the popularity of this agent; it is used 12,000 times a week by customers.
The downside to agents is that they provide fodder for proponents of the pessimistic model of employment in the future. In this model, technology will continue to advance, to such an extent that automation replaces the need for human hands and artificial intelligence (AI) reduces the need for the human brain. Although software coding still requires heuristics, some envision a future whereby, like a self-replicating machine, software agents may replicate themselves or even ‘evolve’ to handle tasks better. Without the need for human intervention, instead of becoming assistants, they may exacerbate the current unemployment situation.
Case Study: Oticon Holdings A/S
Oticon is a Danish company designing and manufacturing hearing aids. Being one of the largest manufacturers of hearing aids in the world, they struggled to compete with big names like Sony, Philips and Siemens. Noting that this will sap their resources faster than their competitors, its’ chairman, Lars Kolind, approved drastic changes to their company’s policies in 1991. He highlighted the formal organizational structure as the main stumbling block; in the words of his IT systems designer “If you can’t talk to someone because they’re sitting behind a secretary and a potted plant, they won’t know what you know. People need to move around.”
The first step was to re-design the office. Oticon’s employees have no permanent desk, no permanent office. Instead there are large open-plan areas with staff moving their “caddies”, which is actually a mobile filing cabinet with a state-of-the-art networked computer. There are still fixed meeting and conference rooms though, with hi-tech capabilities like video-conferencing. To remove the need to be tethered to a table due to paperwork or telephone lines, Oticon uses electronic scanners to scan every piece of work to make them mobile, and every staff is provided with a mobile phone to use.
Next the traditional organizational structure had to go. In place was a so-called “spaghetti organization”. Workers worked on projects instead, and anyone in the company can propose a project and become their own project’s leader. They’ll have to attract their own project members, and thus this project group can move their caddies around and form wherever they want, using whatever office resource they need.
From the above account we can see that they use technology in copious amounts, and that technology is essential to their success. The president reported that this flexible approach has allowed his company to bring out products twice as fast as their competitors, yet at the same time they’ve managed to avoid the issue of isolating workers and hence damaging their morale.
Technology alone cannot guarantee improved productivity, and higher productivity with information technology does not guarantee higher worker morale. A balance must be struck, and technology is but the enabler, not the do-all.
R. H. Rosenfeld and D. C. Wilson, (Managing Organizations : Text, Readings, and Cases, McGraw-Hill, 2nd edition, London )
M. A. Peiperl, M. B. Arthur and N. Anand, (Career Creativity: Explorations in the Remaking of Work, 2002, Oxford University Press)
R. Kling, (Computerization and Controversy, 2nd edition, 1996, Academic Press)
T. Forester (Computers in the Human Context: Information Technology, Productivity and People, MIT Press, Cambridge)
D. N. Chorafas, (Agent technology handbook, McGraw Hill, New York, 1998)
S. E. O’Connell, (The Virtual Workplace Moves at Warp Speed, HR Magazine, 41 (3) 50-53)