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Companies are more interested than ever in the concept of a far-flung workforce.
Joseph Radigan, CFO Magazine
December 1, 2001
When the bombing of the Twin Towers displaced 16,000 of its employees, New York City-based Citigroup Inc. got a useful if unfortunate lesson in the value of mobile technology. "If it were not for our mobile phones, we would have been in much deeper trouble," says Mel Taub, Citigroup's corporate technology officer. Even though most of its employees were able to return within a week to the office buildings and branch locations they had been forced to vacate, he says, "what we learned from this disaster is that we will come to rely on this technology even more."
Cell phones weren't the only technology that helped Citigroup weather the crisis. The number of E-mail messages employees sent via the BlackBerry portable device made by Research in Motion increased 10-fold, to one million per day. Laptop use doubled, as measured by the number of sessions connecting those machines to corporate servers. While usage has now leveled off, the bank continues to invest in those technologies, both as part of its contingency planning and to facilitate what had already been a growing trend toward telecommuting.
In fact, that trend has been going strong for years. In July, a report from the General Accounting Office noted that the number of workers telecommuting has increased 20 percent per year during the past decade. Today some 16.5 million people work from home at least once a month, and 9.3 million do so at least once a week. Larry Buchsbaum, director of E-sourcing Strategies for Boston-based market researcher Yankee Group, says, "The reality is that we're living in a distributed computing world, and that's only increasing. Telecommuting will be more in demand." Twenty-five percent of the companies responding to a recent survey from Gartner Inc.'s Dataquest unit said they plan to increase their reliance on telecommuting.
Telecommuting often calls to mind a bathrobe-clad "knowledge worker" lobbing in his or her contribution from the comfort of a home office. But the arsenal of mobile technologies available to companies today allows the concept of a remote workforce to take many forms, creating efficiencies that boost the bottom line. Keith Bolt, vice president and CFO of Atlantic Envelope Co., in Atlanta, says that because his company's 70-person sales force can easily access the company's intranet from the road, they spend more time making sales calls and less time filling out paperwork at the office. Using a BlackBerry, they can check customer files, inventory levels, purchase orders, and more. In fact, Bolt says that without the ability for reps to access the company intranet remotely, Atlantic Envelope would have to hire more customer service reps and open more offices. "We have sales reps who live and work in Florida," he says, "and we can support them with mobile technology without having to open an office there."
CFOs and other senior executives are increasingly drawn to the idea of employees who don't need office space. Russ Gilbertson, CTO of NetCom Solutions International Inc., in Chantilly, Virginia, says that earlier this year his company was able to close a six-person office in Atlanta, chopping a few thousand dollars per month in rental costs from the company's P&L. The employees remained; they just began working from home.
A Model of Mobility
NetCom CFO Bob Waldron says, "It's not a huge amount, but you're always looking for places to save." In fact, NetCom, which sells network switches and related services to telecom carriers and Internet service providers, has built its entire business model around the idea of telecommuting. Two-thirds of the company's 225 employees work remotely. "Without the ability to telecommute," says Gilbertson, "our business would be limited to companies based within a few hours' drive of our three office locations."
Most companies aren't so dependent on remote workers, which can make it challenging for CFOs to determine whether the investment in mobile technologies will pay off. Bolt says Atlantic Envelope is spending $50,000 in its first year on BlackBerries for its sales force, half for the devices and half for the related software. That's a relatively small sum spent on one specific device. Companies interested in equipping their remote workers with a full array of tools could easily spend tens of millions of dollars, and possibly more. "The expectation now is that you're as connected remotely as you would be in the office," says Ed Brill, Boston-based senior manager of enterprise messaging for IBM's Lotus Software division. That means that a mobile technology shopping list could include not only cell phones, BlackBerries, and laptops — that is, the devices an employee totes around — but all manner of corporate-systems retooling to make Web sites, databases, meeting rooms, and other facilities accessible from a variety of devices while remaining secure.
Security is a big concern, but it's just one piece of a larger management challenge. "Managing virtual teams, making people accountable, and establishing clear deliverables are major challenges to telecommuting," according to Nagaraja Srivatsan, senior vice president of the project solutions group at Silverline Technologies Limited, a software and integration services firm based in Piscataway, New Jersey, and Mumbai, India. He should know: his firm creates wireless applications and other software systems for clients by tapping a network of employees based at three locations in India, as well as Europe, North America, and other locations in Asia.
The need to bring new skill sets to bear isn't lost on CFOs. Fortunately, technology can help. At NetCom, for example, Bob Waldron is looking forward to a new system created by Gilbertson and his technology staff that will allow him to check on the status of every project at the end of each day. "Today," says Gilbertson, "we have a paper-based process in which each assignment results in a sign-off by the client. But with every remote worker tied into headquarters through our virtual private network, and using Microsoft Project, employees can enter all the pertinent data and we can view the status of every project daily."
Joe Radigan writes regularly for eCFO.
Putting a Price on Telecommuting
Despite the flexibility and other advantages mobile technology offers, finance chiefs are likely to approach it with some hard questions about ROI. And, as is so often the case with technology, that can prove difficult. For Kerry Reedy, vice president for sales and marketing at Atlantic Envelope Co., in Atlanta, mobile computing has become part and parcel of daily business, every bit as indispensable as telephones and fax machines. "We've just got to believe this is the right thing to do," says Reedy. "I honestly don't believe the move to wireless can be based on ROI."
Reedy compares the money spent on mobile technologies with other infrastructure software costs, such as ERP. "This technology lays the track for the last half mile," he notes. "Why have all this other technology if you can't get the information to those who need it?" Keith Bolt, vice president and CFO of Atlantic Envelope, agrees, saying that improved customer-service levels justify the cost. —JR