2. Telecommuting @ IBM-Indiana Case Analysis IS 628 – Computer Based Information Systems Spring 2015 BY ELFEGO CRUZ AND DANIEL BECERRA

3. History

4. Financial Situation: Expenses

5. 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

6. Cost Saving Strategy: Telecommuting Employees who spend most of their time with customers and worked in their offices only 30-40 percent Of 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

7. Complications: Employees Good conversion rate overall Resistance primarily came from Mgrs prestige & Ego Most Mgrs also converted after persuasion Psychological dislikes from employees

8. Complications: Information Technology

9. 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

10. Employee Perspective: Advantages & Disadvantages of Telecommuting Advantages 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

11. 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

12. 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; positive externality to clients and society

13. 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

14. Thank You Q & A