Bacon's Rebellion

James A. Bacon


 

Baconometer

Bubbling

The Network of Space

 

Technology is transforming the relationship between people and where they work. To fulfill the promise of telework, the Commonwealth needs to invest less in asphalt and more in bandwidth.


 

John Vivadelli, the CEO of AgilQuest, Inc., propounds a vision for the workplace of the future. Gone are the days when people, in lemming-like masses, all hop in their cars at the same time, drive to their offices along the same congested thoroughfares, do their jobs at central office complexes, then repeat the grueling commute on the way home …. day after mind-numbing day.

 

In the world that Vivadelli imagines, employees have access to a "network of space” that allows them to work at the most efficient locations. “People have different kinds of workplace needs on different days, depending on what they’re doing,” he explains. Some mornings, they might work from home, linking to the office by telephone, e-mail and high-bandwidth video. Other mornings, they might zip over to a satellite office a few minutes away, plug into a work station they’d reserved the day before, and meet with co-workers at a conference room there. Then they might complete the commute to the main office when the roads are clear, shaving a half hour off the normal drive time.

 

Virginia has the [highway] capacity to get people where they need to go,” says Vivadelli. “We just don’t have it for 8:00 a.m. in the morning.” By changing the way we work – using office- and conference-

scheduling tools that AgilQuest provides -- Virginians can redistribute the demand for transportation capacity away from its peaks at 8:00 a.m. and 5 p.m. to other hours of the day.

 

Virginians have two broad options for coping with its increasingly stressed transportation system. We can raise taxes by literally billions dollars a year to finance the massive road and transit projects enumerated in regional 20-year transportation plans that will only blunt, not reverse, the severity of traffic congestion during rush hour. Or, like Vivadelli, we can think creatively about how to reduce and redistribute the demand for scarce transportation capacity.

 

Thanks to innovations in the private sector, demand-side transportation strategies are gaining momentum in Virginia. Bacon’s Rebellion has profiled new businesses that deliver real-time information about traffic conditions to subscribers’ PCs and cell phones. We’ve also highlighted an Arlington County initiative to promote car-sharing services. But when it comes to sheer, society-shifting potential, none of these compares to what Vivadelli and other telework advocates are proposing.

 

The idea of using telecommunications to link workers with their work has come a long way since the 1990s, when early experiments were found deficient and the concept was largely written off as a public policy option. In the past five years, high-speed Internet connections have been deployed widely, reaching hundreds of thousands of Virginians, and initiatives are underway to make big bandwidth nearly ubiquitous. Collaboration-enabling technologies have matured, making it possible to coordinate activity, project video images and share content for significantly less cost than it did a few years ago. Simultaneously, the cost of traffic congestion has nearly doubled in Virginia’s major metropolitan areas, increasing the pay-off for telecommuting strategies.

 

But the most important breakthroughs since the 1990s have been largely conceptual. The notion of “telecommuting” is yielding to the notion of “telework.” The 1990s idea of employees working at home is giving way to the 2000s vision of mobile workforces equipped with cell phones and wireless laptops, working anywhere, anytime: at the corporate headquarters, at home, at a satellite office or on the road. Where “telecommuting” provided mainly a social benefit by getting people off the highways at rush hour, thus reducing the strain on the transportation system, a mobile workforce does that and slashes corporate investment in office facilities and enables employers to re-engineer work processes.

 

Getting one Northern Virginia worker off the road during rush hour would save the Commonwealth some $2,800 or more per year in the cost of expanding and maintaining the transportation infrastructure, says John Starke, president of the Telework Consortium based in Loudoun County. You can add another $2,000 a year in social benefits from the reduction of gasoline consumption and air pollution. Then consider the productivity gains for individual employees who spend less time commuting: a 10 percent gain for a $50,000-a-year worker amounts to $5,000 a year. Finally, toss in thousand of dollars more by reducing the need for office space made possible through Vivadelli’s “network of space” and other process improvements. Starke sees a $30,000 annual value per employee potentially flowing from a mature set of telecommunications processes.

 

Even if Starke is exaggerating the benefits by a factor of five or six, the economic logic of moving towards a more mobile, geographically flexible workforce is still compelling. The United States is on the verge of a workplace revolution -- and Virginia has front-row seats. State policy makers don't understand it yet, but they face a critical a choice: Continue the unsustainable tax-and-build transportation strategy of the past half century, or employ public resources to accelerate the shift to the workplace model of the future.

 

In Starke’s appraisal the main barrier to effective telecommuting has been the difficulty in projecting video. The small, jerky and fuzzy images supported by low bandwidth Internet connections do not offer a viable alternative to face-to-face communications. “If the image is flaky,” he says, “it doesn’t get used.”

 

Now that computers are faster and broadband more available, however, the missing link has clicked into place. Video now can supplement voice communication with the subtle cues of body language. “With high bandwidth,” says Starke, “you can have pretty subtle discussions. [The video picture] tells you whether the person is awake, whether they’re engaged, whether they’re interested.”

 

Starke estimates that it costs about $3,000 initially and about $1,000 annually to set up a PC, video camera, robust Internet connection and software to support a home office.

 

AgilQuest provides another key piece of the workplace revolution. Vivadelli, a former IBM employee who pioneered an in-house version of his technology for the computer giant, has developed software that enables companies to downsize their office space requirements by shifting employees from dedicated offices to shared offices. The AgilQuest product is way beyond the concept stage – blue chip clients from Hewlett-Packard to DeLoitte & Touche are already using the Network of Space to save millions of dollars a year.

 

The typical office, says Vivadelli, is 30 percent to 50 percent empty at any given moment – so many people are out on sales calls, service calls, corporate travel or vacation that they spend only a fraction of their time in their offices. Nationally, he guesstimates, the American economy is wasting $300 billion to $400 billion annually in excess commercial real estate. “Literally trillions of dollars of assets are sitting there underutilized.”

 

AgilQuest software allows companies to shift to a “hotelling” arrangement in which employees utilize office space when they need it. Vivadelli's software allows people to book space in any corporate facility, quickly transfer their office phone number to that location and even reserve nearby meeting rooms. As long as e-mail and other documents reside on the corporate network, the only thing people miss is the family portrait on the desk!

 

It’s a small step from downsizing an office facility through hoteling to distributing office space around a metropolitan area and moving quarters closer to where employees work or interact with their customers. Vivadelli’s technology provides unprecedented flexibility: People can work near home, clients or their co-workers as the demands of business productivity dictate.

 

Starke and Vivadelli cite two other benefits to the Network of Space. Telecommunications technology is already being used to out-source business functions overseas – why not use it to integrate Virginia’s job-scarce rural economy with the state’s more dynamic metropolitan areas? If the tools exist for Northern Virginians to work effectively with Indians on the other side of the world, they exist also to work effectively with Southside Virginians who reside within a half day's driving distance when face-to-face meetings are called for.

 

Finally, 9/11 has demonstrated the vulnerability of highly concentrated business operations. The imperative of business continuity suggests that government and businesses – especially those near high-profile terrorist targets like New York and Washington, D.C. – should decentralize their offices and adopt the capability to reconfigure their workforces at home or in satellite offices should disaster strike.

 

The major barrier to radical change is workplace culture. Many executives believe they can’t manage employees they can’t physically see. There's still a lot to learn, Starke concedes. “You have to increase the maturity, sophistication of your processes. You have to have performance measures, communications processes, collaboration tools.” But attitudes are changing as the pioneers show how telework can be managed.

 

Until those attitudes change, the Telework Consortium, AgilQuest and their allies will continue making the business case for telework, conducting research studies, lobbying for broadband deployment, sponsoring pilot projects and disseminating best business practices. Until the big guys get it, Starke says, small businesses, many of which are virtual organizations to begin with, are likely to lead the way. Given its stake in improving transportation mobility -- not to mention its status as the largest employer in Virginia, with employees scattered all over the state -- the Commonwealth needs to climb on board. 

 

-- July 12, 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Read other Bacon's Rebellion columns about Transportation Demand Management

 

Demand-Side Economics

 

The government remedy for traffic congestion is to increase supply by building more roads. Craig Franklin's solution is to use real-time traffic data to manage demand.

 

Straws in the Wind

 

Does Virginia face untold billions of dollars in "unmet transportation needs"? Only if you ignore innovative experiments in traffic demand management bubbling out of Northern Virginia.

 

Step up to Flex

 

One "flex" car takes a half dozen other autos off the streets. That's why Arlington County supports car sharing as part of its strategy for dealing with traffic congestion.