The Internet and Business
Lecture 11. The Internet in the Workplace.
Spring 2009. Lecture 11.
1
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Group presentation: wiki reminder
• The wiki tracks who does what (example)
• If you haven’t contributed much so far you
really need to talk to your team members
ASAP and figure out how you can contribute in
the time remaining
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Has the internet changed the way you
work in your job?
Restaurant kitchen
Jewelry store
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Which jobs have been most affected
by the internet? Why?
Remember!: an information good
is anything that can be digitized
Spring 2009. Lecture 11.
4
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Has the internet changed everything?
• Affects everything to do with information
• Less impact for jobs or industries involving
physical objects
• But every business has some information
component e.g. sales, marketing, collaboration
• Who benefits more: customers or businesses?
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Impact of the internet on the workplace
includes:
• Where work is done
• How people work together
• What people do
• Who does what
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Biggest impact is in collaboration,
communication and producing information
goods
• Producing information goods
– Making music
– Designing an airplane (producing a design)
– Job design
• Collaborating – with colleagues, suppliers,
customers
– Boeing, Wikipedia
• Communicating – including marketing, sales,
customer service
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Where work is done
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Where information work is done
After the Internet
Before the Internet
• Work where the
information is
• Information in a central
repository
• on paper
• in folders
• In filing cabinets
• Work in office hours or
take papers home in
briefcase
Spring 2009. Lecture 11.
• Do work where it’s cheapest
• Information on database
• Wiki is a simple database
• Can store spreadsheets,
documents, video…
• Remote access from
anywhere
• Updated instantly
• Work any time
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Virtual call centers allow call center
employees to work from home
• E.g. Alpine Access: see videos
– “Alpine Access clients include J. Crew, Office Depot, ExpressJet
and the IRS”
• Can use social networking to create a sense of
belonging in a dispersed organization
• Alpine had 1,500 employees using its social network
within 30 days
– “Share experiences, advice, even pictures and recipes”
•
Source: Carrington, Christopher M. March 11, 2008. “Social Networking: The Water Cooler Reinvented”
Technology Marketing Corporation. http://www.tmcnet.com/channels/voip-contact-center/articles/22679social-networking-water-cooler-reinvented.htm Accessed April 20, 2008.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Outsourcing and off-shoring are big business
• See outsourcing video from ABC news
• Started with software development and software
maintenance
– Software developer in Chicago makes $50/hr
– In India makes roughly $10/hour
• Customer service
• Now outsource entire business processes – called
Business Process Outsourcing (BPO)
– Accounting, payroll, procurement, claims processing
– BPO estimated to be a $28 Billion market
• IBM, Accenture and other US firms have big offshore
operations
Source: Lohr, Steve. February 18, 2008. “Offshore Outsourcing’s Next Wave: How High?” BITS –
Technology. New York Times Blog. The New York Times.
http://bits.blogs.nytimes.com/2008/02/14/offshore-outsourcings-next-wave-how-high/ .
Accessed April 21, 2008.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
What do you think about outsourcing?
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Outsourcings’ scope keeps widening
•
•
•
•
•
•
•
Radiology
Software development
Accounting
Payroll (PayChex)
Tax returns
Customer service
….
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Collaboration
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
What has it been like working with the
your group on a wiki?
People did not have much to say
But my experience is that working with a group on a wiki
can be challenging at first:
•
•
•
You need to be organized and disciplined
You need to work consistently instead of in a big rush
near the deadline
You need to learn to collaborate – look at what others
have done and build on it, instead of just working
independently
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Business requires frequent collaboration
• Multiple skills needed to make a sale require
contributions from diverse experts
– Sales, marketing, product expert, customer service
• Design usually done in teams
– Developing a script
– Designing a greeting card
– Designing an airplane
• Manufacturing means collaborating with
suppliers
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The internet has had a big impact on
how people collaborate
Before the Internet
• Small teams
• Team works in
“team room”
for days or
weeks
• Documents
kept in team
room
Spring 2009. Lecture 11.
Email
• Small teams
• More team
teleconferences
• Email documents
back and forth
• Problem with
version control
• Multiple
versions
• Hard to keep
track
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Wikis & Web
Services
• Can have 1000s
of collaborators!
Wiki always shows
the latest version
• Team members
can edit on own
schedule
• May need some
teleconferences
• Initial setup
meeting
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The internet makes “mass collaboration”
possible – Wikipedia is the best-known
example
Wikipedia Stats
• 75,000 contributors
• More than ten million articles in 250 languages
• 2.3 million articles in English
Source: Wikipedia. April 18, 2008. Wikipedia: About. http://en.wikipedia.org/wiki/Wikipedia:About .
Accessed April 21, 2008.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Case studies – wikis in the workplace
• “Instead of having your documents and
knowledge scattered in multiple repositories,
PBwiki offers one central place to store files
and collaborate – so everyone on your team
can access what they need, from any
location.” Source: PBwiki Inc. 2008. “Business Wiki – Online
Collaboration and Project Management.” http://pbwiki.com/business.wiki,
accessed 4/20/08.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
More on wikis in the workplace
• Here’s a brief video on how wikis are used in
business
–
Source: PBwiki Inc. September 17, 2007. “Peanut Business Wiki.”
http://video.google.com/videoplay?docid=7465944659778789766&q=business+wikis&ei=s0YLSLrjHZGarwLK9f2tBA. Accessed
4/20/08.
• There’s a Katrina Help wiki that was set up to
coordinate assistance for the victims of
Hurricane Katrina
– Dozens of agencies and charitable organizations
– Need a central place to store all up-to-date information
– See http://katrinahelp.info/wiki/Main_Page
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The Financial Times news organization uses
wikis for international projects
• Old method
– Spend hours on the phone explaining project
– “Emailing documents back and forth”
• New method
– Use wiki as a “central hub for project management”
– Share information, manage documents, record conversations on the wiki
– Links to sources such as spreadsheets
• Provides complete documentation
– Previously, emails and early version of documents lost
– Now have a record of the project they can learn from
Source: PBwiki Inc. 2008. “Manage Global Partners with PBwiki: FT.com.”
http://pbwiki.com/content/casestudy-financialtimes, accessed 4/20/08.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Open source software development involves
collaboration by hundreds of programmers around
the world, all communicating via the internet
• Linux operating system (IBM now promotes
Linux for servers)
• Mozilla Firefox
• Apache web server
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Boeing’s new 787 Dreamliner was
developed collaboratively
•
•
•
•
100+ supplies, six countries
Many designed and built components
Boeing acted as the integrator
Any team member anywhere can access,
review and revise engineering drawings online
and conduct simulations
• Raises issues of who owns the intellectual
property
Source: Tapscott, Don and Anthony D. Williams. 2006. Wikinomics. New York: Portfolio, pp 224-230.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Best Buy’s Geek Squad uses online
games to collaborate
• Geek Squad has 12,000 employees who
provide computer support services
• They are spread all over – how do you get
them to communicate?
• Discovered they were talking while playing
Battlefield 2 online
• Now a normal part of the communication
process
Source: Tapscott, Don and Anthony D. Williams. 2006. Wikinomics. New York: Portfolio, p 242.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Online chat and instant messaging are
widely used in business
• Helps collaboration
• Can use IM while being on the phone
• Use with customers as well as inside the firm
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Instant messaging facilitates
“underground” conversations
• Weekly conference call
• People were on IM at the same time
• Two separate conversations on-going – one
public, one hidden
• Used in office politics
– E.g. IM “Volunteer for this! Peter will love you!”
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Web Services
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Web services are software services
provided over the web
• Examples: hotmail, Gmail, Google Docs, PBWiki
• To date, most software used by individuals and businesses
runs on the individual’s or businesses own computer
• That has some disadvantages
– All your files stored on your own computer
– Difficult to share information and keep it up to date
– Need to keep software up to date on many business PCs
• Web services provide software that runs on a web server,
so you can access the software and your data from
anywhere, and you never need to download updates
– Wikidot and Google Docs are free web services
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Web services store data on a web
server so anyone authorized can edit it
• Google Docs (http://docs.google.com) offers free
web based document and spreadsheet software
• You send invitations to collaborators, like a wiki
• Good for producing documents – spreadsheets,
word documents and presentations
• Wikis easier for less structured collaboration
• Can use both – link to a shared web service from
your wiki
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Customer Relationship Management (CRM)
uses information technology to improve
customer service
• Stores all customer-related information in one
database
• Provides instant access to the entire history of
customer contact
• Allows one contact person to handle the entire
transaction, instead of passing the customer off
to another department
• Empire Healthchoice used CRM to let agents
generate their own quotes over the web, instead
of having to check back with Head Office
Spring 2009. Lecture 11.
30
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
CRM functions
• Allows salespeople, customers and people
“back in the office” to communicate
• Track every customer contact
– If customer calls the office the software tells the salesperson
– Tracks email, voice and other customer interactions
• Schedule meetings – coordinate calendars
• Can update prices and product descriptions
instantly
• Track progress against targets
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Salesforce.com is an example of a Customer
Relationship Management (CRM) web service that
allows you to collaborate
• Salesforce.com was the first CRM web
service and is still the best known
• Here’s a short video about how it works
– http://video.google.com/videoplay?docid=451477777870178
7384&q=salesforce&ei=PuUMSOPyEIS4rgKNnsG8BA
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Communication
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The internet reduces the cost of
communicating with customers
• Companies can use virtual assistants e.g.
Jenn at Alaska Air http://www.alaskaair.com/
• Company web sites help to free employees
from answering routine enquiries, reducing
call center costs
– Microsoft Knowledge Base at http://support.microsoft.com/
• Move towards making it easier for customer
self-service  saves money for company,
faster response for customer
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Many companies use blogs to
communicate with customers
• “58% of the Fortune 500 [the largest 500
companies] are blogging as of 4/19/08”
• Companies include tech companies like
Amazon.com and IBM, and also less obvious
companies like McDonald’s, Marriott and
Delta Airline
• Nokia has an “N-Gage Mobile Gaming Blog”
Source: Anderson, Chris and Ross Mayfield. April 18, 2008. “Fortune 500 Business
Blogging Wiki”. Wired Magazine and SocialText.
http://www.socialtext.net/bizblogs/index.cgi , accessed April 20, 2008.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Social Networking at work
• The Gartner (News - Alert) Group recently stated that
“enterprise social software will be the biggest new
workplace technology success story of this decade.
Thirty percent of enterprises will openly sponsor
internal, social sharing spaces to help employees find
others with similar interest, skills, backgrounds and
experiences.”
• Source: http://www.tmcnet.com/channels/voipcontact-center/articles/22679-social-networkingwater-cooler-reinvented.htm
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Email (Twitter?) explosion
• Blackberry owners check email obsessively
• Can receive hundreds of emails a day
• Wikis can help
– Keep updated without receiving dozens of emails
– Outdated information deleted and archived
• Not clear yet how useful Twitter is for
business communication – need easy way to
store, retrieve and prioritize messages
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Observing Employees
You are Being Watched!
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Employers can and do monitor
employees’ work and communication
• Tools such as Spector and Track4Win allow
employers to track employees' internet usage at
work.
• Employees generally have no right of privacy at
work
– Employers can read your emails and social networking posts, even
if you use your personal account
– People have been fired because of things they have said about
work on Facebook
• According to a 2/18/08 NYT blog, many firms
have fired people because of inappropriate use of
email.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Producing Information Goods
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Producing information goods is easier
and more collaborative
•
•
•
•
Writing news articles or business reports
Research
Creating music or video products
Writing software
• The internet lowers the cost of producing all
these things  more competition and lower
prices
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Physical Goods
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Work on a physical object still has to
be done in the object’s location
• Automobile industry workers still need to work
in the car plant, because that’s where the
cars are
• Chicken processing plant workers still need to
go to the processing plant
• The internet has not changed everything!
• Manufacturing processes for physical
products are largely unaffected
– Auto production process still the same
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
However, every job has some
information component
• Clothing manufacturing needs information
about what is selling
• PC makers need information about demand
• Surgery needs diagnostic information
• Warfare needs information about the enemy’s
location
Spring 2009. Lecture 11.
44
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Zara is a clothing manufacturer that uses
instant feedback to adjust clothing production
• Fastest response in the industry
• Spots trends quickly using Point of Sale data
• Rapid production process fills shelves with
clothes that are selling
• Quickly discontinue lines that are not selling
• Results in higher sales, less markdowns, less
unsold inventory
Source: McCafee, Andrew at al. June 25, 2004. Zara: IT for Fast Fashion. Harvard Business School Case Study.
http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=604081
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Dell uses DellDirect to influence
customer orders
• Dell’s business model is to custom-design
computers for customers
• Corporate customers get their own Dell web page
• Employees can order from a pre-approved list of
configurations
• Dell can instantly adjust prices based on
component availability and cost
– “Push” certain memory or hard drive sizes based on inventory
– Guide customers towards components
• Allows Dell to eliminate unsold inventory
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Telesurgery allows surgeons to
operate remotely
• A surgeon can operate on someone in a
different country
• On September 7, 2001 a gall bladder operation
was performed on a woman in Strasbourg,
France by a surgeon in New York
–
Source: Kay, Sharon. 2004. “Telesurgery”. Innovation. PBS Series. Thirteen/WNET New
York http://www.pbs.org/wnet/innovation/episode7_essay1.html. Accessed 4/21/08.
• Uses a surgical robot
• One system is daVinci, produced by Intuitive
Surgical Inc.
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Predator drones are piloted from
remote bases in Nevada and elsewhere
Source: General Atomics Aeronautical Systems 2008. Predator Image Library. http://www.gaasi.com/resources/image_library/images/Predator/a02090014.jpg. Accessed 4/21/08. Operating base information
from Harris, Francis. June 3, 2006. “In Las Vegas a pilot pulls the trigger. In Iraq a Predator fires its missile.” The
Telegraph.
48
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/06/02/wpred02.xml&sSheet=/news/2006/06/02/ixne
Spring 2009. Lecture 11.
The Internet and Business
ws.html. Accessed 4/21/08.
R. David Seabrook. Purchase College, SUNY.
Changing Job Designs
Business Process Reengineering (BPR)
Spring 2009. Lecture 11.
49
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The internet and IT have changed what
jobs involve: now more multi-skilled
After the Internet/IT
Before the Internet/IT
• Jobs focused on
activities
• People responsible for
tasks
• Measured and
rewarded on efficiency
Spring 2009. Lecture 11.
• Jobs focused on processes
• People responsible for
outputs
• Measured and rewarded on
effectiveness
50
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
An organization’s way of producing outputs is
called its process or procedure
•
•
•
•
•
How SUNY Purchase enrolls students
How Ford manufactures automobiles
How Apple provides customer service
How the IRS processes tax returns
How a hairdresser cuts your hair
When you join an organization you learn
“how we do things around here”
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
But people used to be grouped in functions, working
with people with similar skills, rather than working
on processes
• Accounting
• Marketing
• Manufacturing
• Information technology
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The problem is that producing one output (i.e. one
business process) may involve several business
functions
Business Functions Involved in Accounts Payable Process
Inefficiencies can
come from each
function having its
own “stovepipe”
computer system –
hard to share info
Goods or
Services
Supplier
Invoice
Spring 2009. Lecture 11.
Accounts Payable Process
53
Payment to
Supplier
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Business processes became inefficient, because the
involvement of many people in different functions
caused miscommunication and delay
• Procedures were set up years or even decades ago,
before computers were widely used
• Jobs designed for workers with low education –
perform one small task over and over
• No-one sat down and thought about how best to do
something – the procedure “evolved” over time
• Added people over time, don’t always think about
how they interacted with what has gone before
• No-one knows why it’s done that way – “This must be
the way top management wants us to do it”
Spring 2009. Lecture 11.
54
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Business Process Redesign (BPR) increased
speed and reduces costs by redesigning
business processes from scratch
• Eliminate unnecessary outputs
• Reduce or eliminate “hand-offs” between departments
• Move from specialization to “multi-skilling” – several jobs
combine into one
• Organize around outcomes, not tasks
• Perform steps in a natural order
• Do work where it makes the most sense e.g. with users
• Eliminate unnecessary checks and controls
• Workers make decisions (not passed to supervisors)
• Use IT to enter data only once – at the source
• Case manager provides a single point of contact
• Typically reduces costs by 40% or more
• Resulted in huge staffing cuts in the 1990s
Spring 2009. Lecture 11.
55
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Mutual Benefit Life slashed insurance application
processing time by 60-85% using BPR; job became
multi-skilled and used computers intensively
Before
After
• Insurance application went
through 30 steps, 5
departments, 19 people
• Turnaround from 5 to 25 days
– most spent waiting in In
Boxes
• Application spends 22 days in
process but is worked on for
only 17 minutes!
• New Case Manager position
• Case Manager does all tasks,
calls on experts when necessary
• Average turnaround 2-4 days
• Supported by PC with expert
systems software
• Application processing time can
be as little as 4 hours
• Case managers can handle
twice the volume of applications
• Reduced Field Office positions
by 100
Source: Hammer, Michael. 1990. “Reengineering Work: Don’t Automate, Obliterate.” Harvard Business Review July-August 1990.
Spring 2009. Lecture 11.
56
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Even SUNY Purchase is using the internet to
change the way work is done – recently
announced an Enrollment Services Unit
• New students used to deal with multiple functions
– Registrar, Student Accounts, Financial Aid,
Parking, Computer Services
• Now many of these functions are being combined
into a new Enrollment Services Unit
– People who were previously specialized will develop multiple skills
– One contact person should be able to resolve all enrollment needs
– Goal is to improve quality of student service
• Enrollment, grade submission and reporting and
many other services provided using the web
Spring 2009. Lecture 11.
57
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Changing Organizational Structure
Spring 2009. Lecture 11.
58
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
The internet has made it easier for managers
to oversee more people, resulting in “flatter”
organizational structures
After
Before
• Easier to track and supervise
more people
• Easy communication
• Flatter organizational structure
• Managers communicate
with each other
• Direct supervision
• Hierarchical structure (many
layers of management)
Spring 2009. Lecture 11.
59
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Group presentations next week (4/27)
The Impact of the Internet on:
• The movie rental industry
• The retail banking industry
• The social networking industry
Spring 2009. Lecture 11.
60
The Internet and Business
R. David Seabrook. Purchase College, SUNY.
Group presentations
• Explain to the class how the internet has
affected your industry
• Follow Group Project content guidelines
• 20-30 minute presentation; about 10 slides
• 30 minutes MAXIMUM!
• I am happy to help if you give me time
Spring 2009. Lecture 11.
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The Internet and Business
R. David Seabrook. Purchase College, SUNY.