Strategies of Place
Sun's motivation: cutting costs. But the company has also made what Deloitte & Touche's DeZabala calls "a shift to resiliency"—building flexibility into its business processes as well as its technology. Instead of having three locations, for example—one in the East handling transactions, one in the Midwest handling customer calls and one in the West for marketing—a company might set up multifunctional sites able to pick up the slack if another location shut down. A company might even design its facilities according to the kind of geographic concerns used to safeguard against natural disasters, such as hurricanes. "If you know the path a hurricane might travel, you wouldn't have similar facilities along that path," says DeZabala. "In the same vein, certain cities might be in the same geographic plain in terms of a terrorist attack. So you'd be careful what you placed in, say, New York, London and San Francisco." To a certain extent, financial services companies in San Francisco already do that: Concerned about damage from earthquakes, they don't put all their people in one site, and they make sure all their facilities aren't all on the same fault line.
Some companies are finding that the newly dispersed arrangements are working just fine—disaster-planning or not. Consider Empire BlueCross BlueShield, a health maintenance organization with headquarters that once occupied 10 floors in the World Trade Center. Like many other companies once housed there, Empire initially wanted to reassemble workers under one roof, but has since settled on a less centralized setup. At first, many of its 1,900 employees from the Trade Center "platooned" in shifts to fill the desks available at six makeshift offices in Manhattan, Long Island and upstate New York. When seats in the office were not available, they worked from home. The situation has inspired a more permanent, less centralized approach to the workplace. Even as Empire moves into more permanent quarters over the next two years, the company plans to use two New York City locations—one in Manhattan, the other in Brooklyn—with a total of 10 percent less space than it had before, at some 20 percent in savings in overhead and real estate costs.
It's forced rethinking, and results have been positive in other ways, company executives say. "What's the saying, 'Necessity is the mother of invention?'" says Kenneth Klepper, Empire's senior vice president for systems, technology and infrastructure. "We're finding we can do things we were skeptical of in the past. Hundreds of people have dialed in from home, and we continue to have high levels of productivity from people working remotely. I think we'll take what we're learning and turn it into improving the quality of work life and business life at Empire."
Says Charles Grantham, chief scientist of the Sonoma Valley, Calif.-based Institute for the Study of Distributed Work: "Corporate America is developing a different strategy of place, thanks to recent advances in information technology. Sure, you're better positioned for business continuity if you're distributed. But Sept. 11 also crystallized for a lot of people that decentralization—thanks to advances in technology—doesn't have to mean drop-offs in productivity and the death of social interaction between workers." Indeed, Gratham says, it can mean lower costs and newly structured work forces that, "reconstituted in several locations, can lead to more flexibility, greater communication between managers and workers and, ultimately, a better ear on the marketplace."
Anne Field is a Pelham, N.Y.-based writer who covers management and business trends. Besides contributing to CIO Insight, her work also appears in a variety of business magazines and Web publications, including Fast Company, fsb.com and iSource. Researcher Brian Watson contributed to this report. Comments on this story can be sent to editors@CIOinsight.com.
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