the untapped network

How Companies Can Leverage Technology

to Enable the Life Needs of Their Employees

The Untapped Network

By John Nelson

June 2000

Company

Abilizer Solutions, Inc. provides a platform for transforming theworkplace by strengthening the relationship between employee and employer, and enabling employees to effectively navigate their intentions at work and at home. Abilizer has more than 70customers—with over two million employees—providing the AbilizerEmployee Portal to their employee desktops. These companies includemarket leaders such as ACS, Ace Hardware, Applied Materials, AT&TWireless, Chevron, EDS, Ericsson, Fluor, HOK, Oracle, PeopleSoft,RE/MAX, Robertson Stephens, Sun Microsystems and Visa. Abilizer is privately held and funded by leading corporations and private equityfirms including Technology Crossover Ventures, Thomas Weisel CapitalPartners, the Blackstone Group, Cendant, Information TechnologyVentures, US Venture Partners, Comdisco Ventures, the European Web Group, E*Trade and Dorset Capital.

Author

Mr. Nelson oversees the research and analysis division of AbilizerSolutions, Inc. His group is focused on understanding the life needs of today’s workforce and how employers can best address thosedemands. Prior to his role with Abilizer, Mr. Nelson directed AndersenConsulting’s global Strategic Research Group around e-commerce and financial services. He can be reached at 415-216-0100 or [email protected]

Acknowledgements

Abilizer would like to thank the following individuals andorganizations who have contributed immeasurably to this study: Pete Petersen, Larry Butler and Pam Farr of the Cabot Group for their guidance, quotations and content; Constat Market Research for conducting our nationwide focus groups; Jennifer Hale forproviding research and analysis; Sudha Putnam for writing and editing; Jan Martí for production; and Camilla Layton for design.


Overview 2

Contents

Executive Summary 4

Technology in the Workplace 5

Personal Use 6Universal Access

Controlled Usage 8

Employee Needs 10ContentCommunityCommerce

Conclusion 14

Endnotes 15


3 Table of Contents

Executive Summary

Nearly every communication a CEO delivers to the press, shareholdersor investment community includes the phrase, “Our people are thiscompany’s most valuable asset.” This statement is true in today’seconomy more than anytime in recent history. According to theBureau of Labor Statistics, in 1980, employees accounted for only 30 percent of corporate tangible assets; in 2000, they will account for nearly 70 percent.1 The dramatic shift to a “knowledge-based”economy places the focus squarely on attracting, acquiring andretaining a best in class workforce.

The new workforce driving the “knowledge-based” economy isconnected and empowered through Internet-based technology. The number of desktops with access to the Internet is increasing, and the 30-40 million people with work access will soon produce the same amount of traffic on the Internet as the nearly three-foldnumber of home users. While employees are using the Internet forwork-related activities such as gathering research on competitors and communicating with vendors, they are also using the Internet for personal needs. Employees are accessing current news, tradingstocks, researching schools and price shopping at work via theInternet. In 2002, nearly 50 percent of Internet purchases will be made from the office.

Despite concerns of abuse, progressive managers recognize thedemands placed on their employees and are accepting a reasonableamount of personal Internet use while at work. Visionary companiesare taking it one step further and lending assistance to theiremployees’ life needs by providing products, services and programsdesigned to help their employees better manage work and lifedemands.

The technology is in place, and management is recognizing thepersonal needs of employees. Delivering programs that producetargeted content, foster corporate community and provide productsand services around the life needs of employees helps protect a company’s most valuable asset: its people.


Executive Summary 4

In 1980, employees accounted

for only 30 percent of corporate

tangible assets; in 2000,

they will account for nearly

70 percent.

The 30-40 million people with

Internet access at work will soon

produce the same amount of

traffic on the Internet as the

nearly three-fold number of

home users.

In 2002, up to 50 percent of

products and services bought

on the Internet will be

purchased at the office.

Technology in the Workplace

For the last ten years, companies have focused the majority of ITinvestments on building networks to help employees communicateand share knowledge more efficiently within the organization. Now, with the business world’s widespread adoption of web-basedtechnology, companies have begun to extend their corporate intranetsto provide employee access to the Internet. Forrester Researchestimates that the number of employees who have Internet access at work grew more than 55 percent in 1999.2 Translated into dollars, by the year 2003, companies will spend nearly 50 percent of theirinfrastructure budgets on providing Internet access to employees.3

(See Figure 1)

As companies become more connected, employees are rapidly takingadvantage of the power the Internet brings to their desktops. In termsof total number of hours spent online, the 30 million users accessingthe Internet from the workplace produce nearly the same amount of traffic as the 77 million active users at home.4 This has majorimplications now and for the future, as the workplace increasinglybecomes the location of choice for accessing the Internet.

Clearly the motivation for connecting employees through intranetsand the Internet is to make companies more productive by improvingcommunication and the flow of information. However, employees have rapidly adopted these tools for their own uses as well.

5 Technology in the Workplace


0

100

200

300

400

500

600

1999

TOTAL IT SPENDING (Less Services)CORPORATE INTERNET SPENDING

2000 2001 2002 2003

$ B

ILLI

ON

S

Corporate Internet Expenditures

Figure 1 Source: IDC, Abilizer Research

Personal Use

Despite soft corporate policies restricting computer and Internet use to work-related business, personal use of company technology is prevalent. In one survey, 90 percent of respondents indicate thatthey access non-work-related sites at least once a day. Fortunately, the same survey reveals that 82 percent of bosses tolerate a“reasonable” amount of personal use.5

EMPLOYEE VOICE

When asked about employee access, a strong majority ofrespondents confirmed that they are shifting away from using theInternet at home to using it at work. Nearly all respondents admitusing the Internet at the office for non-work-related activities. Theconsensus of the group is that personal tasks need to be performedat work, and that companies understand this. In addition, if thecompany can provide assistance with these tasks, all parties willbenefit. The following factors are driving the preference for workaccess:

• Faster connections, which reduce time for browsing and shopping• Longer work days• Employer-provided online resources and solutions for personal needs

The employee groups surveyed agree that Internet access is not onlyan essential business tool, but also a sign of a progressive company.Besides becoming more productive personally and professionally,those who are granted access to the Internet feel recognized asbeing valuable employees, feel a greater sense of community withinthe organization and develop an increased sense of loyalty.

Results from employee focus groups conducted nationwide by Constat Market Research

Reasonable personal Internet use by employees can have far-reachingbenefits for both the company and its employees. The ability foremployees to better manage and facilitate daily life needs allows them to spend more time focused on their work, and decreases time away running errands.


Personal Use 6

“ The Web serves as a continuous

medium that crosses between

the workplace and the home.

People are taking advantage

of the Web’s productivity around

the clock and are becoming

much more efficient at handling

everyday tasks, whether they

are at the office or at home.”

Allen Weiner—Vice President, Nielsen//NetRatings

Universal AccessA significant development in the drive to connect employees to the Internet is Universal Access (UA). With UA, companies provideall employees with a home computer, Internet connectivity and acompany-based employee portal, either for free or at a subsidizedprice.

Compelling benefits of Universal Access include:• Increasing the number of hours that employees can work,

helping the company increase productivity• Providing tools to help employees accomplish personal tasks

online, bolstering the company’s image as a supportive employer• Differentiating a company from its competitors, creating an

“employer of choice” mentality—internally and externally• Developing employee computer proficiency, improving the

overall skill-base of the organization• Providing a centralized office bulletin board that is accessible

anytime, anywhere, helping a company communicate with a dispersed workforce

Several large companies, including American Airlines and Intel,have rolled out UA initiatives to their workforce. Intel’s programincludes personal computers, Internet access and Internet servicesat no charge, to all employees worldwide. “We’re delighted to offeremployees and their families the ability to take advantage of theeducation and e-commerce opportunities on the Internet,” saysPatty Murray, Intel vice president and director of human resources.“The Intel Home PC Program is the right new benefit for the year 2000.”


7 Personal Use

“ In the future, providing company-

wide access to the Internet and

company intranet will be critical

for both technology and non-

technology companies. It is

understood that a small

percentage of time on these

resources will be for personal

use; a fair trade off considering

the increasing demands placed

on the employee in today’s

marketplace.”

Larry Butler—V.P. Human Resources (retired)

Peoplesoft

Controlled Usage

Along with the benefits of wiring desktops comes concern around the abuse of company technology and Internet content. According to the American Management Association, more than 80 percent oflarge companies will have implemented some type of controlled usage by the year 2001, primarily to restrict access to adult content sites.6

Additional workplace controls may include:• Restricting news and entertainment URLs• Blocking software downloads• Impeding the acceptance of cookies (information that a website

records on a user’s hard disk for future use)• Blocking online purchases

EMPLOYEE VOICE

Employee research respondents agree that companies must protectthemselves from allowing pornographic and other inappropriatewebsites to be viewed on their systems. However, blanket policiesthat restrict access to commerce and content websites can have anegative impact. These policies not only weaken the morale of theworkforce by implying a sense of distrust and preventing employeesfrom accomplishing vital personal tasks, but at times can interferewith work responsibilities.

• “They block the CGI scripting so that if you’re trying to fill out aform—for example to apply to The Wall Street Journal—it won’tallow you to fill it out completely, even though the site itself hasbeen approved by the company.”

• “I can’t tell you how frustrating it is when I’m working late: It’seight o’clock, the stores are closed, and I can’t get online to buya birthday gift.”

• “They trust us with making decisions about their business, butnot with accessing the Internet. It doesn’t make sense.”



Controlled Usage 8

“ A key to competitiveness is

to create an environment that

attracts, retains and excites top

talent. Attractive compensation

and benefit packages, meaningful

work and development

opportunities are important

factors. Increasingly, employees

are also asking for a flexible

environment that helps them

integrate work and personal life

priorities. This requires not only

effective tools, techniques and

programs, but also a willingness

on the part of management to

accommodate individual needs.

In the past, mangers emphasized

consistency in employee matters.

Flexibility is replacing consistency

at “employers of choice”.

Pete Peterson—Sr. VP Human Resources (retired)

Hewlett-Packard

In spite of the potential for abuse, many managers believe that theInternet does not necessarily encourage additional abuse; it simplyreplaces other unproductive activities. “The people abusing theInternet are generally the same employees that had productivity issues before they were granted access. Our top people are not surfing all day.”7

Progressive business managers concede that allowing employeesreasonable freedom for personal Internet activities can benefit boththe company and its employees. Workers can manage their personaland business needs more efficiently, allowing them to focus more ontheir work and decreasing the time for non-work-related activities.Longer-term benefits include increased productivity, morale andloyalty. Leaders in the HR community seem to agree:

“We recognize that a certain amount of personal tasks will get taken care of at work. It’s expected that people will use email and the Internet for business purposes, but we realize that people have lives.”8

“When potential employees interview companies for employment, they evaluate all of the benefits, which may include schedule flexibility, on-site dry cleaning or on-the-job shopping…each trip an employee makes to the store is more time taken away from the employer.”9

“Companies probably lose more money trying to control their employees with an iron fist than they do in lost productivity by giving them free access.”10


9 Controlled Usage

Employee Needs

As employees become more sophisticated about the resourcesavailable to them via the Internet, and as companies realize the value of using technology to enhance work-life navigation for theiremployees, the demand for company-sponsored programs will grow.When employees were asked what their companies could bring to their desktops to better assist with their work-life navigation,responses centered around content, community and commerce.11

ContentThe amount of information available on the Internet and companyintranet is overwhelming; the challenge lies in providing targeted,relevant content to each employee. Assistance with developing andlocating content that is pertinent to the workforce is being provided by many leading companies. By understanding employee needs,companies can negotiate directly with vendors and content providers,or partner with third party providers, to deliver a broad spectrum of value-added offerings to the employee desktop.

EMPLOYEE VOICE

Employee research participants provide positive feedback around the idea of their company delivering content to their desktop thataddresses work-life needs.

• “Our company could take a poll to see what the majority of thecompany is interested in as far as being able to take care of theirpersonal needs, and then create or modify our existing intranet.”

• “If they offered information online around having someone that I could trust to watch my children, that would cut down on mystress and allow me to focus on my work, my productivity.”

• “Trust is the interesting point; having someone that you can trust.We find a lot of these sites on our own, but I think an added valuewould be that the company has done some background research onhow good the service is, the reputation of the doctors or the qualityof the dry cleaning. Then you have a little bit of confidence usingthe service because the company has done some research into itsbackground.”


The pre-selection of content partners can reduce, or even eliminate,the time employees spend searching and price shopping. Providingthese services can be viewed as a company benefit, demonstrating that management understands that employees have lives outside the office, and are willing to lend assistance.


Employee Needs 10

“ Growing traffic on corporate

intranets will draw the

attention of e-commerce players.

Companies and vendors will

work together to develop

corporate buying programs

to gain access to this captive

audience. Just as companies

offer employees on-site childcare

or dry-cleaning drop-off, they

will see intranet e-commerce

as a lifestyle-enhancing perk.

Intranet marketplaces will

blossom as retailers gain a

new audience, companies give

employees a new benefit and

workers save money through

corporate discounts.”

—Forrester Research, The NewBusiness Portals, February 1999

Community Several recent trends—including the push towards globalization andthe continued growth of mergers and acquisitions—have resulted inunprecedented size and profitability for corporations. However, one of the many repercussions of these trends is the loss of corporatecommunity in the workforce. Company intranets have made greatstrides in facilitating the exchange of business information, corporatecommunications and knowledge capital with disconnected employees,but in most cases it has ignored the benefits of linking employeesbased on personal interests and life needs.

EMPLOYEE VOICE

Employee research group participants indicate that building andmaintaining corporate communities covering work-life issues iscritical, but often ignored by HR departments. Simple intranet orInternet tools such as employee classifieds, group calendaring andtopic-related bulletin boards foster a closely-knit community amongemployees, as well as enhance and extend the employer-employeerelationship.

• “When I was forced to relocate across the country a year ago, I reallycould have used some form of local information, or a way to contactothers in the office to find out what neighborhood to live in, thebest place to find an apartment....things like that, where you reallyneed word-of-mouth”

• “Bulletin boards just don’t cut it anymore”• “Everything is focused around the corporate headquarters. If you’re

out here in a satellite office you do not feel very connected with thecompany, and cannot take advantage of all the perks that those atthe home office are accustomed to.”



11 Employee Needs

CommerceEmployees are accessing the Internet at the office not only to retrievenews and conduct research, but also to engage in online commerce.There is a growing preference for purchasing goods and services overthe Internet at the workplace. (See Figure 2)

A number of explanations can be attributed to the growth of onlinecommerce at the office. These include longer work hours, fasterconnections and the growing acceptance by management of attendingto personal issues at work. However, the bottom line indicates thatonline commerce at the office will continue to grow as more workerschoose to access the Internet at work in place of at home.

Employees are not just buying flowers and checking stocks online at the office; they are also performing time-intensive tasks such as researching schools for their children, planning travel and priceshopping for major purchases such as home mortgages andelectronics. According to Jupiter Communications’ “Home Versus WorkUsage” study, approximately 70% of employees spend time gatheringproduct information and price-shopping at work, a sharp contrast tothe roughly 25% of employees involved with less time intensive taskssuch as checking bank statements or credit card balances online.12


Employee Needs 12

$0.01995

WORK BASEDHOME BASED

1996 1997 1998 1999 2000 2001 2002 2003

$10.0

$20.0

$ B

ILLI

ON

S

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

Online Shopping—Home vs. Work

Figure 2Source: Jupiter, Media Metrix, Abilizer Research

When examining actual purchases from the workplace, the evidenceindicates that they are complex, expensive and research-intensiveproducts and services. (See Figure 3)

Leading organizations are increasingly allowing employees reasonablefreedom with personal Internet purchases that typically would havebeen performed with a phone call or a trip to a store during workhours. Large companies can use volume purchasing, partnerships and access to their employee base to negotiate discounted rates on popular products and services. Examples include movie andamusement park tickets, subsidized childcare or preferred rates on car loans and insurance. “When you’re talking about savingemployees hundreds of dollars (with company discounts), that’ssignificant… the job market is very tight, and any benefit is a tool.”13


13 Employee Needs

Apparel

0% 10% 20% 30% 40% 50% 60% 70%

Paid Bills

Flowers/Gifts

Books/Music

Travel

Computer Hardware, Software

Financial Services

33%

53%

54%

61%

63%

Percentage of Employees ŁBuying a Given Product from Work

46% 46%

48%

Figure 3Source: Jupiter Communications

Conclusion

As Internet and intranet access becomes ubiquitous, employers gain a means to extend work hours around the clock and around the globe,as well as a new tool to help employees manage their lives. Corporateintranets provide the infrastructure for connecting employees to a broad range of programs, products and services via the Internet.

According to Hewitt Associates, employees confront a life decisionevery 12-15 minutes at the office.14 Given this frequency—and the casethat “reasonable” personal use is an accepted reality—it makes sensefor companies to help employees accomplish personal responsibilitiesmore effectively. Providing employees with online programs thatdeliver targeted and personalized content, foster ongoing dialogue,promote community-building and provide access to a wide range ofproducts and services around their life needs can help to differentiatea company as an “employer of choice”.

Before companies can truly revolutionize the way they conductbusiness by taking advantage of the Internet and online commerce,they must first transform their workforce. Empowering employees with the necessary online tools, and giving them the freedom to use them in their personal and professional endeavors, is a first steptowards building the company for the twenty first century.


Conclusion 14

Endnotes

1. Forrester Research, “Internet Services Hypergrowth,” February 1999.

2. IDC Corporation, Abilizer Research

3. Nielsen/NetRatings, 2000, Abilizer Research

4. Vault.com, February 2000

5. American Management Association, 1999

6. Constat Market Research, 2000


8. “Desk Service,” Incentive, January 1, 2000, p. 9

9. “All Work and No Play.” The Industry Standard, May 15, 2000, p. 138


11. Jupiter Communications, “Home Versus Work Usage,” 1999

12. “Workers bag new perk with shopping on the job tight labor marketmeans creative benefits,” USA Today, November 16, 1999, p.1B.

13. “Workers bag new perk with shopping on the job tight labor marketmeans creative benefits,” USA Today, November 16, 1999, p.1B.

14. Hewitt Associates, 1999


15 Endnotes

Abilizer Solutions, Inc.744 Alabama Street, Second FloorSan Francisco, CA 94110Phone: (415) 216-0100www.abilizer.com

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