Saturday, July 18, 2009

HP Office Closures Extend Commute

In part 1, we reviewed how HP's data center consolidation that was focused on efficiency also achieved environmental benefits with an impressive 60% reduction in energy use. 

Office consolidation did yield the desired economic benefits, but forced some employees to make longer commutes increasing air pollution. In this case efficiency trumped the environment.

There are situations when green and operational efficiency goals may at first glance be inconsistent. The reason for this apparent conflict is that some costs are still not captured on the balance sheet.

For example, HP IT also applied consolidation to its offices forcing some employees into long commutes. Hewlett Packard did not have specific data available on the changes to its average commute over time. Commuting is a large part of the company’s footprint and closed offices did cause employees to commute longer. An extra 100 miles or more a week is not uncommon for employees moving to a centralized office.

Since HP does not need to deal with the commute costs or the associated air pollution, its ROI is unaffected when calculating the benefits of office consolidation.The burden of the commuting costs falls to the employees and the environment.

The ROI calculation for office consolidation is fundamentally different than the data centers since an important component of the costs is invisible – the commuting costs. Extending the analogy, it would be as if the telecomm costs of the data centers were not considered in the ROI calculation, which would have made data center consolidation less attractive.

Now for those readers seeing red rather than green, please continue reading. The example will illustrate that there are still hard benefits to be achieved.

Unfortunately the same technical solution that HP applied to its data centers --- connecting business partners to systems via high speed telecommunications is not fully available to its IT employees.

HP IT only allows telecommuting once an employee works 30 hours per week in-office with management approval. This may allow an employee to potentially telecommute one day per week unless they are working more than ten hours per day.


1. Enhance the commute
  • Encourage employees to use alternative transportation with some valued incentives to get employees to try long enough to change their habits. HP provides the standard incentives with the standard outcomes, most employees drive alone. Would a monetary incentive, a free HP product, or recognition induce change? Perhaps HP marketers could apply their knowledge of human nature to find a valued incentive.
  • Also helpful is to resolve inhibitors. A fear of many employees is that they will be unable to get home in case of an emergency. Some companies guarantee a ride home to encourage alternative commuting.
  • Establish private bus service a la Google, Yahoo, or Genentech. Or work with someone who would like to or has already to share costs. See my post on Google commuting for more details. 
 2. Maintain remote offices
  • Locate smaller space. Work with companies that also have remote employees who would share space.

3. Drink its own champagne - Virtualize the commute by leveraging HP Skyroom
  • Figure out how knowledge workers can more effectively collaborate from remote locations to allow greater telecommuting. When I was a CIO, I too believed that developers work best when collaborating together and achieved collaboration with physical co-location. But I also believe that technology can make virtual collaboration nearly as effective as in-person.
    • With its latest tele-presence products, Halo Video Conference and Skyroom for collaboration, HP has dramatically improved upon first generation teleconferencing to make meetings long distance very effective. But it is not only a technology issue, it is a people issue on learning how to work and manage virtually. The skills don’t translate exactly to the virtual and therefore many managers and technical resources need to be retrained. I have not seen it done well, so if HP IT could find an “unlock”, this could help accelerate adoption of HP's new products.
    By excluding the increased commuting costs in its ROI calculation, HP was not incented to make a committed effort to figure out how to deal with commuting. As Randy observed for data center consolidation, his team found it critical to get an accurate inventory of "all-in costs" for IT, from equipment to people to energy to real estate. It was necessary to dissect the business in more detail than is typical of most IT shops.

    As a starting point to the analysis, business should also consider environmental costs. Being forced to take a harder look may uncover some unexpected opportunities.
    In the green office example, the opportunities are to find new methods to encourage ridesharing options and develop new commuting alternatives. The benefits are to improve employee productivity by avoiding long commutes and able to recruit from a larger geographic pool who would be unable to commute to a local HP office. Finally as a technology company, HP has the opportunity to expand market share with new products and services by establishing telecollaboration.

    Randy Mott and his IT leaders are considered one of the best in the industry. A team that has already accomplished so much is smart enough to figure out how to make all its programs green.

    1 comment:

    1. I believe that either companies who employ IT workers have but 2 options: Either they require telecommuting/remote working to all of their IT staff whose jobs can be done remotely or face having to be in compliance with yet another government regulation, this time a "green one" from the EPA with hefty fines for noncompliance, and specific specific wokforce participation targets, which could drive environmentally hostile, backward thinking companies out of business or put them at a significant competitive disadvantage in terms of recruiting and retaining a skilled, motivated, healthier and more productive workforce; not to mention the positive impact upon the air quality of the communities in which they conduct business. I expect new regulations to be enacted within the next 10 to 12 months as part of the current the Obama administration's effort to substantially reduce America's dependence on non-renewable fossil fuels, especially foreign oil imports from OPEC nations while incenting green solutions and emerging green technologies. A lot of this is simply a change in perspective once one concludes that the status quo status quo is untenable. In conclusion, I believe another vital component will have to be incentives for adopting healthier lifestyles. Whether one is sitting in front of a computer at the company's regional centers or satellites; or sitting in front of a computer in one's home. Sitting is still part and parcel of the sedentary lifesyle of the bulge, obesity, diabetes and its complications, heart disease, memory loss, early onset dementia and other cognitive impairments that are not inevitable, but are extremely costly to American taxpayers and business itself in lost productivity and higher cost of medical benefits for their ailing workforce, which is stressin our current healthcare system in America.