Internet drives company efficiencies,
changes how Iowans do their work

April 20, 2004

By Cindy Bussanmas
Iowa's Internet

DES MOINES, Iowa — During the peak of the Internet boom, predictions of its economic impact focused on the creation of exciting new entrepreneurial businesses. New virtual industries would be created. The basic business models of tired old companies would be torn apart and replaced by new and exciting Internet-based models.

The actual outcome in relation to the economy is now known as the dot com bust. Optimism in the transformational power of the Internet on business has often been replaced by a puzzled, "What were we thinking? No one is going to pay for that."

But both views miss the mark. Even though the prospects of the dot coms were wildly inflated, the Internet is having a defining impact on industries worldwide.

"After participating in all the early hype about Internet start-ups and then seeing how popular it became to disregard the projections of hte Internet's economic impact, it's finally becoming clear what the primary impact of the Internet will be...at least in the early stages," said Jim Houser, a management consultant and former executive at Pioneer Hi-Bred International, Inc. "It's not so much about creating new work as it is about changing the way we do work."

In Iowa, while it is difficult to find a viable Internet company, the impact of the Internet on the state's industrial base is significant. The impact can most clearly be seen in how the Internet has changed the way many Iowans go about their day-to-day work.

Company Intranets and Internet Web sites provide employees with the information, tools and resources they need to perform their job responsibilities.

For years companies have been focused on cost-saving initiatives to gain efficiencies. This is especially true in Iowa where there are many mature industries like agribusiness, financial services and health care. Improved efficiency has become a central piece of company growth strategies.

At a recent Internet usability conference conducted by Nielsen Norman Group, Jakob Nielson talked about the substantial savings Internet technologies bring to businesses through the reduction in the amount of time employees spend looking for information and performing tasks. Other cost savings are realized through the elimination of telephone calls, overnight mail, postage costs and sending and receiving faxes.

According to a poll conducted by Harris Interactive, "Those online at work believe the Internet has increased their productivity - and made their jobs more enjoyable and exciting." The study found that 71 percent of people who are online at work say the Internet has increased their productivity.

While these statistics are impressive, examples do an even better job of describing the subtle and not so subtle ways the Internet has changed the way employees work.

Intranets can help build a strong employee base through two-way communications with employees. "It's a real challenge to communicate strategy to a broad base of employees," Houser said. "In a multi-national company, business moves quickly and situations are always changing. It's often difficult for employees to keep up with all the rapid changes."

Historically, Houser relied on face-to-face meetings and internal print material to get messages concerning direction, strategy, values, and focus, out to employees.

Today, directives, announcement and memoranda can be released to employees using the Intranet, saving both paper costs and costs associated with distribution. According to Houser, this makes for more informed and therefore more effective employees.

"The Intranet can also help employees become aware of happenings within other business units," Houser said. "An employee in administration who has a close working relationship with sales can access the sales Web site to learn about their processes and products, which in turn helps them understand the overall business better."

Intranets also create a win-win situation for human resources professionals and employees seeking HR-related information.

The new online environment provides more efficient communication to employees and more efficient delivery of information pertaining to high-value information like employee benefits, compensation, time off, learning opportunities and job postings.

"In the past, it seemed like a lot of my job involved recreating and managing the distribution of employee benefit information," said Nancy Betz, director of human resources at Federal Home Loan Bank of Des Moines. "Since the information frequently changed, updating employee handbooks and managing the flow of information was difficult to keep up with."

Betz said now that benefit information and forms are available online, employees can help themselves to the information they need and be assured they are receiving the most current information. "The Intranet has made it so I can spend more time on challenging, proactive work," Betz said.

But increased workforce productivity does not end with the use of the Intranet. Employees and industries also benefit from the massive amounts of information on the Internet, and process improvements realized through cross-functional Internet exchanges.

The Internet has transformed the mortgage banking industry, for example. Companies are working together online to create efficiencies and in the process, they are transforming how people do their jobs.

"The Internet has completely changed my job -- what I do and how I do it," said Carla Richards, vice president of mortgage banking at Bankers Trust.

According to Richards, consumers are a lot smarter because of the Internet. "They've done their homework, and they ask educated questions. They've usually looked at several other companies and know what they have to offer," Richards said. "Now more than ever there is a need for us to differentiate our company and our offerings from our competitors."

Richards said traditional ways of marketing mortgages involved meeting with independent contractors or sending them mailings. With the Internet, their products, rates and services are marketed through e-mail and the company Web site.

Richards said the dot com boom for mortgage banking did not succeed because of the long-distance, impersonal relationship was not enough. "When you are making the biggest buying decision of your life, you want to make sure you are working with a reputable company," Richards said. "At the end of the day, people want to talk to a living person on the phone and meet with them in person. The Internet can help consumers shop and compare and it can help us market but it can't replace that human touch."

Another Internet improvement in the mortgage industry is the application process. The software used for conducting a loan application is now Web-based and online loan applications are completed during meetings with potential buyers.

The new Web-based systems provide real-time uploads to mortgage investors who purchase the loans. Richards said the turnaround time from the mortage investors is immediate, which allows Bankers Trust to provide more efficient service to their customers."What used to be three-week approval process is now instantaneous. Investors make buying decisions in minutes," Richards said.

In addition, Richards said all vendor requests, such as home appraisals and credit checks, are ordered and returned using the Internet. "The time savings and postage savings are significant," Richards said. "It used to take three to five days to receive an applicant's credit report and now we have it in minutes."

Internet professional are also experiencing job changes because of the Internet. Rich Azinger, a multi-media develop at Pioneer, relies heavily on the Internet to do his job. "The technology itself has changed my job and the online connectivity among technical experts is priceless," Azinger said.

Azinger said he is a member of four technology networks that promote technical expertise through active e-mail exchanges with member from around the world. "You send an e-mail describing your question or issue and someone answers you almost immediately," Azinger said. "People often respond by sending me code that I'm looking for or links to Web pages with information about the specific topic I'm looking for."

According to Azinger, networking with other professionals is especially helpful when he's learning a new program. "It helps me get up-to-speed quicker which increases productivity dramatically," he said.

Karee Vernon, interactive technologies manager at Pioneer, relies on the Internet to view product demos of online courses, create requests for proposals, and keep curent on technology advancements.

"The Internet promotes out-of-the-box thinking and let's you see new and diferent ways of doing things," Vernon said. "It also helps you keep up to speed with what other companies are doing."

Vernon and Azinger agreed that product output has also changed because of the Internet. Many of their previous applications were created on CDs but now they are deliverred on the Internet.

"There are several efficiency gains -- the product is real-time and there is only one place to go when you need to make changes instead of burning all new CDs," Vernon said.

Sometimes there are technologies that launch an entire new industry, often replacing existing industries. The automobile replaced the carriage and computers replaced typewriters.

Sometimes technologies remake how an industry operates. For example, cellular technology has remade the competitive patterns of the phone industry.

In the boom period of the dot coms, experts predicted the Internet would bring a jolting change. In the dot com bust, many talk about these predictions being unrealistic. In the midst of all of this, the Internet is proving to defy both early optimism and current pessimism.

While predictions of the Internet's impact on industry in general, and the impact on Iowa industry, have been incorrect in the past, the changes the Internet has already created in how Iowans work and how Iowa companies drive efficiency are profound.

According to Harris Interactive, the metholodogy was: "This Harris Poll was conducted by telephone within the United States between February 17 - February 21, 2000, among a nationwide cross section of 332 adults who are online at work. Figures for age, sex, race, education, number of adults and number of voice/telephone lines in the household were weighted where necessary to bring them into line with their actual proportions in the population.
In theory, with a sample of this size, one can say with 95 percent certainty that the results have a statistical precision of plus or minus 6 percentage points of what they would be if the entire adult population had been polled with complete accuracy. Unfortunately, there are several other possible sources of error in all polls or surveys that are probably more serious than theoretical calculations of sampling error. They include refusals to be interviewed (non-response), question wording and question order, interviewer bias, weighting by demographic control data and screening (e.g., for likely voters). It is difficult or impossible to quantify the errors that may result from these factors."

Harris Interactive: http://www.harrisinteractive.com/harris_poll/index.asp?PID=81