New Zealand firms are increasingly participating in the global economy,with many finding that the best inroads into overseas markets are madeby having a local presence in the countries they are expanding to. Buthow do Kiwi companies manage these global outposts remotely from NewZealand? What technologies do they use to communicate with staff abroadand why do they do use these technologies? Louis van Wyk investigates.
Remote working is becoming more prevalent – a report recently issued byCisco points to research by the Economist Intelligence Unit whichpredicts that by this year, 62% of employees will work with teams indifferent locations, and by 2011, 30% of the global workforce will workremotely.
Considering this trend, it stands to reason that more New Zealanderswill not only be locally-based members of global teams, but will alsoincreasingly work with colleagues based offshore.
As New Zealand’s largest multinational, Fonterra supports 9300 desktopsand laptops globally, according to service delivery manager Lisa Payne.About 70% of these are New Zealand users; 15% in Australia and a further15% spread over around 40 other regions.
To reduce the complexity of operating such a widespread communicationssystem, Fonterra relies on managed services for its telecommunications,data networks and desktop support. This means its main challenge ismanaging the service providers in different locations and the costassociated with the risk of maintaining global local contracts.
“Data networks both between offices and within offices, and telephonesystems, are provided to each office and managed through a centralisedsupport agreement managed from New Zealand,” says Payne.
To enable Fonterra’s dispersed workforce to communicate and collaboratewith each other across the world, all employees have access to instantmessaging with presence awareness, which allows users to set theiravailability status, and virtual team workgroups. In addition, theFonterra intranet, aptly named Milkyway, provides links to corporateinformation and systems, plus daily news stories and messages for allstaff.
The company is also in the process of deploying computer-basedconferencing facilities through its messaging application. But althoughvideoconferencing units are available in some of Fonterra’s largeroffices, Payne says it’s not yet a preferred means of communicating.
“We tend to use audioconferencing and email heavily – this enablespeople to work around time differences effectively,” she says.
Fonterra is exploring the use of messaging-based videoconferencingbefore investing in high-definition videoconferencing or telepresence.
“It will be viable when the technology can run effectively over lessbandwidth or the cost of international backhaul and remote data (tailend) network costs reduces drastically. The ideal solution is theability to provide quality conferencing over the internet that is easilyand instantly accessible,” Payne says. “Fonterra would also need towork on creating a culture whereby videoconferencing was a preferredmethod of communicating.”
But running a multinational enterprise is no longer the preserve ofcorporate giants – especially if you throw enterprising Kiwis into themix, as one of New Zealand’s latest entrepreneurial ventures has shown.
Online accounting software provider Xero employs over 70 people, andwhile the majority are based at its Wellington headquarters, the companyalso has offices in Auckland, London and Sydney, and has staff workingremotely across New Zealand.
“Without thinking, we have become a mini-multinational – it just seemslike a very natural way to work,” says Xero co-founder and chiefexecutive officer Rod Drury.
Based in Hawke’s Bay, Drury encapsulates this remote working philosophy,along with chief operating officer Alastair Grigg, who lives in theWaikato – although company executives are in the Wellington office atleast once a week.
In keeping with the concept behind its own web-based service, Xero hasfound it does not need complex, on-premise systems for its internalcommunications – instead the company mostly uses Skype.
Drury says Skype turns any computer into a communication endpoint,negating the need to invest in proprietary equipment. “We are unlikelyto spend thousands of dollars on proprietary gear. I can’t justifyspending that on activating endpoints.”
Besides, Skype boasts one of the most useful features of unifiedcommunications offerings – presence. “With presence we are able to knowwhere everyone is. With a lot of people working remotely, it increasesthe velocity of our communications.”
Presence also allows remote workers to prove they are actually working.“I would be concerned if one of my sales people has not been online allday. It is a subtle way to prove that you are doing the business,” Drurysays.
Xero uses Skype for both voice and video communications, and about aquarter of Drury’s communication with overseas staff is through video onSkype.
Again Xero has not needed to shell out for dedicated videoconferencingequipment – the built-in microphones and cameras of its fleet of AppleMacs deliver good-quality video calling over Skype, says Drury.
For videoconferences, the company uses Mac Minis with high-qualityLogitech cameras and microphones. “We use this for meetingroom-to-meeting room videoconferences, but it is also good for meetingroom-to-single person connections.”
Audioconference calls are a big cost however, and are generally reservedfor when external parties, such as clients, are involved, or forproduct demonstrations using Microsoft Live Meeting.
Another innovative approach in Xero’s internal communications is theextensive use of Yammer, a corporate micro-blogging tool akin toTwitter.
Yammer is used to share news, links to blogs and even office gossip, andhas morphed into a virtual version of chatting around the water cooler,which has helped far-flung employees feel part of the wider team, saysDrury. “It is like a corporate stream of consciousness. It allows us togrow the company culture and to keep everyone involved.”
This is important for a growing company, and Drury believes tools likeSkype and Yammer will remain the best options even as Xero expands.“What we are looking for is a single system which is seamless whetherused on a PC, a Mac or TV screen. It has to be low-cost and we don’twant proprietary gear.”
Doing business with bed hair
Meanwhile for Zeacom, another Kiwi technology firm with officesoffshore, taking advantage of the latest unified communicationsofferings is a fait accompli, considering it develops such technology.
Based in Auckland, Zeacom has offices in the United States, the UnitedKingdom and Australia, and around 45% of its 145 employees are locatedoverseas.
And despite the vast distances between the branches, the greatestcomplication in connecting with staff in other countries is nottechnology related, but rather the simple reality of time zones, sayschief executive officer Miles Valentine.
However, presence, a fundamental component in Zeacom’s unifiedcommunications products, helps alleviate this issue. “The first thing Ido when I go online is to look at the presence page to see who isavailable.”
In the US, only about 20 of Zeacom’s 45 employees are office-based, withthe remainder distributed across a number of states – and several moretime zones. Using presence is therefore mission-critical to Zeacom. “Fora distributed workforce, whether it is nationally or internationally,presence is crucial,” says Valentine.
“I talk to my managers in the US a number of times daily. I never leavevoicemails – I just set the system to notify me when someone becomesavailable.”
Valentine also uses Zeacom’s unified communications system to operate aUS phone number that is automatically diverted to wherever he is, whichmeans he is always only a phone call away from the US staff who reportdirectly to him.
While regular visits to the US do keep Valentine in touch with staffthere, Americans are much more accustomed to remote management. “Theconcept of a manager working away from you is very common.”
The same does not apply to staff in the UK or Australia who, like NewZealanders, tend to prefer face-to-face meetings. “Whenever I’m in theUK, I spend a lot of time travelling to meet people. Australia is alittle less so. They are starting to understand how inefficient it is tokeep getting into the car for meetings.”
Valentine only uses videoconferencing occasionally to communicate withstaff. “Video is most valuable for external parties. It has benefitssuch as putting a face to a name – it is a good icebreaker.”
The benefit of audio calls for dealing with people across the world,often at inconvenient times, is that you can literally roll out of bedand get on a call. “You can actually do business with bed-hair!”
Although Valentine sees a definite place for video, he says for mostcommunications, audio calls remain the preferred option. “Audio is easyto set up, has lower bandwidth cost and is much more common.”
Video is often the last component of unified communications to beadopted, especially among smaller companies. “There is not as muchdemand for video as for the core tenants of unified communications –email, voice, fax and presence.”
Living the dream
One company with a mission to change this perception is, naturally,Cisco, which has been very vocal about the financial benefits it hasrealised by using video to enable communication and collaboration acrossits global workforce.
The company claims to have netted benefits to the value of $US691million a year through its investments in Web 2.0 and visualcollaboration tools in the 2008 financial year, representing a 4.9%productivity increase.
And enabling remote collaboration through the use of TelePresence, itshigh-end video meeting suite, as well as online meeting service WebExand other unified communications tools, has yielded Cisco savings worth$US303 million a year by greatly eliminating the expense and time oftravel and increasing the company’s responsiveness to customers.
Video is the best tool for facilitating communication and collaborationacross a dispersed workforce, says Cisco New Zealand countrymanager Geoff Lawrie, adding that using TelePresence has transformed thecompany’s business model.
“We are living the dream. We use TelePresence all day, every day [and]video is part of any communications at Cisco.”
However, Lawrie acknowledges Cisco can enjoy these benefits since itbuilds the technology and has its own high-capacity global network. Buthe believes TelePresence will become more mainstream. “Progressivelythat capacity will become the standard way to communicate. As endpointscome down in price, it will become more accessible. It will even become aconsumer technology.”
Cisco’s “incredibly flexible” location policy has also enabled around 20employees with global responsibilities to base themselves in NewZealand and to manage international teams from here, says Lawrie. “Wehave a number of people with global jobs who have made the lifestyledecision to live in New Zealand.”