ImpactofInformationCommunicationTechnologyICToonOfficeDemandinSingaporeCBD.ppt

Impact of Information & Communication Technology (ICT) on Office Demand in Singapore CBDPresentation to Association for Project Management (APM) of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDOutline of PresentationnIntroductionnTrend in ICT applicationnEffects of ICT on Office Space Allocation & Work Practices nSurvey Sample & Data Collection nMailed Questionnaire ResultsnLogit Model and Other Statistical TestsnCase studies by interviewnConclusion of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDIntroductionnICT has frequently been thought to be the driving force behind today’s economy. nIt is generally felt that there is a direct relationship between investment in ICT and productivity improvements, which include¨ better customer service ¨greater product variety ¨shorter response time ¨enhanced product quality; and ¨better customization of products and services. of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBD What is ICT?nInformation & Communication Technology (ICT) is used to refer to infrastructure and product development that facilitate the collecting, storing and analysis of information that may be transmitted electronicallynIt includes equipment like telephones, communication lines used to enhance communication between employers and employees, businesses and customers, and business and business across physical boundaries of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDGrowing ICT Adoption Rate in SingaporenGovernment has been actively encouraging firms to upgrade their connectivity and productivity via its agencies like IDA, EDB, PSBnSchemes offered include: ¨Local Enterprise Computerisation Programme (LECP) by IDA (assist SME to achieve higher competitiveness through effective use of IT)¨Jumpstart Programme by PSB (assisting SME to adopt E-commerce)nIDA’s “Information & Communication Technology ICT usage survey 1999”indicates a high ICT adoption rates among businesses in Singapore of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDWhat are the Implications of ICT for Office Operation and Space Usage?nComputer and information technologies are expected to bring about “the third wave” of revolution to the production and social interactions in the new economynHow would these new ways of production and customer-manufacturer relationships impact on the demand for office space? nWould this IT revolution lead to a major structural change in the office space demand? nHow would the location choice, spatial configuration and functional connectivity of the physical office space be changed to meet the demand of the IT-driven businesses? of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDICT Trends & Investment in Singapore Office BuildingsnIn Singapore, IT-ready office space commands a market premium over obsolete and IT-unfriendly office buildingsnA trend of facelift to existing office buildings where developers or owners spend million of dollars to provide broadband connection and raise floor facility to entice tenants in IT related business nSingapore Land Tower located in the prime Raffles Place business district is one the building that is currently undergoing million dollars upgrading to improve its facility and functionality nHot-desking, home-office and tele-working is another emerging trend in the office market, nThese will significantly transform the way work is carried out and lead to a reduction in demand for physical office space in the long run of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDRelationships of ICT-readiness on Offices Space Use?nHow would active integration of ICT into the work place help companies to reduce the physical space requirement? nAren’t the companies’ space decisions dependent on the prevailing market rents? nThere are no easy answers at this stage to the questions. nHowever, the market driven and ICT induced office space demand shifts can be conceptually explained ceteris paribus using the familiar demand function as shown in Figure 1. of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDOffice Space DemandQuantity of spaceMarketRentAggregate Demand CurvesDDD’D’OriginalMarket ClearingCondition’RR’baa = demand shift caused by rental increaseb = structural shift in demand curve brought about by the ICT revolutionSource: Dr Sing Tien Foo of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDRevolutionary levelsEvolutionary levelsRange of potential benefitsDegree of business transformationHighHighLowLowLevel 5: Business scope redefinitionLevel 5: Business scope redefinitionLevel 3: Business process redesignLevel 3: Business process redesignLevel 4: Business network redesignLevel 4: Business network redesignLevel 2: Internal integrationLevel 2: Internal integrationLevel 1: Localized exploitationLevel 1: Localized exploitation5 Levels of ICT-Induced Firm Operation 5 Levels of ICT-Induced Firm Operation Evolution Evolution Source: Venkatraman, 1991 of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of ICT on Office Space DemandnICT impacts on office space demand would take place in three broad areas: ¨business function and configuration, ¨staffing structure and ¨location choice.nMore information and transaction via the virtual space rather than the physical space (e.g. internet banking, electronic stock brokerage, NET transaction) nFlatter organization structure. nRatio of clerical staff to administrative and executive staff is likely to reducenProductivity of the staff increases as a result of office automation. nSpan of control of managerial staffnICT-induced decentralization of office space for companies that operate largely over the virtual space. of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDResearch Design – Survey Sampling & Data AnalysisnMailed Questionnaire Survey – pilot phasenIn 4th quarter 1999 URA statistics, 41.64% of the total of 5.88 million square meters of office space were concentrated in downtown core.nSample of tenants is restricted to CBD areasn500 tenants in offices within CBD areas ar randomly selected nResponse rate was poor at 9% (46 responses) nDistribution of respondents profile (Figure 1) of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDRespondents’ Profile of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDCurrent Office Size (sf) Occupied of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImportance of ICT Products?DesktopLaptopPrinterMobile PhoneFax MachineVoice Mail Video ConferencingIntranet/LANInternet/ServerEmailElectronic Data SharingCustomized/Task Oriented Software of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of ICT on Office Operation?Quality of SpaceCost of OperationNumber of MeetingsImportance of Meeting Place Workers ProductivityNeed to Meet-upEmployee’s time in OfficeOverall Space Req’d of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDHow ICT Help to Improve Productivity?nShorten Data process time (82.9%)nReduce Number of Clerical Staff (58.5%)nReduction in storage space for document (56.1%)nIncrease Span of control of Middle Management (51.2%) of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDDoes ICT Facilitate Working Away?Does company encourage work away?NoYes of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDICT on working practicesnReasons against working away practice¨Lesser control (34.3%¨Lack of trust (11.4%)¨Nature of job site (80.0%)¨Resistance from employees (2.8%)Nature of works that will suit “working away” practice of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDCustomer Services & ICTMeans of Establishing Contacts with CustomersUsual Meeting Place of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDFactors influencing office space requirement of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDLogit Model 1nFactors affecting perceived space change in futureVariableCoefficientStandard errorWald statisticsSignificance levelSECTOR-.259.265.956.328OFFSIZE-1.7371.959.786.375ICT.EXP1.4781.1591.625.202MAINTNCE1.6381.0782.308.129WEBPAGE-1.8411.7361.124.289NO.EMPLY.9101.301.489.484C.EMPLOY-1.5181.756.747.387AT.WKAWY5.9973.0503.867.049RENT.DRP3.8432.4492.462.117PDTY.OFF-1.5322.094.535.465Constant-2.8714.297.447.504 of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDLogit Model 2nFactors affecting actual office space changes VariableCoefficientStandard error.Wald statisticsSignificance levelSECTOR.040.131.091.763OFFSIZE-.7651.527.251.617ICT.EXP-2.0201.9131.115.291MAINTNCE1.5841.1022.065.151WEBPAGE-3.9301.9584.027.045NO.EMPLY-.4951.093.205.650C.EMPLOY2.5471.7502.118.146AT.WKAWY1.3681.737.621.431RENT.DRP2.4561.5322.570.109PDTY.OFF-1.8031.821.981.322Constant-.0113.440.000.997 of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDCase Interviews – A Quick GlanceBusiness typeProductivityStaff StrengthLocation ChoiceInsuranceYesLess clericalHot-desking in futureNon-profit training institutionMarginalNo impactNo impactLegal serviceDefinitelyLess clerical, More IT staffNear courts, near clientsDCentral themeRelated staffNear client, no hot-deskingProperty ConsultantsYesLess clericalNo hot-desking, face to face importantProperty ConsultantsDefinitelyLess clerical, More IT staffCant hot-desk, face to face importantManagement ConsultantsDefinitelyLess clerical, more consultantsNear CBD, Office hotelingMedical SuppliersYesLess clerical, IT outsourcedOutside CBD, face to face important of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDCase Study 1 – Allianz Insurance Management Asia Pacificn70 staff in Singapore officenICT increases efficiency & productivity of employee and reduces manual and clerical-type tasksnMinimizing operation cost in long-runnMoved from Shaw Building to Centennial Towers – space increased from 10,000 sf to 20,000 sfnReasons: expansion of business and prestige of the Mariana Bay office locationnWireless applications will have impact on work practices, as staff are frequently not working from their destsnTele-conferencing & hot-desking is important of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDCase Study 2 – Accenture Consultants – Business servicesnThe firm provides consulting services related mainly to business management and technologyn500 staff in Singapore officenLocated in the Gateway Buildingn25% increase in space over the last 3-year due to business expansionnAdoption of office space conserving concepts like “office hoteling” and “hot-desking”n80% of staff are professional consultants, and they are apt to office hoteling – worked mostly at the clients placenICT expenditure – 3% total operating expensesnICT increases productivity & revenuenIt reduces clerical staff, but increases IT personnel to maintain the system of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDConclusionnGrowing trends in ICT application in office nImproved productivity via automation of selected operationsnImpact of ICT on demand is not significantnSmall proportion of respondent experienced a reduction in employee size with an increase ICT investmentnPhysical meeting place and office space are still importantnMost respondents do not encourage employees to “work away” away from officenThe logit models suggest that probability of office space reduction is related to the increase adoption of new work preacticesnAvailability of webpage may also be a factor affecting the downsizing of office spacenWe will continue to see changes in the office space use and emerging of new office practices eg. Service office, telecenter, hot-desking etc. of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBDThank youQuestions & Comments of Information Communication Technology (ICT) oon Office Demand in Singapore CBDImpact of Information Communication Technology (ICT) oon Office Demand in Singapore CBD。