Presented by

Ankur Ojh
 Introduction
 Trend in ICT application
 Effects of ICT on Office Space Allocation &
Work Practices
 Survey Sample & Data Collection
 Mailed Questionnaire Results
 Logit Model and Other Statistical Tests
 Case studies by interview
 Conclusion
 ICT has frequently been thought to be the
driving force behind today’s economy.
 It 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.
 Information & 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 electronically
 It includes equipment like telephones,
communication lines used to enhance
communication between employers and
employees, businesses and customers,
and business and business across
physical boundaries
 Government has been actively encouraging firms
to upgrade their connectivity and productivity via
its agencies like IDA, EDB, PSB
 Schemes 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)
 IDA’s “Information & Communication Technology
ICT usage survey 1999”indicates a high ICT
adoption rates among businesses in Singapore
 Computer and information technologies are expected to bring
about “the third wave” of revolution to the production and
social interactions in the new economy
 How would these new ways of production and customer-
manufacturer relationships impact on the demand for office
space?
 Would this IT revolution lead to a major structural change in
the office space demand?
 How 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?
 In Singapore, IT-ready office space commands a
market premium over obsolete and IT-unfriendly
office buildings
 A 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
 Singapore 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
 Hot-desking, home-office and tele-working is
another emerging trend in the office market,
 These will significantly transform the way work is
carried out and lead to a reduction in demand for
physical office space in the long run
 How would active integration of ICT into the
work place help companies to reduce the
physical space requirement?
 Aren’t the companies’ space decisions
dependent on the prevailing market rents?
 There are no easy answers at this stage to the
questions.
 However, 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.
 D Original
Market
Rent D’ Market Clearing
a Condition
R’
Aggregate
b
R Demand
Curves

D
D’
Q’ Q
a = demand shift caused by rental increase Quantity of space
b = structural shift in demand curve brought about
by the ICT revolution Source: Dr Sing Tien Foo
 5 Levels of ICT-Induced Firm Operation
High Evolution
Degree of business transformation

Level 5: Business scope redefinition

Level 4: Business network redesign

Level 3: Business process redesign Revolutionary

levels

Evolutionary
Level 2: Internal integration levels

Level 1: Localized exploitation

Low
Low High
Range of potential benefits
Source: Venkatraman, 1991
 ICT impacts on office space demand would take place
in three broad areas:
 business function and configuration,
 staffing structure and
 location choice.
 More information and transaction via the virtual
space rather than the physical space (e.g. internet
banking, electronic stock brokerage, NET transaction)
 Flatter organization structure.
 Ratio of clerical staff to administrative and executive
staff is likely to reduce
 Productivity of the staff increases as a result of office
automation.
 Span of control of managerial staff
 ICT-induced decentralization of office space for
companies that operate largely over the virtual
space.
 Mailed Questionnaire Survey – pilot phase
 In 4th quarter 1999 URA statistics, 41.64% of the total of
5.88 million square meters of office space were
concentrated in downtown core.
 Sample of tenants is restricted to CBD areas
 500 tenants in offices within CBD areas ar randomly
selected
 Response rate was poor at 9% (46 responses)
 Distribution of respondents profile (Figure 1)
 7%
11% 28%

28%
26%
Real Estate, Finance & Insurance
Business, Retail, Trading & Advertising
Media, telecommunication & IT
Trasport, Industrial Biz, & Legal
Others
 11%
7%
9%

73%

Below 5000
5001- 10000
10001 - 15000
above 15000
 Desktop 67.4
1 0
Laptop2 13
30.4

3 0 65.2
Printer
4
37
2.2
52.2
Mobile Phone 5 4.3
13 Not Important
6 19.6
Fax Machine 7 4.3
41.3
Very Important

50
Voice Mail8 15.2
58.7
9 4.3
Video Conferencing
10 2.2
73.9
21.7
11
Intranet/LAN 15.2
19.6
12 34.8
Internet/Server0 20 40 60 80

Email
Electronic Data Sharing
Customized/Task Oriented
Software
 Quality of Space 8 67.4 13 19.6

7 65.2 26.1 8.7

Overall Space Req’d 6 71.7 19.6 8.7

Employee’s time in 5 67.4 19.6 13

Office 4 10.9 6.5 82.6

Need to Meet-up 3 78.3 19.6 2.2

2 54.3 32.6 13
Workers Productivity
1 32.6 32.6 34.8
Importance of 0% 20% 40% 60% 80% 100%
Meeting Place No Change Reduce Increase

Number of Meetings
Cost of Operation
 No
11%

 Shorten Data process

time (82.9%)
Yes
89%
 Reduce Number of
Clerical Staff (58.5%)
 Reduction in storage
space for document
(56.1%)
 Increase Span of
control of Middle
Management (51.2%)
 Does company
No
encourage work away?
43%

17
Yes
57%
No
9

Yes
 60%
 Reasons against
Nature of 50% working away
works that40% practice
30%
will suit 20%  Lesser control (34.3%
“working 10%  Lack of trust (11.4%)
0%
away” a
e g t
tiv etin men ther
s  Nature of job site
tr k e
practiceAminis MaMr anag O (80.0%)
 Resistance from
employees (2.8%)
 Usual Meeting Place

On-site
Customer's office
Respondent's Office
0% 20% 40% 60% 80%

Means of Establishing Contacts with Customers

In Person
By mail
Telephone
Email
0% 20% 40% 60% 80% 100%
 Location of building 46%
Nature of business 30%
Prestige of building 20%
IT-readiness of building 22%
Employee size 63%
Building size 39%
Rent 70%

0% 20% 40% 60% 80%

 Factors affecting perceived space change in
future
Variable Coefficient Standard error Wald statistics Significance level
SECTOR -.259 .265 .956 .328
OFFSIZE -1.737 1.959 .786 .375
ICT.EXP 1.478 1.159 1.625 .202
MAINTNCE 1.638 1.078 2.308 .129
WEBPAGE -1.841 1.736 1.124 .289
NO.EMPLY .910 1.301 .489 .484
C.EMPLOY -1.518 1.756 .747 .387
AT.WKAWY 5.997 3.050 3.867 .049
RENT.DRP 3.843 2.449 2.462 .117
PDTY.OFF -1.532 2.094 .535 .465
Constant -2.871 4.297 .447 .504
 Factors affecting actual office space changes

Variable Coefficient Standard error. Wald statistics Significance level

SECTOR .040 .131 .091 .763

OFFSIZE -.765 1.527 .251 .617
ICT.EXP -2.020 1.913 1.115 .291
MAINTNCE 1.584 1.102 2.065 .151
WEBPAGE -3.930 1.958 4.027 .045
NO.EMPLY -.495 1.093 .205 .650
C.EMPLOY 2.547 1.750 2.118 .146
AT.WKAWY 1.368 1.737 .621 .431
RENT.DRP 2.456 1.532 2.570 .109
PDTY.OFF -1.803 1.821 .981 .322
Constant -.011 3.440 .000 .997
Business type Productivity Staff Strength Location Choice

Insurance Yes Less clerical Hot-desking in future

Non-profit training Marginal No impact No impact

institution
Legal service Definitely Less clerical, More Near courts, near clients
IT staff
Dot.com Central theme Related staff Near client, no hot-desking

Property Consultants Yes Less clerical No hot-desking, face to face

important
Property Consultants Definitely Less clerical, More Cant hot-desk, face to face
IT staff important
Management Definitely Less clerical, more Near CBD, Office hoteling
Consultants consultants

Medical Suppliers Yes Less clerical, IT Outside CBD, face to face

outsourced important
 70 staff in Singapore office
 ICT increases efficiency & productivity of employee
and reduces manual and clerical-type tasks
 Minimizing operation cost in long-run
 Moved from Shaw Building to Centennial Towers –
space increased from 10,000 sf to 20,000 sf
 Reasons: expansion of business and prestige of the
Mariana Bay office location
 Wireless applications will have impact on work
practices, as staff are frequently not working from
their dests
 Tele-conferencing & hot-desking is important
 The firm provides consulting services related
mainly to business management and technology
 500 staff in Singapore office
 Located in the Gateway Building
 25% increase in space over the last 3-year due to
business expansion
 Adoption of office space conserving concepts like
“office hoteling” and “hot-desking”
 80% of staff are professional consultants, and they
are apt to office hoteling – worked mostly at the
clients place
 ICT expenditure – 3% total operating expenses
 ICT increases productivity & revenue
 It reduces clerical staff, but increases IT personnel
to maintain the system
 Growing trends in ICT application in office
 Improved productivity via automation of selected operations
 Impact of ICT on demand is not significant
 Small proportion of respondent experienced a reduction in
employee size with an increase ICT investment
 Physical meeting place and office space are still important
 Most respondents do not encourage employees to “work
away” away from office
 The logit models suggest that probability of office space
reduction is related to the increase adoption of new work
preactices
 Availability of webpage may also be a factor affecting the
downsizing of office space
 We will continue to see changes in the office space use and
emerging of new office practices eg. Service office,
telecenter, hot-desking etc.
The end