Expert Commentary

The Rise of the Virtual Office

The key to making an office virtual is enabling everyone in the agency to be able to work together as smoothly as they would if they were all physically in the same place. For virtual office operations to be viable, higher speed connections are necessary. Several options are available that include ISDN, DSL, and cable. The higher the speed, the greater the ease of use and productivity generated.


Agent & Broker Technology Issues
April 2000

It seems everywhere you turn you can't help but read articles about the latest Internet craze and how it is going to completely change the way we do business. Even with all of this coverage, many are missing one of the most important applications of the Internet: the virtual office. The usefulness of the Internet lies in its ability to allow individuals to communicate with anyone, anywhere, anytime. This easy communication vehicle is changing the entire concept of what it means to be an agency. The key to making an office virtual is enabling everyone in the agency to be able to work together as smoothly as they would if they were all physically in the same place. The Internet is beginning to make this type of integration possible because it allows rapid, low-cost communication between individual users and businesses.

Why Consider It?

One of the biggest problems we hear as we talk with agents across the country is the difficulty finding and keeping qualified people. There just are not enough CSRs and producers to fill the positions needed. Offering the option to work from home either full-time or part-time to a qualified candidate is becoming an attractive incentive. In addition, you can offer the same option to a current employee who may want to continue to work, but other obligations make it difficult for him or her to continue to come into a physical office.

Not everyone is a candidate for working in a virtual environment. It takes a special type of person to be able to work from home and a special kind of manager to effectively manage virtual employees. To make this concept work, everyone should have clear expectations that are spelled out in writing prior to finalizing the agreement. A few questions to address include: How will performance be measured? What hours are you expected to be "at work"? Who will provide the required office equipment? Who will be responsible for maintaining it? Who will be responsible for technical support? How will paperwork be delivered to and from the remote office? Will a separate room at home be required? If there are small children in the house, who will care for them during "office hours"?

A virtual employee will need to be flexible. An effort should be made to make sure the virtual employee is made to feel connected with the other staff members. Regular visits to the office should be required.

Fast Connections Mandatory

The full benefits of the easy communication necessary for a virtual office to work will only be realized when a high-speed connection is available. As of last January, 93 percent of U.S. homes used 56K bps or slower modems to connect to the Internet. For virtual office operations to be viable, higher speed connections are necessary. Several options are available that include ISDN, DSL, and cable.

ISDN (integrated services digital network) is basically a more expensive telephone line that uses existing copper telephone lines. ISDN provides a higher connection speed by combining two high-capacity phone lines. An ISDN line consistently provides connection speeds of 128K. An ISDN connection is generally always "on." Unlike a dial-up modem, there is no delay to access a website while the modem dials and connects.

For smaller offices or for home offices, an advantage of the ISDN connection is that you receive two telephone numbers with the service. Each of these lines acts just like a regular phone line. This strategy helps reduce the overall cost of the service by allowing you to eliminate or replace an existing fax line with part of the ISDN line.

The cost for ISDN varies across the country. You can expect to pay about $50 per month after an initial setup fee of about $250. This includes installation and the cost of a special ISDN modem. Check with your local phone company for the exact costs in your area. Getting an ISDN line from the local phone company used to be a long and painful process. While some of these problems have been worked out, it will still take several weeks from when you order the service to actual installation.

You will still need an Internet service provider (ISP) to give you the actual connection to the Internet. This could be through the phone company or with any other ISP that has ISDN access available. You will pay a higher monthly fee for an ISDN account than you would for a standard dial-up account.

A new option rapidly becoming available across the country is the digital subscriber line (DSL). It is also a telephone company service that brings high speed to homes and businesses over ordinary copper telephone lines. You may also see the service advertised as xDSL. This refers to the different variations of DSL your local phone company might have available, such as ADSL, SDSL, and RADSL. The speed available through DSL is much higher than ISDN. Typically, individual connections will provide from 1.544 Mbps to 512K bps downstream (from the Internet site to your computer) and about 256K bps upstream (from your computer back to the site). One of the advantages of a DSL line is that it can carry both data and voice over the same line.

We recently installed DSL service at our home office. The cost was $150 for installation and $40 per month (including the Internet connection). Bell South is promoting business access with a $150 installation charge and $55 per month fee. Check with your local telephone company to find when this service will be available.

Another option is Internet access through your local cable TV provider. Cable modems are devices that attach to the cable TV network connection in a home or office. This technology is being driven by the cable companies' desire to provide services beyond traditional broadcast cable TV, such as Internet access. Like DSL, cable access is expanding rapidly. In fact, both phone and cable companies are spending enormous amounts of money developing their networks so they can grab a large customer base as quickly as possible.

We recently installed cable access at our office using the @Home network from our local cable provider. Talk about fast! Where ISDN is a 128K connection, cable is 780K. This translates into being able to download a 4 megabyte file in less than 1 minute. A cable connection is more accurately described as a local area network (LAN) connection. The cable service uses the same wire as your cable TV connection. That wire comes into your house and is connected into a special box and then into your computer using a standard Ethernet network card.

When you have a cable Internet connection, your computer is literally treated just like a work station in an office. Like the ISDN, the cable connection is always active. Unlike ISDN, with cable you do not need a separate ISP to give you Internet access. It is included as part of your monthly fee, along with an e-mail account. In our area, this all costs $40 per month. Our installation cost an additional $250 and included all the hardware we needed (cable conversion box and network card for the computer).

Success from High Speed Communication

It is hard to describe the difference a high-speed connection like DSL or cable makes in the level of satisfaction of using the Internet as a productivity tool. The changes that virtual offices will spark and the benefits that will accrue to those who embrace these changes will far outstrip the benefits of other Internet initiatives like e-commerce. The ability of an agency to communicate with anyone, anywhere, anytime, both inside and outside the organization, will become vital for continued success.


Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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