Study: Some Internet Applications Hinder Workers’ Productivity

Results of a new study dramatically challenge the conventional wisdom on the benefits of the Internet, and indicate that the Web may actually “inhibit” productivity for some workers.

The study, undertaken by Lieberman Research Worldwide for San Mateo, Calif.-based Rearden Commerce, an online marketplace, demonstrates that the Web harms productivity as it relates to scheduling and purchasing business services.

Conducted from October 31, 2005 to November 12, 2005, the online survey polled opinions of 500 U.S. knowledge workers working for businesses with annual sales of US$100 million or more.

Hindering Efficiency

The study aimed to discern how employees schedule, purchase and manage business services, and their efficiency of purchasing services during the workday, on the Internet.

For example, purchasing an airline ticket for a business trip or shipping marketing brochures to an out-of-state customer would qualify as business services. The research shows that while employees want to do the right thing in terms of saving the company money and being as efficient as possible, compliance and productivity are actually being compromised as they relate to the management of business services.

The results indicated there were a number of problems in the areas of compliance and productivity:

  • Employees are not complying with preferred vendors. Research shows that employees feel it is fine to go outside of company policies when purchasing business services. In fact, 87 percent of surveyed employees said that although they are aware of company-preferred vendors, only 38 percent of that same group consistently used these vendors when purchasing business services.
  • Employees are spending more time than ever booking services online. Knowledge workers are being asked to do more themselves than ever before. The Web was meant to simplify people’s lives, but the proliferation of options has dramatically complicated things. More than 40 percent of employees spend more time arranging for business services now than they did five years ago.

Cost Comparison

“What most employees do not realize is that corporate rebates and incentives are enacted when the employee population reaches thresholds outlined in their vendor contracts,” Jeff Pulver, vice president of marketing, Rearden Commerce, told TechNewsWorld.

“While an employee thinks the actual cost of his or her airline ticket is $500, the actual cost may be much less. And, in most cases preferred supplier contracts contain volume commitments that if not met, could jeopardize an entire contract and cost the company millions in lost discounts based on non-performance.”

Additional findings in the study include the following:

  • Booking business services online is decidedly mainstream, as close to two-thirds of all business services were researched, purchased, scheduled or managed online;
  • Preferred methods of purchasing business services vary across service type, as employees use vendor Web sites as the primary method of obtaining airline tickets, car rentals, event tickets, hotel accommodations, but contact vendors directly by fax or phone when arranging limousine rentals;
  • When companies have an intranet, employees can typically access most preferred vendors: and seven in 10 companies that have preferred vendors have an Intranet;
  • The absence of a one-stop shopping tool results in a decline in productivity, as roughly six in 10 knowledge workers desire a single Web site where they can obtain all business services.

Productivity Perceptions

Another study confirms the productivity problem perceptions online — but in a different way.Nearly a third of American Internet users surveyed said they venture online just for fun rather than to read e-mail, or the news or use a search engine, a drastic increase from just a year ago, the Pew Internet & American Life Project said last week.

A survey of 1,931 Internet users conducted by Pew in late November and December 2005 found 30 percent of respondents said they went online “for no particular reason” on the previous day.

Though there is some suspicion, that the Internet harms productivity, perhaps the productivity increases in other sectors of the economy make up for it all in the end. A new study by Forrester Research predicts online retail sales, including auctions and travel, will more than double from $172 million in 2005 to a whopping $329 billion in 2010, a huge jump in expectations from the $20.2 billion in online retail sales Forrester estimated for 1999.

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