In the late 1840's, the UK saw a sudden massive reduction in the nation's equine population. With the advent of the steam engine, and railways crisscrossing the island, the noble nag became surplus to requirements, so subsequently the horse population fell from 1,000,000 to 200,000 in just two years.

At about the same time, roughly five percent of industrial power in the US was supplied my machines, 79 percent by animals and 15 percent by humans. A century later, 84 percent of that power was provided by machines, 12 percent by animals and four percent by humans.

As we embark on the 21st Century, computational power is having a similar effect. Teleworking, services automation, business process computerisation, workforce virtualisation and any number of approaches aimed at using technology to increase productivity are playing an increasingly important role in contemporary business operations.

Whereas the agricultural and industrial revolutions largely replaced the manual with mechanical, the computational revolution, which we are currently experiencing, is replacing the mental labour which characterises the services sector with the virtual production capacity.

Where then, is the place for humans in this emerging equation?

Traditions of telecommuting

Every week, 1.1 million Australians log-on to their virtual offices via the Internet to complete a range of tasks from a customer's worksite, a field office, an airport lounge or the comfort of their own homes. In the US, up to 30 million people from a wide range of industries is taking advantage of telecommunications infrastructure to log into a virtual office and work from a remote location.

And while most people would trace its origins back to the popularisation of the Internet in the early nineties, telecommuting had its origins four decades ago, when Jack Nilles brought rocket science back down to earth.

"I was working with NASA looking at ways to communicate with astronauts on the moon, when a town planner asked me why we had the technology to put man on the moon, but we couldn't think of a way to get people off the freeways," Nilles explains.

Driven by this vision, Nilles left NASA and began to busy himself with more earthly concerns. By 1973 Nilles had convinced a Los Angeles company to conduct a teleworking trial, with spectacular results.

"Workers were all connected to dumb terminals, so they could operate during the day and then dump their work on the mainframe at night via a wideband connection," Nilles explains. "Productivity went up, facility costs went down and people didn't leave as often so it seemed like job satisfaction increased."

Given these positive results, it is a wonder it then took another three decades before telecommuting became popularised, and why it continues to meet with resistance.

"The biggest problems, then and now, are simply management attitudes," Nilles says. "We have to figure out a way to get management over the edge of their innate terror that if they can't see people, those people couldn't be doing their work."

Toni Robertson, faculty reader in human computer interaction at the University of Technology Sydney, believes management holds the key, not just to the successful implementation of telecommuting but to a range of work practice possibilities opened up by technology.

"The mistake often made with telecommuting, and other types of technology, is the adoption of a blanket approach rather than a more complete engagement with the situation," Robertson says, pointing to the need for technology to be implemented in such a way that it expands an employee's creative input rather than excluding them from the creative process. "When designing technology we're actually designing people's work and the way they are able to be in the work place."

Robertson believes the process of computerisation is often made more complex by a disconnect between the people designing and implementing new technologies, and those who work with the technology to carry out certain tasks. This has come about, she contends, because the process through which new technology is implemented in the workplace is dominated by evangelists - whose role is to present the technology as a cure-all - and management, whose task it is to minimise costs.

"There is often a failure to factor in the articulation work, or the work you need to do in order to fit your work into the procedures which are specified by the technology," Robertson says. "Computers have developed in a certain kind of way which isn't natural. There were clear decisions made about the direction it took and what it was designed to achieve and the actual technology users were often not included in this process."

Orchestrating automation

The promise of automation has always been the ability to do more in less time, with fewer resources. The extent to which this has resulted in the need for more people to do less, or for less people to do more, and the ultimate social consequences of workforce virtualisation, is still being debated. However, those businesses which have been able to integrate technology into their workplaces from the outset are at a clear advantage.

Created on the premise that it was possible to cut overheads by offering end users "built-to-order" computer systems, PC maker Dell Computer has relied heavily on a comprehensive technological infrastructure.

Rob Small, marketing director for Dell Australasia, says the company is second only to HP/Compaq when it comes to unit sales in the region, yet functions on roughly a tenth of the workforce.

In a similar vein to the approach McDonalds takes to hamburger sales, Dell begins by installing identical manufacturing infrastructure in every country in which it operates.

"Regardless of whatever factory you visit around the world the production lines are exactly the same," Small says. "We have a much smaller workforce in terms of head count which contributes to our lower cost base, and around the country we have customer facing sales reps who are on the road rather than in offices."

Customer support in turn is provided through two call centres, one in Sydney Australia, the other in Bangalore India.

"The direct model is pure and simple to explain to our competitors, but they will not be able to make it work because it relies so heavily on the way we keep a track of each unit as it is ordered, built and shipped," Small says. "We are big on leveraging resources rather than replicating them globally."

Similarly Oracle, which supplies the software on which Dell's operations depend, places a heavy emphasis on its ability to manage global operations via a single instance of its Oracle ebusiness suite which is physically located on a server in the US.

Unlike Dell, which implemented the virtual work practices from the outset, Oracle was forced to navigate the treacherous straits of change management in order to reorganise its business processes.

Roland Slee, director of business and technology solutions for Oracle in Australasia, says the implementation procedure began with a simplification of the management infrastructure which enabled employees working in physically separate environments to operate within the same virtual team.

"Virtualisation enables global collaboration, where a team distributed across the world pursues a single objective," Slee says. "This way we can take advantage of the best skills at the lowest possible cost."

Slee believes the technological integration of Oracle's global operations is an economic imperative.

"It is the only way to be competitive on a global scale," Slee says. He concedes, however, that the approach provides some challenging management scenarios.

"It is important to encourage the global work force to see themselves as part of a global team. This level of global integration has to be driven from the top. There is definitely a need for high level executive sponsorship."

Chasing management buy-in

Despite overwhelming evidence pointing to the benefits of telecommuting and the ongoing success of globally-integrated operations like Dell and Oracle, workforce virtualisation has its fair share of critics.

Gerard Florian, chief technology officer with technology integrator Dimension Data, says companies contemplating process automation should spend more time planning for the cultural change inherent in the implementation process.

"Knowledge management is a major cultural issue. When people bump into each other on a regular basis, you naturally fall into conversation and often discuss work issues informally," Florian says. "With a virtual workforce there needs to be a lot more discipline when it comes to getting people to talk to each other."

Having implemented virtual workforces since the early seventies, Nilles describes concerns surrounding knowledge management as "marvellous fiction".

"Saying that people who telecommute are some how cut out of office communication is a great excuse for people not to do it," Nilles says. "If you train people properly and make sure they maintain communication with their work team you will find informal communication still occurs."

Nilles also points out that the ability to operate virtually does not mean workers disappear altogether from the office environment, but simply means that they have a choice to operate from a location which best suits the task at hand.

"It is important to decide which part of your job requires you to do some serious thinking and concentration, and which part requires face-to-face interaction," Nilles says. "After virtual workers get some experience they tend to prefer telecommunication-mediated interaction rather than face-to-face meetings - they become comfortable with both."

However, not only do managers operating in a virtual environment have to deal with human challenges, they also need to be aware of the potential technical challenges.

"Personal VPNs and dealing with encryption on notebooks all sounds pretty mundane, but it an important management role for any organisation which is attempting to run a large mobile workforce," explains Florian.

However, having observed the field in the context of how it affects the end users, the UTS's Robertson says there are broader social issues which could facilitate or disrupt the process of workforce automation.

"A lot of computing is designed to automate the procedurisation of work and fulfil tasks which the bureaucracy was created to do. There is definitely an underlying push to keep the workforce untrained, casual and easy to replace or automate," Robertson says. "People designing the systems and the work practices surrounding them have not necessarily been taught how to think about users."

However, Robinson believes the winners of the computational revolution will be those companies that are capable of achieving improvements in productivity and human resource allocation.

"The real economic payback will come from companies which use technology to realise the creative input their employees bring to an organisation," Robinson says.

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