visit here for other reports, http://www.digieco.co.kr/KTFront/report/report_technical_list.action?board_id=skill&kind=a01

1. Flexible Working based on IT [Table of Contents] 1. What is Flexible Working? 2. Today’s Flexible Working introduction cases 3. KSF of Flexible Working 4. Appendices April 8, 2010 Seon Yeo Mi, Kim Hak Kyun

2. Contents What is Flexible Working? 1. Introduction of Flexible Working 2. Concept and definition 3. Types of Flexible Working KSF of Flexible Working 1. KSF of Flexible Working 2. Successful implementation models 3. Extraction of key factors Today’s Flexible Working introduction cases 1. Foreign introduction case (1) US 2. Foreign introduction case (2) Japan 3. Cases in Korea 4. Obstacles 5. Related policies in progress 6. Related systems and incentives 7. Flexible Working and Green Life Practice Strategy Appendices 1. Development of IT-based Flexible Working 2. Changes after successful introduction 3. Flexible Working introduction cases

4. Ⅰ. What is Flexible Working? 2. Concept and definition Flexible Working has been defined differently in many countries and organizations, but considering its characteristics, it can be defined as 'flexible working arrangements without restrictions of time and place based on IT' Concept of Flexible Working in Korea, US and Japan Press release of MOPAS in Feb 16, 2010 “Flexible Working system allows employees to free themselves from stereotyped working arrangements and flexibilizestheir commute times, work places, and working arrangements” Definition of Flexible Working by BT To work at home, on the road or other appointed places through internet and teleworking equipments * refer to BT.com Telecommuting, Telework and Remote Work is . . . at work place which reduces or removes commuting burden on a regular basis US Public Law [106-346] Japan [the Ministry of Internal Affairs and Communications] which removes restrictions in time and place through IT Korea [National Intelligence Service] outside one's office through telecommunication network to conduct all one’s job or part of it IT Time Place flexible working arrangements Flexible Working means flexible working arrangements which removes restrictions of time and place through IT 4

5. Flexible Working can be classified, according to flexibility of time and place, into four types which are Flex time, At-home work, Telework center, and Mobile work1) Types of Flexible Working Different Time 1. Flex time - Staggered Shifts - Alternative work schedule - Compressed work - Discretion work - Core time - Part-time work - etc Same Location Different Location traditional working arrangements Same Time Ⅰ. What is Flexible Working? 3. Types of Flexible Working 1. Flex time • The office is designated, but employees work according to their life patterns without restriction of time 4. Mobile work - Using mobile devices 3. At-home work 2. Telework center • Employees work at a communal center with no designated personal seat or at public work center located near their homes - Mobile office of IBM Korea 3. At-home work • Employees work at home using telecommunication network, which is a traditional telework form - Introduced by KOIS/KOID, Korea IBM and Korean Intellectual Property Office(KIPO) 2. Telework center - Satellite office - Smart office - Spot office 4. Mobile Work • Employees work without restrictions of time and place using remote work equipments as needed - NTT Communications established web connect support center 1) The MOPAS classifies Flexible Working into five fields and nine types according to place, time, method, dress code and complexion. (Press release, Feb, 2010) 5

18. KSF of Flexible Working is defined, as 1) IT infrastructure, 2) positive organizational/cultural perception, 3) work processization, and 4) job restructuring, based on domestic and foreign cases such as that of BT and IBM Ⅲ. KSF of Flexible Working 2. Successful implementation models IT infrastructure: Wired and wireless telecommunication services and security service as the institutional basis Organizational/cultural change: Education program to change perceptions and based on incentives performance Processized work form: Work management process by task or project based on clear role assignment Job restructuring: Improving work efficiency and specialty through task classification by characteristics of the tasks Major features of F/W in BT • BT established BT Working Style as a successful business model on the foundation of technical/experiential know-how Home-based telework group Performance management Personnel management and service CSR F/W framework of IBM • IBM developed the Smart Flexible Working model which connects and combines organization/individual/culture, technology infrastructure and work process organically Organization/ individual/ culture Process & System Technology & Security Assets • Support system which enabled Working Anywhere • Numerical targets assigned to each project • Objective performance assessment • Authorization for project manager to assess performances • Industrial disaster insurance for homeworking • Stronger CSR by green management reference • Making solution as a business model 14

23. As the economic structure and working environment change due to the development of IT, traditional homeworking system also developed into the mixture of homeworking and telework center, which combines homeworking, telework center, and mobile telework [Appendix 1] Development of IT-based Flexible Working [Change of IT environment and development of Flexible Working development] IT popularization "Enjoy IT“ Mobile Communication "Live by IT“ *Digital convergence *Broadband network *Internet information appliances IT paradigm Usage pattern Technology development Ubiquitous Network *Solutionization *Customizing *Smart phone IT advancement “Do IT" *Wireless Internet Reconstituted from Discussion on Preconditions for Spread of Telework, The Korean Association for Regional Information Society Journal, Vol. 9 No. 2 PC Home working Telework center Mobile telework (combined) Customized Combined with other management patterns Diversified working pattern Expansion Working place Use of telecommunication1) Personnel management pattern Significance Traditional homeworking Simple Temporary/part-time/ alternative work schedule Only workplace changed Introduction Homeworking Teleworkcenter Integrated Temporary/part-time/ alternative work schedule Diversified workplace Dissemination 1) Teleworkers show higher adoption rate of IT devices such as network, computing technology and smartphones than common workers_refer to US Telecommuting Forecast, 2009 to 2016, Forrester, Mar. 2009 19

25. Draw selective condition of each task for successfulintroduction of Flexible Working through cases of government institutions: Success of Korean Patent Office and failure of the Ministry of Environment [Appendix 3] Cases of Korean Intellectual Property Office(KIPO) and the Ministry of Environment KIPO Ministry of Environment (Introduced in 2006 -> Continuing operation as of 2010) • To utilize idle manpower and improve concentration at work • Homeworking department : applied to the entire personnel • Scale of operation : 41 homeworkers with one in each department in 2008 -> when converted to voluntary participation in 2009, no one participated • Application requirements : Headquarter officials of 5th grade or below regardless of positions, depending on job characteristics and circumstances. Recommendation from the head of the department (2 days per week) • No appraisal tools contrary to KIPO • Check attendance at the beginning and the end of work • Utilization of idle manpower including the disabled and the housewives • Energy saving at the time of high oil price and greenhouse gas reduction • Compulsory allocation which excluded job restructuring • Disregarded introduction of management process (Introduced in 2008 -> Failed to maintain as of 2010) • To save workspace, attract outstanding workforce and improve welfare • Homeworking department : limited topatent examination staffs • Scale of operation : About 90 examiners are working at home out of 810 (10% of the whole personnel in KIPO) • Application requirements : No limits of job positions, but considers the distinct characteristics of the public service. Two or more years of work experience as an examiner is required to be an applicant (The applicant can choose to work at home 2-4 days a week) • Performance basically appraised by the result of patent examination • Commuter check at 9 AM and 6 PM • Saved some workspace(cost numerically not estimated) • Attracted outstanding workforce and improved efficiency/concentration of examiners • Saved social costs such as commuting costs and pollution • Negative perception about homeworking of public officials • Frequent policy changes by superiors Reasons for introduction Operation Task management Effects Problems Reasons for introduction Operation Task management Expected effects Problems 21

26. Koid/Kois and SMRT are both Flexible Working companies in Korea. The former is operated based on the distinctive characteristics of call center service, and the latter recently established Smart Office for maintenance work [Appendix 4] Cases of Koid/Kois and SMRT Koid/Kois SMRT (Introduced in 2006 -> Continuing operation as of 2010) (Established Smart Office in Jan. 2010) •Initially : to increase job opportunities for the disabled Now : for employee welfare •Cost saving, higher productivity, more social benefits •Mobile work department : entire personnel •Scale of operation : entire personnel (6,500 employees) •Operation : Established mobile office with UTIMS(Urban Transit Infrastructure Maintenance System) for smartphones and improved work process(real-time task management, more accurate information processing, and support for multitasking of the entire personnel). Free calls within the company, direct commute to and from the field •Fast decision making by real-time task management and analysis of results (to be implemented) •Reduced work time by real-time task management (1 hour -> 28 mins) •Saved total 28.4 billion won of direct operating costs for five years •Created 110 billion won's worth of future innovation value •net return on investment : 128.2 billion won (13 times the investment ) •Cost 10.2 billion won(2.4 billion won a year) for installments of mobile devices and data charges Reasons for introduction Operation Task management Effects Problems Reasons for introduction Operation Task management Effects Problems •Homeworking department : 114 call center(only the night shift in Kois and both the day and night shift in Koid) •Scale of operation : about 230 representatives in Kois (17%) and 400 representatives in Koid(22%) •Application requirements : considers employee's ability to work alone and past performance evaluation. Over six months - one year of work experience •Support: VPN equipments for system access •Assess employees by call processing statistics and complaints frequency •Assessments of homeworkers and workers in call center were separated •Job satisfaction survey of homeworkers showed 90 points(out of 100) •The child-care problem has been improved and family satisfaction increased. •Inefficiency caused by excess costs for the establishment of homeworking environment •Communication problems due to delayed information sharing in the company 22

29. IBM Korea and NTT Data are both successful Flexible Working companies, from which key factors, such as changing perceptions in the organizations and estimation of quantified individual performance, can be extracted [Appendix 7] Cases of IBM Korea and NTT Data IBM Korea NTT Data (Introduced in 2008 -> Continuing operation as of 2010) (Introducted in 1995 by Global IBM -> Continuing operation as of 2010) • To enhance welfare (Work & Life Balance) • Flexible Working department : the entire personnel in the legal department except for team managers • Scale of operation : all employees can choose to participate (more than 60% of them are working in mobile environment) • Operation : employees are classified systematically by their positions to work in five types of Flexible Working including staggered shifts, at-home work, permissive leaves with mobile office and part-time work • People Manager functions as a core in the horizontal organization structure • Support : invested 10 billion won for upgrading equipments, laptop computers and mobile devices (about 5 million won per person) • Mutual trust and education in a top-down way • Continuous and corporate-wide 'Diversity' education to improve the perception of managers (the CEO participates in the education as an instructor) • Makes individual targets as an action plan through an interview at the beginning of the year and extracts criteria of quantified performance estimation • The head of the department and the managers assess the performance with individualized role and responsibility(R&R) by job positions • Saves 2.2 billion won per year thanks to reduced workspace • Improves productivity and attracts outstanding workforce with higher employee satisfaction • Achievement of work-life balance • Flexible Working department : The entire personnel except for sales staffs • Scale of operation : now 300 workers are participating among the 8,500 employees • Operation : pilot introduction in Jul. 2006 & formal introduction in Feb. 2008, progressively implementing the system every three months without drastic changes of work style (work at home one day per week / maximum eight days per month) • Support : Established thin client environment by renting company PCs to homeworkers and have them use company SNS software called 'Nexti' to maintain internal security • Sets prescriptive standards by job classification and assesses the final results and the process together • Superior's approval is required • Maximizes self-discipline (answered by 76.6% of participants) • Improves work-life balance (childcare burden↓ family satisfaction↑) * referred from a postmortem research of NTT Data, Institute of Systems Science • Making its internal solution into an information security solution called Secure Collabo for sale Reasons for Introduction Operation Task Management Effects Recent issues Reasons for Introduction Operation Task management Effects 25

31. Japan began to introduce Flexible Working arrangements with telework popularization policy of the Government focusing on the global enterprises and conglomerate firms. Recently, telework has been spread around Japanese IT companies equipped with security management technologies [Appendix 9] Cases of IT Companies in Japan Introduction and management of teleworking in Japanese IT companies • Since 2000 , when IBM Japan first introduced teleworking, it continued to spread around IT companies and telcos Company Contents • Introduced homeworking to the entire company in Jul. 2008 and implemented it for 20,000 employees(90% of the entire personnel) • About 2,000 employees have participated in homeworking from Jul. 2006 to Jun. 2008 • Excluded new employees, production employees and employees who deal with confidential information such as customers’ personal information • Employees can work at home one day per week with the approval of their superior • A homework has to use VPN or thin client PC, which prevents remote access and leaking/saving information • Introduced teleworking system in 2007 and expanded the target range in Aug. 2008 • The initial homeworking system was for parenting/nursing/disabled employees • Employees can work at home two days per week after one year of work experience with no practical limits • Implemented homeworking for 30,000 office workers among 76,000 domestic employees • After pilot test for 1,000 employees in 2006, formally introduced homeworking in 2007. The number of homeworkers exceeded 5,000 as of the end of 2008 • Introduced homeworking system for the whole 6,000 employees since Nov. 2007 • The majority of applicants was parenting female employees at the beginning stage, but now male employees are also working at home for sports or hobbies • Introduced teleworking for pilot test in 2006 by employees' proposal, and formally implemented it since Feb. 2008 • Employed 32 severely disabled persons as part-time workers and assigned web design tasks to work at home • Enabled real-time communication through web camera NEC MS Japan Panasonic HP Japan NTT Data OKI Workwell 27

32. The Government need to establish strong policies to achieve Green Lifestyle of lower costs and higher efficiency through the introduction of Flexible Working on the basis of the best IT infrastructure in the world [Appendix 10]Green effects of Flexible Working Green effects of Flexible Working • Social and economic effects when an office worker works at home one day per week (annually) - 1.11 million tons of carbon emission are saved if all 8.6 million office workers in Korea work at home one day per week - 1.6 trillion won of traffic expenses(185,760 won per capita) and 69 hours and 36 minutes are saved Carbon reduction effect Reduction in cost of commuting (won) Number of cases1) (person) Saved commute time (round-trip) Gasoline consumption (ℓ)4) Carbon reduction amount (ton) Section Pine tree planting2) (plant) Seoul-Busan round-trip3) (times) 1,030 133 48,000 665 66,500 185,760 Objects of study The entire office workers in Korea 20% of office workers in Korea 8.637 million5) 1.11 million 0.4 billion 5.55 million 0.555 billion 1.6 trillion 1 day: 1 hour 27 minutes 1 month: 5 hours 48 minutes 1 year:69 hours 36 minutes 1.726 million 0.22 million 80 million 1.1 million 0.11 billion 0.32 trillion Note 1) The number of cases of cost and time saving : 1000 persons Note 2) One pine tree can reduce 2.77kg of carbon per year (Korea Forest Research Institute) Note 3) by a midsize car Note 4) Gasoline 100ℓ = 0.2 tons of carbon (Presidential Committee on Green Growth) Note 5) Estimated by the sum total of managers, experts, related workers and office workers among the employed in Sep. 2009 (referred from Economically Active Population Research of Statistics Korea, classified by KSCO-6(2007)) * A Study on IT-based Teleworking and National Demand for Teleworking in Green Life Practice Strategy, NIA, Dec. 2009 28