Do Businesses Need Physical Offices in the Modern Era?

The changes in business operations over the last few decades have been almost unparalleled at any time in the last thousand years. The rise and rise of computer technology has fundamentally changed business paradigms over the last ten years and the incredible advances in communications technology and internet technology have changed the business and office dynamic forever. In the modern age more and more businesses are looking to reinvent the traditional work paradigm and more and more businesses are downsizing central offices and closing regional offices in favour of remote work and virtual office spaces. Companies like http://www.regus.com.au/office-space/australia/sydney have risen to provide virtual office services around the world to facilitate the new business landscape that is emerging. With that in mind we turn to examine the need for physical offices in the modern era.

In part the question of the need for physical offices has risen as a result of the recession. The business landscape has been on a rocky foundation for the last five years and the rates of business failure and business insolvency are at their highest in decades. According to a report by the business finance and marketing company D&B the global rate of insolvencies and business failures is on the decline but it is still higher than it was prior to the 2007 recession. This has created a new business agenda where cutting down costs, overheads and importantly debt has become the modus operandi of modern business best practice. This has meant that more and more businesses are looking to downsize business offices and overheads. The costs of running offices and maintaining support staff are one of the biggest drains on many businesses but until recent years it has been untenable to not run large and regional offices for many large businesses. However, recent advances are changing this dramatically so the need is now being re-examined.

When we combine the economic situation outlined above with the rises in computing and communications technology we can quickly identify why businesses are re-examining the need for physical offices.  At most offices 90% of employees will spend the majority of their day working on a computer. Whether they are working directly online, using in house software or simply working with data or in text the computer now dominates business operations. However, the rise of internet technologies has meant that the need for computer based work to be done in house has been rapidly diminishing. Cloud computing has meant that data and software can be accessed and used remotely and that data can be updated from anywhere in the world in real time. Cloud computing allows nearly all forms of computer based work to be done remotely and, because everything is stored remotely, the need for business speed internet connections and a networked office computer system has been removed. Understandably more employees than ever now work remotely from their own homes. This in turn has been helped by the parallel advances in communications technology. The internet has allowed instant communication between employees at vast distances while the rise in networking technologies has meant that the need for meeting spaces and direct communication has declined. At the same time virtual offices have risen to create a new space where work can be coordinated and where traditional brick and mortar functions can be accommodated with the need for a company owned office. These new providers have managed to take on all the function of the traditional office and are helping to facilitate the move towards remote work.

Overall these shifts are creating a new business model where the need to maintain offices and the associated costs is beginning to decline. In the coming years we can expect to see more and more employers and employees being removed from the physical office landscape – either in part or in totality.

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