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Team 2: Making the Business Case for Virtual Teams

Page history last edited by Drew Harpin 7 years ago

 

Making the Business Case for Virtual Teams

 

 

I. Introduction

 

The objective of this wiki is to convince senior and mid-level IT managers of the benefits and advantages of virtual teams.  By deploying virtual teams and employing virtual collaboration tools, enterprises can increase productivity and expedite the turnaround of project deliverables.  Furthermore, the nature of virtual collaboration allows for the free-flow of ideas and concepts, as teams have the ability to communicate with each other and access information either asynchronously or synchronously. Ultimately, it is our position that virtual teams allow companies to gain a competitive advantage by moving their products to market faster, and by bringing the best minds together in an environment that is not constrained by geographical or cultural barriers.  

 

II. Purpose

 

Technology has an enabler for teams to get work done has been steadily increasing since the latter half of the 20th century. Many reasons exist for this growth. A few are:

 

Decreased Travel Expenses – It is less expensive to virtually collaborate than to transport personnel to and from meeting locations. This is especially important in today’s world where energy costs are becoming prohibitively expensive. For instance, suppose a manager is tasked to train a team located in another office. Generally, the manager would be required to travel to the site and conduct the training. In a virtual environment, a manager can utilize web based tools to conduct training; and usually for a fraction of the cost when compared to travel.  

 

Decreased Time to Market – For enterprises to maintain profit margins and remain competitive, it is imperative that product delivery occur in faster cycles. By cutting the time it takes to organize and implement tasks through virtual collaboration, a business can deliver products to market faster.

 

Increased Productivity – Typically, working on a project task meant dealing with the added time of waiting for approval or review by another team member or team.  Productivity suffers as a result. In a virtual environment, tasks can be reviewed and approved in real time. In this setting, team members can be alerted of a deliverable or project task via video and/or voice conference, email, instant message, or calendar assignment. 

 

III. Audience

 

The intended audience for this business case is primarily organizations that require collaboration to complete projects.  This is not limited to IT organizations, and we feel that other organizations, such as academic environments, would also benefit from virtual collaboration.  Because virtual collaboration requires both people and technology, we feel that mid to senior managers will find the most value in this business case, as they generally are involved in policy decisions. 

 

IV. Business Drivers

 

Virtual tools enable companies and employees to communicate and collaborate without geographical boundaries. Prior to the advent of virtual tools, collaboration took place through email, phone calls, or during travel. And thanks to advances in cloud computing and other technologies, today, travel is no longer a necessity for in-person meetings or collaboration.

 

In 2003, South Korean researchers conducted a study which showed empirically that the use of virtual tools increases knowledge sharing in communities and companies, and that the benefits of virtual tools are many when the appropriate technology is coupled with the appropriate strategy.1 Globalization is here, and as a result there is a greater need for unfettered communication and knowledge sharing. Virtual tools are a cost effective way to accomplish this. Companies can decrease or eliminate travel costs, the cost of office space, and in some cases IT costs. Virtual tools even provide organizational benefits, such as the ability to synchronize teams under time constraints. And for hiring managers, time zones and locations are no longer limiting factors when evaluating talent. This creates a win-win situation as the company expands its talent pool while also saving on recruitment costs. 1 However, it is important to understand that not every company will benefit from virtual teams and tools. Some companies simply do not require the technology.

 

Global Competition

 

Today, all companies are affected by globalization. Industry competition is worldwide. When businesses cannot rely on in-house expertise, they can look outside of their backyards and across the world. It is no longer uncommon for companies to have customers and employees located different countries. Although employee-centric virtual collaboration is important, virtual collaboration with customers via Facebook, Twitter, websites, and blogs should not go understated or undervalued.1

 

In the global business environment, employees and partners who speak different languages may still be expected to work together. Bridging these language barriers can be difficult. However, virtual communication tools such as video chat, visual aids, and interactive media are proven ways to help overcome these barriers.2

 

Carl Wiese writes in his blog post Three Drivers of Collaboration that market barriers are low and competition can come from anywhere.3 Therefore, it is crucial that companies have a strategy for global competition. The traditional thinking that enterprises gain their competitive advantage by being the best at everything has shifted to specializing in a few key areas and outsourcing the rest to experts. Wise argues that companies must adapt to a new phase of collaboration that is mobile, social, visual and virtual.5

 

Real-Time Business

 

Real-Time business means that data is updated at the same time it is entered. This enables companies to quickly respond to and/or adapt to what is happening in the market, and is a distinct advantage for marketing departments, sales departments, and the business in general.4 For example, marketing departments can identify and respond to trends as they happen, and sales departments can make more informed decisions with the latest information.6

 

Interaction is no longer limited to email and phone in lieu of in-person meetings. Virtual teams and tools enable companies to collaborate with foreign counterparts and customers in real-time. This creates a boon to customer satisfaction as the customer is able to quickly and easily obtain feedback.6 When it comes to competing globally, Real-Time Business is essential. 

Cost

 

Virtual tools make it possible for project teams to continue work around the clock. When one team goes home for the day, another can take over. Continuous work increases productivity and allows a project to be completed more quickly. Costly overruns or time delays can be mitigated or avoided completely.  

 

With an economy in flux, sustainability is a key consideration for companies. Travel costs can be drastically reduced by the use of virtual teams. When more employees are working virtually, there is a reduced need to maintain physical office space. Cisco found that, “Buildings are estimated to account for no less than half the world's energy consumption, while property operating costs represent the second largest business expense for a typical organization after human resources.”5 Clearly, an opportunity exists to reduce overhead costs by utilizing virtual teams.

 

Employee Satisfaction & Recruitment

 

More and more employees are able to choose where they work from, making it easier to meld work and family life. Many employees jump at the chance to work from home. Oftentimes, there is little difference completing tasks at home versus completing tasks at the office.

 

By collaborating virtually, less emphasis is placed on age, race and physical appearance, which makes for a more homogeneous work environment. Furthermore, employees are not restrained to an 8 to 5 workday, since work can be completed from anywhere at any time.

 

Each employee has certain conditions and times under which they operate optimally. Some individuals perform their best at 6 am, others at 11 pm. Virtual tools allow employees to work when they are at their best. Typically, this results in a better work product and a satisfied employee. When employees can work from anywhere, commuting time can be reallocated as the employee chooses. Small office interruptions that occur throughout the day are also avoided.

 

Virtual tools also expand talent pools. Geography no longer precludes a talented individual from being hired. The trick for companies is locating the right people with the right talent. Virtual tools make this task easier by allowing companies to interact with talent from all areas of the world.2 Virtual interviews in particular are gaining steam as an effective method of evaluating talent from distant geographical areas.

 

V. Employee Based Drivers

 

In addition to company benefits, virtual teams and teaming technologies also benefit employees. Workers can be exposed to vastly different viewpoints and ideas when working with individuals from other regions and cultures. The synthesis of ideas are richer, and the outcomes more well rounded. Workers also enjoy a more flexible lifestyle and greater job prospects. Although virtual teaming is not a new concept, it has increased in popularity and is altering the way we work.

 

Flexibility

 

With virtual teaming, employees can be dispersed across various geographical areas and multiple time zones.  In the book Implementing Virtual Teams: A Guide to Organizational and Human Factors, Abigail Edwards and John Wilson state that, “Virtual Solutions can deliver to employees the flexibility to design the way they work around other commitments and preferences they might have.”8 Essentially, employees are better able to balance and control their workloads both during and outside of work hours.

 

The technology of the 21st Century has brought about changes to not only the office, but family dynamics as well. Men are no longer the sole bread-winners, and dual-income households are common.  Working women must find ways to care for children while also keeping to their professional commitments and responsibilities. Virtual teams and technology facilitate this type of flexibility. Working mothers are no longer chained to their desk. And in some cases, no desk or traditional office exists at all. With virtual teams, work and life can take place in tandem. 

 

Expanded Job Market Boundaries

 

Similar to how organizations have more access to talent; employees have more access to companies. Employees benefit from an expanded job market by being able to work for companies that in the past they would have had to relocate for. And companies are no longer restrained by location. According to the article the Advantages and Disadvantages of Virtual Teams, “Virtual teams have created newer opportunities for people who are less mobile and hesitant to relocate due to either family requirement or physical challenge. Now, any task that does not require the physical presence of a person, and can be supported by communication technology, creates an opportunity for many deserving candidates.”9 Thus, virtual teaming benefits both organizations and employees by broadening the job market and eliminating boundaries to connect talented workers with growing companies. 

 

Job Satisfaction

 

Lastly, virtual teaming has the ability to improve employee job satisfaction.  According to Lynn Marotta with Web Conferencing Zone, "An increase in job satisfaction can be looked at as a somewhat indirect benefit of working on a virtual team, but a benefit none the less. Workers who are allowed to work virtually often are much happier because they have more control over their hours, projects, etc. Increased job satisfaction almost always means better performance.”10 In essence, virtual teams empower workers by granting them a sense of autonomy.

 

Companies often pass on higher costs to the customer and/or the employees. Therefore, the cost savings from using virtual teams can be used to reward workers and/or pay dividends to stakeholders. And in an economy where the cost of living can out pace the rate-of-pay for some, a moderate bonus could go a long way in fostering employee loyalty and satisfaction. The overwhelming response given by employees for why they disliked or or did not perform their best at their job was because they did not feel valued. Acknowledging employees hard work, however small, can go a long way in regards to employee satisfaction.

 

VI. Information Technology Drivers

 

Information technology (“IT”) has become a mission critical component in the competitive business landscape. However, IT is not viewed as a revenue generating business function for some corporations and they dawdle in their IT innovation. By failing to invest in technology, many organizations have lost their competitiveness while opponents elevate their market share. Thriving companies understand that IT should be viewed as an integral part of their organization, and in some cases, a way to distinguish themselves from competitors. As more companies turn to virtual teams, technology should be at the forefront of discussions and decisions with management. When implementing virtual teams management should consider the following factors:

 

Infrastructure

 

Across the nation there are many small businesses that have multiple work stations that are not networked, linked or shared. Infrastructure coupled with virtual teaming tools can remove these barriers, allowing businesses to realize their true potential. Virtual teams complement traditional collaboration rather than seeking to replace it.11

 

Virtual teams have shown to be most successful when making creative and logical use of existing resources. With the ubiquitous consumer adaptation of tablets, laptops, and smartphones, naturally, these devices being incorporated in virtual teams. Companies are warming up to the idea of Bring Your Own Device (BYOD) policies, as most large corporations today place a greater emphasis on information security.16 Employees utilizing their own tablet or laptop can be a low cost hardware solution for companies on limited budgets. Employees also reap the benefit of flexibility and familiarity since they are using their own devices. BYOD is just another way for businesses to take advantage of virtual teaming without a large start-up investment. In some cases these start-up costs are passed on to the employees. Employees normally maintain technology costs regardless of whether they work virtually or in a traditional corporate structure, so this absorption of costs is not conscious. The organization only takes on the cost to secure the infrastructure to support devices working within the organizations network.

 

Customization

 

Virtual teams provide customized solutions for the needs of businesses. And to be or remain competitive globally, a business must consistently and continually cultivate, design, and develop their IT solutions. Some leading innovative companies such as IBM and Johnson & Johnson have already put significant resources into virtual collaboration.12 Virtual teams offer promising opportunities in a variety of settings and can be designed and deployed to an organizations specifications.13 User-friendly software and systems can be adapted to fit the goals and needs of the company. These systems will not only make it easier for employees to collaborate, but can incorporate customer managed tools that allow clients to use company services to assign tasks to virtual team members. And with regards to open source software, businesses can reap the benefits of building out from existing frameworks.

 

Utility

 

While some companies appreciate the value of IT, many are unable to harness its true potential. Virtual teams by nature encourage the use of technology. Members of virtual teams rely heavily on technology to mediate their interactions, often maintaining different environments in which they are working and varying technologies to support specific work needs. An organizations market position often rests on its ability to reduce costs without creating operating inefficiencies. This has to be accomplished all while fulfilling competitive operating margins alongside maintaining the quality of products and services.14 Therefore, it is vital for organizations to squeeze as much utility from IT as possible.

 

Skill

 

Organizations should offer training to virtual teams to develop cultural competencies as a means to improve skill building, awareness, and understanding. After all, all offices of an organization pursue the same general goal. Managers should be the first to be trained since they are a pivotal part of the process.12 It is imperative that managers have experience leading groups that are dispersed in various locations across the country. A suitable manager for virtual teaming will have an understanding of how to define roles and expectations so that the organization’s needs are met.

 

Unlimited support should be offered to virtual teams from the organization to ensure objectives are clear for organizations evaluating virtual teams for the first time. A small team of independent thinkers who are successful at working collaboratively or solo should be chosen as the test group. If a small team cannot be established, a large team can be broken up into groups to accomplish targets since smaller groups have a history of enhanced performance. It should be understood that all offices are involved in the same general goals and collective team processes. It helps to build a better rapport with virtual team members if there is more collaboration rather than competitiveness. A lack of trust is the most frequent reason teams fail.12 It can be easier to build trust if the employees already know each other, but trust can be built among strangers using tools and collaborative team building methods. For example, various companies have set up frequent meetings to establish virtual team relationships to keep track of accomplishments and build a rapport among team members. Also, seeing group members through virtual chat and conferencing allows some of the interpersonal aspects that a traditional office provides. Teams who are aware of collaborative technology practices and tools have been known to perform better than those who had no prior experience in this area.12 Collaborative techniques provide teams a repetitive process that allows groups to come to a consensus. There are a multitude of tools that can be used to support virtual teams. These include scheduling, organizing, briefing, problem solving, and group writing tools that can be found on an assortment of websites. Keeping staff knowledgeable on the various tools available will enable businesses to flow better and increase overall productivity.12

 

Knowledge Sharing

 

(Ghoshal, 2013)

 

Knowledge sharing translates into a competitive advantage for organizations.15 Knowledge management systems and knowledge repositories help an organization disseminate large amounts of information to workforces effectively, irrespective of the virtual team’s physical location or time zone. An organization can maintain a shared repository through a shared LAN folder or web hosted forum. In the illustration above, direct communication occurs through the knowledge repository. And although the illustration indicates two contributors, there can be many providers of artifacts for the system. One reader in the diagram represents the multitudes of readers that will benefit from the data input into the system. A knowledge repository can expand to the extent of those who are allowed access to it.15

 

Virtual teams, by nature, have a diverse knowledge base.15 Companies should be sure to utilize this competitive advantage to benefit all aspects of their business by enabling knowledge sharing and communication skills through virtual tools, talent development, and training. All forms of data, information, and knowledge should be contextualized, shared, combined, and reused in order to create new knowledge. A culture of sharing should be supported at all levels of IT implementation to assure maximum growth and market share increase.

 

VII. Conclusion

 

Senior and mid-level IT managers, and corporations in general, have much to gain with the use of virtual teams. Studies show definitively that virtual teams increase productivity and expedite the turnaround of project deliverables. Driving the adaptation of virtual teams are reduced travel expenses, decreased time to market, and increased productivity, to name a few. Organizations that require collaboration to complete projects are best suited for the use of virtual teams. However, virtual teams are not limited to IT driven organizations. Academic institutions can also benefit.

 

For business, virtual teams and tools enable companies to collaborate without geographical boundaries. Globalization has brought about this demand. Virtual teams are cost effective, allowing companies to expand their talent pools while saving on recruitment costs. Companies are also able to reach out to the best talent without regard to location. Virtual teams and tools assist in bridging language barriers by incorporating video chat, visual aids, and interactive media.

 

Enterprises no longer gain a competitive advantage by being the best at everything. Instead, has they specialize in a few areas and outsource the rest to experts. Today, companies must adapt to a new phase of collaboration that is mobile, social, visual, and virtual.

 

In today’s ‘always on’ society, it is important that businesses have the latest information at their finger tips. Real-time Business means that data is updated the moment it is entered. This allows companies to quickly respond to trends.

 

Cost is a consideration for all businesses. And with an economy in flux, sustainability is a key consideration for companies. Virtual teams can drastically reduce the cost of travel. In some cases, there is no need to maintain a physical office space at all. Cisco found that half the world’s energy costs are related to operating buildings. Clearly, there is an opportunity to reduce overhead costs by utilizing virtual teams.

 

Virtual teams increase employee satisfaction. Employees are no longer limited to an 8-5 workday, and can choose to work when they are at their best. This often produces a better work product, as well as a more satisfied employee. Employees afforded the flexibility to work around other commitments and preferences are typically happier since they are better able to balance and control their workloads. Granting employees this autonomy often results in better performance.

 

Virtual workers can also be exposed to vastly different viewpoints working with individuals from other regions and cultures. As a result, the synthesis of ideas is richer, and the outcomes better rounded.

 

Employees will also see greater job prospects thanks to virtual teams. Boundaries are eliminated and talented workers are connected with growing companies. Workers can pursue opportunities that in the past they would have had to relocate for.

 

As one could imagine, technology is a key driver of virtual teams, and a mission critical component for business. However, since IT is not viewed as revenue generating business function, IT innovation for some companies can sometimes lag. Failing to invest in technology is a risky bet, and many corporations have lost their competitiveness as a result. Thriving companies understand IT should be viewed as an integral part of their organization. It can even distinguish them from competitors in some cases.

 

When considering virtual teams business must first evaluate their IT infrastructure, i.e., their ability to support virtual communication and collaboration. Many small businesses have multiple work stations that are not networked or shared. Infrastructure changes coupled with virtual tools can remove these sharing barriers and allow employees to realize their true potential.

 

Since virtual teams often reach across physical and cultural boundaries, developing cultural competencies for employees is beneficial. It will reduce conflict and promote skill building, awareness, and understanding. Managers should be trained first and have experience leading groups in dispersed locations. A suitable manager will have an understanding of how to define roles and expectations so that the organizations needs are met. Independent thinkers should be selected for company who is forming its first virtual team. Trust can be built in cases where the employees do not know each other with team building exercises.

 

And lastly, knowledge sharing. Knowledge sharing translates into a competitive advantage for organizations. Knowledge management systems and repositories help disseminate large amounts of information to workforces effectively. And virtual teams, by nature, have a diverse knowledge base. Knowledge sharing and communication skills can be honed through virtual collaboration, talent development, and training. A culture of sharing should be supported at all levels of the organization.

 

References:

1.    Koh, J., and Y.-G Kim. "Knowledge Sharing in Virtual Communities: An E-business Perspective." ScienceDirect.com. Korea Advanced Institute of Science and Technology, 2 July 2003. Web. <http://www.sciencedirect.com/science/article/pii/S0957417403001167>.

2.    Heller, Rebecca. "A COST-BENEFIT ANALYSIS OF FACE-TO-FACE AND VIRTUAL COMMUNICATION: OVERCOMING THE CHALLENGES." N.p., n.d. Web. <https://est05.esalestrack.com/eSalesTrack/Content/Content.ashx?file=440f092d-3901-432f-8a3b-2110878043ec.pdf>.

3.    "The Business Case for Enterprise Collaboration." Oracle Insight, Mar. 2010. Web. <http://www.oracle.com/us/corporate/insight/enterprise-collaboration-wp-171715.pdf>.

4.    Nash, Kim S. "Globalization: IT Tools to Collaborate and Bridge Language Gaps." CIO.com, 16 June 2010. Web. <http://www.cio.com/article/596968/Globalization_IT_Tools_to_Collaborate_and_Bridge_Language_Gaps>.

5.    Wiese, Carl. "Three Drivers of Collaboration." Cisco Collaboration Virtual Experience. N.p., 21 Mar. 2012. Web. <https://communities.cisco.com/community/technology/collaboration/collaboration_virtual_experience_2012/blog/2012/03/21/three-drivers-of-collaboration>.

6.    Rouse, Margaret. "Real-time Business Intelligence (BI)." Tech Target, June 2010. Web. <http://searchbusinessanalytics.techtarget.com/definition/real-time-business-intelligence-BI>.

7.    "Unified Communications: Use Virtual Collaboration to Improve Environmental Sustainability."Unified Communications Applications Solution. Cisco, n.d. Web. <http://www.cisco.com/en/US/solutions/collateral/ns340/ns394/ns165/ns152/white_paper_c11-459857.html>.

8.    Edwards, Abigail, and John R. Wilson. Implementing Virtual Teams: A Guide to Organizational and Human Factors. Burlington: Gower Pub Co, 2004. Print.

9.    "Advantages and Disadvantages of Virtual Teams." Advantages and Disadvantages of Virtual Teams. Managementstudyguide.com, n.d. Web. <http://www.managementstudyguide.com/virtual-teams-advantages-and-disadvantages.htm>.

10.    Marotta, Lynn. "What Are Some of the Major Benefits for Having Virtual Teams?" Benefits for Having Virtual Teams versus Traditional Teams in Business. N.p., Sept. 2006. Web. <http://www.web-conferencing-zone.com/benefits-for-having-virtual-teams.htm>.


11.    Pauleen, D. (2004). Virtual Teams: Projects, Protocols, and Processes. Chicago: IGI Global.


12.    Jill Nemiro, M. B. (2008). The Handbook of High Performance Virtual Teams: A Toolkit for Collaborating Across Boundaries. Chicago: Jossey-Bass.


13.    Making the IT Project Business Case. (2005, September 20). Retrieved February 8, 2013, from CIO Update: http://www.cioupdate.com/budgets/article.php/3550231/Making-the-IT-Project-Business-Case.htm


14.    TERADATA CORP. (2009, March 2). TERADATA CORP 10-K 2009. Retrieved February 8, 2013, from wikinvest: http://www.wikinvest.com/stock/TERADATA_CORP_(TDC)/Competition-the_Information_Technology_Industry_Intensely_Competitive_Pressures_Adversely


15.    Ghoshal, M. K. (2013). Opinion: Knowledge Management for Virtual Teams. Retrieved February 9, 2013, from Infosys: http://www.infosys.com/infosys-labs/publications/infosyslabs-briefings/Pages/knowledge-management-virtual-teams.aspx

 

16. Bradley, T. (2011, December 20). Pros and Cons of Bringing Your Own Device to Work. Retrieved February 21, 2013, from PC World: http://www.pcworld.com/article/246760/pros_and_cons_of_byod_bring_your_own_device_.html

 

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Comments (3)

terbush@... said

at 5:55 pm on Mar 21, 2013

Formatting of page, your small type makes reading this hard. It is also difficult to navigate through the sections. But content is good, thorough analysis

terbush@... said

at 3:20 pm on Feb 13, 2013

Is there a citation for the graphic? I look forward to the fleshed out version (some topics seem pretty thin).

terbush@... said

at 3:44 pm on Feb 5, 2013

Please keep to your topic -- the business case for VT. Your VI section is out of scope.
Please provide a link back to the main page.

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