Most organisations embark on a virtual team approach to their work for a combination of the following reasons; reducing costs by using personnel from lower cost locations, accessing skills not readily available in their principle location or working to maintain a workload balance across a global organisation by sharing work between locations rather than building one location while another is quiet. Generally, in my experience it is unusual to find an organisation that would only fit one of the above options, more typically it will be a combination of two. There are of course other reasons for virtual teams to be used but these three are by far the most common.
Its not all about costs
Adopting a virtual team approach purely to reduce the costs of the work being undertaken is one that is fraught with risks if not fully planned and, if appropriate allowances are not made for contingencies. Companies leaning this way tend to be driven so heavily by the attraction of the anticipated savings, they can finish up sacrificing the quality, schedule and even the actual delivery cost of their project in an attempt to keep costs down.
I have seen projects where, for instance, travel between centres was eliminated for all but the most senior personnel and where appropriate enabling technology such as video conferencing, project wide access to telephones (mobile and fixed lines) and even employing the best people for the project was kept to an absolute minimum, certainly kept to a level which meant that the tools were not able to be used effectively to give meaningful communication between centres. Doing this results in messages not getting sent and understood properly which in turn lead to potential rework and delays to the overall job, saving a few thousand dollars on an air ticket or additional video conference system can result in additional project costs of menu multiples of the savings, yet the approach continues in many project to this day.
Using virtual teams to access hard to source skills is the second most common reason, and one encountered frequently in consulting organisations. These organisations base their business model on providing the best skills available globally to their clients and to do this they need to be able to “sell” these skills globally, as such they need solid mechanisms to enable their global skill pool to be made available on a local level without having their people permanently on planes. In other industries the need to access hard to source skills also drives organisations to use virtual teams, in industries such as engineering it is frequently the case that tens to hundreds of personnel will be working remote to the hub of a project to deliver their part of the job, to relocate such large numbers of people is both expensive and highly disruptive to the personal lives of the individuals.
The third principle reason for virtual teams is to balance work across a global organisation. This is a slightly less common reason than those listed above and even where it is the stated approach of organisations it can sometimes be one that is conceptually encouraged by management but then discouraged by operational and reporting processes. For example, an organisation may state internally and publicly that it wants to balance its work globally but then places reward structures and procedures in the business that encourage and reward locally focused activities rather than shared work.
If you want to keep up to date with future articles, please enter your details below to subscribe to our regular newsletter.