Virtual Teams – How To Mitigate The Risks
The benefits of virtual teams are well documented. Easy access to a vast global pool of highly specialised and talented people can reduce project delivery time and significantly lower project costs. But there are also many pitfalls and hidden risks. Below are some of our ideas to mitigate the risks. This is based on best practices and on our own direct experience of managing virtual teams and helping select the right teams for 20,000 clients.
Planet of the virtual workers
The market for virtual work is big, growing fast, and focused mainly on knowledge intensive work. McKinsey, a consulting firm, say that while the last era of globalisation was driven largely by sourcing low-cost production, the next era will centre on the rise of the global knowledge economy.
Between them, Elance, Odesk and Freelancer have about 22m users (most of them are virtual workers) and their combined turnover was about a billion dollars last year. Finding a virtual worker prepared to work immediately, anywhere in the World, has never been easier. The global staffing market is worth about $422 billion, with online staffing growing 10 times faster than offline. More business is based on the exchange of knowledge Vs the traditional exchange of labour or resources. To put this into perspective, knowledge-intensive flows reached $12.6 trillion 2 years ago, according to McKinsey Global Institute — more than the combined GDP of China and Germany.
At Software Buyguide, we have used virtual workers and teams spread across 10 countries, including Philippines, Ecuador, India, USA, Ireland, Pakistan, UK, Kenya, Hungary, Bangladesh, Bulgaria and Colombia. Any organisation can harness the best talent, wherever it is.
The perfect mix – time, quality and cost
Increasing productive work hours by “following the sun” could mean faster project completion. Couple that with the ability to access a team based on experience and specialisation, and you have the right people to reduce quality risks and increase innovation. Also, virtual teams typically incur lower office space costs, and lower unit or hourly costs. But the most successful firms strategically determine which activities are best performed by virtual teams, based on time, quality and cost. Virtual teams offer the perfect opportunity for the average business, with a tight budget and keen to achieve tight deadlines, but equally keen to maintain high quality standards.
No free lunch
Hordes of talented professionals want to work for your firm – separating the wheat from the chaff is difficult and time consuming. Getting this wrong can be costly, delay your project and even impact the morale and productivity of your staff.
But selection is not the only risk point. You encounter the same potential pitfalls associated with any other project, just amplified. At the most basic level, you need to professionally organise and manage everything from project documentation to the right work environment to collaboration tools and communication schedules. But, never underestimate the impact that different time zones, physical distance and cultural barriers can have. With all of the best intentions, your virtual team’s promise to complete the project “tomorrow” may sound like a broken record, but only to you and others with your cultural viewpoint. By aligning ourselves around virtual teams and understanding their culture, we’ve avoided some of the most common pitfalls.
Despite the risks and pitfalls, virtual work is here to stay and there are huge benefits, especially for mid size and small organisations. Large organisations, especially the large technology, accounting and legal firms have been doing this for more than a decade. We know some very small firms that have built their businesses on the back of their ability to harness virtual talent. Others have been frustrated by the time and effort required to filter through profiles and then organise and manage their chosen virtual teams.
Project Management Overlay – Essential Extra
The most successful firms use Project Management to mitigate the risks that are a natural consequence of any project, especially projects with a virtual team component. These organisations have embraced the benefits of project management because they know that good project management is a predictor of on time on budget project delivery.
We continue to use virtual workers for many of our projects and over the years have learnt how to find the best virtual resources, select the right trusted experts and build powerful virtual teams. We’ve also learnt so much more about the need for good project management and also which project management styles work best when managing virtual experts and/or teams.
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