There has been a marked increase in the number of companies that regard themselves as project oriented. Consequently, so has there been an increase in the recognition of the impact of successful projects on the profit-loss status. Therefore, there is a heightened pressure to assure that projects are successful in terms of deliverable results, cost, and delivery date. Global projects with virtual teams have emerged as vehicles by which the cost and duration of projects can be reduced while maintaining a reasonable control on the quality and scope of projects. As a result, there are financial and operational incentives to develop an infrastructure that is friendly to virtual projects. This friendliness will be manifested by strategic imperatives to formulate a customized set of procedures and guidelines specifically for the virtual projects of the organization. Further, the globalization of business has resulted in greater interest in a more comprehensive suite of the best practices of project management.
Through the use of virtual teams, managing organizations by projects has become the reality, because teams and their associated projects are no longer limited by physical boundaries. The fundamental change is that, with the virtual team as an option, geographic location is no longer the primary context in which to define and pursue business opportunities in support of strategic goals and competitive objectives. Managing organizations by projects is a philosophy based on the principle that strategic goals of the corporation can be achieved through the planning and execution of a series of projects that are clearly defined and carefully implemented. If a policy of managing by projects is adopted, then a project mind-set permeates the entire spectrum of strategies of the company. Therefore, best practices of project management principles can be applied even to those undertakings that, because of physical boundaries, previously were not considered a unified and distinct project and thus were not subject to traditional project management procedures. As a result, the basic definition of project scope, cost, and duration will become the guiding light for staffing any form of effort that requires the planning and execution of a sequence of defined tasks that are to be performed by resources of the organization (Ferrilla, 1997). This might sound like stating the obvious, but some organizations do not follow this simple test to identify project-oriented work. The philosophy of managing by projects involves a major transference of focus, particularly for an organization that only occasionally undertakes projects, typically as part of a major program. In the management-by-projects approach, projects and project management are regarded as assets to the organization and as critical elements of the organizational success. In this approach, project management is accepted as the way for the organization to accomplish all of its goals, not just some of them.
When the organization is following a management-by-projects approach, everyone's work is viewed within the context of managing and successfully completing specific well-defined projects. In this environment, there is a goal-oriented frame of reference, and projects are used as the key tool to deliver products, to support organizational change, and to foster improvements in effectiveness and efficiency. In a manage-by-projects environment, by contrast with a traditional environment, projects are not considered in isolation from other work; rather, projects are viewed as essential for the survival and growth of the organization. Since, under these circumstances, projects often permeate many segments of the organization, a greater significance is placed on enterprise resource management. The increased significance is due to the fact that, in the traditional environment, each project is executed singularly with little regard to other projects that are under way in other areas.
The interrelationship between projects, and the pervasive nature of projects within the organization, has been described as a web of simultaneous projects (Dinsmore, 1997). The comprehensive portfolio of projects would include projects that develop and fine-tune corporate strategy, projects that focus on operational improvement, projects for organizational transformation, and projects for traditional development. In a manage-by-projects environment, scheduling of the individual project components is no longer the top priority, although it is an important issue. The challenge for the Project Management Office (PMO), or other centralized coordinating body, is to ensure that the right resources are assigned to each project team when they are needed, while maintaining a comprehensive balance of the organizational resource pool.
If the organization has primarily, or exclusively, utilized traditional teams for previous projects, the progress monitoring systems, if there were any, are dependent on face-to-face reporting and diagnosis. Therefore, under these circumstances, the progress of a virtual project would not be measurable and may not even be visible. Consequently, the success or failure of a virtual project would become an event that either delights or disappoints management, as the case may be, but remains unpredictable nonetheless. Notwithstanding, it is logical to expect that with proper planning, and with specific attention to the unique features of work in the virtual environment, organizations would be able to nurture cohesive virtual teams that conduct successful projects on a regular basis. At the other end of the spectrum, if virtual teams are not planned and supported properly, their failure would be far more devastating and drastic than would have been the failure of a traditional team.
The increasing use of the manage-by-projects concept and the widespread use of virtual teams for project work will ultimately depend on the intensity of the organizational desire to maintain a healthy balance for all project resources, or the motivation to finish all projects on time, and on the desire to deliver the projects in a cost-efficient manner. With the acceptance of virtual teams as a viable option, resources will no longer be limited to just those people who work in a single location. Virtual teams will afford the organization the flexibility of combining the goals of individual projects with the needs of the entire organization. Consequently, virtual teams will become the tool by which project deliverables, project cost, and a balanced resource pool are aligned with strategic objectives of the enterprise.
There is no question that the opportunities presented by virtual teams outweigh the challenges in terms of efficiency, a large pool of resources, and immediate access to those resources. Probably the most significant advantage of a virtual team is that the resources of a virtual project organization can be deployed quickly and cost effectively. However, in order to provide a healthy and nurturing environment for the virtual teams, significant organizational changes must be made in favor of the specific needs of the virtual teams. If the organization does not have a comprehensive PMO, the adoption of virtual teams might be an appropriate occasion to establish a PMO (Rad and Levin, 2002). However, if the organization already has a PMO, then modifications may need to be made in its features to accommodate virtual teams. For example, if face-to-face standards are employed, PMO personnel will not be able to provide training, consulting, and mentoring to project personnel with whom they cannot have a traditional meeting. Probably the most significant items of change are the new and modified procedures that replace face-to-face procedures in handling project functions. In general, all those PMO functions that deal with things issues of a project can be easily modified for a virtual team. However, those functions that deal with people issues, such as mentoring or training, will need innovative and unusual approaches in order to be effective in virtual teams (Figure 1.1). Other areas that would need significant, but subtle, changes are those that deal with communication, conflict management, progress monitoring, and brainstorming. It should be highlighted that traditional procedures must be maintained and enhanced because traditional teams will still continue to be present in organizations. In fact, the availability of both types of project delivery modes will afford the organization the option of selecting the most cost-effective form of implementing each prospective project.
One of the interesting features of virtual projects is that they allow organizations to form joint ventures for specific short- term purposes. In this scenario, a lead organization creates internal and external alliances with other organizations. The alliances are based on the determination that each of these organizations possesses unique competencies that are considered the best in its own class for building specific products, or delivering services, in the shortest possible period of time. More than likely, these alliances will be based exclusively on virtual relationships because the required skills might not be contained solely in the lead organization. The skills will be contained in hybrid groups of individuals who might be from different organizations, who might be located in different geographic areas, and who might never meet face to face during the life of the project. The virtual team, formed for the purposes of such an alliance, might draw resources from competitors , customers, and suppliers. The purpose of this team is not longevity but rather to bring specific, high-quality products to market in the most expeditious manner. Once the project is completed, the alliance, or the virtual team, can be disbanded very quickly and efficiently . Therefore, in a way, the objective of this virtual team, not much unlike any other project team, is to arrive at the point when the team will be dissolved in a graceful and yet expeditious manner.
With the increase in the number of companies that have offices and plants around the world, many projects would become a multilocation virtual team. The project team might be a cross-disciplinary team, or the team may be composed of two separate departments, such as production and research. Organizations are redefining themselves as they optimize strategies and resources across borders in order to respond to competitive business pressures. Therefore, the dynamic nature of the transformation of global project implementation policies might become complex and even chaotic (Brake et al., 1995). More so than traditional teams, the virtual team project resources can be selected based on the person who is best suited for the project, because the selection is independent of his or her location. Such freedom in team member selection and having the most appropriate skills at the disposal of the project manager will result in attractive cost and schedule efficiencies. With this kind of careful preplanning and proper resource matching, a far more efficient project team will emerge. Thus, organizations can implement a project team response in situations where a co-located team might be too expensive. Team formation does not involve relocation costs, and occasional technical experts can be added to the team regardless of their location and without the need for travel expenses.
Another motivation for the use of virtual teams and global projects is the incentive for a lower total cost for the project deliverable. The exchange rate between two different currencies that are potential providers of a particular project resource might make a resource in the country with a favorable exchange rate appear to be exceptionally low priced. Buying power of the salary for the same skill level of a certain discipline might be the same in two different countries , although this is not always the case. Thus, additional savings will be gained if the buying power of the skill favors a particular location. This lower cost consideration has been one of the major reasons why many system development projects of U.S. corporations are conducted with global teams drawn from resources residing in Asia, Eastern Europe, Central America, and South America.
Thus, the primary efficiencies of virtual teams come from selecting the most skilled and/or the lowest price of a given resource, because the project manager has access to a large portfolio of resources available, albeit individual resources are in different locations. Another attractive feature of a virtual team is the ability to select people who have access in their locations to sophisticated technologies that are desirable to the goals of the project, particularly if these technologies are not available in other locations. Thus, in a virtual team environment, enlarging the resource pool increases the probability of selecting people of higher competence and fosters the use of more relevant equipment, both at attractive costs. As Juhre (2001) notes, at times when skilled technical resources are in demand, global staffing becomes a critical success factor for enterprise projects.
Given that it is likely that the location of virtual team members might literally span the globe, team members in different locations can take turns conducting activities that require constant attention. Such continuous work can be accomplished in a hand-off arrangement. This will result in unusual efficiencies in terms of resource utilization and faster project completion. Tasks such as progress monitoring, data collection, and testing can be performed around the clock. Team performance will create the appearance of what is commonly known as a three-shift, round-the-clock operation, even when the project has only one shift in operation at any given location. If all documents are maintained in a soft-copy fashion using agreed-upon tools, documents can be passed easily for review and enhancements at the end of a shift from one team member in one geographic location to a team member who is beginning his or her day in another location. If, for example, the virtual team has team members from the United States, Europe, and the Pacific Rim, then the organization can expect round-the-clock teamwork to occur, particularly for tasks that need continuous attention and/or rapid implementation.