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Distinguishing Between Virtual Teams and IT Outsourcing

Published by SPK Blog Post
on February 27, 2012

One of the benefits of an IT outsourcing partnership is that it can offer companies the option of working with virtual teams who can help support different types of IT and business operations, regardless of the locations of the workers. Teams and team members who work in different geographic locations can help companies accomplish a wide variety of IT tasks, such companies include global financial services firms that use a follow-the-sun approach to complete data processing efforts each day.

Virtual teams can also provide companies with additional flexibility and business benefits, including reduced office expenses, smaller IT footprints, plus the ability to recruit people for specific skills and areas of expertise regardless of physical location.

Still, it’s important for decision makers to make the distinction between virtual teams and outsourcing since, as consultant Martin Zwilling recently blogged about on Forbes, a virtual team isn’t just another name for outsourcing.

Virtual teams who are separated by time and/or space ideally are assembled with complementary skills to accomplish a defined task or project, typically by communicating electronically.

One midsize software development company based in the UK has achieved success with its use of a virtual team. The company was facing rising demand for its services. However, with a staff of just 20 people, including its executive team and project managers, the company had to turn down client projects due to resource constraints. Augmenting internal staff wasn’t an option since this would have led to higher overhead and other complications.

To help support its growth and take on new customers, the software developer partnered with an IT outsourcing provider to set up a virtual application development team in India tasked with working on an initial client development project. A team of five C# and .Net developers was assembled. Project managers in the UK and team members in India communicated using instant messaging and Skype tools.

The team met its four-month project deadline, lowering its originally projected overhead costs by 65%. The virtual team effort enabled the company to develop an ongoing development model with the systems integrator where resources could be scaled up or down on an as-needed basis.

Because of the differences in time and location (and sometimes language), virtual teams are most successful when goals, expectations, and vision are clearly communicated. This includes making all relevant project information transparent, including all project timelines, milestones obtained, revisions required, and measurable results.

These types of requirements are particularly critical for IT outsourcing partnerships since any virtual team members who work on behalf of an outsourcing client need to fully comprehend the client’s objectives and mission to ensure that they’re being met.

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