Business Value of Virtualization

Invention, creativity, ingenuity, risk and opportunism have always thrived during times of strife and crisis. It is safe to say that the wild financial market fluctuations over the past weeks define strife and crisis. How does a company overcome the hurdles it is facing in the near term as well as put a solid foundation in place for the long run? In a word, virtualize.


Virtual business processes allow a company to be extremely flexible in all economic environments. It is the elasticity of virtualization that enables a firm to respond to changing business conditions quickly, much faster than in a quarter or a half-year timeline.


A virtual business takes advantage of the Internet, leveraging its global reach and reliable infrastructure.  In a recent study of 212 respondents, the Computing Technology Industry Association identified numerous business advantages to utilizing teleworkers. The study showed that incorporating telecommuting in to the business model:

- improves productivity (67%)

- reduces costs (59%)

- provides access to more and qualified staff (39%)

- and improves employee retention as well as health (37%, 25%, respectively).


I'm advocating major real estate reductions, not a complete shutdown of the facilities. There are times when teams need to meet, or customers are being hosted.  Having some nominal amount of office space supports the business needs.


A cold hard look at the firm and all of its processes will show where virtualization can be implemented most quickly and effectively.  The top five areas to virtualize, in no particular order:


1.    Marketing and Marketing Functions

This group generates creative outputs.  Much of its time is spent writing and developing content, which can be performed anywhere.  Brainstorming within the team is readily accomplished via teleconferences.  Worse case, they can use a conference room in the downsized real estate footprint.

2.     Human Resources

Most large companies use recruiters and the Internet for job postings. This team can readily perform its functions in a virtual manner.

3.    Financial Functions

These functions include activities such as payroll, 401(k) administration and accounts receivable and payable.  If they haven’t been, these activities should be automated.

4.    Information Technology

There are many functions of IT that readily lend themselves to virtualization. Desktop agents make remote management and support a snap.  Moving to a thin client model with hosted business applications completely removes the need for desktop support.  These are just a few examples of IT functions that can be quickly and inexpensively virtualized.

5.    Training and Education

Training and education are readily accomplished through video libraries, social networks and virtual environments such as Second Life.  To have classrooms or labs set up at the office is a huge waste of facilities resources.


By applying virtualization in today's business environment against the business' bigger picture goals of moving toward an e-Business model, the current environment will be rendered providential and opportunistic.


The next post will address how to deal with management concerns in the virtual business.

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