Management Concerns in the Virtual Business

Virtual business processes is a leading tenet of business in the 21st century. Virtual business processes leverage the digital infrastructure, support communication and collaboration around the globe, and provides a solution to geographically dispersed teams. The virtual business model provides a sound solution to both strategic and tactical business planning. With all these great benefits, why is management so reluctant to implement virtual business processes?  More importantly, how can you get the executive team to change their thinking on virtualization?


Since the development of scientific management theory during the Industrial Era, management has been focused primarily on the management of people and the work they do.  Although this has evolved into multiple variations, such as empowered teams, the fundamental focus has been on how best to control people. This is even true of white-collar workers.  Many mid-level managers keep in the back of their minds the idea that higher authorities are subtly monitoring their comings and goings.


The emphasis on what people do loses sight of the fact that it is how people do their jobs that matters most. Although the output of professionals does have meaning, output is controlled through contract.  Improvements in process efficiency lead to increased productivity and subsequently lower costs.  As economic conditions contract, like we are experiencing right now, executives lose sight of this fact.  The shoot from the hip response is to turn the screws on an already overtaxed workforce, resulting in reduced morale and output.


Virtual business processes prevents this short-sightedness.  The processes and the associated workers are distributed in any number of locations, linked via collaborative technologies and therefore cannot be scrutinized by management on a minute by minute basis. Consequently, management in a virtual business environment has to resort to a project management focus, the output, to ensure the initiative is accomplished.


In addition to the change in management perspective on how to manage people, executives must also change their perspective on the decision making process. By implementing virtual business processes, the firm can readily apply business intelligence to the decision making processes.  Virtual business processes coupled with business intelligence has the opportunity to radically change a company’s response time to changing market conditions. The more nimble a company, the greater its chances of success, defined as market share and profitability.  Even the largest companies, implementing virtual business processes are able to quickly respond to changing market conditions.


The two optimal tools for helping executives excel in the virtual business world are project management and business intelligence.  Project management tools aid in shifting the focus of work to results, alleviating the need for constant employee monitoring. Project management changes the business emphasis to one of strategic outputs readily developed, linked and measured against overall corporate strategy.  It eliminates the random projects that consume time and resources that don’t contribute to the overall focus of the firm.


Business intelligence tools provide insight into changing market conditions well before the changes are reflected across the broader market.  With advanced notice, firms are able to adjust to meet the changes ahead of competition. BI tools also allow companies to develop playbooks based on different scenarios. When the time to make changes comes, decisions are already in place and readily executed. No time is wasted and the company can continue to move forward.


Does your firm use project management and business intelligence tools?  Tell us how they are working out in your environment.

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