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and groupware while appearing to others to be a single, unified organization with a real physical location. A virtual organization in business can be: • A business which operates primarily via electronic means • Independent organizations that share resources to achieve their goals • In grid computing a group who shares the same computing resources More and more organizations are looking at virtual organizations to address critical resource, personnel and logistical issues. There are many definitions of virtual organizations, including: • A flexible network of independent entities linked by information technology to share skills, knowledge and access to others' expertise in non traditional ways • A form of cooperation involving companies, institutions or individuals delivering a product or service on the basis of a common business understanding. The units participate in the collaboration and present themselves as a unified organization. • Virtual organizations do not need to have all of the people, or sometimes any of the people, in one place to deliver their service. The organization exists but cannot be seen. It is a network, not an office. Attributes of VOs A dispersed network of skills and capabilities: The structure of a VO is distributed among multiple locations resulting in the capacity of bringing in a wider pool of skills and capabilities. The use of telecommunications and computing technologies: These technologies serve as the enabler that makes a VO exist. One could argue that VOs have always existed-traveling sales staff, outsourced staff and staff working at home. However, what is new is that technology has made it much easier to support distributed work teams. Barriers of distance and time have been overcome by technology. Flexible, dynamic, restless: Organizations no longer are constrained by traditional barriers of place and time. VOs support dynamic changes to the organization including employee work environments and processing structures. Restlessness refers to the attitude to willingly change products and services, geographic dispersion, communication patterns. This has the potential of leading toward higher levels of innovation and creativity. Integration: When different individuals, groups and organizations get together in a VO, they need to interact collectively to achieve success. This implies greater levels of collaboration, cooperation and trust. Integration leverages the synergy of individuals. Need to implement VOs • A need for process innovation: This is often motivated by competitive pressures, stakeholder demands and other factors to achieve increased productivity and quality. There is typically a 30 to 50 percent increase in productivity as result of implementing VOs. • Sharing of core competencies: VOs help address the voids in an organization resulting from starting up, turnover and retirements. • Globalization: Many organizations are finally realizing there is a vast pool of untapped skills, knowledge and abilities throughout the world. • Mobile workers: VO concepts can help the numerous companies employing mobile workers such as auditors, consultants, salespersons and service technicians. • Cost reduction: Improving efficiency often means reducing overhead, such as physical assets used to support traditional work environments or redistributing costs over several physical locations. • Changes in employee values and attitudes toward work: Quality of life is a major factor particularly in attracting and retaining quality employees. Employers have realized that a balance of work and personal life, family requirements, personal fulfillment and flexibility are important considerations among employees. • Costs and problems of travelling: VOs address transportation issues, such as unproductive commute time, traffic hassles, the cost of fuel and environmental impact of commuting vehicles. Approaches in implementing VOs • Telecommuting: Employees work at a location away from the usual workplace, but not necessarily at home. Computers and telecommunications equipment are used to maintain contact between the telecommuter and the home office. • Telecenters: These satellite offices typically are located in communities outside of major cities and provide space and equipment for employees commonly not available in the telecommuter's home.
It has a tremendous impact in the sharing of data and for supporting increased functionality (e. • Hot desking: This arrangement is for offices in which staff members spend a significant amount of time on customer premises. For example. There is a growing trend toward a convergence of functionalities onto one device. computers and personal digital assistants can seamlessly connect with each other using a short-range (10-meter) wireless connection via a radio frequency. • 2 . When they arrive. e-mail wireless devices and Internet appliances. Intranets permit the sharing of company information and computing resources among managers and employees. databases and project management. the intranet is extended to external stakeholders such as customers. employee information. In an extranet. By controlling this electronic image of himself. • Hoteling: This is when the client provides a hot desk for the VO's employees. internal job offerings. suppliers and trading partners. • Personal devices: Personal devices include personal digital assistants. explore under Antarctica or perform surgery remotely. electronic mail. documents. Examples of intranet applications include manuals." KM technologies supporting VOs include: • Collaborative technologies: Collaborative technologies include document sharing software. e-mail wireless devices. XML is evolving to be the common structure for data interchange among disparate heterogeneous systems. • Virtual teams: Employees collaborate from remote locations using e-mail.. • Virtual reality (VR): There are various types of virtual reality. they are assigned a computer workstation where they can access their documents. telecommunications. Many CAVE setups have multiple users involved. wireless local area network (LAN). Examples of extranet applications include collaboration. the user might steer the Mars rover across the terrain. groupware such as Lotus Notes. virtual meeting rooms. group calendaring. glasses. goggles or a data glove) and interacts with that world as though he were actually a part of it. It involves the removal of permanently assigned desks to all or some of the employees. project management. The user steps into the CAVE and enters a virtual world on all sides. • Intranets and extranets: Intranet is a network of networks contained within an enterprise and protected from outside intrusion through firewalls. searching for information). which is a computing and telecommunications specification that describes how mobile phones. applications and e-mail. and newsgroups. news and training. data sharing. The user manipulates this figure within the world and interacts indirectly with the world. application sharing and video/audio conferencing. o Telepresence technology: The user remotely controls a mechanical manipulator to perform some action or explore some aspect of a world. the user can interact extensively within the world. o Mirror world or second person experiences: The user is represented by a figure inside the computer. schedules and calendars. These devices enable employees to have an office anywhere and an expanded reach to both management and clients. o Immersive experience: The user visits a world through a wearable device (head tracker and helmet. Technologies Basic technologies: Basic technologies supporting VOs include the Internet and the World Wide Web. Knowledge Management (KM): KM has been defined by the International Center for Applied Studies in Information Technology as "a conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance. procedures. Another wireless technology. • Extensible markup language (XML): Extensible mark-up language (XML) is language for describing structured. cell phones. allows a user to connect to a network through a wireless radio connection. It is the most expensive type of VR setup. • Wireless technologies: Wireless technologies include Bluetooth. and video conferencing. o CAVE (cave automatic virtual environment): It consists of a multiple screen environment. which surrounds the user. pagers and laptops. o Desktop systems: They run on regular personal computers without additional hardware. groupware.g. shared whiteboards. files.Mobile working: This refers to the working environment of mobile workers who require tools such as cell phones. the Intranet and/or video conferencing. Extranets permit further accessibility.
• Computer security: Due to the multiple clients in a web-based architecture.g. such as processing power and memory. home computers range in the type of hardware characteristics. assembly line and assembly crew. Finally. There is the delay in waiting for a response after a message is delivered. technical jargon. To be conservative. The lack of face-to-face interaction and the absence of body language or vocal inflections tend to reduce the quality of the message delivered. thereby leading to situations where critical information was not received in a timely manner. forms. Examples of information resources that can be consolidated and accessed via a portal include search engines. For example. use of capital letters. a virtual team member may send messages to everyone on the team.. the UPS truck and driver who delivers the computer. regardless of location and ownership of the company. vertically integrated organizations to virtual entities that rely on business partners to fulfil major parts of their supply chains. All of the inventory in the system. Members in a virtual team may find it frustrating that messages are misunderstood or not received by other members thereby resulting in inefficiencies. These inconsistencies often result in common applications being slow.Portals: Portals are starting web sites for users to access the knowledge content they need and want. This means a company will outsource any part of its operations to companies that can more efficiently. Benefits may include overall lower inventory levels in the whole system and better customer service. The Dell virtual organization includes the Dell customer service rep. Areas causing these difficulties include e-mail slang and informalities. This has the impact of slowing down the necessary information flow and interactivity between the entities in a VO. e-mail slang and icons. There is the problem regarding ambiguity about whom to include in the communications. e-mail. • Communication Issues: The communication issues are not necessarily technical in nature. customer support and integration of these components into the final computer products. a receiver can misinterpret the tone of the message because of the way the message was constructed (e. Example of a Virtual Organization: Companies are rapidly moving away from selfcontained. web links. team members may inadvertently leave out important constituents in the communication loop. • Loss of personal contact: Employees may miss the camaraderie of a traditional office environment. Related to this problem is the reliability of the network and its servers. reliably and costeffectively implement the work. databases from disparate sources. This may be an issue when critical information must be passed on in a timely manner. can be viewed as a single system.e. • The dynamic nature of technology: This makes managing hardware and software upgrades a difficult task for any information technology manager in a VO. Moreover. • Security: Organization resources may be open to intruders and hackers. There are organizational and market conditions that would o 3 . marketing. • Ensuring employee self-motivation and self-discipline: Keeping the employee focused on the job can be challenging when there is limited managerial oversight. documents and task lists. the potential limitations on bandwidth for transmission. On the other end of the spectrum. • Defining goals and limits of responsibility: This must be done in a virtual team to prevent duplicating an effort or missing a key job requirement. which contributes to mailbox overload. supply people for various components. and people from MasterCard who pay for it. Dell tries to keep as little actual inventory on hand as possible. • Managing and controlling at a distance: Traditional managers do not feel secure particularly in a crisis when their employees are working remotely. it can have profound effects on the productivity of a VO. setting the level of importance as urgent). Technical Issues: Several key technical issues surround VOs: • The capability of the communications network: For example. difficult to use or even inoperative across the different computers. most of the components in a Dell computer are made by other companies while Dell focuses on its strengths i. confusion over teleconferencing protocols and outdated distribution lists. but related to human factors. there are many points of possible intrusion into the centralized applications and data sources of an organization. If the network is down frequently. there is a problem with store-and-forward asynchronous communication systems in that it often takes time to communicate. • Hardware and software compatibility issues: In a telecommuting scenario. Managerial Issues: Managers new to a VO need to realize a new managerial style is required because of the special issues one must face in a distributed work environment: • Potential abuse and wasted time: The lack of face-to-face interaction may result in the employee focusing on non-work activities.
• Partnerships and strategic alliances: The number of partnerships and interorganizational alliances among different firms has grown steadily and is expected to increase as part of need to gain competitive edge and new customers. particularly when these requirements are outside their core mission. The perceived visual space is three-dimensional rather than two-dimensional and the user is immersed in the computer-generated environment. Virtual manufacturing provides a model for making rapid changes in products and processes based on customer requirements and an agile manufacturing system attempts to implement it. • 24-hour-a-day storefronts: Growth of the Internet has been fuelled by consumer desire to have convenient access to products and services. The following trends are anticipated in the upcoming years: • No set schedule or workplace • Greater focus on own initiative and responsibility. Finally. The virtual environment for virtual manufacturing is simulated through immersion in computer graphics coupled with an acoustic interface. Virtual Teams 4 . the lack of computing and communications technologies can hold back the implementation of a VO. knowledgeable and empowered people. These collaborative efforts can be facilitated via the VO structure. • High-speed networking and software interfaces: High-speed networking and software interfaces are concerned with computer-aided-design (CAD) model portability among systems. perhaps because of security restrictions.or medium-business virtual manufacturing • Agile manufacturing: Agile manufacturing integrates an organization's people and technologies through innovative management and organization. • Growth in virtual intermediaries: Examples include education brokers. precisely depositing layer upon layer of material. data and support are located off-premises and accessible typically via the Internet. market organizers and personalized service providers. collaborative design using virtual reality over distance and use of the Web for small. requiring more self-discipline and self-motivation • More flexible guidelines and rules • Higher mobility of individuals • Potentially less job security for those not willing to participate in the VO approach Virtual manufacturing: Virtual manufacturing is the modelling of manufacturing systems using audiovisual or other sensory features to simulate or design alternatives for an actual manufacturing environment. The part is built one layer at a time. and devices such as steering and brakes for cars or instrument clusters for airplanes. governments have been heavily promoting the concept of telecommuting and other forms of VO. People Trends: Employee expectations are expected to change. a VO cannot be successful where knowledge cannot be readily shared. The subset of virtual reality that is used in virtual manufacturing is commonly known as virtual environment. Organizational Trends: Organizational trends are summarized below: • More telecommuting: With energy costs rising and environmental concerns growing. The concepts underlying virtual manufacturing include: • Virtual reality: Virtual reality is broadly defined as the ability to create and interact in a simulated space that represents an environment very similar to the actual environment. rapid prototyping. Furthermore. • Outsourcing: Many organizations are turning to outsourcing to fulfill their business requirements. there may be cultural resistance particularly in an organization where trust and sharing are difficult to achieve. VOs must support this requirement. high-detail models interaction and display. There may be a lack of strategic fit for the company. • Rapid prototyping: In rapid prototyping a CAD drawing of a part is processed to create a layered file of the part. The screen separating the user and the computer becomes invisible to the user. The motivation for virtual manufacturing is to enhance people's ability to predict potential problems and inefficiencies in product functionality and manufacturability before real manufacturing occurs. the company wants to focus on face-to-face customer interaction as opposed to using communication technologies. and flexible and intelligent technologies. Application service providers are one type of outsourcing where specific applications. For example. or the prototyping and manufacture of a proposed product using computers.prevent employees from taking part in a VO. Also.
Virtual team: In addition to being a team. Another benefit of a virtual supply chain is its ability to decrease the time to market for a product. These skills fall into three categories: technical or functional expertise. • There is no commuting time Virtual SCM The key to low costs in global environment is through a virtual supply chain management system. Problems can be spotted and addressed with speed to minimize downtime or effects on production schedule towards achieving customer satisfaction. Implementing this involves coordination amongst many parties of different countries. these companies are trying to achieve the lowest manufacturing costs while increasing quality standards. they tend to break into sub-teams. virtual team members are physically separated (by time or space) and primarily interact electronically and who may meet face-to-face occasionally. • Expenses associated with travel. These systems are designed for flexibility. Benefits of Virtual Teams • People can work from anywhere at anytime. • Interest groups: A virtual interest group could be a group of investors sharing strategies and outcomes. punctual transportation timing and justin-time inventories all contribute to the finished product to be ready within the shortest time possible. Teams need to develop a common approach or method on how they will work together to accomplish their purpose. lodging. some of which may be in other countries o Mergers and acquisitions o Emerging markets in different geographic locations o Desire of people and government organizations for telecommuting o Need to reduce costs o Need to reduce time-to-market or cycle time in general Types of Teams or Groups • Task groups: A virtual task group could be a small software development group of people telecommuting to their office. often in multiple countries. • Command groups: A virtual command group could be a national sales team distributed throughout the country. inventory levels and maintaining customer satisfaction levels. As visibility into inventory levels across all stages is clear. Collaboration amongst different parties is the only way in which businesses can thrive. • Many physical handicaps are not a problem. A team's purpose and performance goals go together. performance goals and approach for which they hold themselves mutually accountable. complexity and speed in managing networks of suppliers. Internet-enabled infrastructure allows ease of cross-checking of inventory levels. Teams need complementary skills or the right mix of skills to do the job assigned. rents may be reduced or eliminated. In a bid to remain competitive. Traditional linear supply chains just do not have the capability to support such a complicated production process to which virtual supply chains hold the key. not just physical location. order status and expected product delivery schedules. This can only be achieved by distributing the production of different component parts to multiple vendors. parking. Virtual teams = teams + electronic links + groupware Reasons for Virtual Teams • Team members may not be physically collocated. distributors and warehousing agents virtually. • Team members may work different shifts • Realities facing organizations such as: • Organization-wide projects or initiatives o Alliances with different organizations.Team: A team is a small number of people with complementary skills who are committed to a common purpose. • Friendship groups: A friendship group might be represented by a virtual community. problem-solving and decision-making skills. Finally. Many companies have begun to incorporate this into their outsourcing plans to contract manufacturers all over the world. Common system protocols allow efficient communication. More than that. collaboration and coordination amongst the different vendors and let everyone work together as if they were one large business. Generally. • It may not be practical to travel to meet face-to-face. teams have from two to twenty-five people. 5 . a virtual supply chain that networks all parties together is something that is necessary to reduce costs. • People can be recruited for their competencies. and interpersonal skills. the returns on assets attained will also be increased. the short production schedules. Once the process starts at the top of the supply chain. Finally. sustaining lead time standards. groups become teams when they hold themselves accountable for the outcome. manufacturers.
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