Business Applications of Virtual office Technology

Business Applications Of Virtual Office Technology

Overview

The emergence of low cost microcomputers and data transfer devices in the 1970s made it feasible for some office workers to perform their work outside of formalized corporate settings1. The advent of the personal computer in the 1980s, and widespread implementation of wireless and high speed data transfer technologies in the 1990s, made it possible for certain types of office workers to perform their work anywhere the necessary software/hardware infrastructure is established. Employees working from their homes, utilizing computers, modems, fax machines, email and other electronic means to perform their jobs and communicate with their coworkers work in a virtual office. In recent years, the virtual office has become one of the major movements within business and other organizations, primarily due to technology advances and associated benefits. A virtual office is defined as a temporary or permanent office setup in various locations: home, satellite offices, hotel room, corporate office (shared work space), airport, airplane or automobile2. According to one survey, there were approximately 20.8 million virtual office workers in 2003. This count continues to increase 10% annually. Corporations that have implemented the virtual office concept include IBM, Lotus, Andersen Consulting, Hewlett-Packard, AT&T, Dun & Bradstreet, Ernst & Young, and Compaq.

Even though such virtual employees may use a company email address, mailing address and phone extension, they still work from an outside that location. A virtual office doesn’t necessarily have to be a room in a person’s home, however. A laptop in a hotel or even at the beach will do. In most cases, a person who works from a virtual office is set up thanks to his place of employment. All equipment belongs to the home office and must be returned upon termination from that company.

The virtual office worker doesn’t necessarily need to be an employee. Self employed workers and entrepreneurs working from their homes or on road trips via laptop and wireless connections are also telecommuters. The owner of a virtual office can also be an independent contractor or freelance worker, with no ties to one specific place of business.

Benefits

The benefits derived from implementing a virtual office are numerous. Many corporations are reaping significant cost savings and productivity gains as follows. Virtual office has been shown to increase productivity by 15 - 20% thanks to flexible work schedules that allow employees to work the times they are most productive. Another benefit is reduced real estate expense of 40 - 60% that results because virtual offices have reduced office space requirements that convert to actual, hard dollar savings. In addition, many overhead costs, such as electricity, are cut out or kept to a minimum for the company with virtual employees. Telecommuting also eliminates crowded offices. Some virtual employees may even agree to lower pay in exchange for the ability to work out of his home.

Because virtual employees are located close to customers and can quickly address customer needs, customer responsiveness is improved. Working in a virtual office cuts out a frustrating commute. A virtual office worker can work in pajamas or sweats if he’s so inclined, eliminating the cost of a pricey business wardrobe. Expenses such as office supplies can either be billed back to the home office or written off on his taxes. Telecommuting may even eliminate the expense of day care or a full time baby sitter. The virtual employee is able to work without the distractions of a busy office. Because of all these benefits, employees are happier and their overall quality of life is enhanced, further contributing to increased productivity. In short, experience has shown that virtual office appears to be a win - win - win concept for corporations, employees and customers. Many more companies plan to adopt this concept.

Downsides and Risks

There are downsides to a virtual office as well. Working by one’s self is lonely and many virtual employees miss the camaraderie of an office. There are also many distractions at home, such as the refrigerator, the telephone, the Internet, the kids, and neighborhood affairs. It takes a disciplined person to be able to work in a virtual atmosphere.

If a virtual office sounds like it would be a good idea for a particular company, that corporation would be well advised to do