Are you becoming a virtual company?

As I look back over the last five years and forward to the next five I see a clear trend in our industry.  More and more companies are going virtual.    Now, become you assuming what that means let me share the observation that there are many different kinds of "virtual".   Here are some examples.

1. A company that has "at home" inbound customer service reps, either their own or a third party.
2. A company that has several employees who work remotely. This usually occurs with a good employee...or desirable new hire.....who can not re-locate for any number of reasons.
3. A company that has outsourced a major part of their business because they have realized that they are not experts in that area. Software development, fulfillment, call center, human resources, light manufacturing/assembly are just a few such areas.
4. An ecommerce pure play company who has chosen from the beginning to outsource everything. (I believe this is more a function of the fact the company was born when all the needed outsourcing services were already developed.)
5. A company that has realized the dangers of being too insular and needs outside input or vendor input in various operation areas to deliver continuous improvement.

It is important to note that becoming virtual is a continuum, not a zero sum game.   You never become 100% virtual, nor are you 0% virtual.  Everyone is on the continuumn. 

Some of the typical reasons for not outsourcing functions include loss of control/understanding, risk caused by vendor failure, vendor staff turnover, trust, etc.    (This is somewhat ironic as very often most of these issues are present when a company decides to perform all functions internally.)   On the other side of this issue are, I believe, more enlightened companies who realize they can not be expert at everything and they need to focus on only the critical differentiators like product and brand development.  More importantly, they realize that many areas of their business have become too complicated, too sophisticated, too technology laden for them to underwrite the cost of what it takes to become and remain leading edge.  They realize they must perform these functions co-operatively with others (other customers of their vendor) in order to keep costs in check, learn, advance and remain competitive.   After all, is it reasonable to believe that you can be leading edge in all areas of your business?   Is it reasonable to believe your employees won't get isolated, myopic or stale in their non-critical functions?   It is worth a hard look in the mirror on this one and at least a look at what others in your category are doing.   I believe we will continue to march towards the virtual company.  We will be pushed by our internal failures and shortcomings and pulled by the success and new virtual business model of many ecommerce pure plays.   No matter what side of this fence you are on, I would welcome a conversation.

Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes@b2bdmi.com or (954) 383-5221 (direct line).