Setting up a part of a business to operate as a virtual company raises one further important issue. Capturing and sharing knowledge is vital where partners regularly come and go. A secure but accessible data room is essential for effective joint working, with an intranet that encourages the exchanges of ideas, in turn driving innovation.
Developing the appropriate facilities is a vital investment but contractual links are required to underpin the virtual network. Traditional employment contracts are not sufficiently output based, and procurement contracts generally lack the flexibility essential to a virtual organisation. Because exclusivity of service goes against the principles of virtual organisations, individuals and businesses in the network are not permanent features, nor necessarily working full-time on the objectives of that network. So working methods, contractual links and ownership of intellectual property must all acknowledge the coexistence of other virtual organisations drawing on the same resource pool.
A common feature of successful virtual companies is that they make information more available than is usual, not less. Trust and a form of loyalty become paradoxically more important rather than less. Once again, understanding people and cultures outweighs the importance of technology in the virtual world. This is crystallised in the 90/10 rule promoted in the Jessica Lipnack and Jeffrey Stamp's book on working across boundaries in virtual companies - 'Virtual Teams'. Managing a successful virtual company is ninety per cent people and ten per cent technology.
Copyright Partnership Sourcing Ltd 2001. All rights reserved.