Second Life - outsourcing's next frontier?

When PA Consulting wanted to build an extra wing for its offices, it hired the best man for the job.

Unusually, perhaps, it turned out that the best man for the job was an enormous rabbit, and one which wanted to be paid in an electronic currency that didn't exist a few years ago.

But then again, the office extension PA wanted was a virtual one, built in the rapidly growing Second Life online world.

Second Life - the business evolution

Click on the links below to see pictures of some of the many real-world businesses that have set up outposts in Second Life.

Toyota
Nissan
Intel
Dell
Cisco
IBM
Circuit City
Sears
Wired
ABN Amro
Samsung
Field Fisher Waterhouse
AOL
Adidas
Nissan
Sun Microsystems
Reebok
Penguin
American Apparel
Reuters
CNET Networks
PA Consulting
Yankee Stadium

As well as finding a rabbit to build the extra wing for its Second Life HQ, PA Consulting also found in-world 'residents' willing to work as greeters in its office in exchange for the in-world currency, Linden dollars.

"We've outsourced first-level support to the global labour pool," explained Claus Nehmzow, member of PA Consulting's management team.

But far from being a kooky one-off, a number of companies are looking at how virtual worlds can help them improve the way they create and manage teams in their own businesses - as well as providing a new market.

Depo Consulting is using its Second Life office not just as a showcase but as a means of improving the management of its team - some members of which it has never met in the real world or even spoken to on the telephone.

Peter Dunkley, director of Depo, which develops Second Life buildings for its clients, said: "The most compelling differences between this and existing remote working is the ability to work as a team - and to manage that team."

Dunkley argues that working through a Second Life virtual office means it is easier to hire workers, either long-term or for specific tasks, from anywhere in the world - and most importantly manage them.

"For the individual team member you have the benefit of working from home whilst still enjoying relationships with co-workers and - critically - with the organisation itself," he said.

For example, meetings in Second Life are more productive than conference calls, he said, because all the participants have to be engaged. Unlike on a conference call you can't get away with doing email or making coffee at the same time as listening in.

Virtual worlds offer the ability to provide development capability in new ways, using more flexible and advanced methodologies - and at lower cost than traditional offshore development can deliver, he said.

But this doesn't mean the end of traditional outsourcing, of course - in fact, there's no reason why established outsourcers can't use the same benefits to manage their dispersed teams.

Dunkley suggests the first thing that companies interested in virtual worlds should do is get in there and look around.

"Critically, don't restrict it to your IT strategists as you'll benefit from a broad range of explorers," he suggests.

Setting up an office is a good first project to work on, so long as it isn't left to gather virtual dust but has a purpose - such as being a venue for team meetings or recruitment and interviews (particularly effective when looking for IT staff, according to Dunkley). Building the office can be a huge learning experience in terms of how projects work within a virtual environment, he suggests.

But don't leap in with anything too sensitive, such as projects involving personal data of customers.

As Dunkley points out, it's wise to not get too enthusiastic too quickly: "Your compliance department are likely to start spinning like tops if you start having critical meetings with your corporate finance advisors about a hot new deal in your new virtual office located between a beach club and a casino."