virtual team and project managment

Running header: VIRTUAL TEAM MANAGEMENT

University of Maryland University College

Virtual Project Management Submitted by – Subrata Mukherjee

VIRTUAL TEAM MANAGEMENT

Table of ContentsExecutive Summary:.................................................................................................................................4

Introduction:..............................................................................................................................................5

Virtual projects and its benefits:................................................................................................................7

Advantages of virtual projects:..............................................................................................................9

Multi-dimension challenges in virtual project:.......................................................................................11

Political/ Legal aspect:........................................................................................................................11

Security:..............................................................................................................................................12

Economy:............................................................................................................................................13

Infrastructure:......................................................................................................................................14

Culture:................................................................................................................................................15

Communication and negotiation:........................................................................................................17

Time zone:...........................................................................................................................................18

Dysfunctional Conflicts:......................................................................................................................19

Team building:....................................................................................................................................19

Resource utilization:............................................................................................................................21

Agile project (Project life-cycle).........................................................................................................22

Hard to track status:.............................................................................................................................22

Venture capitalist issue:.......................................................................................................................23

Ethics:..................................................................................................................................................23


Project closeout:..................................................................................................................................24

Project management knowledge areas and Virtual project management:...............................................25

Project integration management:.........................................................................................................25

Project scope management:.................................................................................................................27

Project schedule management:............................................................................................................28

Project cost management:....................................................................................................................30

Project communication management:.................................................................................................31

Project Procurement management:......................................................................................................32

Trend of virtual project in IT industry:...................................................................................................33

Conclusions:............................................................................................................................................35

References:..............................................................................................................................................36

List of Figures

Figure 1: Virtual team work life-cycle model...........................................................................................8

Figure 2: Virtual project trend...................................................................................................................8

Figure 3: Maslow’s pyramid...................................................................................................................12

Figure 4: Project team building...............................................................................................................20

Figure 5: Project scope change reaction in Virtual teams.......................................................................27

Figure 6: Collaboration tools used in virtual project (Siebdrat, Hoegl & Ernst, 2009)..........................33

Figure 7: Project team performance variation with physical distance....................................................34


Executive Summary:

Contemporary advancement of globalization compels every industrial sector to produce at the cost

of less investment. Reduction in total cost of ownership (TCO) implies the enhancement of total

benefit of ownership (TBO). This apparently abysmal equation seems to be never ending on the lower

limit of the TCO. Industries innovates multiple avenues to cut down the cost – one of the pioneer

among the innovations is virtual team based project execution.

One of the many tangible benefit of the virtual team includes shorten project life-cycle duration at

the lowest cost. Moreover, ease of incorporating global talent to the project without incurring

astronomical travel budget. Moreover, as well managed virtual project produces one of the finest

quality project output compare to traditional project. Thus, virtual team based project management

seems to be the win-win solution for both enterprise as well as employees.

However, apparently lucrative solution comes with its own set of unique challenges, which as

mostly not present in traditional co-located teams. Based on the literature survey and personal industry

experience with the virtual team of over 12 years, this paper would illustrate in detail, what are the

benefits and challenges the virtual project management faces, and talk about the various best practices

to alleviate the challenges. After all, in this fiercely competitive market enterprises find virtual project

is one of the key drivers to minimize TCO to drive-up TBO, which is the ultimate dream of a modern

conglomerate.


Introduction:

In 21st century, the virtual project management becomes the personage in the arena of the project

management. During 1990, an increasing number of the Fortune branded conglomerates, e.g. -

Goodyear, Motorola, Texas Instruments, General Electric, etc. had begun their odyssey into the virtual

project arena by exporting the team concept to their foreign affiliates in Asia, Europe, and Latin

America to integrate global human-resource practices, which is considered to be the onset of virtual

projects (Thomas & Bostrom, 2007). Contemporary wave of globalization added momentum to the

advancement of the virtual project management. Virtual project is characterized by group of

individuals who work across time, space and organizational boundaries with links strengthened by

webs of communication technology. They have complementary skills and are committed to a common

purpose, have interdependent performance goals, and share an approach to work for which they hold

themselves mutually accountable (Brake, 2001). Contemporary advancement in the area of

telecommunication, team collaboration methodology, e.g. – email, IM, Wiki, etc. and Internet

technologies (World Wide Web), makes the virtual project management possible. The virtual project

enables enterprises to explore best available resources around the globe in a low-cost and efficient

manner. Virtual projects are considered to be a derivative of the PMBOK specified project

management strategies. Thus, it follows the PMBOK specified project life cycle, viz. – initiation,

planning, execution, monitoring & control, and close-out (Project Management Institute [PMI], 2008).

One of the major criteria in project selection phase in the portfolio management is benefit-cost

analysis, and 24X7 project execution facility. During the initiation phase of the project analysis of the

total cost of ownership (TCO) and total benefit of ownership (TBO) are measured to validate if the

project would enrich the organization following balance score-card model (Mantel, Meredith, Shaffer,

& Sutton, 2011). The TCO not only includes the cost of the direct labor and materials, and indirect


administration and marketing cost; it also includes the cost associated with security of the working

personnel, security of the data and technology, intellectual properties, and legal hassles. Other

challenges of virtual project management include - working with unknown people, sabotage, hidden

agendas, communication gap, etc. However, as of now, there is no silver bullet has been invented that

is full proof in the virtual project management arena. Owing to the nature of the business, not all the

project can be managed using the virtually, e.g. – NASA’s space shuttle cannot be managed virtually.

On the other hand, most of the manufacturing, and Information Technology-related projects are the

great candidates for the virtual project. The obvious question spawns-up, what is virtual project

management? How does it work in tandem with project management methodologies and PMBOK

knowledge areas? Finally, what is the benefit-cost ratio of the virtual project? Are there any other risks

that project management must be aware of and take care of?

Using example driven theoretical fashion, this article would touch upon each of the

aforementioned questions to justify, how a virtual project helps to bridge the gap between conventional

project management and power of the telecommunication to make a global team working towards the

mission to ensure the success of a project. Orchestration wise it would illustrate the virtual project

management from all the nine project management knowledge areas. Today most successful fortune

branded companies, e.g. – Walmart, Exxon-Mobil, Verizon, Comcast, BlueCross BlueShield, JP

Morgan Chase, Barcley Capital, Morgan Stanley, Bank of America, General Electric, Pfizer, General

Motors, etc. are expeditiously using this methodology to add competitive advantages to their business

strategies. Virtual project not only enable organization to save money in project, it also enables to have

access to pool of the global talents to ensure success of a project.


Virtual projects and its benefits:

Virtual team is characterized by a group of project team members that are independent of the

geographic locations (around the globe) contributing to the project success with their respective

expertise. Unlike traditional project team, in virtual team, members are not co-located, and most part of

their communication and co-ordination are performed in a virtual manner, viz. – the Internet, long

distance teleconference, video conference, Microsoft live-meeting, Cisco WebEx, and other

communication tools (Linkow, 2008). Today project managers are hard-pressed by the senior

leadership to achieve strategic fitness with lowest possible investment to thrive in the marketplace.

There are no better ways than the virtual project team to accomplish the senior management’s

aforementioned zeal to thrive in the wave of globalization. By virtue of flexibility of the virtual team,

the members from different area of expertise can work on the same project without wasting time and

money on travel, and project runs around the clock (24 X 7) by some teams around the globe without

shedding money on overtime. Example includes – JPMorgan Chase’s IT project involves USA team,

UK Glasgow team, and India team. USA project team collects the business requirements and design;

the incomplete design task is picked up by the India project team, when USA working hour ends. On

the other hand, when India day ends, then Glasgow team finishes the remaining part of the architecture

design task. As a result, USA team next day morning would be able to start software development

based on that design. One of the major advantages of virtual team is shorten project timeframe without

increasing resource burn-out rate. Unlike traditional project team, the requirement collection and

design in Agile Scrum in virtual team takes weeks to complete, as opposed to months. Another positive

perspective on this approach is it enables Walt resources to be engaged in multiple projects

simultaneously, and still to be at home. A pioneer business school, Columbia University did an


extensive research on virtual project management over a decade; the high level outcome of research

has been depicted in Figure-1 (Saunders, 2000)-

Figure 1: Virtual team work life-cycle model

As per Forbe’s, the latest trend in the virtual project management is shown in Figure-2 (Johnson,

2005).

Figure 2: Virtual project trend


Today virtual project in the IT arena becomes industry de-facto. Fortune#1 branded Walmart has

chosen Tata Consultancy Service (TCS) as their virtual project members. Firtune#39, Comcast has

chosen Cognizant Technologies (NASDAQ- CTSH) and Infosys (NASDAQ- INFY) as their extended

project team to execute the project in virtual arena from offshore. Verizon telecommunication has

opened their offshore units in India and Sao Paulo in Brazil, who would be engaged in the project

virtually. Another Fortune giant, Bank of America and Merrill Lynch has chosen Tata Consultancy

service (TCS) and Cognizant Technologies as their virtual project team extension member in effort to

reduce 45% of the project execution by 2015. This list goes on forever. The advantage of virtual team

is that it can fit all possible project origination structures (McCuiston, Wooldrige, Pierce, 2004) –

Pure project organization

Functional project organization

Matrix organization

o Weak matrix

o Balance matrix

o Strong matrix

However, in reality most of the virtual IT projects are executed wither matrix or projectized

organization fashion. In manufacturing industry the functional organization concept prevails.

Advantages of virtual projects:

The virtual project provides numerous benefits. As mentioned earlier, if a seasoned project

manager efficiently manages a virtual team, it can yield many folds of advantage compare to risk

associated. A glimpse of the virtual team based project management has been illustrated below-


Project execution round the clock at some part of the world – As team belong to various

time zones, they continue working round the clock, which help to accomplish same work in

less time.

Access to diversified talent pool – as team may span over multiple nations or geographic

boarder; thus, project would get an enriched exposure of talents around the world, e.g. – quality

team from Japan, IT talent from India, etc.

Cost effective project execution – Labor rates are different at different part of the world. The

labor rate is much lower in the developing nations, as compare to the developed nation.

However, developing nation has equal or more versatile talent pool as developed nation. If the

majority of the project team is working virtually, then overall cost (TCO) would go down.

Lower travel – There are quite few instances with the traditional team, where team was poor

performing because team member spend more time on travel/commute, as oppose to true

project work. Moreover, it is not uncommon that few of the project personnel have travel

restriction due to personal affair. Virtual team works like a pro in those cases.

Quality of deliverables – As team is spending more time on the construction/development

phase; also, multiple reviews are taking place from various team members, the chances of

error/bugs being caught is pretty high, which reduces rework, and saves money and time.

Flexible schedule – Project teams working virtually can have their work-life balance, without

jeopardizing their project activities. They can choose their own working schedule by using

VPN, Version Control tool, etc.

Less micromanagement – Project manager primarily drive the virtual team based on the

matrix, as oppose to interfering with every minute detail of the co-located team, e.g. – how


much work assigned, and at a given check-point, how much has been accomplished? This

attitude promotes more category-Y manager, as oppose to category-X manager.

Less attrition rate – In a virtual team, employees get enough freedom to stay at home, select

their own time to work on their task, etc. This creates more employee satisfaction, as a result

attrition rate of the employee turn-over reduces.

Despites all the great objectives of virtual team, it often suffers from some of critical shortcoming,

e.g. - building trust, cohesion, and team identity, and overcoming isolation among virtual team

members. Next section would go over the various shortfalls of virtual project management, followed

by section would describe the virtual team best management methodologies.

Multi-dimension challenges in virtual project:

As mentioned earlier, there is no universally accepted and applicable theory that works across the

virtual project in harmony. By definition, each project is unique (PMI, 2008); no two projects ditto

identical. Being a derivative, virtual project also claims to be different. Thus, each virtual project

would need a case-specific analysis. In this section, various dimensions of the virtual project would be

discussed to describe, how each of them impacts the virtual project implementation and management.

Political/ Legal aspect:

A virtual project management is strongly influenced by the socio-political landscape of the

country. If the country has higher bureaucracy, the speed of virtual project execution would be

retarded. Example includes; a virtual IT project being executed, which is spanned over Korea USA

may have to slow down, due to delay in obtaining NOC (no objection certificate) from the Korean

government (Powell, Piccoli & Ives, 2004). Similarly, if local government has legal restriction on the


data/content that can be shared across the other country that would severely impact the project.

Example includes China and Russia being the communist countries; they have strict rules on the

Internet based content access. Almost all the content is subjected to the scrutiny by the local

government. It poses a threat to the project execution speed, as well as some content may not be able to

share with the Chinese counterpart of the project. Thus, the political power and legality of the country

add uncertainty to the virtual project.

Security:

As per the Maslow’s law, the self-actualization would not take place unless the lower levels of

the physiological needs are satisfied for a performer. According to the Maslow’s law, human need in

hierarchical in nature, unless the immediate lowest level is fully completed, the person is not ready to

move to the next level (Mantel, Meredith, Shaffer & Sutton, 2011). Self-actualization is the ultimate

level, where a project team member can produce best of its capability. In order to arrive to the self-

actualization the 2nd level, which is safety, must be satisfied. Thus, for a virtual project to be

successful, safety of the project team members; as well as, project assets are must have a constraint.

Figure 3: Maslow’s pyramid


Example includes, virtual project with team in Russia is facing the problem of safety, as Mafia

reign. Similarly, Afghanistan and Syria are being the war ridden countries; it is the least preferred

among the leadership to execute the virtual projects.

In addition to the physical security of the working personnel, the data security plays a vital role.

Being the virtual in nature, project data is at the mercy of the team member. Competitors are around

the world look for easy prey from the virtual team to get hold of the sensitive project data. Leaked data

is utilized to harm the business units or even whole enterprise.

Economy:

Projects are being selected based on return on investment (ROI). While the project is underway,

that time if the cost of the project increases in an unprecedented manner, the project may lose its ROI.

Project sponsor may decide to terminate the project immaturely. For a virtual project, as more than one

nation’s economy is associated, thus chances of economic impact are high. Typically, the cardinal

factor that drives project cost higher than estimated includes country’s GDP (gross domestic product).

GDP is also related with the inflation rate of the country. Countries like China, Malaysia, Indonesia,

etc. are having a pretty high inflation rate. If the virtual project is executed out of those countries,

project budget would be at risk of the unprecedented market risk. Project manager either needs to have

a high contingency buffer, or pad the calculation of each item to safe guard the project. Either of the

aforementioned situation is major threat to the project. Senior management does not like any of them.

The inflation rate also has the impact to the Forex transaction. Example includes, a virtual

project involving Japan and USA calculated working capital need for second year is $5 million,

considering $ = Y 3.5. However, if the $: Y ratio increases, due to inflation the need of working

capital need would be increased. Using the allocated budget fewer amounts of baseline work can be

accomplished. It would cause either project to run over the budget or delay in completion.


Often enterprises to obtain the best bet of their money, they keep the money invested in the

market with a provision to access as and when it is needed. If the inflation rate increases, then net value

of the money would be reduced by (Mantel, Meredith, Shaffer & Sutton, 2011) –

Net present value = {Future value / (1 + inflation rate + interest rate)^year}

Similarly, the cost of the project executives travel internationally would be increased. As they

have to buy the air ticket, book hotel, rent car at higher price. This additional budget would deter the

rate of project execution.

Infrastructure:

As the virtual projects are totally technology dependent; thus, infrastructure must be full proof for a

virtual project to be successful. Infrastructure further subdivided into technological infrastructure, e.g.

– speed of broadband, availability of the software, etc. and corporate infrastructure, e.g. – availability

of power, water, better roadways, etc. The infrastructure becomes so critical for a virtual project

success. Example includes, in Mexico even though the salary is lower than the average USA auto

industry workers, but poor infrastructure adds up the cost of the manufacturing quickly. Thus, the

overall TCO for the manufacturing in Mexico is higher than USA. As per the report published by the

Department of Labor (2005), office of technology done a survey on the compact size auto

manufacturing cost comparison between USA and Mexico that shows all-inclusive manufacturing cost

in Mexico is higher

Table 1: Compact car manufacturing cost USA MexicoParts and components $7750 $8000Labor $700 $140Supply chain cost $300 $1000Inventory $20 $40


The similar problem exists in software industry in India, where the overall operating cost of ISP

for a dedicated line EVPL (Ethernet virtual private line) cost per GBPS per month data is $20;

whereas, the corresponding USA counterpart cost less than $5. When a project calculates the TCO, this

sum total cost needs to be considered.

Culture:

Cultural traits play a significant role in the virtual project management. The project manager

must be cognizant about the work culture of the country to tap the full potential of the workforce.

Table-2 describes extremely known cultural traits across the globe as identified by Hofstede (1984) -

Table 2: Cultural dimensionIntrovert/Extrovert Introverts are good as a self contributor. They

enjoy delivering their own part with

satisfaction. They are not good in handling

multiple tasks simultaneously. Example –

China, Malaysia, etc.

Extroverts can do multiple jobs together;

they like to share most of their emotion with

co-workers and superior. They always

provide warning signal ahead of time.

Example – North America

Masculine/Feminine Male dominated society. In presence of male

members female members often timid, even if

they know the solution. Example – Kenya,

Ghana, etc.

Powerful and successful women are admired

and respected. Example – USA, Canada, etc.

High-power distance

(HPD)/Low power

distance (LPD)

HPD believes in strong hierarchy. Sub-ordinate

won’t express himself in front of superior.

Large difference in compensations and social

respects. Example – Asian countries

LPD is a flatten society, where supervisor

consult with sub-ordinate to get the project

executed. Example – North America, and

UK.

High uncertainty

avoidance/Low

High uncertainty avoidance index people

cannot work uncertainty, e.g. – threat of layoff,

Low uncertainty avoidance index people

ready to accept changes and risk. They are


uncertainty avoidance unknown future direction, etc. Example –

Japan, Indonesia, etc.

not sway by emotions. Example – USA,

Canada, etc.

Religious/ Liberal Religious people always god fearing species.

For whom religious rituals are more important

than project. Example – Arab emeritus.

Liberal people enjoy life not being attached

to any region. Moreover, this people are

most tolerant of other religions. Example -

USA

Monochronic/

Polychromic

Monochronic cultures like to do just one thing

at a time. They value a certain orderliness and

sense of there being an appropriate time and

place for everything. Example- German

Polychronic cultures include the French and

the Americans, who can juggle between the

work and keep balance in it.

Cultural traits play a signification role in the project success. A project management must understand

the nature and cultural background before assigning a work to a team member. Moreover, knowledge

of the cultural background helps to set the expectation from the team member. Example includes,

assigning a project leader role an introvert team member would not only increase the probability of

losing the team member; it would also introduce more risk to the project. By nature, introverts are poor

in managing people. Similarly, task a religious person heavily and refrain from performing his

religious rituals would not only offend him (her), employee attribution rate would increase, which

would disarray the project. A virtual project’s manager must be cognizant of all this cultural aspect to

deal with the virtual team without hurting any members’ morale, but ensure project execution is

smooth.

Consider the JPMorgan Chase’s IT project team between North America and India – the team

members having entirely different culture. US team members are extrovert; they belong to high-

uncertainty index, and liberal. On the other hand, Indian counterpart is mostly introvert, and masculine

society. A virtual project manager from USA, if try to impose North American cultural trend on Indian


counterpart, e.g. – promoting introvert female members to lead the team, other team members may

turn hostile or sneak for sabotage, and hostility. As a result, the project execution risk would increase

many folds.

Communication and negotiation:

In the virtual project, communication takes the cardinal role. Generally, the body language plays

a critical role in personal communication. However, due to the nature of the virtual project, the

communication among the member often misses the body language part. Same response can be

interpreted by the different members of the team in the different way. In every interpretation, some of

the meaning of original authoring would be lost. This would create confusion among the team

members. Even it may send the wrong signal to project sponsors and other stakeholders. Moreover,

improper communication would beget numerous conflicts and rumors, which may potentially wreck

the virtual project team.

To overcome these gaps effective communication strategies become enormously important. Each

type of communication, viz. – email, IM, phone call, voice mail, etc. needs to have a crystal clear

connotation, including examples to articulate what one want to convey. When meetings are called, it

needs to keep in mind, if “N” numbers of project team members are in one-hour meeting, which

implies from the effective working hour #N hours need to be deducted. Thus, every meeting should

have a clear agenda. Project manager must take the moderator role to keep the meeting on-track. End

of the meeting a clearly articulated meeting minute must be distributed. It often happens projects in the

virtual meetings are a mess. Instead of making decisions out of meeting, people often get deviated

from the core discussion, which potentially need to call for additional meeting. Every additional

meeting would take away 2N hours of effective working time from the project.

In managing virtual team, project manager must employ his analytical, comprehensive, and


empathic listening ability (Oertig & Buergi, 2006). Absence of the body language in the

communication can be partly compensated by the effective listening strategies. Language barrier is

often the acute problem in virtual project management. Different nationals have distinct

style of communication, even speaks same language in different accent, etc.

Negotiation is project managers’ major weapon in the virtual project. Project manager needs to

apply this not only with its project team members; as well as, senior management, and other

stakeholders. In a negotiation, it is utmost importance to judge other party’s BATNA (best alternative

to the negotiated agreement) before anchoring. The BATNA is also driven by the cultural traits

(Hunsaker & Hunsaker, 2008). Example includes, for a negotiation involving with the high-context

cultural trait, it is futile to expect that outcome of the negotiation would come from the single

negotiation deal. Moreover, manager needs to be cognizant about the negotiation strategies, e.g. –

integrative and disintegrative. Americans are poor in negotiation, because they are mostly straight talk

personality. Often they are the victim of Winner’s curse; example includes Comcast and AT&T

splitting deal with territorial movement. Multi-party negotiation is ultimately more problematic to

reach to a conclusion.

Time zone:

One of the major business benefit in moving towards the virtual team model is project execution

would be around the clock, but management does not need to pay overtime. As the project moves

across the nation, the time-zone difference created. It is not uncommon to have almost small to no

overlapping time zones between the project participating counties. As a result, incomplete project work

hand-offs would be extremely tricky. While a team is working on the project, he may not be able to get

any of his questions’ answered, due to his counterpart may be in the bed by that time. As a result,


either team needs to delay the schedule of the activity and wait for the answer, or work as per their

understanding but get ready for rework.

Dysfunctional Conflicts:

Conflict is an integral part of the project management. Primarily conflicts are of two types –

functional conflict, and dysfunctional conflict. Like risk analysis, if the opportunity is more than risk

then accept it; similarly, the functional conflict enrich the co-ordination in the team to deliver better

quality deliverables. However, the dysfunctional conflict is a project killer. It may arise from

interpretation of a statement different than the intended meaning of it, hidden agendas, lack of body-

language in communication, or mere political game. The symptom of dysfunctional function conflict is

even more acute in a virtual team. In a virtual team, conflict not only arises from the functional

perspective, it also arises from the non-functional perspective. Dysfunctional conflicts can wreck the

project and team integrity, which would reflect in poor project deliverables and attrition in the project

team. As per Johnson (2005), enforcement of strong conflict resolution methodology, A-E-I-O-U can

be ideal to avoid dysfunctional conflict.

To avoid the unpleasant scenario from spurring up, project manager needs to develop a code of

conduct, e.g. – at least 48-hours before the review all the review materials need to be circulated to the

reviewers, software code must have 90% and above unit test coverage, etc. These guidelines would

behave as a guard rail for the project.

Team building:

As per Tuckman’s theory the project team building goes through the following steps –

Forming: During this step, the project manager recruits or borrows members from other functional

team for the project execution. This stage is important for a project team to work in a cohesive manner.


During this phase, members try to explore about each other. Being the virtual in nature, project

manager gets burdened with additional responsibility to utilize the relationship based management

style to ensure successful completion of the task building process.

Storming: Unlike forming stage, during storming stage team members fight over power,

responsibilities and roles. This phase also requires project managers help to establish clearly articulated

roles and responsibilities. Being virtual nature all source of rumor and confusion are floating the team.

To keep the project the team morale high and project under control, manager needs to ensure that there

is no overlapping responsibility, which is root of contention. If this process persists for prolonged

period that may wreck the project, due to dysfunctional conflicts.

Norming: This step is characterized by agreement and consensus built in the team, who respond well

to facilitation by leader. Roles and responsibilities are clear and accepted. Big decisions are made by

group agreement. Smaller decisions may be delegated to individuals or small teams within group, and

the commitment is strong. The team discusses and develops its processes and working style. There is

general respect for the leader and some of leadership is more shared by the team.

Performing: During this stage, team would be engage in functioning properly in the project. Project

manager needs to supervise and guide the team with his task leadership role. Whatever conflict would

arise that needs to be controlled and monitored by the previously established methodologies.

Adjourning: During this stage project team is dispersed for their next new venture.

Figure 4: Project team building


Being the virtual in nature, the forming and storming stage takes extended period of duration than

conventional project team. This critical loss of time put its toll on the project schedule and budget.

Moreover, indirect impact to the project quality is undeniably true.

Another major challenge in the virtual team is establishing trust between project managers and

team spread around the globe. The reason is lack of relationship bonding between project manager and

the other team members. When people have similarity in mindset, the trust building process naturally

expedites. However, owing to the virtual nature of the team, and lack of direct access of the project

manager make trust building process extremely difficult. If employees are from high-context society or

introvert in nature, they would be hesitant to put forward their problem or express their concern

openly; the root cause is trust. They do not want to take a chance to express their desire or concern

without observing the nature of the person and his attitude.

In this event project management needs to first employ his relationship based leadership style

to gain trust to the employees. Project manager, needs to establish more introductory session, if

possible using video-conference, so that the body language does not get eliminated. It would also

enhance the team bonding and expedite the trust building. Leadership style of autocracy of the project

manager needs to be transformed into facilitation mode, to empower the team members, who would

bring the project success.


Resource utilization:

A project team consists of a resource of various talents and socio-cultural dimension. It is

undeniably true that assigning the right task to right resource is the key to project success. In order to

properly assigning the task to the team member as per his ambition as well as, project interest would

create win-win situation. Example includes –

Japanese to be assigned to project quality management

China to be engage in manufacturing

India to be engage in Information Technology

Unless resources are getting matching task assignment with their skill set, they would not be able

to deliver their 100%, and unsatisfied resource might be threatening the project by leaving the team

suddenly. Even if they are forced to stay in the team, team would not be cohesive to yield synergistic

output (McCuiston, Wooldrige & Pierce, 2004). As a result, project would suffer from the poor quality

and low team morale.

Agile project (Project life-cycle)

Agile development is spawning over the last decade vigorously, due to change nature of the global

business. Due to the nature of agile project management, its rapidly changing requirement and other

decision, it requires a lot of face time among the team members to inculcate the same thought process

frequency in the team. However, in virtual team face-time or in-person meeting is a seldom occurring

event. As a result, it poses strong challenges to implement the agile project management

methodologies with the virtual project team. In order to make agile project successful with virtual

team, quite a few additional measures needs to be taken, e.g. – individual one-on-one time between

project manager and each team members, in-person visit to virtual team location, encourage team to


escalate the issues once suspected, propel team members to take additional responsibilities and reward

the proportionally, etc.

Hard to track status:

If the virtual team hides the truth, and project data from project manager, it would be extremely

difficult for project manager to know the detail of the project. It is not uncommon that group of virtual

team member to reign their face-value, they lie to project manager on the weekly status meeting, where

the project status is far below the baseline value. During delivery time, team may make-up stories or

starts blame-game on why work has not been completed on-time. However, this uncontrolled project

situation would impact the corporate growth of the manager, which would be in jeopardy. Moreover,

project manager’s accountability to the stakeholders would be questionable. Once the time is lost, it is

gone forever, which cannot be rewind.

Venture capitalist issue:

Quite a few instance project funding comes from venture capitalist (VC); who invests into a company

early to become the board of directors and enjoys profit sharing. However, the VC has earlier bitter

experience with the project failure due to inclusion of virtual project team; he (she) may not be willing

to invest into another virtual team based project, unless opportunity is evident over the risk.

Sometimes, new VC are scared about his money, thus is strongly discourage the use of virtual team.

Ethics:

Perhaps the single most important aspect of the project is the project ethics. In a virtual project,

demand for ethics is more important, because ethical view changes across the border of a nation. Being

multi-national project ethics of each country must be equally honored and dignity needs to be

maintained. However, situation becomes really tricky, as the ethical perspective chances from the


national border. Example includes, in USA drinking during office hours considered to be unethical

practice. On the other hand, in Germany, drinking is allowed and considered as a morale boosting tips

in fellow employees. Thus, if a German project manager manages USA project team and order lunch-

on beer, following his (her) country’s ethical practice, he (she) would be barred soon from the USA

perspective.

Similarly, in USA paying bribe to a government official is considered to be unethical. However, in

Indonesia, paying gold biscuits to a government official is considered to the courtesy to get the NOC

documents signed (Linkow, 2008). Thus, if a US project manager sticks to his ethical principle in

Indonesia, there is every possibility that project will be waiting indefinitely on approval.

Project closeout:

As per PMBOK best practice project close-out is a phase every project, irrespective of its project

ending nature (extinction, termination, augmentation, and addition) should religiously follow (PMI,

2008). The main objectives of project close-out phase are multifold-

Learn from past mistakes, which can be leveraged in the next project

Understand what was right that contributed to project success

Understand the customer happiness and potential for reparative business (PMI, 2008)

Perform the financial accounting and send out the final bill to customer

Judging vendor performance and classify them in the database accordingly

Ensure compliance in the project auditing

Archive project documentation for legal and future uses


Evaluate performance of the project personnel

However, if the project is virtual project, how the project closeout would be done? The accounting

principal used may not be uniform, e.g. –USA follows GAAP accounting rules, but India follows the

accounting standard Ind AS (Ministry of corporate affair, 1956). There is every possibilities that both

of them would not converged. Moreover, the audits are running from different countries may not take

into consideration of the interface issues, e.g. – Forex transaction, international customs fee, etc. As a

result, the final corporate balance-sheet and income statement would be convoluted.

One way to alleviate this problem is to run from the parent organization’s nation. As a result,

uniformity would be maintained, as well as interfacing cost would not be overlooked. However,

project manager needs to ensure, unless all the needed audit documents are available from virtual team,

there is an accountable counterpart would stay in the project.

Project management knowledge areas and Virtual project management:

So far this paper illustrated on how various dimensions control the project outcomes and why

virtual project’s manager needs to be aware of each of these facets to enforce effective control. In the

next section, it would emphasize how virtual project impacts the PMBOK specified different project

management knowledge areas.

Project integration management:

As per PMBOK, one of the major deliverable of this phase of the knowledge area projects Charter.

A project charter is considered to be the yard stick, using which project manager would build the

project plans and other monitoring mechanism to guide the project. The accuracy and granularity of the

data in the project charter matter the most. However, being a virtual team, all the may not equally co-


operate to provide enough details to the project manager. Typically, in onsite-offshore based models of

IT project execution, offshore just provides their overall estimate, not the detailed break-down of

estimation. It is purposefully done so that offshore can keep control on their schedule and budget. For a

project manager, it requires numerous escalations to get the details. Most often than not, project

manager unable to get the detail without being hostile with the project team. One of the key

components WBS and WBS dictionary to build the project plan would be impossible unless virtual

team members religiously help to build level-2, level-3, etc. of the WBS in the project plan.

Being into different time zones and relying on electronic mode of communication often makes it

difficult for the virtual project managers, how much depth is missing from the project plan. This

problem even acute in multi-year projects and the project requirement are the rolling-wave. Not

complete project scope is known at the beginning of the project, as each release or iteration comes

closer, the scope would be clear. As a result of this the project plan would remain fluid. Thus, baseline

plan loses its effectiveness. Any other calculation has done out of the baseline plan, e.g. –schedule and

cost, would be equally feeble.

Similarly, monitoring of the project based on the fluid project plan would be a futile attempt.

Especially, the EVM strategies require a strong baseline plan to measure the schedule and cost index

variation, and expected final cost calculation.

Weak baseline also has the strong potential to financially jeopardize the project too. The capital

budgeting of the project would lose the accuracy. Not every company in this fiercely competitive

global economy does have the luxury to retain a very high contingency buffer. Thus, the project budget

would be impacted, due to incomplete baseline.

Best Practices:


Project must ensure that the project baseline plan has enough details captured for him (her) to track

the project from start to finish. Moreover, the project plan must be signed-off from individual task

owners, and with senior leadership. This sign-off process would ensure that every project member

completely understood the task needs to be accomplished and how it interfaces with other group’s task.

Any change request (CR) approval must be triggering the re-baseline of the project plan and

raising invoice for the additional work to accommodate new schedule and additional resource capacity.

Project scope management:

As per PMBOK, the project scope management deals with the defining, establishing, and monitoring

the scope of the project. Project scope not only includes the functional aspects of the project; it would

also include the non-functional aspects, e.g. – SLA to load a UI page for a software application.

Moreover, scope does specify the exclusion, constraints, and assumptions of the project. For an IT

project scope change can be detrimental; it may mean that complete re-work needs to be done. Not

every country in the virtual project arena responds equally to the scope changes. A study conducted by

IBM (2010) on USA, Germany, Japan, and France shows their respective reaction to the project scope

change in figure-5 (Hunsaker & Hunsaker, 2008).

Figure 5: Project scope change reaction in Virtual teams


From the above list, it is quite obvious that Germany is most reactive to the scope change. Under

this circumstance, if a virtual team consists of Germany asked to scope changes in the middle of the

project, Germany team may produce extreme poor quality deliverables.

To minimize the changes and obtain more input from the users, quite a few software companies

use prototype strategies. The prototypes can be one of four types –

Concept prototype

Horizontal prototype – to clarify the scope

Vertical prototype – Refine database design, design key components early

Functional prototype – A small replica of the final deliverable in a quick-dirty fashion

Best Practices:

It is well known facts that having too-much or too little flexibility in the scope is not always

good option from the project success perspective. If the projects are executed in virtual mode, scope

locking down is needed to achieve the desired success. It would require project manager’s leadership

and negotiation power to accomplish it. If not entire project’s scope is not finalized at the beginning,

the high level scope must be locked down. The scope for the next phase must be detailed out and get


approval before going to start working on the phase. Any CR, be it minor or major, must be directed

through the change control board (CCB). Once it is approved, the new scope must be come through as

a new intake request.

Project schedule management:

As per PMBOK definition, schedule is one of the triple constraints of a project. However, in

context of the virtual team, the idea of the schedule management becomes dilute. Not all the nations do

have same outlook towards the time. In USA, schedule is treated with utmost urgency, but nation like

India; it is still relaxed. As most of the IT projects executions are done in offshore, one of the schedule

slippage penetration points becomes the offshore counterpart.

If the project requires international delivery or shipment of software, hardware, etc. then

additional, schedule needs to be slotted. As international shipment often subject to multiple nations

customs clearance, carrier’s handling delay, etc. gets added to the overall project schedule. The

trickiest part, no definitive number can be put on these international shipments. Use of Monte-Carlo

simulation is one way to understand the expected duration of the delivery by using optimistic,

pessimistic and most likely duration of the previous delivery of the similar kind.

Scheduling in a virtual becomes all the more challenging, when teams do not share the enough

detail of the project. Team’s intention is not to give much control to project manager, just give high

level details. They want to retain more freedom over their assignment. However, project monitoring

using EVM analysis requires the detail on the actual completion for a given CAPM.

Another constraint in estimating duration of a task is unawareness of the holiday calendars of

different nations. Moreover, vacation pattern is different in different countries. Example includes –

summer in USA; people travel a lot and take personal vacation; whereas, in India people prefer to

travel during winter months. Moreover, national holiday calendar is different between USA and India.


Best Practices:

One way to alleviate it is to perform the schedule estimation must be done using the resources’

knowledge base, efficiency, working time, and non-working time (Mantel, Meredith, Shaffer & Sutton,

2011). The first two entities - knowledge base and efficiency, are not easy task for a project manager to

judge in a virtual team. He needs to mostly rely on the feedback from the other teams or his (her)

peers. This uncertainty of knowledge about resource makes it difficult to realistically estimate with

high confidence interval level.

Project manager also need to gain trust from the project team and become Y-category manager, as

oppose to X-category manager (Hunsaker & Hunsaker, 2008). X-category manager starts with

suspicion, but Y-category starts with trust. In a virtual team to have proper control on schedule requires

project manager to build the trust first.

Project cost management:

Project cost is the most important facet from the operation management perspective; as well as,

senior leadership of point of view. In today’s competitive world, every project has limited budget to

accomplish the project. The cost of the project is estimated based on bottom-up estimate, as well as

considering factor of safety – contingency funds. There are quite a few project monitoring tools

available to control the project cost, e.g. – earned value matrix (EVM), etc. As mentioned earlier, the

virtual team poses difficult challenges – if any of the participating counties economy fluctuates that has

direct impact on the Forex rate. Thus, even if the project is on target from the schedule and scope

perspective, due to increased inflation or degraded Forex would drive-up the cost of the activity

completion. As a result, the project budget would be increased.


Best Practices:

There are quite a few way inhibit this risk. At the beginning of the project (during planning phase),

use the market analysis data to predict the future inflation rate and GDP of all the participating

counties in the project. Based on the forecasting, set aside the project funding. Also, have a escrow

account set-up abroad with a reputed financial institute to minimize risk of working capital.

Transferring risk can be accomplish by use of investing the fund in the derivative “Option” market

with “Call” features. Another way to minimize the risk is hedging the fund with an insurance company.

Project communication management:

It is the most important aspect of the virtual team management. As teams are dispersed over the

globe, thus lack of communication is an inevitable event. Poor communication begets conflicts; as well

as, crystallizes hidden agendas in the team. Introvert team members always suffers from poor

communication; when introvert team members works in a virtual team, it becomes all the more critical.

Often introvert team members are found to be very confident and meticulous about their own job, but

inefficient communication strategies refrain them from flourishing with full potential.

Best Practices:

As mentioned earlier, the virtual team’s manager plays extremely important role in this regard.

Project management must have a strong communication plan for both internal, and external. Internal

communication plan must be geared toward the internal resources, which would specify the types of

communications, frequency, responsible parties, method of distribution and procedure for archival.

Example includes – daily stand-up call to provide the previous day’s completion status, along with any

burning issue that requires immediate attention.


On the other hand, external communication plan would deal with what frequency what type of

communication would be going out to the customer, client, sponsor, senior leadership, and other

stakeholders. The content of the external communication must be thoroughly reviewed; as, presence of

any faulty information may ignite the spark in the stakeholders’ community.

As mentioned previously, project manager of virtual would have to spend additional time in

communicating with individual team members, either teleconference or IM to understand what is the

issue or difficulty a team member is facing. This is needed for project manager to work through the

issue towards resolution, not to put the person into the middle of blame game. Moreover, project

manager also needs to employ his various listening strategies (analytical, comprehensive, etc.) to go to

the root of the problem. Escalation of the issues can only be possible if the issues are identified in a

timely manner, and in this regards communication is the only savior to a project manager.

Project Procurement management:

International procurement is often error prone process. As it has legal impact; as well as, cost

impact. The procurement can be delayed to involvement of foreign customer and shipping companies,

who has no clue about the project priorities. Moreover, some procurement may also requirement local

and State government clearance, which could also be a lingering event. Even in United States, UCC

code of the procurement is not valid in down south in Louisiana area. Similarly, international

procurement has their rules with respect to the penalty and liquidation damage perspective. Moreover,

if a vendor stop co-operating at the middle of the project, what project manager would be doing to get

the project back on track?

Best Practices:


Factor in the uncertainties in the project schedule and get it blessed by the project sponsor. If

project budget permits, employ a brand ambassador in the foreign country, who can communicate with

the local government and customs on behalf of project manager to expedite the process.

If the project is outsourced, ensure contract clearly stated out sub-contracting clause. If it is

perceived that the sub-contracting would delays the process, put a penalty clause in the contract to cite

that contracting agency would be responsible for all the financial damage. Also, have a good reputation

with sub-contractors. Always, keep a back-up vendor ready. Moreover, maintain the pre-approved

vendor list to build the trust between the client and vendor for optimal procurement.

Trend of virtual project in IT industry:

A recent study in the information technology industry on 20,000 IT projects across the globe

shows that trend to use the virtual team based projects are increasing exponentially. It has been

observed that each of the virtual team has used more than around 12 Internet based technologies, e.g. –

email, IM, phone, audio-conferencing, etc. Team also uses Wiki extensively to perform the co-

ordination, and open source framework to increase project team collaboration. Given the volatility in

team, task, and technology and time pressure, team interaction frequently proved difficult. Since

technology is the major communication mechanism in virtual teams, these project teams had to adapt

their technology use when problems arose or when opportunities to improve presented –

Figure 6: Collaboration tools used in virtual project (Siebdrat, Hoegl & Ernst, 2009)


Virtual team management is a great strategy, but it needs to be utilized properly to obtain the

maximum possible benefits. Market research shows that there are three important areas that project

management needs to be cognizant about in a virtual team management (Kuruppuarachchi, 2006).

Establishment of supportive systems for virtual teams.

Excellent communication and conflict resolution strategies across the cultures.

Strong leadership skill of either transformational leader or situational leader.

Efficient ongoing monitoring and controlling.

MIT Sloan School of management conducted an analysis to depicts, how the physical distance

between the team member would impact the efficiency and effectiveness of the of the project in figure-

7 (Siebdrat, Hoegl & Ernst, 2009).

Figure 7: Project team performance variation with physical distance


It is obvious that virtual project offers a wide array of benefits to the senior management. However, it

needs to be crafted as per the organization’s need. If the enterprise is planning to embark in a mission

to use the virtual team based project management in the first time, then a formal training in project

management would help. Additionally, organization requires electing a project manager for a virtual

project, who has respect for other cultures, strong in communication, understands diversities, and has

great spirits to drive a team towards success.

Conclusions:

The backbone of the virtual project is ubiquitous technologies, which facilitates the easy access

to the knowledge base around the world at a lightning speed. Unlike the traditional project team model,

in virtual projects are great way for an organization to reduce the project lifespan, also control the

budget, and have access to the global resource pool. However, to make a project successful the active

involvement of the leadership and meticulous use of the PMBOK specified project knowledge areas

must be enforced. In reality, virtual projects require more control on the project management

methodologies, but freedom to the resources’ thought process to beget best-in-class project artifacts. IT


projects are easy to implement using the virtual team model. The reason being, IT projects are already

embraced with the technology pool, and full of highly qualified personnel, who have prodigy in both

the technology and project management. It is idempotent that the project manager carries extra

responsibilities on his (her) shoulder – strong communication, excellent listener, strong team

motivator, strong conflict resolve, ethical, and aware of cultural dimension of the project team

members. Project manager must understand the presence of the aforementioned challenges in a virtual

team and design the work culture accordingly to become successful. As mentioned earlier,

management should not only be looking at virtual projects is a vehicle to cut the cost; it also enables

access to the global resource pool, spend less time on travel and more on development to create a win-

win situation.

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