Diving into a virtual world? Better plan ahead, report says

While companies are increasingly turning to virtual worlds for employee collaboration and as a way to strengthen relationships with customers, few have developed comprehensive strategies to deal with places like Second Life or Kaneva, according to a report released this week by The Conference Board.

"Although virtual worlds appear to mimic the real world, this is an illusion," Edward M. Roche, the author of the report, said in a statement. With that in mind, companies must address a bevy of questions around corporate strategy, cost and IT requirements before making the jump into a virtual world, the report noted.

First, companies must devise an entry strategy, the report suggests. While some companies may view virtual worlds as a new frontier, similar to the Internet a decade ago, others that operate 24/7 may be eyeing virtual worlds as a way to "cheat the clock" and break down internal barriers to global operations.

"Early results from virtual environments point to higher degrees of collaboration and openness," the report noted. "Only time will tell if this is a fundamental shift or just a work force reaction to a very engaging technology."

Next, a company should outline its corporate purpose for entering a virtual world, such as whether the goal is to "stake a claim" or to provide customers with more information about products and services. Companies should also determine who will be in charge of managing the virtual world initiative; some might opt to form a committee, others could use their existing sales and marketing department.

One of the most important questions is which virtual worlds should be used, the report said. For consumer-facing applications, a public virtual world might be the best fit, while companies might want to opt for a private or internally hosted virtual world for internal collaboration projects, The Conference Board said. Companies also should focus on the rules that each world has in place. For example, some use currency and others don't.

"In a virtual world, nothing is random -- unless it is programmed to be," the report noted.

Companies also will want to calculate how much a foray into a virtual world will cost. This might be difficult, since no benchmarks have been established. However, companies will need to budget for hiring a consultant to create the concept, deal with requirements and build the virtual world presence. That consultant might also be needed later to continually refresh the virtual world presence, the report said.

In addition, companies that plan to link IT systems that, for example, handle customer and product information to the virtual world should take building and maintenance costs, double them and allot 65 percent of that amount to systems integration work.

Companies also will need to justify the investment. Some companies are placing these costs in HR departments, customer and market research groups or sales and marketing divisions, depending on how the virtual world will be used.

Finally, organizations must ascertain whether their IT department is up to the job of taking on the additional work required to launch and maintain a presence in a virtual world. "The IT function in most companies is one of the most under-rated and under-appreciated groups," Roche said in the statement. "Unfortunately, continual nagging from users and extremely difficult technical challenges tend to make IT resistant to change. Often, a new project is considered little more than another headache. But, ultimately, IT can be counted on to get the job done. Just budget the money and get out of the way."

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