Have Your Avatar Call My Avatar: Virtual Business

Virtual Value

The car company Scion is a case in point. Scion has had a presence in the virtual world since April 2006 and is now established in four sites -- Gaia, Second Life, There.com and Whyville -- according to Adrian Si, interactive marketing manager at Scion, a division of Toyota Motor Corp. "It gives us great exposure," he says.

Not all companies are so upbeat. "What happened is they just didn't get people interested, so they've been going through a bit of a hiatus," Prentice says, noting that over the past year or so, a number of companies shut down their virtual operations or just let their in-world sites turn into ghost towns. But that's not as dire as it sounds. Prentice says it's less a permanent corporate pullout than a temporary pullback for assessments.

"They're refocusing on how to use the technology, possibly using one of the virtual worlds to work better internally," he explains. "So they're looking at using it for collaboration vs. e-commerce. They're setting up meeting rooms in private areas so they can control access. It's a little like teleconferencing."

Meet in Cyberspace 

Some companies find significant value in internal collaboration. Text 100 Corp., a global public relations firm with 31 offices around the world, made its virtual-world debut last August with a companywide meeting.

CEO Aedhmar Hynes, who is based in Manhattan, says she scheduled the meeting so she could update employees on company news and celebrate some business milestones.

But the real benefit wasn't the easy and cost-efficient dissemination of information -- although that was important -- but rather the camaraderie built by the event, she says. "It really made us feel like one company, because everyone had a shared experience. It created a bond," she says.

The event also motivated employees to experiment with ways to collaborate in Second Life, she says.

"Once people created avatars, they were more likely to get involved and do things in Second Life," Hynes says, noting that she has seen smaller meetings and training sessions take place in-world since that first event last year.

Hynes says she initially heard about the virtual world in 2005 and soon realized that it was a technology that could increase internal collaboration as well as collaboration with clients. She also saw the virtual environment as an important marketing opportunity.

Test Market 

Erica Driver, an analyst at Forrester Research Inc., says there are several areas where virtual-world technologies will be critical for companies. One is viewing, analyzing, presenting or interacting with complex data. Another is learning new skills or rehearsing material. (You can't stage a fire on a real oil platform, but you can run through it virtually, she says.) A third is transforming presentations into tours that take place in virtual worlds.

IBM is looking at the virtual world for all of that. Its employees have had meetings, events and training sessions in-world, both at its own internal site and in Second Life.

It's also looking to use the medium to sell its products and services to other companies. "It's just a very powerful way of meeting, interacting and doing work with other people," says IBM executive consultant Doug McDavid. He says that about 6,000 to 7,000 IBM employees have avatars.

An early meeting took place in the fall of 2006, when IBM workers met in the auditorium on a private island that the company purchased in Second Life. (Owners of such islands can restrict access to authorized avatars, allowing for private exchanges.)

And late last year, IBM ran a training session for project managers using a virtual world built behind its own corporate firewall, says Susan Stucky, who manages the service design group in the Services Research Center at IBM's Almaden Research Center.

The training exercise centered on a fictional company that was changing from auto parts shipping to auto assembly. In this exercise, IBM had to adjust an existing contract with the company to meet its evolving needs.

In two eight-hour sessions, about a dozen project managers located in different offices went in-world to work as a team to renegotiate IBM's contract with the company. Using avatars, the project managers had to designate responsibilities, make proposals and pitches, and interact with the company's CEO and CIO -- everything that would happen in a real-life situation.

Stucky says IBM didn't do a formal return-on-investment study but still found that holding the exercise in a virtual world offered important benefits. For example, she says, it clearly saved the company money. It was cheaper to build a virtual auto-assembly shop for training than to replicate one in real life. And there were no airline tickets, hotel bills or meal tabs for out-of-town attendees; everyone participated from their home offices.

In addition, Stucky says some research has found that people are more willing to take risks as avatars than they are as real-life individuals, which could make virtual training more effective than its real-life counterpart.

Virtual Tech Support? 

The role of IT on this emerging new frontier is far from clear.

When Text 100's Hynes jumped into Second Life, she didn't consult her IT staff. And when Hynes decided to establish a richer presence for her agency in Second Life, she opted to outsource the work, hiring The Electric Sheep Co. in New York.

Aaron Uhrmacher, Text 100's global peer media consultant, says agency executives did seek input from the IT department before outsourcing the work but found that the group didn't have the skills necessary to build an in-world presence. "It was like the early days when you had to build a Web site, [and] you had to hire someone with HTML skills," Uhrmacher says.

So where does that leave IT?

Although the virtual world and its expected future evolution into the 3-D Internet are clearly emerging technologies, analysts, business executives and industry leaders say the push to explore their use in business often comes not from the IT department but rather from others, such as marketing or human resources.

But IT can't afford to take a back seat. Tech professionals need to offer their own ideas, insights and services as their business colleagues seek information.

"Right now, the critical questions are being asked, and people will expect IT to have a baseline of knowledge, so somebody in IT [had] better be studying this," says Enderle. "Because if IT is not participating in these decisions or IT is participating badly, it reflects on the IT organization and the company."

Jonathan Reichental, director of IT innovation at PricewaterhouseCoopers, says IT professionals must first understand that realizing the business potential of virtual worlds involves much more than creating avatars.

They need to look at virtual worlds as they look at any other technology and understand how they can improve business functions and processes, how they can help the company reach its internal and external goals, and how they can be implemented to do all that, Reichental says.

Even when companies opt to outsource the work, IT has to be prepared to evaluate providers and manage the relationship. For instance, IT support manager Brad Bartman says his department made sure Text 100's work with Second Life was secure and that it didn't cause any problems with the agency's infrastructure. IT also worked on various projects in support of the initiative.

The main message for IT: Get involved and see where all this leads.

Even champions of virtual worlds don't see them as a replacement for the real thing. There are times when face-to-face interactions are the only way to go. And, yes, there are times when a simple telephone call or e-mail exchange will suffice. But there's a growing list of advantages to working in-world, too.

"Will it replace real life? No, it will not. Will it replace e-mail? Probably not," Stucky says. "But for those already in the virtual world, it's an authentic experience. It will just be a while before we get to that point for everybody."