Corporate investment in virtual worlds

CIOL Bureau
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EGHAM, UK: Many business leaders are skeptical of investing in virtual worlds because of the continuing lack of clarity regarding their proven benefits, but there are steps IT leaders can take to encourage corporate investment, according to Gartner, Inc. Haphazard investments in poorly planned virtual-world projects will continue to cause funding difficulties in some instances, but once the benefits have been proved; many organizations find that virtual worlds enhance casual social interactions inside the distributed enterprise, which can lead to innovation and produce competitive advantage.


“Despite understandable concerns about investment during a time of growing business uncertainty, we believe that the internal deployment of virtual worlds offers most enterprises significant benefits in cost savings and improved productivity,” said Steve Prentice, vice president and Gartner fellow.

Prentice said that externally focused virtual-world projects, however, remain difficult to justify for many enterprises. “Early attempts suffered from a lack of clear objectives and a limited understanding of the demographics, attitudes and expectations of virtual-world communities,” he said. “As a clearer understanding of the dynamics of this new media channel develops, we expect this situation to change during the next three years, but for the moment would advise organizations to focus on internal projects.”

Gartner recommends a three-step, incremental approach to virtual-world investment in which costs are constrained and benefits are clearly measurable to help gain the funding and approvals needed.


Stage 1: Virtual Worlds as Training Environments

Every organization has a training budget, and role-playing and scenario-based training exercises are well-established in many fields. Virtual worlds with strong development tools (such as Second Life) can be used to replicate specific environments (such as a retail location or a street scene) in which trainees can interact with each other, the environment and their trainers via their avatars. On a larger scale, substantial virtual environments are being used in training emergency services and military/law enforcement services to simulate real-world scenarios, — especially complex scenarios involving multiple agencies, such as biochemical emergencies or terrorist incidents in urban locations.

The ability to stream media into virtual worlds and embed documents into display objects enables trainees to proceed at their own pace to assimilate material, and then interact with each other and their trainers to explore their understanding and knowledge. The benefits of improved employee knowledge and training can be clearly enumerated, and the savings (or transference of funding) compared with established training methodologies can be reliably calculated to build a credible and substantiated business case.

Stage 2: Project-Based Avatar-Enhanced Collaboration

Having established a viable presence for virtual-world technology inside the enterprise, and begun to build basic virtual-world skills in the employee base, the second phase involves extending virtual-world deployment to support collaboration and employee interaction. Examples of successful projects of this type include worldwide product launches involving training, presentations and project planning that eliminate the need to bring employees from multiple locations to a single site, with substantial savings in travel and associated costs and time.


Apart from project-based success metrics, the ability to show cost savings — for example, reduced use of expensive videoconferencing or telepresence facilities, as well as reduced international travel and "downtime" — to support and offset the initial investment forms the basis for a credible and defensible business case.

Stage 3: Nonspecific Social Collaboration

Employee interaction and collaboration are well understood as key drivers in employee satisfaction, productivity and innovation. However, in the modern distributed business environment, with employees working from home offices, on the road or in multiple locations overseas, "casual social conversations" that once took place around the water cooler no longer occur. Employees increasingly work in isolation and broader-based interdepartmental discussions that are often the source or seed of new ideas and innovations no longer take place.

A virtual-world recreation of the social environment — seating areas, white boards, even a virtual water cooler — can serve a valuable function in recovering the disassembled social cohesion of the workforce.

The benefits can be significant, but will be hard to enumerate, because they will be predominantly in the "soft benefits" area of employee satisfaction, morale, retention and innovation. Nevertheless, with a proven record and established management acceptance of virtual-world projects, the business case for this final stage should be acceptable.

“The bottom line is to take a cautious and staged approach toward introducing virtual-world projects into the enterprise; moving too far and too fast will significantly reduce the chances of success, increase costs and make the benefits more difficult to quantify and attribute,” concluded Mr. Prentice. “By following the three-step sequence, virtual-world investments will have a greater chance of success and will lead the way toward future funding and deployment.”