Page 11-12 - I think you will find most HR groups quite "irritated" at your comments here. We would expect to irritate the HR groups with these comments. After all, they are inflammatory in the sense that we essentially define them as "nonessential". We have substantial data to show that this is a fact - companies of all sizes see HR as overhead and as part of the management control function of personnel. Take a look at what Ford, P&G, Merrill Lynch, et al are doing around HR. They are outsourcing the hiring functions, benefits are being administered and managed by a third party, and the employees themselves are responsible for signing up or dropping enrollment in the medical/dental/optical plans, 401K, etc. There are very few functions that justify or rationalize an in-house HR staff. According to data we collected in August 2003 and again in November 2003, the elimination of HR as we know it is on the rise across companies of all sizes. Just how far do you honestly think a company could, or should, carry your "employees as free agents" concept? Supposed you had a company with 1,000 employees broken down as follows: 400 Production, 50 Accounting, 300 Sales, 50 HR and Legal, 150 Overall Supply Chain and 50 IT. Where should you function with "Free Agents"? For your scenario, my personal opinion is that the free agent concept should be pushed as far as possible. The idea is to have a strategic core of people that act at a higher value capacity whether that is project management, outsource management, or some other function making everyone else project-centric, results-driven, free-agent in nature. Show me a company that is NOT offshoring or outsourcing manufacturing aka production. In the wake of Sarbanes-Oxley and the need for fiscal transparency, how large does this accounting staff REALLY need to be? Go for expertise, leveraging technology for cash flow associated with procurement and sales of raw goods and services, and finished goods and services. The financial activities are directly linked to the supply chain, which should be automated and streamlined. To some extent we see the free agent idea already with channel strategies and how they function in the greater market. Generally speaking, there needs to be a core of solid "rain makers" to support those top channel partners. Again, this goes back to the idea of a core staff team and free agent the rest. Supply chain is managed very easily through technology. Look at what companies of all sizes are doing today - moving toward a common db language such as LDAP to improve inoperability of systems and information flows, improve JIT deliveries, reducing the number of suppliers to ease manageability, but keeping competing suppliers to contain costs and ensure sourcing. IT - well, leveraging IT is what this book is all about. Basic notion: if a company elects to virtualize and manage via internal personnel, standardization is key. I would NOT recommend homogeneity, but most definitely standardized. Those desktops and laptops should be standard as far as reasonably possible. Definitely leverage a desktop management tool from LanDesk Software, Marimba, or Microsoft for remote management and support capabilities. Tie these to your inventory and employee database systems for life-cycle management. Ditto for the other hardware. In terms of supporting the remote/home/tele-worker aim to use the same configuration for the cable users, and the same configuration for the teleco users in terms of security/routers, computing device, etc. The goal is to avoid truck rolls and manage/support the employees and free agents remotely. The underlying theme of this book appears to be focusing greatly on "required" and "desired" geographic location of employees and using the Internet bandwidth to connect them. Am I over-simplifying this? Yes, I know I am. But we must sometimes step a little further than normal in one direction or another to make a point. Could be Internet, could be company private WAN connection, could be cable, satellite, wireless, etc. doesn't really matter; but yes, the net of this is that the infrastructure is in place to support any employee from their perceived workplace Utopia. Do you find little or no value in the ability for spontaneous face-to-face human interaction? Other than Production workers on an assembly line, let's look at all the other areas. Within the core team of company personnel, yes, spontaneous face-to-face interaction is important. Isn't that the idea behind Instant Messaging and Groove? If you have to have that video component CU-Cme and its market comparables are readily available. Goes back to the infrastructure being in place to support and sustain the business. Sales: I completely agree: these people could be "virtualized" quite easily. BUT would you really want your Sales force to be strictly Free Agents with the limited "Loyalty" this might result in? Another BUT: By NOT having a Sales Office for these people to work from, are you not just pushing the cost of a work environment onto these people by saying "work from your homes". I am having a difficult time trying to think of an industry where the sales person might actually be permitted to be housed inside the customer's facility. Maybe an Outsourcing "Farmer" as opposed to a "Hunter". Think Channel play and consulting. It is not unusual for a consultant to have a workspace at their client's office. For most businesses, sales are predominantly through channels. There are channel "captains" that manage the bigger, key, strategic accounts, but for the most part business is done via portals (b2b/b2c) or through channels. HR/Legal: Your belief is that we should just not have an in-house HR group because they serve no purpose other then pumping out paychecks every two weeks. Just hire an outside law firm to do all your work. Can't argue much there. The data is conclusive, the HR functions are not a good use of company fiscal resources and companies around the world are saying so loud and clear. Ditto with a large legal team. Accounting: Would you Outsource your accounting and finance people? Or would you virtualize them and tell them to work from home? Or do these people not fit into the BPV model? Do you really want the owners of your financial lifeblood being "Free Agents"? And Tyco, Qwest, Enron, et al haven't made it clear that fiscal transparency isn't desperately required by the stake holders?! Show me where the glitch would be when automation is used to book/bill through the supply chain? We would definitely have a core team to address the "exceptions", but an entire department... we think not. Whether a firm elects to outsource or automate these functions, we take an agnostic position. Supply Chain: You would outsource the vast majority of this function and leave only a small number of Planners and Management. But suppose your supplies cover a really broad range of goods? How much Supply Chain can Walmart or Kmart outsource or virtualize other than Inventory movement? Will UPS manage any range of goods to be sourced? Can you trust someone with "Limited Loyalty beyond their Fees" to own your supplier relationships? And what if your relationships with key suppliers are of "Strategic Value"? Do you outsource these or do you keep these in-house? Do you tell your Supply Chain people to work from home? Think portals, b2b, vpns for supply chain automation and management. The supply chain is made up of strategic relationships. This is where that core group of relationship managers comes into play. By the way, this is a new title that is percolating within the IT organization. Someone needs to act as maestro to the different processes being outsourced or virtualized; someone who knows the interactions of the various processes and the process flows. IT: You cover that quite well in the book and I agree with most of what you say. Thanks! Is the Sales Team the only group that is truly a candidate for "Virtualization"? When you update this book, you should have, in addition to your individual case studies, one "Docu-Fiction" Full Picture, a quasi-hypothetical case study where you lay out, in detail, a full blown Virtualized company as YOU would do it if you ran the company. Connect the dots. Put all the business functions into your story and show who should be virtual and how the groups would play together. As noted, no, sales is not the only function that could/should be removed, automated, eliminated, outsourced, etc. There are lots and lots of jobs that are truly outdated in today's technology driven market. Thank you for an excellent idea regarding the docu-fiction mapping for the book's update. You make a pretty bold statement on page 15 stating that BPV could bring about a "complete transformation of the American economy." How will this happen? What will happen to the "workers of the world" in this new economy? Will the Republicans be jumping for joy because there will be absolutely no remaining vestiges of those evil unions left and every employee can be dumped on a minute's notice and so have totally no bargaining power vis-à-vis wages and benefits? Not to drag "Political Economy 101" into your book, but I don't see the American work force ever sitting quietly by while they are turned into "disposable Kleenex" to be used and tossed away when they are no longer needed. Yes, I am being a polemist to make a point. The short answer is, yes. The longer response is that this will not occur overnight or even within one or two presidencies. Just as the industrial revolution took decades to reach a crescendo, so will this new business paradigm. Business models and methodologies overlap. Expect the same to occur this time around. Take the lessons from previous times and identify your role within the new business model. Just as the assembly line was a fabulous idea that was easily applied across many businesses, technology plays the same role today. Outsourcing and off shoring is not bad, it turns mundane, commoditized jobs over to economies that leverage a human labor force (China, Korea, India, Ireland, Russia). In terms of employees as disposable - we are already seeing that lack of loyalty from both employer and employee. How many 25-year gold watches will be handed out this year? 5 years from now? 10 years from now? Fewer and fewer - we are already well down this path. Didn't Microsoft lose a lawsuit to a Class of its "Consultants" that Gates and Co wanted to exclude from stock options and other benefits because these people, who had worked there for many years, weren't "really" employees? They were "contractors". So I guess you just make sure you never keep the same "Contractor" for more than 6 or 9 months so the courts can never make this argument against you. Lessons learned. You can bet this is part of Microsoft's policies today. The IRS has solid rules established on what constitutes an employee and who is a 1099. On page 28, as well as other places, you make the statement that the Virtualized company that uses the Internet as a virtual medium moves orders of magnitude quicker than its competitors. One answer would be that since you have your sales force "living" as close as possible to the customer, you know what the Customer wants faster and can respond faster. Where else, other than proximity to the customer, can BPV make the whole company "faster"? Finance - closing the books month end, quarter over quarter, and yearend. Supply chain and inventory - what's moving, what isn't. Manufacturing - produce what's selling, drop what isn't. Product development - add features in high demand quickly. R&D - develop new products with 3D modeling, resource allocation, raw materials list development, etc. Improved product placement - which products are selling best where? Logistics, transportation, the list goes on. In a couple of places, but primarily on pages 30 - 31, you talk about the concepts of "Data versus Information"; companies are drowning in data. I completely agree that too many companies are drowning in data. But, what is it in BPV that allows BPV, by itself, to be able to turn data into info? To keep from drowning, management needs to sift through the data one time and determine what it truly "Needs" to run the business. Then stop collecting all the other stuff. Why would your model of BPV make this decision-making process easier? Can Cisco hardware tell me what data I need to run my business? Can Cisco hardware create the "sifting algorithm from whole cloth"? You mention this concept again on page 50 where BPV can convert data into information but you really never explained HOW BPV does this. Directly related to information overflow and the need for distillation, think IBM's WebFountain intelligent agent concept. By entering a set of parameters into the search engine, it comes back with information, including annotations so you can judge the source. By applying the information to a structured decision model, the pending courses of action are defined. Also, measurable milestones are identified, so if you are off course slightly, adjustments can be made to correct the path before you get too far down it in the wrong direction. BPV, by itself cannot address the data versus information issue; nor can Cisco's hardware. BPV is built in layers. One of those first components is structured decision modeling. Through structured decision modeling, a company can identify what processes should be defined as core, as well as be able to map out its strategies around growth plans. You have obviously written this book for the CIO or CTO or IT in general. Make sure you write the next one for the CFO. CIO's can make recommendations all day long but unless the CFO AND the CEO buy in to the argument, the recommendations will never see the light of day. You REALLY need to educate the financial management of corporate America if you want your ideas to get traction. This is one area where Nova Amber's structured decision modeling expertise comes in to play. We would be happy to work with you and your CFO to identify and map out how BPV can best be applied in your specific situation for optimal near- and long-term benefit. Please don't take this wrong but the Interworld Media Group Case Study was lame. What I took away from that case was that Interworld is a tiny, 75 seat company, with a 1970's Help Desk. Doesn't Cisco have any clients that have 5,000+ seats and have outsourced some level of desktop management Help Desk? Criticism heard. The focus of that case study was on outsourcing, not LanDesk, Novadigm, Marimba or any of the other DTM tools available. It may have derailed the focus, it may not have. The focus of that chapter and case study is to discuss outsourcing as one method of virtualization. Additionally, BPV is for companies of all sizes from the small business to the largest of enterprises. Interworld fits the small business model, concurrently demonstrating that company size is not important when cost savings can be realized through outsourcing and leveraging BPV. My company is firmly planted in the 20th century on half of the things you recommend in your book. For example, we are spending probably in excess of a million dollars to physically move senior managers to the corporate facilities area because the CEO wants these people to be inside the Headquarters building. I have discussed the basics of our foray into outsourcing our primary IT environment with Nova Amber. Financial arguments won the day, and for all the right reasons. A company should never outsource something that will cost you millions more to have someone else do for you, all "Grand Outsourcing Philosophical Statements" included. In terms of implementing a BPV strategy, we are actually discussing having our HR group start down the path of employee-based "career management" and "succession planning". Congratulations on your company's forays into decision modeling and the BPV arena. Outsourcing is not for every firm, and your company arrived at that decision through a comprehensive analysis process. To address your other points, decision modeling and BPV is not something that will occur overnight, but is a long-term strategic plan. It also involves a 100 percent buy-in of the entire executive management team. Regarding real estate and executive management relocation, I suggest your CEO call some of his peers such as Jack Welsh, formerly of GE; John Chambers, Cisco Systems; Scott McNealy, Sun Microsystems; Sam Palmisano, IBM, and see what they are saying about virtualization. He could save the company a substantial amount of money by NOT relocating the executives.