WHITE PAPER

Maximizing Project Potential:

Using Virtual Teams to Increase
Project Efficiency and ROI

Corporate IT budgets are shrinking due to the current recession, and

technology managers are challenged to do more with less.

Three common cost-saving strategies being used by IT today are:

 Postponing hardware upgrades
 Cancelling projects
 Avoiding external services

However, ruling out professional services can actually be a

disadvantage if certain skills are needed for a project or the outcome
will be significantly better with the help of consultants. To help IT
managers decide when to use in-house resources and when to
outsource, this white paper presents four steps to doing a cost-benefit
analysis.

It also shows how using a “virtual team” to complement your in-house

skills can be cost-effective and can lead to better results.
 Maximizing Project Potential

How IT Is Coping with Lower Budgets

The current economic conditions have compelled the majority of CIOs

to cut at least 10% from their budgets. And with almost half of those
making cuts of 20% or more,1 the big question is how to make fewer
dollars go further.

Many IT departments are reducing spending on hardware or cutting

projects to accommodate a smaller budget, while some are freezing
spending on external services.

IT cost-cutting strategy #1: Postponing hardware upgrades

The heaviest IT cuts are probably in hardware. For the first time in many
years, IDC forecasts that hardware spending will decline (by 3.6% in
2009).2 Companies are simply keeping their servers, PCs, and printers
in service longer. This is practical and easy to do, and it’s fair to say that
most companies are using this strategy.

Extending the hardware life cycle is a good short-term solution when

working with a limited budget. However, Forrester Research predicts
that hardware spending will jump in 2010, as companies make up for
lost time on upgrades.3 If the recession continues into 2010, though,
and budgets remain low, IT directors will need to find other strategies to
reduce costs.

IT cost-cutting strategy #2: Cancelling IT projects

Many IT managers are also reducing the number of technology projects.
Improved project Some projects are being postponed until budgets increase, while others
success rates are are being cancelled outright. Twenty-four percent of companies have
more beneficial to a increased the hurdle rates for new projects.4 This means that IT projects
company than the will have to pay for themselves faster, have a higher return on
short-term savings investment (ROI) or make a more significant contribution to the health of
from cancelled IT an organization.
projects.
Although postponing or cutting IT projects is another strategy that can
help IT managers meet budget requirements in the short term, this
approach can actually be damaging to a company. According to
Gartner, the #1 business priority in 2009 is improved business
processes.5 And in many cases, business processes are improved
through the implementation of new technology. IT projects can also

1: “The Pitfalls of IT Cost Cutting” Business Week. 6 Feb 2009. Retrieved 7 Apr 2009 from
http://www.businessweek.com/managing/content/feb2009/ca2009026_260212.htm
2: “Hardware Vendors Will Feel the Pinch in 2009” CIO Update. 25 Feb 2009.
Retrieved 7 Apr 2009 from http://www.idc.com/getdoc.jsp?containerId=prUS21702809
3: “US IT Market Outlook: Q4 2008.” 9 Dec 2008. Forrester Research, Inc. Retrieved 5 Apr 2009
from http://www.forrester.com/Research/Document/Excerpt/0,7211,46671,00.html
4: “The Pitfalls of IT Cost Cutting” Business Week. 6 Feb 2009. Retrieved 7 Apr 2009 from
http://www.businessweek.com/managing/content/feb2009/ca2009026_260212.htm
5 : “Gartner EXP Worldwide Survey of More than 1,500 CIOs Shows IT Spending to Be Flat in
2009 “ Gartner. 14 Jan 2009. Retrieved 7 Apr 2009 from
http://www.gartner.com/it/page.jsp?id=855612

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 Maximizing Project Potential

bring about Gartner’s second and third business priorities: reducing

enterprise costs and improving workforce effectiveness.

Unfortunately, since project requirements are now centered around

payoff timelines, other benefits of the project are being pushed to the
background. As a result, vital IT projects may be cancelled or
postponed, unknowingly threatening a company’s competitive edge and
leaving it in a vulnerable position for the economic turnaround.

Despite concern over costs, the real issue is to make every project that
is funded a success. It is more effective to focus on improving the
success rate of projects, rather than simply cutting costs in the short
term.

IT cost-cutting strategy #3: Avoiding external services

To go in-house or When moving forward with strategic projects, the big question is always
to outsource: that whether to do the work in-house, or to utilize external services. Although
is the question. costs and benefits will be different for each situation, many companies
are actually ruling out external services completely in an attempt to stay
on budget.

Some organizations are partial to internal spending because they feel

that projects will be less expensive this way. But this is not always the
case. It’s best to do a separate cost-benefit analysis for each project to
determine whether it will be more beneficial to complete the project in-
house, to outsource, or to use some combination of the two.

In-house or Outsource?

There are benefits and pitfalls whether a project is completed in-house

Approaching a or it is outsourced.
project with a staff
that does not have Assigning a project to the staff on-hand allows an IT manager to have
the necessary complete control over and visibility of a project. It also helps to get more
capabilities can use out of available resources, although using these resources may
lead to problems take away from concurrent projects.
and higher costs.
Additionally, if the available staff does not have all of the skills
necessary for the project, this can be a risky option. Attempting to
complete a project with a staff that lacks the necessary capabilities can
easily lead to missed deadlines, quality issues, and cost over-runs.

Although not all consultants deliver prime results, some do have

necessary specialties, management experience, a proven track record,
and a project guarantee.

In many cases, your available staff will have some, but not all, of the
skills necessary for a project. In this scenario, combining resources with
an external services provider can be the best solution. After identifying

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 Maximizing Project Potential

skill and efficiency gaps, the next step is to hire consultants with
specialties that will complement your team’s current capabilities.

According to Ollie Ross, the head of research for The Corporate IT

Forum user group, more important than having the right technology “is
investing in and having access to the right people who understand how
a business’ potential can be delivered through technology.”6

Consultants can also provide an outside perspective and a reality check

on a project’s potential. Any IT manager can usually benefit from this
outside analysis.

So when is one approach better than the other? The following section
provides a systematic way to help answer this question.

Four Steps for Cost-Benefit Analysis

Here are four steps to help you find the best approach for any project,
by doing an independent cost-benefit analysis.

Step 1: Determine the potential of the project

Given the ideal project team, what will this project accomplish? What
will the payoff be: increased efficiency, improved customer service,
decreased expenses, higher profits? How vital is this project to your
company’s executive team? Does it have a highly placed champion?

Step 2: Assess the project needs and your current capabilities

What skills are required to achieve the best possible solution? Analyze
the capabilities of the current available staff (those who could work on
the project). Carefully identify any need gaps.

Does this project require certain specializations, or a certain level of

experience to deliver the best results? Is the current staff capable of
performing the required tasks and delivering the highest return? Would
it be helpful to have team members with management experience?

Step 3: Think about additional resources

How much space; how many servers, workstations and so on are
available? What added software or training will be required?

Step 4: Complete your analysis

If the project fulfills its potential, what will be the financial benefits to the
company, in hard dollars? Beyond those, what are the qualitative
benefits, such as better customer service and retention, greater
efficiency, etc.?

6 : “Innovating in a Downturn” Verbatim. Corporate IT Forum. 11 Mar 2009. Retrieved 7 Apr 2009
from http://www.tif.co.uk/verbatim/2009/03/11/innovating-in-a-downturn/#more-117

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 Maximizing Project Potential

Compare the benefits and costs of completing a project in-house versus

with the help of consultants. Do a best- and worse-case scenario for
each approach to help identify the risks.

The Best of Both Worlds: Virtual Teams

While there are thousands of technology consultants in the market, not

A virtual team is all of them have the expertise to produce a quality solution in an
one that has not efficient manner. IT service firms come in many shapes and sizes: from
been assembled small companies with a single team, to corporations with hundreds of
until a project’s consultants on staff.
particular needs
call for it. One type that can deliver best-of-breed expertise is the virtual team. A
virtual team comes together around a client’s specific needs, giving you
the best of both worlds: the vast skills of a large consulting firm at a far
more cost-effective price.

Since even large consulting firms may not have all the skills and
expertise required for each type of project, a different type of firm has
emerged. This is a technical services provider with a small core staff,
and a large network of highly effective IT specialists who are only called
in when needed, many with years of management experience.

Some of the major differences between in-house teams, traditional

consulting teams and virtual teams are highlighted in the chart below.

Traditional
Benefits In-House Virtual Team
Consultants

100% Visibility NO NO

Large Variety of Small firm— NO

NO
Skills Large firm—
Management Maybe Maybe
Experience
Use of Available
NO
Staff

Filled-In Need Gaps NO NO

Guarantee NO NO

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 Maximizing Project Potential

Benefits of Virtual Teams

Virtual teams help There are many advantages to employing a virtual team of
IT departments professionals, as follows.
cash in on critical
■ Higher productivity rate: Team members with more experience
projects.
and greater specialization can deliver custom solutions in less time
and at a better quality level than traditional consulting agencies. The
very best talent is selected as needed, giving clients an efficient,
capable team without any deadwood.

■ Filled-in need gaps: A custom team of specialists can fill in IT

efficiency gaps in almost any organization. This optimizes the
money spent on services and allows IT to use its current staff for the
other parts of a project.

■ Innovative solutions: IT experts, especially those with

management experience, can often devise original solutions to
business problems. During the analysis phase, IT managers may
hear a recommendation or solution that they had not already
considered.

■ A better return on investment: With higher productivity, an

efficient mix of in-house and outsourced skills, innovative thinking,
and guaranteed results, a virtual team can deliver a better ROI for
your budget.

What to Look for in a Provider

Here are some questions to use as a checklist when comparing virtual

service providers:

■ Do they have a good track record?

When putting a project in the hands of another firm, an IT manager
must be sure that they have provided quality services in the past.
Do they have proof, such as data or testimonials, that shows this?

■ Can they offer a guarantee?

If a company cannot guarantee that they will meet the given
requirements within the allotted budget, why not?

■ How much experience do they have?

How long has the company been in business? How long has each
team member been active in the technology industry?

■ Who will lead the team and take responsibility for the project?
An IT manager should feel comfortable with the person taking
control of a project and be confident in their capabilities.

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 Maximizing Project Potential

■ What is their approach or process?

How does this firm go about completing a project? Will they take full
responsibility from conception to completion?

■ What are their values?

Which do they care about more: profits, or quality of workmanship
and satisfied customers?

Conclusions

Many IT managers are struggling to achieve the best results with lower
budgets. But this does not have to mean cancelling IT projects or
avoiding external services.

A virtual team from an outside service provider can complement your in-
house skills in a cost-effective way. This approach can also lower risks
and boost the ROI on an IT project.

To learn more about how to use virtual teams to help with your critical IT
projects, visit http://www.nuwave-tech.com/services. You can also e-
mail info@nuwave-tech.com or call (603) 594-9896 ext. 251 to speak
with Ernest Guerrera, Director of Professional Services.

About NuWave Technologies

NuWave Technologies, Inc. has been providing professional services

and innovative software solutions for 10 years, but its staff members
have been delivering high-quality solutions much longer. NuWave’s
customers include Bankserv, Chevron, Excelergy, FirstData, JCPenney,
LogicaCMG, NSTAR, and RBC Capital Markets. By assembling its
teams from the most highly qualified professionals, NuWave is able to
take full responsibility for a project, as well as guarantee project
success.

info@nuwave-tech.com
(603) 594-9896 ext. 251
154 Broad Street
Suite 1531
Nashua, NH 03063

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