Have Your Avatar Call My Avatar: Doing Business Virtually

Lots of corporations are dabbling in virtual worlds, but no one has found the killer application--yet.

What do Xerox printers, Fenway Park, green creatures and an executive zipping around with a personal jetpack have in common? Are you stumped? You might not be if you had an avatar.


This Is Not a Game: Virtual Worlds Coming to Your Business, Forrester Predicts

Second Life CTO to Seek New Life Outside of Virtual World

For those who don't, here's the answer: Xerox Corp. workers, customers and analysts all came together for a meeting and product launch held simultaneously at Boston's legendary baseball park and at Xerox Inspiration Island in Second Life. Several virtual participants were, in fact, green, and Xerox Chief Technology Officer Sophie Vanderbroek made a spectacular crash-landing entrance via her virtual jetpack.

Jonas Karlsson, a researcher in the Xerox Innovation Group, says the virtual meeting provided an opportunity to showcase products as well as test the use of Second Life for a meeting. But Karlsson is being modest. In reality, the event has a larger meaning: It's helping to herald the next big thing in communications.

The real world and the virtual one—in which people represented as avatars can interact with others as well as virtual representations of real and imaginary objects—are beginning to blur in professional settings, as companies explore how virtual environments and technologies can bring value to their businesses.

Don't worry if you don't have an avatar yet. It's still early. But be warned: Many think it's just a matter of time before being "in-world" becomes as important for business as having a website and standard teleconferencing equipment is.

"Everybody's kind of all over the map of this, and for the most part, people have no clue what they're supposed to be doing. It's very much in the exploration phase," says Rob Enderle, principal analyst at San Jose-based Enderle Group. "But eventually someone will do it right—and we're still waiting for that someone who does it right—and then they'll all come flocking to it."

Businesses are already getting a sense of what the right approach might entail, mostly from entertainment companies, Enderle says. He points to The Walt Disney Co.'s virtual-world offerings, which include a fairy site and a Pirates of the Caribbean site, as ways to attract and retain customers.

"Those are ways to keep [kids] tied into the Disney experience so they'll consume goods and services," says Enderle. "They're one of the few companies that really thought through that, but even with them, I don't think we've hit the limit on really making use of the tools."

CTO Sophie Vanderbroek's avatar provides a guided tour of virtual Xerox.

But, again, it's still early.

It was just two years ago that Second Life, the virtual world created by Linden Research Inc. and the clear leader in this arena, starting making headlines, says Stephen Prentice, an analyst at Gartner Inc. And even though SL is the best known of the virtual worlds, it's not really that big. It claims about 12 million residents, but Prentice says that number refers to the 12 million people who have downloaded the free software. The actual number of users who have been in-world in the past 30 days is closer to 850,000.

That's not a huge target audience, yet some companies were still eager to jump into Second Life and other popular virtual worlds during the past two years, Prentice says.

"When it started to take off in 2006, we saw a lot of companies creating virtual headquarters," he says. Some of the big-name automakers, banks and hotels replicated themselves in virtual worlds and then waited to see who would show up, using their virtual operations as a way to market, advertise and maybe make money.

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."

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.

IT's role in the virtual world

The IT department's role vis-à-vis its company's virtual-world activities will vary based on what the business wants to accomplish. If executives want a presence in an existing virtual world for marketing reasons, IT's role might be limited. But if they want a virtual world built behind the corporate firewall for meetings, IT will have a whole different set of responsibilities.

Here are some issues that you may have to address:

  • Access. Some IT departments have blocked access to virtual-world sites, so they will have to open ports if they want to encourage workers to experiment.
  • Public or private? Companies that want to try this technology for internal uses might decide it's better to build a platform that's behind the corporate firewall, while others might decide there's a business value in creating a presence in one or more public sites.
  • Hardware requirements. Some virtual-world sites have robust hardware requirements, and many companies' desktops and laptops lack the horsepower required to support them.
  • Security risks. IT needs to determine whether—and, if so, what—additional technologies need to be deployed to mitigate the risks associated with opening ports to the virtual world.
  • User education. Conversations in Second Life and other public virtual worlds aren't necessarily private, so users should be warned about disclosing proprietary information.
  • Build or buy? If the decision is to buy, IT has to consider how to evaluate a provider; if it's to build, IT has to determine which skills and equipment are needed.
  • Updates. Some virtual-world sites need to be updated every week or even every few days. That means IT will be very busy handling those updates, or it will need to allow tech-savvy users to handle them on their own.

Sources: Dave Kamalsky, program manager/software architect for virtual worlds research at IBM; Jonathan Reichental, director of IT innovation at PricewaterhouseCoopers; Rob Enderle, principal analyst at Enderle Group

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.

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.

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 website, [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.

1 2 Page 1
Page 1 of 2
Discover what your peers are reading. Sign up for our FREE email newsletters today!