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It’s a Virtual World

Slowly, companies are leaving the physical world behind to cut costs, improve communication, and find new ways to collaborate.

(originally published by Booz & Company)

Sandra Kearney sat across from me during our first meeting in early 2007. Between us, a bottle of champagne bubbled and a platter of sushi beckoned. I had been interviewing dozens of IBM employees without permission from the company. Kearney (who has since left Big Blue) dropped in on me unexpectedly, wanting to know why I was snooping around; was I writing a book or an article?

I responded that I had stumbled upon a sizable number of IBMers who were using the Internet in an entirely new way, and I hoped to document what could be a complete transformation of the business world. For a moment, her face revealed nothing and she remained perfectly motionless. Then Kearney, at the time IBM’s global director of emerging 3D Internet, began to tell me what the company was up to.

Although it was almost as if we were speaking in person, Kearney and I met that night not in an upscale restaurant but in Second Life, an immersive, three-dimensional Internet platform where people create avatars to represent themselves. In such virtual world software platforms, an individual’s avatar can get together and talk with other similarly constructed digital stand-ins in real time. Kearney, in fact, was in Arizona, and I was at my desk in New York.

Scores of virtual platforms exist on the Internet and are used for everything from entertainment to business to socializing. An estimated 300 million people worldwide have registered for participation in some form of this activity, according to Kzero, a virtual world marketing and development company. In 2008, according to trade group Virtual Worlds Management, venture capitalists and other investors bet nearly US$600 million on more than 60 software producers involved in the fledgling technology.

In most applications, anyone can register for free to create an avatar. An avatar can be customized down to the smallest detail to look like the person operating it or it can veer wildly from the physical reality. Communication is conducted with a blend of text, chat, and mixed media. Translation devices let people surmount language barriers. Data files can be shared instantly. Movement is controlled in real time by the person behind each avatar, and also through scripted animations that allow for increasingly realistic movements — instead of looking stiff and motionless, avatars can shift in their seats, for example, or follow the script cues for other smooth-flowing gestures.

Although viewed as novel and innovative, for much of the past five years or so virtual worlds were mostly pigeonholed by the media and even the digerati as another way to social network — a multidimensional, more anonymous version of MySpace or Facebook. Almost completely neglected was the value of the virtual world as a tool for business, for example, in bringing together global workforces instantly at any time, offering an opportunity for far-flung teams to share and pore over findings, conducting sophisticated simulations, and training new recruits at a fraction of the cost of in-person sessions. IBM estimates that, with an investment of roughly $80,000, it saved more than $250,000 in travel and venue costs for a recent corporate Academy of Technology event and enjoyed more than $150,000 in additional productivity gains, because these virtual participants were at their computers and able to dive back into work immediately at the conclusion of the meeting. Certainly, IBM could have enjoyed similar cost savings by holding these sessions as Webinars or teleconferences — in other words, with people communicating face to face via video, viewing staid exhibits and illustrations — but company executives much preferred the rich and compelling full-motion graphics in the virtual world as well as the ability for participants to instantly share their insights about particular pieces of information and change content in real time.

Today some 6,000 IBMers are linked in virtual worlds. One of the more intriguing applications has been crafted by the Blue Gene research team, which is developing supercomputing programs that, among other things, explore biological processes. I (well, my avatar) met with Blue Gene avatars from multiple continents to discuss how virtual worlds enable them to collaborate more efficiently. They described with enthusiasm a recent presentation on protein folding, the process by which critical molecules in the body take and maintain their shape, or, if they fail to, produce such diseases as Alzheimer’s and mad cow. During this virtual world session, IBM scientists generated a three-dimensional molecule of protein on the screen and slowly depicted its evolution into its final form. This representation of protein formation then became the centerpiece for ongoing research in different time zones at the same time, blurring the line between a physical and virtual lab.

Indeed, modeling difficult-to-illustrate ideas and products and sharing them with prospective clients or internal teams is one of the more attractive aspects of virtual worlds to companies. Northrop Grumman Corporation, for example, has used this technology to generate mock versions of expensive and complex — and highly classified — defense equipment planned or under development. Using a virtual network, Northrop has been able to keep customers closely involved in the design and engineering of critical projects and to lead simulated operational training sessions.

The employment search firm Manpower Inc. is among the most innovative organizations with a high comfort level in the virtual world. The company began using Second Life in 2007 to reach and organize people who had already been initiated into the virtual world, or who were interested in starting to. “The virtualization of the labor market is a key issue as the world of virtual work is morphing into something that will become an integral part of how companies get work done,” says Manpower CEO Jeffrey Joerres.

In Manpower’s Second Life office, thousands of visitors and job seekers from more than 50 countries have already experienced avatar-to-avatar communication through employment fairs, live events, and seminars. Manpower even helps applicants learn how to become more businesslike in their new, unfamiliar avatar form, including lessons on dressing their virtual alter egos in professional attire. What’s more, traditionally marginalized segments of the workforce, such as the physically disabled, often find that biases and prejudices against them are minimized in a virtual environment where avatars, in theory at least, have no disadvantages.

Despite successes in the corporate world, virtual environments are still probably some years away from mainstream acceptance. In August 2008, research firm Gartner Inc. said in a report on emerging technologies that it will take at least two to five years before virtual worlds become prevalent for business applications. By then, companies may not have much of a choice: The need to cut travel, training, and meeting costs, gain substantial access to global talent, trim back internal redundancy, and increase communications among departments that were once isolated from one another will force organizations to find new ways (and new worlds) to do old tasks.

Author profile:
Rita J. King is senior fellow at the Carnegie Council for Ethics in International Affairs and the CEO and creative director of Dancing Ink Productions, a company that specializes in research, strategy, and creative content for new global digital cultures.
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