The virtual corporation is fast becoming a reality

Technology will create a world of shifting alliances between businesses , helping staff and customers

Thanks in large part to the headsets and other paraphernalia associated with virtual reality, it is generally thought that the virtual corporation is a long way off from, well, reality. But in case you did not already know, the virtual organisation is already with us.

For some time car manufacturers have not made all the parts of their vehicles, or necessarily designed them. Many businesses operate in managed office suites, which give phone callers the impression that the receptionist answering works exclusively for one company rather than all occupants of the building, as is really the case.

According to consultants working in this field, that is just the start. As the increasing acceptance of home banking demonstrates, the financial services industry looks particularly open to the concept. Robert Baldock, a partner with Andersen Consulting, is working on a project with Nationwide Building Society that would enable customers to analyse the services they were interested in via a service called Interact before approaching an employee of the building society.

He believes that the service will be picked up by other organisations. Companies will grow to resemble "storefronts" in that they will be the first point of contact for customers and will not necessarily make, market or distribute the goods or services being bought. So long as the service is good and not more expensive than at present, the customer will not mind, Mr Baldock says.

As part of this move, he and his firm have teamed up with other organisations, including Intel, Compaq, MCI and Hewlett-Packard, to build the DAVINCI Virtual Corp, a simulated business environment designed to show how technology can address some of the challenges facing industry. Senior business executives will have their first opportunity to see the project in operation at Andersen's centre for strategic technology in France next week.

A world of shifting alliances between organisations that would appear to have little in common sounds like a nightmare for the individual employee. But Mr Baldock insists that it could be more enjoyable than the present system, as well as more demanding. If organisations put the parts of their operations that they do not regard as central or providing competitive advantage into the hands of third parties specialising in these areas, there are better opportunities for the employees to advance, he claims. For example, in the City the back-office personnel are commonly regarded as second-class citizens who have little chance of promotion above those working in the glamorous "front-office" operations. If they worked for a specialist supplier of back-office services of the sort starting to appear in the US, their chances of promotion would be enhanced.

Equally, Mr Baldock maintains that when his own firm takes over the information technology or internal accounting functions of companies - as it increasingly does - it typically offers careers to those people that come with the operation.

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