COST
Virtual teams can help companies lower overhead costs and labor. There are teams of inexpensive, highly skilled labor forces in various locations around the world who can't or do not want to be relocated. Access by communication to these labor forces leads many organizations to offshore certain functions traditionally performed in-house or by contractors. This is an appealing option to many organizations looking to reduce overall project and maintenance costs. By outsourcing the development of an application to Philippines, for example, an organization can reduce the cost of a project. This is because Philippines, in addition to many other countries, has a large population of highly educated people who can be accessed with today's advanced communications technology. This allows the company to pay someone in Philippines much less to do the same work compared to someone working locally in the U.S. Virtual teams also reduce travel, accommodations, and other miscellaneous expenses for team members.
TIME and FOCUS
Managing a virtual company can consume a huge amount of time - time that could be spent building the business. The office conflicts, tensions, and politics are minimized and nearly eliminated in a virtual company. Because people are physically separated, many of the negative and time-consuming aspects of the "office dynamic" simply cannot take root, thus freeing the entrepreneur to focus on building the business.
EFFECTIVITY
In terms of effectivity, Although the absence of a "normal" office environment changes the job of managing people, it doesn't eliminate the need for doing so effectively. In fact, it introduces new challenges the founder must be aware of. As in every area of business - and life - these challenges are the flip side of a set of advantages that prompted the model to take hold in the first place.