Managing Expertise in a Distributed Environment

Expertise is the primary resource and product of professional service and technical firms. These firms often organize around project teams that advise and work under contract for clients. A key problem for management is to deploy expertise in project teams so as to meet the expertise requirements of projects and clients. Because expertise may be geographically distributed across multiple sites, many of these firms create virtual or distributed teams. Doing so gives these firms access to a larger pool of knowledge resources than would be available at one site and helps leverage expertise across the organization. However, geographically distributed collaboration in teams incurs coordination and other costs that local work does not. Is a distributed team worth these costs? We studied a professional service firm with distributed and collocated project teams. In this firm, domain expertise tended to be concentrated within geographic sites, whereas methodological expertise was distributed across the firm. We examined whether a better match of domain and methodological expertise to the needs of projects resulted in more profitable projects, and whether distributed teams matched these two types of expertise to the requirements of projects as well as or better than did collocated teams. We found that most projects were collocated, with members drawn from one site who had domain expertise that matched project requirements as well as when members were drawn from other sites. The profits of projects were unrelated to the match of domain expertise with project requirements. However, project profits were significantly and positively related to a match of methodological expertise with project requirements. Furthermore, distributed projects showed a stronger match of methodological expertise with project requirements than did collocated projects, and predicted disproportionately more profits. We conclude that an appropriate utilization of organizationally distributed expertise has a positive impact on project performance.