Distributed teams describes a work setup where your employees are based in multiple locations. Outsourcing, remote work and work from home are various types of distributed teams.

What Are Distributed Teams?

Daniel WeissLast updated on January 2, 2024
8 min

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Gradually, businesses have made a shift toward using distributed teams and remote teams, and with good reason. In the interest of efficiency and smart business, many companies are bucking the traditional business models where all their employees commute to a physical office every day.

With the onset of the pandemic, out of sheer necessity, many businesses were forced to develop distributed teams to survive. Other companies that were already using this model have adapted their business models to meet their current needs.

Companies have to be agile to be successful and competitive, which can be challenging. The pandemic, the difficulty in finding and retaining talent, and the advancements in technology have created the perfect storm that keeps executives up at night wondering whether it’s worth it to continue incurring the expense of offices, leases, utilities, cleaning, equipment, and office furniture. Distributed teams are becoming the new normal.

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What Are Distributed Teams?

Distributed teams consist of two or more employees working in different locations. Team members don’t share the same physical workspace and they aren’t necessarily centralized in a central geographical area. They could be working in different cities or even in different countries. A distributed team might also consist of some team members working in an office while others work at home.

Distributed teams function better when they have an infrastructure that incorporates communication, collaboration, organization, and coordination. Having teams in different locations working together makes it possible for companies to tap into the advantages of having a globally diverse workforce.

A cloud-based phone system and other digital tools play a significant role in helping manage important aspects of the team like communication, project management, human resources, and security.  Communicating online, one-on-one and group chats, and video meetings are the next best thing to meeting in person. These tools keep team members connected and teams keep business flowing.

Distributed Teams vs. Remote Teams

The terms distributed teams and remote teams have similar characteristics, but they’re not the same.

The term remote team simply means that some of the team members work remotely. Some companies set up their remote teams by hiring employees that live within a reasonable geographical distance from one another and periodically, they may meet up together in person at the office. Remote team members generally have the ability to work some amount of flexibility into their day.

Distributed teams may be set up where team members work in various locations around the world, which means that they have team members working in many different time zones. They are also identified by one or two team members that work in a specific office location and other team members that are spread out in various other locations. Members of distributed teams may be required to meet in one of the company offices. Some members rarely or never meet each other in person. This is a common arrangement where regional managers have their own territories and they meet to plan and share information regularly as part of a regional sales team.

What distributed and remote teams have in common is that some team members work in a physical location away from the other team members.

A new type of team has also emerged called a hybrid distributed remote team where teams essentially fit the definition of distributed teams and all members of the team are working remotely.

Remote, distributed, and hybrid distributed remote teams typically form where it’s simply not practical for team members to work in the same location for a variety of reasons. Generally, the same rules apply to all team members regardless of where they work. Cloud-based phone systems and other digital tools help them function and feel like a team.

Distributed teams work well in many different industries. For example, many global companies in the fashion and beauty industries need to follow a customer-centric model.

Fashion styles follow different trends in various countries. Some cultures have very fashion-forward vibes, while cultural influences may demand a higher standard of modesty in others. The beauty and cosmetic industries face a similar challenge because certain ethnicities dominate certain geographical areas and companies need to respond to certain skin tones or hair textures.

While there may be brick and mortar stores in various locations and online stores that carry the full line of products, certain teams may have a higher degree of expertise in certain product lines and they can be available for customers in the time zones where they’re needed most. This is notable since the personal care industry is projected to increase to 48% in the United States by 2023. Some companies set up distributed teams so that they have 24/7 accessibility in every country. A customer can place an order in the morning and get their shipping, ordering, or billing questions answered in the middle of the night because team members working in other time zones are on the job.

eCommerce needs need to better understand the customer experience to better assembled distributed teams.

Read on to see how your customer service strategies align with modern shoppers.

E-commerce companies took the lead by using distributed teams to manage their ordering, shipping, and customer service operations. In light of the pandemic, retailers have needed to take a page from their book and start doing more business online. According to a Leesman survey of 22,756 retail employees across the globe, 46% said they didn’t have any remote work experience prior to the pandemic. Today’s retailers that were deemed non-essential were pressed to get their feet wet with e-commerce swiftly because of having to close brick and mortar stores due to COVID-19. In many cases, businesses have had to quickly convert to this model within days or weeks.

The health and wellness industry has also had to make expedient adjustments due to the pandemic. Cleveland Clinic stands out as an example of how an industry can put together various distributed teams to manage a virtual health clinic. Healthcare companies can use this model for managing appointments, assisting with billing, scheduling follow-up care, and meeting with physicians online and via mobile apps.

The international food and beverage industry provides another example of the benefit of distributed teams. Companies can set up distributed teams the world over that can respond to customer needs in their time zone and in their language.

Why Businesses Are Shifting Towards a Distributed Team Model

Upwork projects that 73% of companies will be using distributed teams by 2028. This arrangement allows companies to be more employee-centric, which is notable when you consider that 76% of millennials would give up pay for more flexibility. In light of the pandemic, many parents need to work at home because their children’s schools are closed. Even when employees can go back to the office, companies may decide that they can offer their employees a better work-life balance by sticking with distributed teams.

Understanding how to build the right eCommerce distributed team can drive better success for your organization.

This two-part eBook provides the essential components needed to grow and scale an eCommerce support team.

The benefit for companies is that it gives them a larger talent pool to draw from because they’re not limited to the talent pool in their geographical area. Companies that are looking to scale a new market or introduce regional products can tap into the expertise of their employees living in those areas.

Distributed teams make a world of difference for seasonal businesses, especially for retailers during the holiday season. In 2019, e-commerce sales were up 14.6% year-over-year. Grocery and beverage stores had a 2.9% increased and health personal care stores increased their holiday revenue by 1.6% year-over-year. Distributed teams play a major role in sales, shipping, and customer service.

Using the Right Technology Stack for Distributed Teams

Successful distributed teams need a technology stack for hardware and software that meets their customer’s needs as well as their own.

Distributed team members will need basic office equipment such as a desktop or laptop computer, printer/scanner, and a headset. Some team members may find it helpful to have a video conferencing command center that has high-quality video and audio features to enhance remote team meetings.

It’s crucial to consider the most appropriate types of software applications for distributed teams in the interest of efficient communication and project management. The right software applications will enhance internal communications and organization. Also, it will enhance how customers perceive your company and interact with team members.

Your technology stack should consist of the following:

Video conferencing software-Video meetings allow for virtual introductions. As the movement toward distributed teams grows, new norms are developing to help teams connect. Forbes describes how these types of teams can connect by having virtual happy hours, overlapping hours, earning rewards, and more. Zoom, Skype, GoToMeeting, and WebEx provide some examples of video conferencing software.

Project management software-Distributed teams benefit from an application that allows for internal file-sharing, external file-sharing, task and goal management, and forecasting. Trello, Wrike, ProofHub, and Basecamp are popular options.

_Cloud-based phone system-_Try Aircall’s cloud-based system for internal communication and collaboration for chat tools, email, web apps, sales automation, and CRM systems. An Open API is available to make integration with other applications possible.

Document creation-Distributed teams will also need an application for creating documents, spreadsheets, and presentations such as Microsoft Office suite or Google Drive.

Storage and backups-An app like Dropbox is highly useful for sharing files, backing up files, and storing files. Sync, Zoho, and CloudUp are other options.

Your company or industry may also require some other type of specialized software specifically for your market.

Distributed Teams Popularity

Whether businesses had been using distributed teams or whether they developed them in response to the pandemic, it’s clear that they can be successful, especially when they’re equipped with a cloud-based phone system and the right technology stack. The concept is expanding and it’s quickly becoming the wave of the future.

Published on August 3, 2020.

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