Where does the ‘virtual office’ come from? How deep are its roots? And why did it evolve in the first place?
Here’s a revelation for you: The virtual office industry is older than many of its clients.
Virtual offices date back decades. As an offshoot of a business requirement for greater workplace flexibility, ours is a constantly moving and evolving industry that has its roots deeply embedded in business trends and shifting workplace requirements.
At Alliance Virtual Offices, we know history is a powerful thing, and we believe it’s important to know where the virtual office industry has come from in order to understand where it’s going.
To that end, and as a virtual office company ourselves, we decided to see what information exists that explains the evolution of the virtual office. Unfortunately we didn’t like what we found. So we’re doing something about it, and that involves speaking with some of the early pioneers of the industry.
As part of our journey we spoke to London-based Richard Nissen – considered by many, including Alliance, as a founding father of the virtual office movement.
Richard played a vital role in the development of our industry, because he invented and trademarked ‘the virtual office’ in the UK in 1992. That in itself is an important piece in our history, yet the story goes back even further.
“I set up my business centre, Business Space Ltd., in London in 1980,” Richard explained in an interview with Alliance Virtual Offices. “Post 1980’s recession, it was a challenging time and we weren’t hitting the necessary occupancy levels to turn a good profit margin.”
“Riding the dragon of change”
Richard was operating against a backdrop of long-term 15+ year office leases, extortionate dilapidation’s, and upward-only rent reviews. So he looked at ways to change and diversify his offering. “Better to ride the dragon of change than be dragged by it.”
At the time there were only 8 digital telephone exchanges (the rest operated on Strowger switch technology). When Richard trademarked the virtual office in 1992, it wasn’t just the name he developed – but the process behind it. Richard is credited with pioneering the digital exchange telecommunications system, which eventually launched the virtual office concept in the UK.
His official trademark puts it in black and white:
Telephone and telephone rerouting services; rerouting of telex and facsimile messages; mobile telephone services; mail forwarding; message delivery and sending services; all included in Class 38.
It wasn’t just about telecommunications. Richard created the virtual office to provide a package of three core services:
- Enable callers to obtain a DDI (Direct Dial-In or Direct Dialling Inwards) number for a specific person. Richard’s business centre receptionists could map calls and see who was calling, allowing them to put the caller on hold before presenting to the receiver. Previously, the technology didn’t exist to do this, so his development was a significant step forward.
- In addition to a personalized call answering service, Richard added a business address to the virtual office package. This allowed businesses to create a real presence at his London offices – albeit without actually needing to work there.
- On that subject, at times businesses did need a physical place to work, so Richard added a third component to the early virtual office – meeting room rental. This allowed remote or travelling companies to use his conference rooms, which were furnished and ready to go, anytime they needed a physical workplace for meetings or for other business.
Interestingly, the requirement for a physical office presence while working remotely can be traced back further. Specifically, to 1973, when AOMI (now Barrister Executive Suites) offered furnished law suites for attorneys in North America.
Resources suggest that AOMI began providing “off-site tenant programs” in the 1970s for semi-retired lawyers and those who wanted a headquarters without the cost and upkeep of a full-time office – a model that’s similar to today’s virtual office, minus the technology.
Back to Richard Nissen, and he recalls “other operators coming onto the scene” and offering similar services a couple of years after he created The Virtual Office in 1992.
Competition wasn’t a problem – rather, it was lack of awareness that prevented widescale take-up in the early years. Today, the virtual office concept is much more widely adopted. As for Richard’s three core elements, they still exist as the backbone of the virtual office – but demand for each specific service has experienced numerous ups and downs over the years.
“Then, there were no mobile phones,” he recalls. “Today, every business owner and employee has a mobile phone with voicemail and very few of our clients want a receptionist to ‘introduce’ the call. They prefer to have calls redirected to mobile or to voicemail.”
As a reflection of the ‘mobile revolution’ and the ability to synch laptops, smartphones and tablets, Richard says that currently a very popular feature of virtual office technology is the ability to have voicemail messages sent by email as a .wav file, so users can pick up messages on whichever medium they are closest to.
As a result, it is evident that fewer businesses need virtual phone technology – yet the virtual office is still in demand. This is partly because the virtual office is more than just a phone; it is a package of services that meet various purposes incorporating receptionist support, a professional business ‘front’ and access to on-demand physical workplaces. Above all the model has survived the test of time by its ability to fuse cost-efficiency with flexibility – a combination that will never fall out of favor.
A “place to hide”
Unfortunately, just as the virtual office package has attracted a diverse range of requirements by entrepreneurs from all walks of business life, it has also caught the attention of fraudulent companies.
“They use virtual offices as a place to hide,” explained Richard. “Unfortunately, a large proportion of other virtual office providers don’t carry out enough thorough, rigorous checks on new clients. But we decided early on that we wouldn’t tolerate errors, so we adopted the ‘Total Quality Management’ process to keep such companies out of our business.”
This process virtually eradicates errors by ensuring that all aspects of the company’s operations are carried out correctly the first time.
“Our error rates were approximately 20% and they soon dropped to less than 1%,” says Richard. “It ensures background checks on new clients are carried out ‘to the book’ every time, and other processes are carried out accurately – such as knowing how is calling, who they are trying to reach, even holding current emergency data for their next of kin.”
This process ties in with ‘Know Your Customer’ (KYC) – a compliance process that requires virtual office operators in the UK to maintain correct records on all clients. Without current, accurate data, virtual office businesses are at risk from fraud and can be penalised under Money Laundering Regulations imposed by HM Revenue & Customs (HMRC).
“A virtual office provides no physical presence, a great address, and a good phone service. In the wrong hands, it can be a haven for criminals and fraudsters.”
Richard is speaking from experience. At one point, a fraudulent company slipped through the net despite appropriate checks being carried out. “It wasn’t enough. They had taken addresses at other business centres too, not just ours. In the end, the person who did their due diligence hadn’t poked around hard enough.”
This error was chalked up to experience, and Richard’s team have since tightened their procedures as a result. Alliance Virtual Offices carries out similarly thorough checks, which are designed to confirm that new clients are who they say they are.
Indeed, one of the biggest benefits of being a pioneer is that Richard has been in the game for long enough to know how to handle virtually any challenge that presents itself.
“That’s the great thing about being in the business as long as I have,” he added. “Everything that could happen, has happened – and our company is all the better for it.”
Richard Nissen is a long-term member of the Alliance Network, and an industry pioneer in every sense of the word. You can see his virtual office listing here on Alliance Virtual Offices.