The Kensington Technology Group, which makes technology and ergonomic equipment for the office, did a study in April 1998 that showed the majority of telecommuters in the United States accomplished at least 30 per cent more work in the same amount of time.

"People are immediately attracted to the productivity enhancements and cost-savings with the virtual model," says Peter Sweeney, the president of InDimensions Corp., an e-business consulting firm headquartered in Kitchener-Waterloo, Ontario.

There is a corresponding price to be paid, Sweeney cautioned. "You have to commit to making time for socializing and in-person meeting. Building those relationships is the glue that holds it together."

Sweeney's company employs four full-time workers but the team grows to as many as 25, as projects come and go. Full-timers work from home and contractors are home-based or work from traditional offices. They're located in Ontario, Alberta, and Virginia.

"What's important is that all this activity converges online to form a unified and functional team. We all work at the office -- and our office is online," he says.

Statistics Canada predicts there will be 1.5-million telecommuters in Canada by the end of this year. According to a 2001 survey conducted by the International Telework Association and Council (ITAC), there were 28.8-million, or one in five U.S. employees, who telecommute in the United States. The study also found that a majority of these telecommuters are more satisfied with their jobs, more productive and more loyal to their employers.

InDimensions employees use e-mail, instant messaging, Web-based video conferencing, collaboration tools such as Microsoft NetMeeting, discussion boards and, of course, the telephone.

"The challenge was finding the right mix of tools for our needs," says Sweeney. "We not only had to learn how to use each tool, but more importantly, what tools are appropriate in different situations."

One of the most touted tools is Web video conferencing. Web cameras are now less than $100 and fast connections that make video useful are available in the home for less than $50 a month.

Sweeney warned, however, that people have inflated expectations about video conferencing. "They want the Jetsons," he says. "Unfortunately, we're not there yet. If you're using the public Internet, you will be frustrated by network congestion from time to time."

The six Canadian branches of SAS Institute, a multi-national business solutions company, use Web-based video conferencing to meet once a week. To make video conferencing a viable tool, SAS uses leased equipment and boosted Internet bandwidth from a third-party video conferencing company to guarantee network capacity.

Kalvin Falconar, account executive at SAS Institute's six-person Calgary office, says that the big benefit of video conferencing is not saving money, but creating opportunities. "If it gets us faster to market, the benefit outweighs the cost."

Web conferencing also saves time that would otherwise be spent in airplanes and airports, a savings that encourages more frequent meetings.

Sixteen years ago, Falconar was selling software for a company that required a quarterly national meeting. "We would bring in (staff from) Edmonton, Calgary and Regina and have a day or day and a half meeting in one spot," he recalled. "I'm at SAS now, but now we do a weekly meeting through video conferencing."

"We view video conferencing as a vital component to the virtual office," says Sweeney. "There is a tremendous amount of communications provided through facial expressions. Even when the video is fragmented, that communications value remains."

Bernie DeKoven, an on-line collaboration consultant based in Redondo Beach, California, disagreed. He says face-to-face meetings should be reserved only when there is absolute value in them.

"It's not that we should stop meeting face to face," he says, "but that our face-to-face meetings should become better vehicles for exploring the social and political agendas of organizational life."

The biggest challenge, Sweeney says, is ensuring that people communicate clearly in a digital environment.

"You have to work harder to understand the reasons why communications break down in a virtual environment," he says. "You have to work on the interpersonal relationships in a more concerted way."

In addition, not all people adapt well to it.

DeKoven, who runs the Web site Coworking.com, says workers who rely on regular human contact have the most problems with a virtual work environment. "People who need face time are the ones who have the most trouble. They feel excluded and threatened. They feel endangered and that endangers the quality of what is getting done."