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This involves outsourcing projects to third parties or offshoring development to divisions in remote locations. A\u00a0popular approach when implementing these strategies is the establishment of virtual teams. The justification for embarking on this approach is to endeavor to leverage the potential benefits of labor arbitrage available between geographical locations. When implementing such a strategy organizations must recognize that virtual teams operate differently to collocated teams, therefore, they must be managed differently. These differences arise due to the complex and collaborative nature of information systems development and the impact distance introduces. Geographical, temporal, cultural, and linguistic distance all negatively impact on coordination, cooperation, communication, and visibility in the virtual team setting. In these circumstances, it needs to be recognized that the project management of a virtual team must be carried out in a different manner to that of a collocated team. Results from this research highlight six specific project management areas, which need to be addressed to facilitate successful virtual team operation. 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