Saturday, April 27, 2013

X is (kinda) for eXperts' eXodus

Sorry, I'm resorting to cheating a bit for X. But I know I'll be in good company...

Back in the early days, any business that invested in a computer had little choice but to create an IT department to look after it, program it, and craft a network around it.

As the industry has matured, various aspects of IT have transformed from dark art to predictable engineering, and from niche specialty to wholesale commodity.

And as soon as something becomes a commodity you can buy off the peg, why would you waste time doing it for yourself? You want to be free to do what you do best.

Taxi companies don't keep a car manufacturing plant in the back yard. They buy their vehicles from people whose business it is to make them. That leaves them free to deal with their business of moving passengers around.

This makes sense for a lot of things in the IT world too - servers, workstations, whole networks, and many mundane business applications, can be bought in where needed and scaled up easily.

But, you can have too much of a good thing

The trend now is to see everything IT as a commodity, and something you should best ship out the door to the experts, because IT is not your core business. As a result, many of those in-house IT shops have been entirely disbanded and outsourced.

And with them often goes a lot of competitive expertise.

Why does that matter, if your business is not IT?

IT is all about enabling your business processes, about making them smoother, more efficient, or smarter. Even enabling you to do things you could never have done in the past. The thing is, some of those processes are what give you a competitive edge. They are what distinguish you from all the other folks in the same business as you.

Suppose your business is manufacturing - I don't really care what you manufacture - but suppose your competitive edge comes from outstanding client relationships. You have long-lasting, trusting relationships and you can anticipate what your clients will need next, what is important to them, and can suggest new ways you can meet their needs. This fruitful partnership is what keeps them coming back to you rather than to your competitors.

In that case, you probably want a top class client relationship management system. One that intimately supports how you have chosen to do business. 

Sure, there are lots of such systems out there, but how are you going to rise above your competition if you are using the same software that they are? This is an area where you need to be doing something that none of them are doing.

And how can you keep doing what you do best if the software insists you bend your process to fit its limitations? IT itself may not be your core business, but you'd better be sure that IT is in very close harmony with those parts of your business that are core.

The only way to achieve that is to keep the development and evolution of that key enabling software very close to your heart. The best people to do that are people who have skin in the game, who understand your business and care about its success, in other words ... your own employees.

14 comments:

  1. I agree with you. Ideally, my family's company needs its own IT department, but right now it's still too small to justify the extra expense.

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  2. IT as a dark art. I love it.

    In house IT is good when it works, but when IT guys get bored, they seem to become big brother with who is doing what on their computers and read people's email for fun. True story.

    Outsourced seems to be lackluster. They don't know you and they don't care as long as they get paid.

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  3. Misha, you don't necessarily want a big department. Let someone else look after the humdrum stuff, but if there's some element that will make or break the unique way you do business, that's what you want close control over.

    Jean, attitude and motivation are big factors, for sure. The other problem I see is that the outsourced vendor seems to end up being the one calling the shots - throwing The Contract in your face at every opportunity and you end up paying through the nose for every little bit extra.

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  4. Hi Ian .. love the point about using similar software - no individuality ... that's the key to a successful business .. big or small ...

    Cheers Hilary

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  5. Another excellent post, Ian. I'm impressed with the logic behind your defense of in-house IT.

    And, once again, written in layman's' terms, and any silly fool can understand it.

    Most of your A to Z would make a good class syllabus for intro to computer programming. :-)

    Almost done now, 2 to go. I wasn't going to sign up. Last year about did me in, but you inspired me to jump on board again this year. :-) Thanks!

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  6. IT is so integral to everything else these days that I think it's hard to separate it. When it goes wrong, everything stops.

    mood
    Moody Writing

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  7. Hilary, individuality - where it's needed. Knowing where that is is the key.

    Teresa, thanks. I am glad to hear it is coming across OK in layman's terms, and glad you decided to join in.

    Mood, when it goes wrong, it's obvious. The hidden cost is the billions of $$ lost when it goes right enough to get by but not as right as it should be.

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  8. I'm part of that core. I've been there going on 13 years and all the business logic and core knowledge of how our technology interfaces with our data on a large scale is not as visible to those making the decisions on how to proceed with newer technologies. That gets outsourced.

    The "Oh, shit" usually happens when you've left out the core, thinking that the problems which may arise out of the core group will slow you down.

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  9. This is stuff about IT that makes sense! I am starting up my own tiny publishing house to produce my own Tae Kwon Do story books (niche market) and have virtually no capital- in house IT is a way off yet BUT totally get your point. I did get a smart phone which means I can stay in touch with my social media sites and this has driven most sales so far. Amazing the difference that little box makes!! I am catching up A-Z visits (starting a business has been vastly time consuming) but will be back to learn more!! Thank you :-)

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  10. Excellent advice- no point in outsourcing if it's going to cause issues more than help. Excellent topic for the A to Z and thanks for making it so reader-friendly.
    A2Z Mommy And What’s In between

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  11. You bring up some good points. I've always like just learning how to do things my self, but that because I don't always have the money to pay other people. I usually have the time to learn though. And what you learn in one field can be applied to create new ideas in another!

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  12. Diane, lack of consultation with those in the know is a pervasive problem, for sure.

    Lisa, you are lucky. For that kind of venture, you are probably OK with off-the-shelf technology anyway. Social media are a world of their own far away from the heavy business applications I'm talking about, and the thing that distinguishes writers is the writing. Technology can only help so far there, it doesn't define your business.

    Tracy, thanks. The trouble is that it still happens anyway.

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  13. Samuel, if you have the time to learn, then good for you. Cross pollination can lead to new insights.

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  14. I have seen our IT dept. at work shrink to the point of nobody knowing our key system and it's causing us daily headaches. I get fatal errors a few times a day that cost me probably a half hour of work-time waiting for my computer to reboot. When our systems are down, we can't work. That's pretty huge.

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I also try to respond to comments. I usually do so during the early evening (Pacific time) which may be many hours away from now!

So if you leave a comment and return some time later and I haven't responded yet, please don't think I'm ignoring you. I'm not. Honest.

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