Tony Greenberg wrote a recent blog post (on tonygreenberg.com) which pertains to IT trends; when reading it I wondered if it had any implications for the Advisory industry…. Readers should note that Tony is an ‘outsourcing’ advocate; I’ll summarize his article with my comments in brackets, and then ask a question:
We need to sharpen our instincts and stop trusting IT industry myths. I entered the IT business in ‘96. I found massive inefficiencies that I promised I would solve. Here I am 10 years later with the same pursuit.
The US owned the global auto industry for decades. Today, the US is third in motor vehicle production behind Japan and China.
There’s another industry that we’ve built that’s straining under the weight of myths from a new breed of underhanded execs and salespeople; yes, IT, we owned that one too….The CIO was the superstar, but today many are under the CFO’s thumb, with an ever-shrinking budget. In most [many?]organizations IT is viewed as an expense to be cut, not a driver of productivity.
Just as any large conglomerate goes through cycles of centralization and decentralization, a large IT shop will go through waves of using outsourcing or in-sourcing as a panacea for ills that can’t be solved by either one – or just to create an appearance of activity. And as full of sound and fury as these waves are, they signify nothing.
We buy too much from big companies that lock us in by hiding detail and complexity. Then we happily reward dubious value by never shopping around even as the rift between market and BigCo’s rates grow.
RFP’s are what most [many?] companies use to show how little they know about what they really need and who to buy it from. Vendors use any little bit of weasel room to sell you their value proposition.
We think that we can’t change our contract mid-term even when business need and market conditions change. So we endure the 3 or 5 or even 10 years when we could have used that same business need to realign even the most onerous deals real time. And no contract is non-negotiable even when it’s closed. In reality, you never get what you deserve – it’s always what you negotiate. Razor sharp guardrails and multi-vendor relationships are where success lies.
Price can represent marketing, sales commissions, a positioning strategy, financial stability, and many other things that are irrelevant to the fit between a buyer and seller.
All you need is the upper right quadrant? 9 times out of 10, if you pick the generic “best” recommendation, it won’t be the right fit. Sure, it’s better than the 99% chance of screwing up if selecting randomly, but no quadrant will replace an analysis of optimal fit.
The cloud changes everything? As did the twenty fads before it I could name a dozen obstacles to it, but even if all those are overcome it will only fill one niche in a wide spectrum of need. The cloud is [may be?] simply another way of looking at virtualization.
IT buyers are [may be?] fearful of a better solution because it means they didn’t do a good enough job before. In reality, if you bring in an outside voice of reason that shows a better way, you’ll always be the hero.
In case you were wondering, the cast of perpetrators in this case includes IT salespeople, analysts, and press, but most importantly the buyers who don’t expect enough. Not holding our IT vendors to higher standards has the same price as our car industry. Complacency leads to inefficiency, and inefficiency is only waiting for the right outside competition; maybe not today but soon, and for the rest of our lives. But while we can’t build the flying car, maybe we can build an efficient IT market.
A ‘Gideon’ comment: even after my cut&paste job above, the points made seem challenging. I do not have recent field experience re IT buying habits, however Greenberg’s conclusions make me think: do any of the author’s conclusions apply to the advisory sector of the IT industry?