Movin’ Up The Value Chain

value-chain

 

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Ok, so it’s time for the flip side of my previous post on the abstraction of technology into a world of services. In that post, I essentially argued that as technology starts to become even more central to our lives, the ‘digital literacy’ we need to interact effectively with that increase in technology is conversely shrinking. While I will still maintain my point about the importance of being able to understand technology to be informed citizens, I’ll argue another point of view for the transition of technology-to-services.

The first real red herring we need to dispense with in this situation is the allure of nostalgia. ‘Things just ain’t the way they were before!’ Exactly. What part about rapidly improving and developing technology should be held hostage by the habits of the past? Much time has been spend bemoaning the abstraction of technology to services on the basis of personal attachment to old ways of working. If the technology is worse in its newer form as a service than it was previously, then sure, it’s reasonable to make objections. But if it just means you don’t like it, then the reasoning deserves some respectful skepticism.

The main point, however, is that abstracting of technology to services continues the age-old trend in industrialized countries of value creation through specialization and economic exchange. Rather than every person farming his or her own food, we make exchanges (in money) for dedicated farmers to grow our food for us. This frees everyone else not growing food to focus on other tasks that enable society to further develop. When all the sysadmins out there isn’t worried about maintaining their own mail server 24/7 by using a service to provide email (such as Google Apps for Business or Microsoft Office 365), they can provide greater value to their respective organizations.

It’s a matter of maximizing value for your dollar. As services arise to take the place of existing technologies (that previously had to be handled independently and with dedicated staff), the opportunities for more advanced and more valuable use of staffing resources grows tremendously. Different organizations can focus these new-found surpluses in different directions depending on their strategic needs. It should be greeted by all as an enabling opportunity, but more often it is feared as a strictly cost-cutting measure.

This is not to say that a lot of organizations see technology as services as exactly that: cost cutting measures. And in those organizations, the result of firing very talented technical staff to save a buck will undoubtedly have dire long-term consequences. Why? Because the staff who previously provided that technology are your best resources for maintaining and expanding the level of “digital literacy” throughout the rest of the organization. The organizations that successfully evolve their technical wizards into stewards of the new technology services that replaced them will thrive. They will avoid the pitfalls of being oversold services that can’t deliver, and being overcharged for limited capabilities.

So, there’s plenty of reason for good organizations to get both the economies of scale and expertise of technology service providers, and maintain their existing talent to provide better value to the organization in different roles. But why doesn’t this seem to be the prevailing wisdom even in good organizations? Why is it such a difficult road to travel? Well, let’s talk about the 800lb. gorilla in the room:

Outsourcing.

Yes, that’s perhaps the greatest fear to any in-house technology staff, and due to a long history of poor decision making by penny-pinching, short-sighted companies, it is very understandable and very real. I think this dark shadow over the technology world (well, relatively speaking – it probably looked like a giant beam of light to other parts of the world desperate for jobs) throws a significant hurdle in the way of technology service providers who have genuine value and opportunity to offer to other organizations. It’s a stigma that is ingrained in the fabric of the tech world, and only time and smarter business decisions will help heal the wounds outsourcing has caused.

To take a more optimistic look at the future of technology as a service, the technology keeps getting better, more capable and (hopefully) easier to use. The benefits of using a service provider vs. in-house technical resources will become so lop-sided in favor of the technology service provider that even the most recalcitrant IT directors will recognize the benefits and evolve their services to take advantage of those capabilities. And in the process, hopefully understanding the continued importance of developing their own extant technical staff into “digital literacy stewards” for the organization.

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