Posts Tagged ‘Business model’
Consulting Ecosystems – What’s Next
(Originally posted on 4/28/10 and reposted 8/10/10 due to technical problems)
I was recently at a SIM (Society for Information Management) dinner. The speaker was Jim Stikeleather, CTO of Dell Services (formerly Perot Systems). The title of his presentation was “Next Generation Computing”. I’m not going to try to repeat the presentation here, he did a much better job than I could do (it was a good presentation). I will focus on a few of the points he made. They relate to my last post, “A Consulting Ecosystem“. In that post, I warned you that there would be more on the topic. Well, here is the next installment.
I have included three slides from his presentation. All of these images are linked to full size versions, so click on them if you want to see the details of the slides. I have also included a PDF version of the full presentation here. The presentation includes some specific information about Dell Services that may be of interest to you as well.
In my last post I discussed the idea of the “Hollywood” business model and what it meant for small consulting companies. This presentation provided some of the inspiration for those views. I believe what I liked most about it was that our views of the future were so similar. Obviously, if he agrees with me he must be right on target. In the above slide he identified 
the trends and drivers in play. The point here is that as computing functionality becomes more available and less expensive, it can be more widely used. It also makes it less of a differentiator for individual companies. I have long believed that computing power has no intrinsic value. Its only value comes from those business capabilities that are enabled by its use. I’m sure that view is not well received by much of the IT community but my experience proved to me long ago that this is true.
I think another interesting point is show in the slide covering the evolution of cloud computing. In this slide, he provides a vision for the evolution toward the federation of cloud resources and applications. In this context, a “federation” means using multiple cloud applications together to meet a business goal or goals. What this means to me is that we should see more and more “specialist” applications being mashed-up and used together. This idea is some time away but I believe it is a reasonable expectation since we’re seeing it today to some extent. As standards mature this trend should accelerate.
Some of the slides in this presentation offer a specific timeline with forecasts by year. While these forecasts seem reasonable, I am a little nervous about forecasting specifics far into the future. However, I do agree with the overall trends. I do believe our comfort level with the use of cloud-based applications will grow steadily over time. I believe that standards will continue to mature. I do believe that more and more organizations will want someone else to provide the computing infrastructure. I believe that cloud-based applications will become more capable over time. I believe that the physical infrastructure of the cloud will become more capable and reliable over time.
The presentation document speaks to business process outsourcing, or BPO, more that the speaker actually did. The presentation was very interactive and so it was hard to get to everything. As a disclaimer, I must mention that my business does not include BPO but does include the analysis of business processes. The two are separate but the analysis work is often part of a larger consulting engagement for BPO firms. The question here is very personal for each BPO customer. Essentially, it boils down to whether a prospective customer is comfortable with their business process living outside their firewall. The data that I’ve seen implies that small to midsize businesses (SMB) are signing up quickly but larger businesses are taking more time to decide. It’s basically a cost reduction decision with some business simplification thrown in to the mix.
I can’t say that I’m as enthusiastic about this as the other topics of the presentation. Besides that, I can’t find a consistent definition of what BPO “2.0″ means. I’m going to assume in this post that it means more pervasive use of BPO than “1.0″ versions and includes the idea of federated BPO providers. Having run many manufacturing business processes over the years, I struggle with the idea of my business processes living outside the firewall. I’m sure I’ll get there eventually. The closer an application lives to my company’s P&L, the closer I like it to be to me. I just worry about the exposure to cloud-centric risks like a patch or upgrade to the application coming as a surprise.
In conclusion, I think this presentation was valuable in that it collects insight from various sources, not just Dell/Perot. It did include some Dell/Perot sales material but that’s to be expected and wasn’t emphasized by the speaker. I encourage you to take a harder look at the presentation. It has some valuable nuggets of information. It does support the notion that the technology world is evolving in a direction which will allow smaller consulting companies to be far more scalable and effective than ever before (good news for us!).
Thanks for stopping by.
A Consulting Ecosystem
I recently attended a dinner meeting addressing, among other things, the future of work. That reminded me of a book that I read a long time ago in which the same thing was discussed. That book is titled “The Future of Work”. An image of that book cover is shown here (click on it to see that book on Amazon.com). I’m not going to attempt to do a book review here. I will address one of the points made in the book and what it means to the consulting business.
In Grantham’s book he describes the “Hollywood Model”. That business model is based on the movie making business in Hollywood where teams of independent, self-supporting specialists group together for a project. At the completion of the project, these teams disband. These specialist entities may be individuals, small organizations, larger organizations or yet another small team of specialists. As this idea evolves we start to envision a network of entities that begin to look like a complex molecule.
Maybe it would be more meaningful to refer to a molecular consulting ecosystem. Just for kicks I did a Google search for “molecular consulting ecosystem” and got no hits. I think I’ll include that phrase in my keywords for this post. Or not. Back to a serious note, the notion of comparing coordinated groups of independent entities for some common purpose to something like a molecule is not a new idea. Actually, if you think about it, we are talking about a fairly structured collection of entities focusing on very specific goals or projects. I think the best analogy is a crystal. Crystals are composed of atoms in a very specific structure. They tend to be stronger and more predictable than more typical organic molecules. They also tend to last a long time. Maybe naming such a business model after a crystalline structure is a good idea.
So what should be done to actually use this idea in a more general purpose consulting environment? Let’s think about a few more details and specific goals of such an arrangement. So what are the basic goals for the group?
- The entities (individuals or small groups) must be knowledgeable.
- The entities (individuals or small groups) must be perceived as knowledgeable by the group’s clients.
- The entities (individuals or small groups) must be safe to do business with.
- The entities (individuals or small groups) must be perceived as safe to do business with by the group’s clients.
- The group must have a means of generating new opportunities.
- The group must have a means of presenting a unified presence to the marketplace.
- The group must have an accepted means of distributing revenue among the entities.
- The group must have an accepted means of distributing operating costs among the entities.
- The group must have an accepted means of distributing liability among the entities or centralizing it as appropriate.
- The group must have an accepted means of recruiting and vetting new entities.
- The group must have an accepted means of allocating rights and access to any intellectual property generated by the group during an engagement and not the exclusive property of the client.
- The group must have access to systems to support collaboration among the entities for skills exchange and training.
- The group must not be constrained by national boundaries.
- The group must have access to systems to allow the collaboration on work product documents and proposals.
- The group must be able to scale to perform various sizes of engagements.
- The group must be able to include external entities as necessary for specific engagements.
- The group must be able to include clients as appropriate.
Basically, the group must be able to function very much like a company but maintain the ability to expand and contract as needed. It strikes me that what the group needs is an infrastructure that looks much like a PMO, or Project Management Office. That PMO must have some of the attributes of a business and not just a department within a larger organization. Going back to our crystal analogy, there must be a seed crystal around which other crystals form or connect. That seed crystal becomes the key to making everything else stable and effective. The seed crystal contains the PMO.
Maybe I’ll just call this the “Crystal Consulting Model”. Google doesn’t have anything for that phrase either. Anyway, consider this a part of an upcoming series of posts. I don’t know how many or when they will appear but this topic is important to our business so defining it more clearly is very important to us.
Thanks for stopping by. Any comments would be much appreciated. See you next time…