I was recently told that Information Technology Outsourcing (ITO) and integration of multi-service providers is still an emerging market. In my role, everyday I deal with looking at outsourcing of customer IT environments; the opportunities; the value I, as a service provider, can bring; and the risk for both sides. I’d like to point out that I’ve been involved in ITO in some fashion for almost 20 years. It certainly isn’t new, or emerging. What it is is a changing one.
With the years gone by it was easier to either single source (procure through one provider) or completely manage all your IT service needs due to the relatively small, non strategic, investment in IT; that and businesses and IT managers alike could wrap their collective heads around the problem. As the complexity of IT grew so did the strategic investment to deliver business outcomes, this forced businesses to look to multiple parties for the delivery of services in order to take advantage of the leading edge IT capabilities: Multiple suppliers, internal teams ora mixture of both were used in this delivery. This forced a new managed service and system integrator (MSI) function to emerge, stitching together the various IT services in order to deliver a cohesive end-to-end service to business.
With the recent normalisation of Everything as a Service and the push for “good enough” service provision, businesses are caught in the mix of pushing to adopt these cost saving services and yet continue to receive value from the IT services that they procure. This push, coupled with the shadow IT adoption of cloud based services, has moved IT departments back into the business of service and system integration. This is what my colleagues and I call micro-sourcing; ad hoc procurement of services.
To follow up on the conversation I had previously stumbled on this article by Stephanie Overby at CIO magazine. In it she highlights eight tips to deal with liability when outsourcing to multiple IT vendors. I saw it as a great example of how ITO is viewed by the market and those that make the decisions. This is a very valid, risk centric, view of ITO. Given my conversation and Stephanie’s article I wanted to pull them together to show that what some of the tips, and thus preconceptions, do is to reinforce the MBA-esque risk adverse nature of the approach to ITO and limit the benefits that it can provide.
Silicon Valley’s latest acquisition has the twitter sphere in a tizz. For those living under a rock, Facebook acquired messaging company WhatsApp for $19B dollars
What I like about the whole situation is that WhatsApp exploited a perceived gap in market. Sure there are messaging apps that work across multiple platforms, but their focus is all about the social platform. WhatsApp’s was more simplistic, universal messaging across platforms. Given the platform and style of service, users feel far less threatened and take up in various geographies show this.
They are also a “cloud service platform” that allows them to mine the information on relationships and interconnectivity that a lot of players in the social service space would kill for. The fact that Google offered USD$10B previously is a clear sign of their value. This can be attributed to a lot of things, least of which is their growth rate and repeat customer rate.
Whilst this might highlight some some trends in market, like the purchase of startups focused on social services, it is a blinkered view of the market as a whole. These MEGA players (Google, Twitter, Facebook, etc) have a weird and wonderful product and marketing model that most of the world is still trying to get their heads around. Like most marketing machines, new product are critical to the survival of a company (be it new to market, improvements or repositioning). WhatsApp shows a link between Google and Facebook’s understanding of their customers (BTW that’s not you) and what they want, but most importantly, what it is worth.
Apart from the incredulity that is coming out by the average Joe, there are severalitems and articles out there that attempt to show why the $19B.
The best article I read was from Danny Crichton (@DannyCrichton) who points out that the growing trend in social application business acquisition is going to change the nature of business, certainly in Silicon Valley. I’m leaning toward agreeing with most of his observations though I’m wiling to bet that some of the other cities around the world will get a look in as the Valley is rapidly becoming expensive!
As I tend to reference Simon Wardley’s mapping a lot recently is was good to see that he’s finally named it the “Wardley Map” developed by Simon in 2007.
If, like I, you like the concept for its flexibility and ability to clearly show a business ecosystem, make sure that you are following along here.
Things have been very quiet here for a few months. Having some downtime from work and studies I’ve looked to spend time with family and make up for lost time with friends, rather than blog. But with the new year a new set of studies and an interesting workload I will be looking to pour my thoughts here a lot more.
As a follow on from the benefits of business mapping from July, Simon Wardley has kindly used the example to explain why you map. This illustrates:
- Needs, differentials and efficiency targets, including the operational constraints as well as hidden business components;
- What type of focus and management can you apply to the various components based on the types of focus;
- Ideas on measurement for different stages in the lifecycle; and
- Where to attack the market using Innovate, Leverage and Commoditise (ILC).
My plan was to do a similar write-up, however I don’t think I’d ever explain it as well as Simon, instead I’ll work on a couple of follow-up posts that discuss integration of the business map into the Business strategy / Enterprise Architect roadmap (as opposed to just the technical roadmap) and a generic look at the cost vs. value as you move from new capability to commodity.
Thanks again to Simon for sharing his thoughts and ideas.