It’s not enough to be good: we need to be original

We all like a good jacket. One that fits well and makes us feel good. But how long is it since we went to a specific tailor? Someone a friend recommended, perhaps, for doing a good job in the past.

The same trend is emerging in IT. The dynamics of how we provide IT services (either as external systems integrators, or internal IT departments) are changing. The did it, done it stories we’ve relied on in the past are becoming increasingly irrelevant to a business caught between globalization and spiraling competition. Where previously we built our reputations on being good—for delivering quality in the past—being good is no longer enough. We also need to be original.

Quality was a real problem when buying clothes in the 1800s. Without today’s quality standards and processes, you were never sure that you were going to get what you asked for. Even relatively recently, back when I was growing up, we used to pick through racks of t-shirts in the hope of getting one that wouldn’t twist out of shape in a few washes. Manufacturing was also expensive in the 1800s, with most people only able to afford the clothes they were wearing. A purchasing decision was a decision they would live with for a long time.

When quality is a problem, and the item you’re purchasing is expensive, managing risk becomes your biggest concern. How can you ensure that the product you asked for is the product you receive?

This is the situation IT has been in for some time. Four years, fifty million dollars are not uncommon figures in a world where you cannot buy a business capability off the rack. The closest we’ve come to this ideal are packaged applications, which is more akin to a DIY or flat packed kit where you provide some of the parts. The business still need tailors—system integrators or internal IT departments—to help put the parts together.

The solution—in both 18th century tailoring and with current IT—was to rely on someone with a track record. The did it, done it stories collected over a career provide some surety that they would receive the result they expected.

Tailoring has come a long way since then. Manufacturing processes have matured to the point where quality is simply another factor used by a procurement department to influence the final price. Quality is something a client can assume, and is no longer something actively managed.

The move away from did it, done it stories has radically changed the dynamics of the tailoring industry. We’ve seen the rise of designer labels which don’t manufacture, but which provide a unique image that many people want to associate themselves with. The traditional bespoke tailors have become boutiques which provide a unique service (an experience). The industry is also dominated by off-shore manufacturing providing quality at a low cost. The market seems to have broken into three layers.

The value triangle

The value triangle

At the top is value, where clients search the globe for the vendors which can provide them with something unique. This might be a designer which provides a specific image, or the local bespoke tailor who provides a unique experience. Or it might be the IT consultancy that brings you some unique insight into a business event (such as Sarbane-Oxley) or innovative ways to use a technology.

On the bottom are the industrialized capabilities—the factories that manufacture goods. These factories might be creating suits, running IT projects to even testing solutions. As the goods bought from factories are purchased on cost, and labour is the largest factor in cost, they typically migrate to the cheapest geography.

And finally, in the middle, are the clients concerned with risk management. These are the vendors who are good at something—vendors with did it, done it stories—which does not create any specific value, and that has not (yet) been industrialized into a factory.

We’ve seen the death of the traditional did it, done it story on shore (in the first world at least) for tailoring. We’re currently watching it play out for conventional enterprise applications.

The problem for tailors—and IT services—in the first world is that it is not enough to be good anymore. You need to be original.

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