Consulting

And since I have been almost entirely detached from the technology world for the past month, I have absolutely nothing interesting to say!

Fortunately (at least I suppose it's fortunate), as is often the case after long vacations, there is a massive pile of problems and projects piled up in my inbox that have accumulated in the interval. I imagine after I dig through all that and starting piling into the work I will have plenty of things to say about the latest and greatest, the old and busted, and all the confusion that both engender among the business and IT community.

I hope everyone else enjoyed their summer vacations as much as I did. As nice as it is to have regular Internet access again, I have to say I could have been gone another month on top of the last month and not quite managed to be completely comfortable being back to work again.

Jonathan Sapir brings up this topic in a post on his Power in the Cloud blog, using Force.com's PaaS aspects as an example case of how cloud platforms might effect IT consultancies by encouraging increasing specialization (and as a result, smaller firms).

Traditionally, most clients have looked for one-stop shopping in their development consulting engagements, and Jonathan posits that the benefits of this model, in terms of both assignment of responsibilities and internal synergies available from set teams, may be outweighed in the PaaS environment by the benefits of specialization combined with a decreased emphasis on infrastructure nuts and bolts work that previously required someone from either the client or consulting team to address.

I think he is probably correct in this assessment, for at least as far as he takes it. I think that CIOs have other motivations for trying to conduct one-stop shopping with large firms, not all of which are as beneficial as those Jonathan has outlined... it's as often done out of laziness or cachet as a cool assessment of capabilities (this has been made pretty obvious over the last year or so with so much public evidence slopping around over mismanagement and poor performance at the big-name firms). And I'm not sure that relying on synergies on consulting teams has ever been such a brilliant idea in the first place... one might assume they exist since that would be the logical way to run a consulting business, but logic is more rare than one might expect in the IT industry. Many large consulting firms have terrible churn rates and rely on hordes of inexperienced, fresh out of school consultants to handle that grunt work that is supposedly being done by a well-oiled team of experienced professionals.

So the big-tent firms probably aren't going to disappear anytime soon, but specialist firms will be on the rise, and that's a good thing. Something I preach as a consultant is to outsource the work, but maintain the control. That advice was not often heeded by firms dealing with large consultancies, which have their own inertia and interests which often over-rode client concerns and requirements. By splitting the tasks up, businesses will be force to keep an accurate internal accounting of who is doing what and how it all connects, which is more work but to their ultimate benefit, since they are the only ones in a good position to know if the final system is advantageous for their business.

Jonathan is also coming from a slightly different consulting perspective than I am, and consequently he focuses on a rather narrow aspect of consulting, the development side. That is a substantial component of IT consulting and it will surely be affected... but the other sorts of IT consulting are also bound to be affected by the upswell of cloud computing. Certainly, the traditional demands for SMB catch-all and MSP consulting firms will wane. Many of those which survive will have to take a different tack, focusing less on becoming a dependency for their clients and learning to let go of ongoing revenue and reliance in favor of project-based work transitioning clients to solutions which may not involve the consultant in an ongoing capacity. This is a bitter pill to swallow and resistance is certain, probably slowing adoption of new technologies in many cases; nonetheless, ultimately consultants are going to have to explore other revenue models to stay afloat.

Trying to stay ahead of the industry curve hasn't always worked out so well at here at IMS, but we're trying it again with this change. We abandoned the MSP model before it even really got off the ground in favor of a more strategic, less co-dependent approach to providing guidance to clients... and that remains my bet on where the industry will ultimately go. In that way, it jibes nicely with Jonathan's perspectives on software development consulting: the result will be small, more specialized firms... although probably fewer of them.

07/13/19 SW Edits: Spelling

We are doing a little bit of that around our business model as well. This week, we are rolling out a new website: AgileOperations.net

To go with it, we're introducing a new service specialty (or rather, putting a name to an older one): Agile Operations Consulting.

Agile is a concept that has existed for quite a while in the software development world, long enough that people are starting to get sick of the term and what was once seen as radical and contrarian is now simply becoming mainstream and unworthy of special appellation. But outside the occasional dalliance with the coding community, it hasn't seen much use in the world of Information Technology (IT itself being a monicker which is fading as technology becomes ubiquitous and those using it are decreasingly specialized in the function).

For some time now, we here at IMS have seen the value of many of the precepts informing the agile development movement, and have sought to incorporate those philosophies into our planning and operational consulting engagements. It's been a rough road, in no small part because the concepts are so foreign to many clients. And yet, they should not be; for Agile Development itself is little more than an adaptation of lean manufacturing to the software world, and lean is hardly an unfamiliar idea to most business people (and certainly not to any business school graduate). So while we have been implementing our projects imbued with these philosophies, we've also decided that it's time to start educating people about them. I wrote more on that subject at my other blog, here.

It's been clear for a while now that the field from which we sprang, managed services, was doomed to consolidation and obsolescence. It's too easy to provide services virtually; MSPs are a great deal for customers now, but the same thing that makes them a good deal (specialization and economies of scale) makes smaller, local shops vulnerable to larger national organizations. We're already seeing some of this with HP, Dell, and Zenith Infotech essentially absorbing local IT shops to put a familiar face on what is actually a large, impersonal, distant service. It's cheaper, of course, as the economies of scale are greatly expanded; but it's also considerably less profitable for the local services. This trend will only accelerate, and in my opinion it's not a great business to stick with.

So I've been looking, for nearly a year, for viable alternatives. The fact is that these economic conditions, coupled with industry trends, will almost certainly result in the next ten years or so with a contraction in tech jobs. No one wants to say it, but outsourcing, virtualization, and other efficiencies are going to hit the technology job market just as hard as steelworkers or auto plant workers. My goal is to position IMS to avoid that pit by finding the next important and desirable thing in the industry. And I believe that this is it. Techs and outsourcing companies and cloud platforms may be a dime a dozen in five years; experienced consultants who can tell you how to use all those things together easily to improve your business will still be valuable. And agile operations is a path to achieve that.

Regardless of the motivation, agile ops consulting is now officially in our toolbag. Follow along on the AgileOperations.net site for further examples, musings, and articulations of the concept.

If you want to find out what the next big thing in any given field is going to be, find the people who are currently making money in that field, and listen very carefully to what it is that they are complaining about.

I had the opportunity to go to a demo put on by Zenith Infotech recently for their new cloud computing initiative (everybody has got one, it seems) which they are calling BoxOffice or Datacenter as a Service (DaaS) at the low end, and Virtual Private Data Center (VPDC) at the high-end. These are the things that my fellow attendees, mostly SMB-focused IT consultants and service providers, were complaining about.

The technology basically allows the virtualization of the average SMB network into pay-as-you-go cloud processing utilities or commodity on-premises hardware which functions as a blackbox of storage and re-purposable processing power. It's fully capable of deployment in a mixed environment, for clients who still need significant desktop processing (graphics-intensive and similar functions are good examples of these; network bandwidth still isn't quite there yet to support virtual desktops handling these tasks) but those needs are becoming fewer and fewer. On-premises virtualization for the SMB has been a tough nut for resellers to crack; the computing resources and administrative overhead have been hard to sell. ZI is abstracting this into the MSP level or above, so it's not a matter of deploying infrastructure at a single customer, but instead of leveraging their backend infrastructure for thousands of customers. The cost advantages are obvious.

ZI already offers some significant service outsourcing products, and they support re-branding for their partners, so you may already be using their services if you work with a Managed Services Provider (MSP). (If you don't already work with an MSP, what are you waiting for? Go find one, it's the best way to avoid getting nickled and dimed to death for PC support apart from going back to pencil and paper.) In the MSP gold rush, they have been the successful shopkeeper selling picks and shovels to the eager prospectors.

Zenith Infotech sees the MSP market contracting, and using existing small providers as resellers of cloud technology is their way of making the leap. This isn't a new strategy, or a poor one, by any means: it's a great way to expand your sales force without paying anyone to do so, and Microsoft has used it successfully in the SMB market for decades now. Microsoft, however, has proven slightly more adroit at skating around the harsh realities of the new world as it applies to their de facto sales force, however. Because what ZI was pitching seemed to scare the heck out of the MSP reps who understood it.

What they had to complain about were not the technologies themselves, which most of us geeks can agree are pretty cool. Instead, it was what the deployment thereof was going to do to their profit margins. The single most contentious Powerpoint slide the presenter put up showed the cost breakdown between a traditional on-premises server and workstation deployment (the predominant model today) billed under a flat-rate MSP contract, and the same capabilities deployed in the BoxOffice model. The slide was confusing because in some senses it presented apples and oranges, but a few of the crowd worked it out pretty quickly: while the BoxOffice model could save the customer nearly 50%, most of that 50% was going to come out of the reseller's pocket.

There was considerable discussion of this point, with some people just flat-out unhappy about it, and others claiming that the market would continue to expand so their businesses would continue to grow even at lower profit margins, but my take was that just about everyone there was clinging fearfully to their trusty shovels even as Zenith Infotech showed them the backhoe of tomorrow.

IMS pulled back from the MSP business about a year ago, in part because it was hard to see the future in it. The consolidation which is now occuring was obvious even then; large providers have economies of scale which small operations simply cannot compete with. The market will drive toward commoditization; some buyers will stick with the small mom and pop local shops for the same reason that some buyers still pay higher prices at the neighborhood deli instead of shopping at Safeway: familiarity and loyalty. But as with the grocery market, most IT shoppers will wind up at the chains because they are more cost-effective.

What will always be golden is good advice. The technology may become a commodity; how and when to apply it will continue to be a matter of judgement and perspective, and someone with the right experience and expertise can continue to be invaluable in helping decide where to spend and where to save on technology.

This is still bad news for MSPs, because advice doesn't require the time or infrastructure to deliver, and it scales differently than their existing businesses are structured to handle. It's easy to find someone who can troubleshoot Windows; it's hard to find someone who can clearly articulate virtual desktop deployment advice to customers. The market will contract, and a lot of existing MSPs will go out of business the same way that many local computer stores did when Dell and HP started selling direct to customers.

None of this should be construed as a stab at ZI or at MSPs. I was suitably impressed with the BoxOffice model; I think it's a great approach for many small businesses and I intend to seek out a reseller of the technology to refer people to as soon as it becomes available and stable. But it's a warning sign for MSPs who only have a single platform in their bag of tricks. You're going to have to fight hard to hang onto your clients in the coming years and you had better be prepared to accept lower margins in the process. As the presenter said, "It's time to make hay while the sun shines." There are clouds on the horizon.

Ah, the glory days... I thought they were gone, washed away by the grim new realities of the recession. All the fun and excesses of big-time consulting seemed to be but a distant memory.

But then I happen upon this tale of consulting triumph, and I see that the old slash and burn approach is alive and well in the big iron world of SAP implementation. Anytime you can raise the blood pressure of those poor mortal client staffers, stuck in their dull, dead-end, nine-to-five worlds, you are living the consulting high life... like a minor deity, you are impervious to the cares of those who will look upon your works afterward, and can only laugh at the furious imprecations they launch at you (or more frequently, into the aether, as their fear precludes direct confrontation).

More seriously, that post, and a number of others on that blog, are great examples of how not to do things, both as consultants, and as clients. There isn't a lot of clarity on who is running the implementation process, and apparently whoever it is doesn't have good controls in place on what is happening, because like half of all IT projects, it sounds like it is dragging on over-time and over-budget.

Reading a blog post doesn't give you an objective picture of the scenario, of course, but you can tell things aren't going well. As the author mentions along the way, this isn't necessarily out of line for SAP installations. Which isn't a bad reason for avoiding such traditional complicated mega-projects in the first place. SAP itself may or may not be the right answer, but the massive, traditional implementation scheme that most SAP consultants bring in the door is like flipping a coin insofar as how your transition will go. There are as many failures as successes; there is something wrong with a process that offers such low odds and you can't necessarily pin it on either the clients or the consultants. It's a problem with the process they have both bought into.