Tuesday, May 11, 2010

Will Cloudsourcing Change the Face of Consulting?

Some say a perfect storm is brewing that will change the face of consulting forever. It is called Cloudsourcing and it is the combination of: Cloud Computing + Online Collaboration + Inexpensive labor + tightening corporate purse strings =

• More Offsite (and offshore) consulting
• Shorter and less expensive IT and consulting projects
• More pre-built deliverables such as software applications
• Commoditization of IT in general

Could this be true? Will we all be working remotely to deliver our client projects going forward? Maybe someday, but not anytime soon. Sure there will be projects that fall perfectly inline for Cloudsourcing, such as Small/Medium size businesses who loathe infrastructure, software firms who are well organized to hire and on-board offshore, and high-tech companies who have already accomplished manufacturing outsourcing.

But,I challenge that there is still and always will be a strong need for more soft skills then hard, more white collar than blue, and more human elements that can never be replaced. Now, I'm not blind and I clearly see there will continue to be a push to off-shore more IT labor to save costs, and I think this works well when projects are in well-defined “Development” phases that software engineers can work remotely, effectively. However, here are reasons I believe Cloudsourcing will be a slower adoption than some are predicting:

• There is still too much confusion with Cloud Computing among IT departments. Face it, there are very few cloud pioneers, and most organizations are taking a “wait and see” approach. Most of the Fortune 2,000 and Federal government agencies, who are the ones who spend the most consulting dollars, haven’t jumped onto the Cloud bandwagon quite yet. Although a lot are investigating and interested in Cloud because they know this is the future of computing, they haven’t committed yet and probably won’t for a couple more years. Some say the pioneers are the ones with arrows in their backs, and this is why a lot of CIO's are letting their peers forge into the Cloud before they are. Cloud is inevitable, it is certainly they direction our industry is moving; it's just moving a little slower than some predicted.
• It’s hard to see eye to eye when you can’t see face to face. I believe it was Hilton Hotel’s marketing program that launched that slogan. And it’s too often true. There is too much human element in IT projects that cannot be accomplished through teleconferences, online collaboration, email, or other non-human mediums. It reminds me of the "Jay Cutler Conference Call Fiasco" that any Bronco's fan remembers. You have to meet people in person, and that is why there are so many consulting road warriors out there.
• Think about it…how many of these initiatives can be successfully completed without face to face meetings: Requirements Management, Project Management, Enterprise Architecture, Governance, Technology Insertion, Portfolio Management, Program Management, Communication Management
• Off shoring of Operations, Maintenance, Sustainability, Support, and Administration to me makes a lot of sense. However, off shoring innovation, business requirements, prototypes, and new ideas to me seems risky. I’ve always claimed off shoring is a delicate balance of quality vs. cost and anyone who has been on an offshore team knows how well the product or deliverable needs to be specified before handing over to the offshore team to develop it. Also, I've experienced off-shoring may be cheaper, but it's also slower so anything that is requiring rapid market penetration, flexibility to change on the fly, or time sensitive may not be the best candidate for this model.

Ultimately, we will see minor shifts to more cloudsourcing type models, but certainly no wholesale shifts. Small and Medium sized businesses are prime candidates and are already beginning to embrace this model. It makes sense for them. It just doesn't make sense for the typical Fortune 2000 corporate culture, especially for their strategic initiatives. Don't get me wrong-- I'd like to see the model work and spend less time in airports myself, I just don't think corporate culture is ready for such a monumental shift in consulting models anytime soon.


  1. The Economist hadd a piece on this last week titled "Online services that match freelancers with piecework are growing in hard times":


    massively relevant. enjoy.

  2. join beta invitation to the future of cloud sourcing http://www.cloudfactory.com/