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.

Compared to ERP, SOA got Unlucky

Flash back to the 1990's. Organizations were spending triple-digit millions of dollars to implement ERP systems. I worked for a Big 5 consultancy at that time, and we were closing weekly $50M deals for being the system integrator on ERP implementations. Times were great! The promise of a new era was there. The cure for "IT cancer" was solved through ERP, right? Not exactly, but CIO's were spending massive amounts of dollars and willing to wait 2-3 years to see slow-moving ERP implementation projects finally hit the Production-ready datacenters. Servers were ordered in the hundreds and rolled out without a second guess. And what were the results of the ERP-era? At that time, that didn't matter too much, as everyone was convinced this was all we needed.

I certainly can't argue that ERP systems were or are a bad decision-- I think ERP is a necessary evil that most organizations need to have, simply to get the benefits of the business rules, data collection, server-based and distributed computing, and consolidation of capabilities. But, ERP certainly didn't solve the promises of being the entire IT Universe (maybe, just the Master of the Universe?). No one can argue that an IT dept only needs an ERP system, hence the need for SOA to help connect the entire IT portfolio. The challenge we face today, is the timing and new attitudes that are driving today's IT projects compared to those of the 1990's.

Flash forward to 2009. SOA projects are getting short leashes-- CIO's are asking for quick results and not willing to make large investments on SOA until they are very confident that the results will be there, quickly. If the results aren't near immediate, death to your SOA project-- SOA projects have been cancelled, and some analysts are claiming SOA is dead. So, why is this happening? Why didn't SOA get the $100M budget and the 2-3 year patience of CIO's from the last decade?

Before I hypthesize on the reasons for the IT spending shift, I did find it necessary to mention I have yet to meet a prospect or customer who diminshes the value of SOA-- there is universal agreement that it's something that could benefit business and IT alike. Whether you call it SOA, EA, EAI, business architecture, webServices, process modeling, integration, legacy modernization, cloud-- we are all talking about the same thing and very rarely am I questioned on the value. However, there is a lot of nervousness, trepidation, and lack of funding to do SOA. How can this be?

Well, timing is everything. First, the role of CIO has changed. CIO's are under extreme pressure from the CEO and CFO to ensure rapid results. If SOA had gained traction during the mid-90's, today's issues would not have been a concern and everything would be happy in SOA-land and I wouldn't be writing this blog post. However, back then, we were too busy building today's silo's to worry about connectiong them. Also, the patience and funding has changed over the past 15 years. SOA got unlucky from that perspective. Very few organizations get the "big bang" funding to roll-out enterprise SOA. Sorry SOA, times have changed. There is also a fair amount of confusion and lack of education on SOA. I meet a lot of organzations who don't understand the underlying SOA, fundamentals, principles-- they know they want to connect systems, empower their LOB's, and automate business processes, but they are still confused about SOA. Your not going to invest in something you don't understand, so that is certainly a barrier to championing an SOA project.

So, SOA evangelists, Architects, sales reps, and ISV's we all have our work cut out for us-- our customers tell us they need SOA, but they don't want to spend big dollars. My advice: keep your chin up, keep spreading the gospel on the value of service orientation, and be content on doing small SOA projects rapidly. There is a pot of gold at the end of the rainbow, and if you can prove that SOA is legit and willing to take your initiative one bite at a time and tie ROI to each bite, there is no denying the fact that the SOA Journey will survive.