Dec 20 ’12
The Expertise Cloud
Companies are increasingly looking to the cloud to solve several challenging business problems, including a desire to reduce their IT costs and time-to-market. Many executives also want to reduce the burden and cost of managing IT. Small to mid-sized companies struggle with this; they can’t afford the full-service IT department that larger companies in major industries can fund. No company really enjoys the challenge of maintaining a right-sized workforce. Layoffs are a management nightmare, followed only by the difficulty in hiring the right people once the balance shifts. The costs are a problem, and so are the psychological aspects. It’s difficult to introduce and maintain a corporate culture of inclusiveness and teamwork with regular cycles of layoffs. Customers also notice this and ask the question, “Does this company understand what it needs to support our products?”
Given early returns on cloud, it’s only a matter of time before savvy companies begin to look at new options for their most expensive resource—people. Large companies still benefit from outsourcing and offshoring relationships, even as compensation differences between employees and offshore staff narrow. Smaller companies don’t usually have that option. Services companies such as IBM Global Services, Tata Consultancy, and others tend to have minimum staffing levels, exceeding the needs of smaller and start-up companies. The contracts are often fixed and aren’t responsive to fluctuating business demands. That makes the traditional route too costly. What’s the best way to manage employee costs while still getting the talent you require?
One option is hiring independent contractors on a project or short-term basis. While that’s feasible for start-ups, or when a company already has a relationship with a few contractors and only needs limited support, the logistics to find, assess, and manage a larger pool of independents is daunting. Instead, the next best way will be the “expertise cloud.”
Extending the concept of the cloud to people, the future will include a network of talented contract workers in an expertise cloud; they will provide services on a project or “length of contract” basis. Expertise cloud providers will gather a pool of domain experts who offer the desired services, creating an offering that’s attractive to freelancers and companies alike. With a price list based on skill level, value and capability, companies can opt for a single person’s service for a week, a small team for a project, or a larger group for a season. The cloud provider could offer benefits, but would definitely be managing the sourcing and payroll of experts. Security and privacy issues would be managed through contracts and bonds. Offered skills might range from a variety of IT competencies to marketing to technical writing and even sales. Neither the structure nor the challenges internal to the expertise cloud offering will be of concern to the companies contracting for these services. All a company needs to determine is what they need and for how long. They would then select the cloud that provided the assurance of a quality workforce at a
price they can afford.
Companies will continue to have a core workforce, scaling up and down as needed with contract expertise, rather than incurring the costs associated with regular cycles of layoffs and hiring. With reliable contracting sourced from around the globe, offered at a known price, companies will have the ability to advance their business goals at much lower cost and risk. In addition, these clouds may cause significant expansion in the labor pool, including retired people with top-quality skills who may not wish to work full-time anymore, but still want to be in the game. A more flexible way of working will have great appeal to many, though not all, including new parents, people struggling with other personal and family demands, and those moving into retirement who would like to simply cut back their hours. Others may create a work year that includes significant time off for personal projects or travel. Working from home or anywhere in the world will have appeal for workers and open the market up for employers. That means a larger pool of expertise to draw from.
The benefits of the expertise cloud are similar to those of the resource cloud:
• Economies of scale. Cloud-sourcing expertise brings the economies of scale enjoyed by larger organizations that engage with big outsourcers to smaller companies, making them more competitive.
• Enterprise-class capability. Most large companies have experts in all areas of the business. Smaller companies require their staffs to multi-task and rarely can afford “best in breed” in some niche areas. Imagine instead getting top talent to design a buzz-worthy social marketing campaign, configure your system software, upgrade your servers, or create your capacity plan. Rent the expertise you need when it makes sense.
• Full cost accounting. Hiring is expensive and new employees take time to ramp up. Cloud experts can hit the ground running with no acquisition cost and no need to train. Cloud employees will probably rarely require office space or equipment; they can exploit the powers of global connectivity to collaborate.
The expertise cloud promises a 21st century win-win for employers and expert workers, powered by global collaboration technologies. Where will it come from? Though one might expect legacy outsourcers to initiate the cloud, expect some new players to initiate it, much like Kodak ceded photo sharing to Facebook. Get who you need, when you need him or her, with the expertise cloud.