Posted by tggokul on November 20, 2006
I have had opportunities to work in Products ( US and India) as well as organisations specializing in Services (India), and I think from a technology point of view they are not very different. I got an awesome chance to work in IOS ( Internetworking Operating System) of Cisco when I was in a Servicing company and I know people who have had monotonous jobs when they were in certain product companies ( Luckily for me I always has a great learning experience in all the organizations I have worked for till date, from a technology point of view). So the question is does it really matter which kind of business model the company you work for follows, as long as the inherent technology excites you?
Now, I am aware that company valuations are different in each of the above models and if I were to own equity of two companies, one following the servicing model and the other the Product model and they are making the same revenue, I will take the latter, no doubt about that. But then, this again is purely from a monetary point of view and for this blog I will talk entirely from a technology point of view.
So even though I am against cheap body shopping, I am not entirely against the servicing industry ( unlike a few passionate friends of mine who think outsourcing curtails innovation). It sure helped me further my career ( mentionCisco on you resume and see the results) and I am not complaining. But the question that needs to be asked is what is it doing for the organization?
Take for example, Servicing Organization A which has people with expertise in a certain domain. What prevents Organization B from buying out every person in Organization B and service the same customers in that domain? There is no IP ( intellectual property) involved and all that is needed is loads of cash. So I believe nothing prevents the IBMs and the Accentures of the world from taking over Professional Services in any domain they choose to monopolize. The only reason they don’t do is that they are too proud/undermanned to take small accounts and hence the smaller players survive on these orders. If IBM says that it wants to be opportunistic, and take every order from a 1$ to 1 million dollars, I don’t see why they can’t and destroy these small players.
This is why I would be uncomfortable if I was a CEO of a medium/small enterprise Servicing organisation. I would become dependent on ‘People’ and their expertise rather than ‘Technology or IP’ that comes with products. And the only reasons these level companies survive is because the likes of IBM don’t care for the small orders. A 50,000$ is nothing for IBM, it could be a huge thing for a 200 member company. This is my theory.
Now, I had a discussion with a colleague from the marketing department on this and she had an entirely different take on this. To be fair, I am going to represent her side of the arguement as well. She says, if IBM were to get people from Organization A to ramp up their operations, the employees would necessarily not be the same smart people as they were in Organization A. The DNA of a company and its culture would define how well the employees can produce results. So she says if Organization A has a better work culture than IBM, it wouldn’t affect Organization A if the person moved from Organization A to IBM because the production would not be the same. That is why IBM does not get into all domains as of today and has nothing to do with money.
This is where we agreed to disagree. I believe if the person switches jobs for the right reasons, his performance in Organization A or B would be completely exclusive of the work culture of either organizations. If I were a CEO I would rather trust the patent document, than the brains behind it.
What are your thoughts?