ExO the disruptor!
ExO (Exponential Organisation) will soon be disrupting the outsourcing service provider. Outsourcing service providers (OSPs) have been comfortable with their business model, the ups and downs of the margin rate are now an acceptable part of doing business. But ExOs may not be so easy to ignore or brush away as their disruption will have a long lasting affect. These new business patterns are the external attributes and interface processes that are an integral part of the Exponential Organisations operations.
Exponential Organisation (or ExO) is described by Salim Ismail of the Singularity University as the organisation that achieves a ten-fold increase in performance through “Massive Transformative Process”, “SCALE”, and “IDEAS”. Where “SCALE” is an acronym representing the five external attributes of the Exponential Organisation, and “IDEAS” is an acronym representing the five internal attributes of an Exponential Organisation. Salim Ismail explains the details of the Exponential Organisation in his presentation here.
As mentioned before, “SCALE” is the acronym that describes the external attributes of an Exponential Organisation, in which the letter “S” signifies “Staff on Demand”. A startup would sustain a small core team, and would only hire extra developers on contract basis as and when required. This would make it difficult for the OSP to build a sustained relationship over the long term. The requirements from the startup could be more intermittent and much less frequent thus affecting the OSPs cash flow. Neither is there any reason to assume that the requirements would not vary from a technical and domain perspectives.Even large enterprises will begin to source teams internally to validate innovation, by looking at their own change makers.
OSP the disrupted!
If their past is any indicator to the future actions then the OSPs reaction to the disruption will be predictable and will fail. In most cases this will consist of a combination of creating or improving/increasing the bench process or numbers, slurp more than the others at the milk round, desperately seek resourcing partners, or lastly establish an internal university of centre of excellence. These are all techniques for camouflaging the real problem. The joker in the pack is of course the university or centre of excellence. In fact, the whole notion of establishing a centre of excellence is so misunderstood that wherever it is implemented it has no meaning. And, what about the university, the term is meant to provide a validation to what goes for training in some of these organisations. What is required in place of all these half measures and cover-ups is a root and branch solution that addresses the real problem, and that is the trend towards the commoditisation of the developer which the ExO disruption will accelerate. One should not think or hope that ExO will not happen; it would be unwise to underestimate the ability of Silicon Valley to prophesise the future and then begin to create it.
- If you have not partnered with external resourcing provider then it is already too late, because the cost to do so now will be much greater.
- As noted in many other places before (and here) you need multi-talented resources on your books if you are to have any opportunity of making headway with the ExO types. If you want to provide temporary resources to a startup then you need these multi-talented resources whose feet will hit the tarmac running. There will be very little time to learn in this scenario.
- Agile becomes the operational mantra, but “fail fast” technique unlike its meaning in software development is tied very closely to reputational risk; you don’t get many second chances. With the onset of ExO there may be very little room for long-term relationships. Each engagement will stand on its own merit, the next engagement may or may not materialise for the same organisation. This future may also redefine the relationship of an employee for the OSP. The developer has to appreciate the consequence of the commoditisation of his services, he has to master a few of the skills, and be a jack-of-many other skills.
- The OSP has to adapt quickly to the ExOs integrated process that controls and manages the ExOs external attributes. The OSP has to become much more adept at continuous innovation in the services and resources he provides. His competition now will increase exponentially, since anyone closer to the ExO (as in near shoring) will be in a much better position to bag the business. Off shoring will increasingly become less of an option for ExO types.
- What does all this mean to a developer in a service organisation? The days of 9-to-5 thinking are long gone, as a developer you have to be also a bit of marketer and a sales person. You need to use more than a CV to sell experience and skill. Beside all this, you should also aim to be multi-talented. You should be adept at social networking, use Twitter, LinkedIn and Google+, and follow the leaders in your chosen fields of interest. Always keep your profiles up-to-date. You are not unique, you are one amongst many, so find ways of standing out, differentiate yourself.