FRAMINGHAM (05/01/2000) - I recently interviewed an IT executive at a major brokerage firm about his company's use of application service providers. He said something I've heard over and over for years: that having an application service provider manage the server for the application we were discussing is a good idea, because systems administration isn't a "core competency" for the brokerage.
We've all come to accept this little truism over the years. Babysitting hardware doesn't add value, so why not let someone else do it? But then I got to thinking: Is writing contracts a core competency? If not, shouldn't we trash our legal departments? Is doing math a core competency? Of course not - so out with accounting! Smiling at stockholders? Ix-nay - fire the CEO!
In fact, if our only mission is to maximize return on capital, let's all just become day traders. Oops! Picking stocks isn't my core competency. I'll have to get my broker to do that for me. And I'll just, um ... uh ... hey! What is my core competency, anyway?
So does it really make sense to say that systems administration isn't a core competency and therefore can be jettisoned? I know many highly competent systems administrators personally. Some of them work at application service providers and others at dot-coms. And right now, those service providers and dot-coms are attracting lots of venture money because they're apparently going to be much more successful in the new electronic economy than their corporate customers - who are too smart and "focused" to get their hands dirty with anything as "nonstrategic" as managing servers.
Ready to buy a clue? In the world of e-commerce, all information technology - including infrastructure management - is inherently strategic. There may occasionally be some ostensible short-term economic logic in leveraging a service provider's capabilities. But there's no long-term competitive advantage to be had by using the same application service provider, the same managed network service provider and/or the same PC outsourcing company as everyone else.
Here's where the real problem arises: When you turn over your technology operations to someone else, you deplete your staff and sacrifice the in-house expertise that is the wellspring of all IT innovation. In attempting to reduce monthly costs, you mortgage your future - plain and simple.
I don't recall any of the big data center outsourcers going to their clients and saying, "Hey! We got a great idea! It's called a Web site, and we can come up with a demo for you over the weekend if you want." That's something only motivated, well-trained, mission-conscious IT employees do - not service providers whose sole mission is to deliver cookie-cutter, status quo technology so they can maximize their own profits.
Of course, motivating, training and retaining a great IT staff is a tough job.
So if you don't want to do it, I understand totally. Just don't use pretty language about core competencies to justify complacency, short-term thinking and lack of vision.
Here's another revelation: There's actually no such thing as "skills." There are only skilled people. And people - as inconveniently human as they may be - are what make any organization a success. Leading them, nurturing them and maximizing their potential is any company's real core competency.