Thursday, 4 August 2011

The SI is dead. Long live the Supplier Integrator

Have we reached peak SI is a splendid post by Peter Evans Greenwood about the changing IT world.
On one side of the boxing ring there is the traditional system integrator, on the other side there is a multitude of change agents:
  • Business taking back budget for IT spend from local IT
  • On-demand and on-time (i.e. small) projects rather than "strategic" million-dollar ones
  • SaaS for a quick proof of concept over old-fashioned PoCs
  • Standardisation over customisation (what I call "Shop and Stop")
  • Consumerism outperforming enterprise shop offering
  • Overall decimation of the traditional SI Time & Material model

I dig all that - oh and by the way that last bullet is my own, all the others are my rephrasing of Peter's words. Vendors and system integrators thrive on selling high-priced consultants to implement complex products, with preferably as much customisation as possible. Time is money, as they both rely on billable hours

Of course that all usually gets swept into a comfortable lump sum of a few million, but if you negotiate a "solution" too sharply you'll end up with the "solution provider" flocking your offices with under-qualified, inexperienced and low-priced consultants and being pointed at the fine print when you object - there's always a trade-off

So, where are we heading for? We're heading for small projects rather than large or humongous, on-demand rather than on-supply (where supply points to a fixed install base that has extreme limitations in terms of time and money), and on-value rather than on-promise (sic). That is all supported by Cloud where you can IaaS PaaS and SaaS solutions on a pay-per use basis for anything between a minute and eternity (which is only getting costly after short-term PoC's), new-ware in stead of legacy, and freelancers in stead of system integrators

The IT battle field of this decade will be populated by freelancers or small entrepreneurial companies rather that ye old fashioned SI's, plugging companies into several SaaS solutions at a time. As the software is pretty much standard, so will the timeframe be, and the cost. Customisation? Doable afterwards on the data - requiring excellent knowledge of integration but I'll get to that in a later post

So, is there room for system integrators after or even druing the second half of this decade? No. Or is it? It is. LOL

Having your offices flocked with system integrator consultants or vendor consultants is one thing, but having them flocked with freelancers or SMB's is another. In the former case, you can hold one party accountable no matter what happens, and it all depends on your contract whether that'll be successful or not. In the latter, slim chance: what holds those together? Only the fact that you're paying them

Can and will they drive you crazy? Yes. Will any of those ever offer you a project over Time & Material? No. So what gives you control? Nothing. I see an opportunity for the old-fashioned system integrators there: they can become supplier integrators, a single contractor towards the client, controlling all the diverse parties and solutions and maintaining and guaranteeing fit-for-purpose for the client

Will that 180 or 270 the game for system integrators? Surely so. But it'll keep them in business. Yet it will demand a completely different approach to business as usual, extremely up their risk and demand highly skilled professionals on the technical level as well as functional

The bottom end of the IT market will (and has) become up for grabs. The top end will remain controlled by old-fashioned system integrators if they can make the switch to supplier integrators. As usual, everyone in the middle gets sandwiched

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