The flat world rebound effect?
The late 90s and early 2000 saw the firm trend of businesses embrace flatworld sourcing not only for the classic cost arbitrage opportunities but also more importantly it gave businesses an opportunity to tap into a geographically spread stretched supply chain to source talented human capital around technology services. With this kind of sourcing moving into a mature state operating model, global innovative companies have successfully reduced their technology unit costs for business transactions.
The paradox however is that demand on technology budgets from a CFOs perspective neither seems to drop nor in fact even seem to be flat. The only inference one could make is that demand patterns shows an upward trend reflecting true symptoms of a rebound effect. With no respite seen on the demand for technology, be it the consumer market or for automation of business processes, optimizing supply chains, driving customer experience etc.. combined with technology's inexorable march that support these needs, the demand pattern is no mystery.
So what next? Where is the fountainhead for the next wave of efficiency gains? Is it mainstream technology sourcing from China? Is it about outsourcing of entire business processing + technology infrastructure + services to a "on demand" elastic cloud provided by a third party whose time and space co-ordinates are irrelevant?
While I have no answers to these questions, one thing is for sure - the juggernaut of the flat world rolls on with ever greater might.....
The paradox however is that demand on technology budgets from a CFOs perspective neither seems to drop nor in fact even seem to be flat. The only inference one could make is that demand patterns shows an upward trend reflecting true symptoms of a rebound effect. With no respite seen on the demand for technology, be it the consumer market or for automation of business processes, optimizing supply chains, driving customer experience etc.. combined with technology's inexorable march that support these needs, the demand pattern is no mystery.
So what next? Where is the fountainhead for the next wave of efficiency gains? Is it mainstream technology sourcing from China? Is it about outsourcing of entire business processing + technology infrastructure + services to a "on demand" elastic cloud provided by a third party whose time and space co-ordinates are irrelevant?
While I have no answers to these questions, one thing is for sure - the juggernaut of the flat world rolls on with ever greater might.....
Comments
I am not sure whether it is the rebound effect that is driving the need for more expenditure on IT or whether the hapless CIO can never realize the full potential of the IT investments already made and is forced to chase the latest technology buzzwords (e.g. mashups, web 2.0) in order to justify his or her existence. I have seen many organizations use no more than 10-15 % of the capabilities of the software platform on which they run their business.
http://www.walkersresearch.com/BusinessInformation.asp
Posted by: Shawn Mills | June 25, 2008 7:49 PM