NOT COMMODITY

Organizations that treat Information Management services as a simple commodity, the value of which is solely determined by its price, are missing something, and are likely not getting everything they could be out of their Information Management infrastructure.

‘smarter’ organizations understand cost is an important component of any purchase decision, but ultimately the value received in exchange for a given cost is what is truly important.

Cost, Value

Every responsibly managed organization (and I would dare say every organization interested in surviving and thriving in the long term) thinks about and actively manages costs. In fact, I believe effective cost management is an obligation employees have to the organization’s stakeholders – be they shareholders, taxpayers, or others. At the same time, the more progressive, and I would argue the more successful organizations, don’t take an overly simplistic view of costs. These ‘smarter’ organizations understand cost is an important component of any purchase decision, but ultimately the value received in exchange for a given cost is what is truly important. Of course, measuring value is not trivial. Value is truly multidimensional – in the realm of Information Management it would certainly include the incremental revenue or savings generated by the initiative, but also time-to-market, usability, quality, extensibility, and many other factors. This can make it challenging for companies to compare the offerings of different vendors. We can easily compare the cost, but what about the value?

Solutions & Software

As those familiar with Adastra will know, Adastra helps companies leverage data and information assets to achieve operational, tactical and strategic goals. We do this through three core offerings – Solutions, Software and Services.

In the first two categories of Adastra’s offerings – Solutions and Software – the questions of value and evaluating competing offerings is, while not quite trivial, relatively straightforward. Typically, for a given solution or software product, the organization evaluates how well the solution (or software) fits its needs. If there is good alignment, the organization determines if the value offered by the solution represents a good business case. If there are multiple vendors with a solution that aligns well with the organizations need, the vendor with lower pricing may be successful. But in most cases organizations are focused on the ‘best’ solution (best being the one that meets the organizations requirements). They understand the folly in buying something ‘cheaper’ that isn’t going to truly meet their needs.

Services

In the case of Services, there is a disturbing trend where organizations are considering Information Management Services as a ‘commodity’. Unfortunately, the wisdom that organizations apply when evaluating the value of Solutions and Software is often not evident when it comes to Services. But Information Management Services are NOT a commodity. A commodity is a term meant to describe a good or service without qualitative differentiation. A one ounce bar of 99.99% pure gold is the same regardless of where it was mined and who produced it. A consumer expects to pay the same price from any supplier, because the products are the same and more importantly, the value is the same. This thinking, when applied to Services, leads to measuring value in cost per unit time (typically dollars per hour). For a given category of services – let’s use Data Integration Development as an example – some organizations believe $90/hour is better value than $120/hour or $30/hour is better value than $45/hour.

But this makes a very bold assumption – a given Data Integration Developer produces the same output value in a given hour. This assumption is rarely true, even if we look at what is typically considered a ‘lower’ skilled service. Anyone who has hired house painters realizes that some painters work faster than others (different output per unit time). Some have higher quality (is the ‘cut’ between the trim and the wall perfect, or does the wall paint bleed onto the trim in places). Does fixing that require rework, meaning the total number of hours has increased? What about preparation of the wall surface and application of primer? Will the paint job last for ten years, or will it require painting again in three? Did the painter cause other problems, such as painting over smoke detectors or electrical outlets? How much does it cost to bring an electrician to fix that? Just looking at these few factors (and there are many more), one can quickly realize that the $40/hour painter may not provide better value than the $60/hour one.

So let’s return to the world of Information Management, and the Service performed by a Data Integration Developer. This is an interesting example from a number of perspectives. First, this type of work typically represents a significant portion of the Service component of any Information Management project. Secondly, it is a type of Service which organizations often describe as a ‘commodity’ service. And lastly, it is interesting in that the work performed by Data Integration Developers can have a dramatic impact on the cost and value of an Information Management initiative.

With all due respect to house painters, [an Information Management service] is a more complex task and requires far greater application of judgement, and involves more decisions than house painting.

I want to share two recent examples from Adastra projects where the work of a Data Integration Developer had a material impact on the cost/value equation. But first let me describe what a Data Integration Developer does. Most typically, the person develops code (typically using a Data Integration software tool) that takes data from a set of tables or files, integrates and transforms this data based on a set of business logic described in a technical specification document, and populates another set of tables optimized for analytical use. On a given project, the Data Integration Developer may interface with Business Analysts, Data Modelers, Architects, Designers, Quality Assurance Analysts and Project Managers. With all due respect to house painters, this a more complex task and requires far greater application of judgement, and involves more decisions than house painting.

The first example I have that demonstrates the non-commodity nature of their work relates both to reusability, and the strength of Adastra’s team. For a Financial Services customer, one of our Data Integration Developers was working on a transformation, and was unsure about which approach to use. She took this to the team lead for advice, and the team lead decided to involve one of Adastra’s Senior Solution Architects who is a leading global expert on the client’s Data Integration tool. Now, consider this is a resource that the client isn’t even paying for, and the client may never even know the person was involved (unless of course it was appropriate based on confidentiality and security considerations to disclose it). But the three of them (the developer, the lead, and the senior architect) considered the pros and cons of the best approach. As it turned out, because the developer did a little bit extra coding work as a result of that discussion, the other members of the development team were able to reuse her code on similar portions they were working on. The team lead estimates that this decreased the total development effort by at least 15%. Sort of like a painter with a roller and brushes vs. a painter with just a brush.

The second example is from a project for a retail customer where the Data Integration Developer was performing coding and came upon a specification that they thought might be incorrect. The specification was very clear (though dealing with ambiguous or unclear specs is another area which often arises and demonstrates the non-commodity nature of our work), but our developer noticed that the way certain cases were treated was different for this one item than for the four similar items throughout the specification. The developer decided to check with the Business Analyst just to be sure, and it turned out that the one item was correct, but the four other items were wrong. The requirements had changed and should have been applied to all five items, but the client only updated one of them! So, what was the impact of the developer applying critical thinking and initiative and questioning the specification? Had the developer coded to the specification as it was, it would have certainly passed unit testing, and possibly Quality Assurance (as the test cases would have looked to confirm the logic as per the specification), and would have only been caught in User Acceptance testing or perhaps even in production. Ultimately, whenever it was detected, it would have needed fixing. The cost to remediate the ‘defect’ at that point would have been hundreds of hours, a delay to the project schedule, and dissatisfied users. A scarier possibility that it may have gone completely undetected during testing, resulting in business decisions being made based on incorrect information.

We have really only scratched the surface with these two brief examples, but I think it’s clear that Information Management Services DO have qualitative differentiation. They are NOT commodities. Adastra’s Services are often not the lowest cost as measured in cost per unit time. But we are very rarely (if ever) bettered as measured by value generated per unit time or value delivered per dollar of cost. Adastrans are smart, innovative, and hardworking, and are passionate about the work they do and the customers they do it for. Our expertise and methodologies enable us to deliver exceptional work under the most demanding of circumstances. I challenge organizations to recognize that cost per unit time is a failed metric, and embrace Adastra’s unbeatable value proposition.

it’s clear that Information Management Services DO have qualitative differentiation. They are NOT commodities

A couple final thoughts. While this example focused on a Data Integration Developer, the same is true of other Information Management Services roles such as Business Intelligence Developers and Quality Assurance Analysts that some argue are commodities. They aren’t commodities, and there are similar examples that demonstrate why that is the case. Finally, the commodity argument is most often applied to offshore teams, but I believe this is primarily a function of out of sight, out of mind. Adastra Bestshoring offers unrivaled value. If your organization isn’t already utilizing this service, what are you waiting for?