When tools are on the cloud, companies have to make money rain

Cloud computing is the new buzzword, at least untill the next one comes.It’s a reality we can’t ignore, even if it’s more about a question of place than about technology : it’s the place where things happen.

Let me explain. Consider someone who is able to work alone and must work this way. It’s the efficient model that was proposed by Taylor decades ago. No one needs nobody else and has to repeat the same task endlessly. It’s easy, in such a context, to know where things  happens : they happen at the individual’s level and it’s easy to calculte in which proportions each one contributes to value creation. Tools are on the groung, beside the person that operates them without any kind of interpersonal interaction. Everything’s so easy in a perfect world.

But one day the perfect world breaks into pieces. Companies realize than a worker can do nearly nothing on his own, that he has to exchange with others, to things with them. Worse ! They have to innovate, find answers, fix problems togethers. And in order to do that, they’re provided with tools : phone, email, forums, wikis, blogs…

For decades business have ben ran following a cost driven approach, trying to answer these questions : who’s doing what, for whom, how much does it cost, how much does it bring in… I let you answer these questions today. Take also into consideration that the “old” model supposes that each player operates appart from the others and can be evaluated individually, that his performance is not impacted at all by his colleague’s…. Headache in sight…

• Who does ? Not only the one who uses the found answer but also all those who helped to find it.

• What ? because asking “who does what” in an unique sentence is now a nonsense. The “what” has to be definined according to the problems of the say. We can know “why”, it’s the assigned objective, but the “what” changes every day.

• Where ? In phone wires, email boxes and on the intranet.But physically where ? It depends… Where is the server ? Ah ? Value is created by the IT department ? Not at all but it provides the tool to create value.

• For whom ? For the one who needs the information to do his job, what can also be understood as “satisfying one internal or external client’s need”. But it’s fluctuating. And not exhaustive. In a state of the art knowledge oriented organization, everything must be reusable by those who’ll face, one day or the other, the same problem.

• At what cost ? It depends on the time it will take. 10 minutes, one day…

• For what gain ? le price a service has been sold to the client, the time that will be saved in the future if what has been done is capitalized. So it’s variable and doesn’d depend on the time that is spent.

Very confusing isn’t it ? Can do better in terms of traceability.

Conclusion ; there’s really a value taht is created but it cant be analyzed according to the classic methods.

Because it’s impossible to link up value with entities, people activities, the “old” model il still applied. It allocates the whole benefit (both financial and moral) of the operation to the person who uses the result, who needed it, even if he did only play a minor role in what was done. Nice for him.

Therefore the others are not considered as creating value and the time they spend, the par excellence cost measuring unit, is wasted time. Especially if their manager  did not take direclty any benefit from this cross-organizaion informal activity and feels he’s paying someone who’s working for another business unit. “Since I pay you on my budget I owe your time and have to make it 100% profitable…for me”. In a few words, even if companies want their people to collaborate, things are done in order to make spontaneaous collaboration and support an economic nonsense.

If only the manager could claim part of the merit for his unit, he would be more comfortable with that because it would help him to show the link between the use of his ressources and a concrete benefice. And, globally speaking, collective performance won’t be considered as something that arm indivual evaluaton.

In brief, if value is created on the cloud and businesses want virtuous network dynamics to emerge, they have to wonder of to turn clouds into rain in order to sprinkle all those who participate in order to demonstrate the link between the benefits of cloud activity and ground measured value.

This could be sumed-up by “clouds are full of value but accounting needs to be fed by rain drops”. So it brings collaborative issues to a question of costs and value allocation.

Everybody has heard about the famous Google’s 20% of time dedicated to innovation. Saying people have to spend 20% of their time on personal projets has a bug impact on management and ressources using. It’s not the same if you know you have to make 100% of your team’s cost profitable or if you only have to have a profitable use of 80%, the rest belonging to the company as a global organization.

Note that’s something that has been done for ages for machines : it’s called an allocation key and it’s nothing more than an arbitrary allocation of its using for various purposes. It allows not to make a single unit support the whole cost of a shared ressource. Without this concept, many globally profitable investments would be cut because they would look like local nonsenses. An allocation key applied to people is what may help businesses to have a better financial reprensentation of the collaborative reality, so it’s what should be used to pilot this new kind of organization, making it accounting compliant.

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Bertrand DUPERRINhttps://www.duperrin.com/english
Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler

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