Go cloud, young man
Several times recently, I've advised personal acquaintances who find themselves between jobs to investigate any opportunities to put their skills to work online. The rationale is simple. In an economic recession, everyone is looking for ways to save money, and therefore the growth sectors are those that help people and businesses do more with less — low-cost supermarkets and fast-food outlets, second-hand and discount traders, and the subject of this article: any online service that strips out excess costs through automation and remote access to administrative and professional expertise.
By and large, online is cheaper because it eliminates all the time frittered away moving information from one place to the next and moving people from one meeting to another. Imagine how much time is saved when a customer looks up data for themselves and then enters new information directly on an online form, instead of having to phone up and ask questions, then fill out a paper form and have someone re-enter that data on receipt. Think how many more people an adviser can deal with if instead of handling physical paper and attending face-to-face meetings, they can just pick up the phone to their client and discuss documents and data they're both viewing online.
That time saved is a huge salary cost that an online provider no longer has to bear. It's a cost burden that keeps prices high at conventional operators. Businesses that transfer custom from their old providers to go online no longer have to pay those inflated prices, so they save money. The online providers still make a profit on their lower operating costs, and as they grow they make even more money. Those cost savings and profits come at the expense of the people who are no longer employed on those wasteful, time-intensive manual processes and face-to-face meetings at the conventional providers. Jobs and profits move from the old providers to the new, which is why I say to my friends, look online for opportunities.
Nowhere is this more true than in the kind of professional work in which most of my personal acquaintances have made their careers — banking, insurance, law, accountancy, sales and marketing, journalism and so on. Yet despite this, most of the people to whom I give this advice completely ignore it, either because they don't get it or they don't want to believe it.
What they don't understand (or refuse to accept) is that the Web has reached a point of maturity where it has now become an effective platform for automating most forms of administrative and professional work. We're just at the beginning of a white-collar shake-out that is going to transform professions and will ultimately reshape our cities as office-based work becomes more mobile and dispersed. It's going to be a scary, disruptive transformation — more on that below — but resistance is futile. This change is as inevitable as the industrial revolution, and the only way to survive and thrive is to understand and embrace it.
The accounting profession provides a useful case study. AICPA, the professional body for chartered public accountants in the US, has been encouraging its members to wise up the Web for several years, and a few months ago it endorsed online accounting vendor Intacct (disclosure: a recent client) as a provider of services to its members through its CPA2Biz subsidiary. Dan Druker, Intacct's SVP of marketing and business development, explained how this changes the way accountants work in a posting to Enterprise Irregular Vinnie Mirchandani's blog:
"Since the cloud makes physical location meaningless, accounting firms can for the first time align labor supply with client demand. They can apply labor from less expensive geographies and can bring talented, part-time professionals back into the workforce. Because they can serve clients anywhere, it is much easier to specialize, providing better career paths for their people and higher value for their clients ... Because the cloud is always on and always connected, both the accountant and their client always share the same financial information in real-time. This allows accountants to become proactive advisors — they are no longer looking at a QuickBooks file at the end of the month or a shoebox of receipts at the end of the year ... For the average mid-sized accounting firm, the business impact of moving to the cloud is, give or take, a 50% increase in productivity."
The posting highlights the beneficial impact of embracing the Web. The computers take over the drudgery, accountants graduate from mere bean counters to become business advisors, specialists can make the most of their expertise, qualified professionals bringing up children or living in unemployment blackspots can rejoin the workforce. And that 50% productivity boost? That's someone's job on the line, either because the firm slims its own workforce or because it wins business from a rival.
In a recent ZDNet blog posting, Tom Foremski encapsulated that productivity effect in this chilling phrase: The Internet devalues everything it touches. In many industries (and accountancy is probably one of them), a 50% productivity gain is barely scratching the surface of what's achievable when this really gets going. Foremski talks in terms of "Internet-based disruptive business technologies" that are "at least 10 times more effective at one-tenth the cost," citing the impact of online classified ads site Craigslist on print classified advertising as the most dramatic among more than a dozen different examples:
"Craigslist's use of Internet technologies has managed to transmute $10 billion in value into $100 million. It's the opposite of the dreams of alchemists — Craigslist has managed to transmute gold into lead. That's what the Internet provides — the means to dramatically devalue an existing industry."
It's a depressing existence these days if your job is selling ads on a newspaper. At my bank, staff at the local branch are error-prone, listless and officious, whereas when I call the online call center, they're sparky, pleasant and efficient. It's going to get more and more dispiriting for people in jobs on the raw end of this trend. That's why my advice to younger neighbours and relatives is to seek their opportunities in the cloud. At least some of my compatriots are taking the advice, according to the BBC.
Some may find it scary, though, as the Web makes it possible to contract work by the hour or minute, eviscerating established notions of job security. In a keynote presentation at SaaS Summit earlier this year, Maynard Webb, CEO of on-demand contact center service LiveOps, talked about what struck me as a brutally Darwinian competition for survival among operators working in the cloud:
"Picture being able to get as good or better results from the cloud as you could from an employee in the cubicle next door. And when your business spikes — or your world melts down — it just bursts up and down. And the poor performers don't get fired, they just fade away."
Webb explained that his workers prefer it that way (for more on the model, read this NYTimes write-up). But it's a huge turnaround from the expectation of a job-for-life that became the norm for my parents' generation in the second half of the last century:
"What we see happening in LiveOps today is that people want to work differently than ever before," said Webb, explaining that they get to decide what hours they work. "They have to be good, but they get to be in control of their destiny, maybe for the first time in their lives."
As this upheaval works its way through society over the coming years, few people are going to feel truly in control of their destiny. Those determined to succeed by embracing the cloud and the Web will have the best chances. In contrast to earlier waves of automation, I suspect those who do physical work will find themselves least affected. People will still be needed to drive trucks and buses, repair homes and automobiles, care for the sick, the elderly and the young. The most affected will be those who shuffle paper, sit in meetings, transmit information and apply knowledge. Their jobs are going to change beyond recognition, if not disappear altogether.