Joseph Blass, CEO, WorkPlaceLive
Conflicting Incentives in the Workplace
Warren Buffett, the American business magnate, said in a recent shareholder letter relating obliquely to corporate bankers ‘advising’ on mergers and acquisitions, “Don’t ask the barber if you need a haircut”. Of course he will say you do.
Whilst business managers rely on their employees and advisors for professionalism, expertise and objectivity and want to believe that they are always fully aligned to doing what’s best for the company, this isn’t always necessarily the case. Often employees have their own agenda. This is known in economic theory as the ‘principal-agent problem’.
Understanding the Principal-Agent Problem
This refers to the situation when the ‘principal’ or employer has one goal but an employee or advisor, called an ‘agent’, may have a different agenda altogether. For example, sales agents might work towards maximising their commission rather than the company’s profit. Ideally, these two objectives would be perfectly aligned, but this is not always the case.
This phenomenon is an intrinsic element of human nature. As long as managers are aware of this possibility, it becomes part of their parameters when making a decision. A business manager realises that the corporate banker or the sales person has an agenda just as the local barber has one.
The IT Department Dilemma Explained
However, when it comes to IT, most businesses rely for expertise either on a company employee or an outsourced provider. This expert recommends which hardware to buy and where, which systems to use and how they should all be integrated, deployed and ultimately supported.
Joseph Blass
But the IT manager may have a built-in principal-agent problem if the agents feel that they might actually be doing themselves out of a job by simplifying the IT. Under these circumstances, they will not consider certain IT solutions, even though a particular solution may be best for the company.
If IT suddenly became smooth to operate, let’s say as easy as the company’s electricity supply where all one needs to do is flick on a switch to make it work, where would that leave the IT manager? Would anyone ask the ice delivery man what he thinks about buying a freezer? Would anyone ask a video shop whether they’d recommend Netflix? Not very likely.
Yet, business managers sometimes baffled by IT jargon still ask on-site IT guys for their advice about Cloud solutions that might put them out of a job. Luckily for the IT people, Cloud can mean so many things that they can actually recommend some form of Cloud, thus giving the business manager a false sense of comfort that the business is actually adopting the latest technology.
However, it is likely that the IT people aren’t necessarily presenting the business with all the options available. Some Cloud solutions are partial and still require local servers. If a company has some software packages in the Cloud, its data held locally, backed up to another Cloud provider, and its email on Gmail, the IT provider has created a complicated eco-system that will safeguard his job for many years with the promise of future on-site visits and constant hardware upgrades which can be very costly. Good for the IT guy! But is it the best solution for the company?
The Shift Toward Utility-Based IT
A better option might be for companies to purchase IT as a utility, like electricity, and just pay a monthly per-user fee.
Opting for a fully managed cloud computing service can mean the end of expensive and disruptive hardware upgrades, inefficient downtime or problematic delays when requesting the simplest of tasks, such as setting up new users. Companies will receive one simple invoice for services, including email and their usual Microsoft Office suite of services, thus adopting a ‘pay for what you use’ pricing model.
What Is Hosted Desktop in the Cloud?
A Hosted Desktop service through the Cloud is an IT solution that many businesses are adopting. A Hosted Desktop unlike other Cloud services, doesn’t just backup to the Cloud, but does everything in a secure Cloud environment, including the computing itself.
The benefits of this service include cost savings and allowing employees to work from anywhere and on any device. Employees have access to their usual work desktop – with exactly the same look and feel, as well as their emails and all their business applications using a web-enabled device such as a smartphone, laptop or tablet. The service works well through the 3G network and can offer a corporate-grade computer system at any location with an internet connection with existing 3G, and rapidly developing 4G services.
The provider performs daily data back-ups for its clients; this date is stored securely in a corporate-level datacentre with backup power and generators, cooling, fire suppressant systems and 24-hour security, making it more secure than an in-house server set up could ever be.
The main benefit, however, is peace of mind. With a Hosted Desktop, businesses will enjoy a simple eco-system. Imagine this scenario: no need for weekly local visits or laptop formatting, no need to consider servers or cooling, or backup or security, just one simple, low monthly bill for all your IT needs.
Making Informed IT Decisions
So would every IT expert recommend every solution? Probably not. But it’s important that business owners be aware that any objection they have might be tainted by an understandable, and perhaps subconscious, personal interest.
And you don’t have to be a technology expert to choose the right IT solution, so don’t be bamboozled by acronyms or tech-babble. Just as you can choose a car based on your needs, such as fuel consumption, comfort, cost and reliability without having to understand the workings of a combustion engine, so, too, a business manager can just ask for seamless, secure, capex-free IT. He doesn’t have to be an IT guru to work out that such a service already exists.
