Saturday, May 16, 2009

Strategic Consultancy Reconnaissance*

Forward Opinion Base Sollom's (FOBS) first mission: Strategic Intelligence.

In combat, a commander tasks units to gather information from the "battle space," so that the commander may make informed decisions and take calculated risks based upon their assessment of the enemy's known and perceived capabilities and intentions.

Before FOBS was even set up, I started gathering strategic information on Seattle's "business space." To borrow from a must-read book for business leaders, "The Mission, The Men, And Me," by Peter Blaber (Berkley Caliber, 2009), I listened to the people on the ground - I gathered intelligence on the patterns, trends, assessments, and guesses from Seattle's corporate leaders and lieutenants. What's my strategic assessment of their collective strategic assessment? They need more information.

What information do they need, and why? Can someone start a business, or change the direction of one, with new strategic business intelligence - can they simultaneously conduct business intelligence analysis and business operations? Yes, and the trend, the pattern, that is emerging is strategic third party technology reconnaissance (STPTR).

STPTR is where a third party vendor technologically integrates vertically and horizontally into their first party host corporation. You read business technology content describing Customer Relations Management (CRM) or Communications as a Service (CaaS). This is the technological equivalent of Big Four Accounting (or Big Three) consultancy - but with more intelligence and operational integration.

Consider a public corporation wants to modify or create a business line. Much like government, they outsource to a third party contractor/consultancy. That third party consultancy, in the emerging technology space, now offers content creation, human resources facilitation, marketing and branding, and legal management of the above. The third party consultancy becomes a division of the first party company.

Thus, technology becomes the fulcrum upon which business intelligence is gathered, stored, and disseminated. Although business intelligence is not new, the integration of bundled consultancy services is an emerging trend. How profound is this, what are the unintended consequences of such an emergence?

Consider hiring a STPTR that is integrated into your rival's business model. What is to prohibit the STPTR from transferring the knowledge, skills, and abilities acquired, funded, and supported by your rival into your business? After all, the technology, staffing, patents, branding, etc., of the STPTR is the STPTR's and not your rival's. Say a bunch of Yahoo emeritus executives start a STPTR as a strategic stop-gap to Microsoft efforts to acquire them. Instead of going to a head hunter, or a consultancy, the Yahoo execs use the STPTR as a trojan horse to integrate into Microsoft operations, and their STPTR is later hired by Google, Linux, IBM, or Cisco. How can you separate Microsoft's technology from the STPTR's technology? Who do you regulate, tax, award patents, sue, acquire, negotiate with, etc?

So, who are the strategic technological Captains of business, the Bill Gates', or the CEO of a new STPTR? Unconventional business warfare at its best and most unpredictable...Machiavellian computing anyone?

*Post-script: A reader suggested that I change the STPTR acronym for stickiness. Thus, to better reflect the subject, I'll change the acronym to SCR: Strategic Consultancy Reconnaissance.


  1. Good post B.

    Back in the day, the consultancy houses went to great lengths (I think it was regulated) to compartmentalize projects -- so there was no spillover. Probably to protect from insider trader info, etc. Wouldn't these same protections/regulations apply here?

    Also, how do you apply this to cloud computing? Who owns the data? If you switch from one cloud to another, how do you transfer your data?

  2. Aaron,

    The idea behind SCR is that consultancy is evolving across many different paradigms. When the accounting firms provided consultancy, it was confined to individual projects at the first party firm, regulated by industry rules and regulations that focused on accounting standards. The concept behind SCR, is that consulting firms have evolved (or devolved) into bundled services consultancies, whereby third party SCRs now have vertical and horizontal integration into first party companies' entire business model. The SCRs have visibility on all aspects of a particular business, and thus can collect, store, and disseminate business intelligence either internally or externally. Moreover, at least domestically in the U.S., rules and regulations are focused on specific aspects of a business (accountancy, patent and trademarks, employment law, anti-trust), but don't yet account for third party SCRs breadth and depth of penetration into the entire business model of the firms they have relationships with. So no, I don't think the protections/regulations have been amended to grasp this paradigmatic trend.

    Your second question flows from the discussion above- how can you identify, and delineate, proprietary information/content/media/brand? One novelist that identified this conundrum was Neal Stephenson, in his book, Cryptonomicon (Avon, 1999). As part of the plot line, Stephenson describes off-shore data storage locations as the next threat to ownership of proprietary data ownership and transfer. His off-shore data centers are analogous to modern day cloud computing. Third party SCRs could potentially act as an agent, a service provider, of collected proprietary information because their integrated, bundled service model makes it difficult to differentiate the origin and ownership of data. Much like social collaboration conducted within a technological environment makes it difficult to assign valuation of ideas to the process and overall result of collaboration, third party SCRs could become modern day off-shore data sovereigns, where they could store and disseminate proprietary information under rules and regulations that benefit them. When you attempt to talk about cloud computing, you will eventually use the term ecosystem, and here is where the debate of technological DoDarwinism comes into play..."but for this service, interface, server, script, content, domain, etc., this idea would not have been spawned, have evolved, etc."

    Taken together, the concept of third party SCRs is analogous to PMCs (private military corporations). Do the laws, conventions, and regulations of accepted "technological warfare" apply to SCRs, or will they conduct unconventional technological warfare...beholden to no law or conventions?