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The widespread problem most middle-sized companies face, he says, is this: proprietary software is unique. Companies can’t locate outsiders who understand their in-house system’s problems. There is too much variation. So, they become dependent on in-house programmers. Then these programmers demand raises or else quit. They have the companies over the barrel. Escape is not easy. So, the young man wants to break away from his mid-sized company. At the same time, hundreds of local mid-sized companies may want to break away from 100% dependence on an in-house programmer. Is there an opportunity here?

A solution at a price: I tried to give the young man advice on how to set up his own company. What mid-sized companies and some small companies need is a preventive maintenance program that is provided by an outside firm of computer geeks. The geeks’ provide preliminary information about looming problems. If they can analyze what’s wrong, they can recommend

"If you are in a dead-end job in a competitive company, you may not care. It may fit your career objectives. But if you are in a dead-end job in a dead-end company, you had better start looking for an exit strategy"

high-price specialists to come in on a part-time basis to fix the problem. For this, a company pays the geeks a monthly retainer fee of KSHs. 35,000 to KSHs. 70,000. A computer analyst comes in once a month for half a day to check things out, get rid of viruses, worms, etc., and give a warning of trouble brewing. But such geek service companies don’t seem to exist. Is this an opportunity? Or is there some fundamental barrier to entry? The young man told me this: "A company can buy a server for under KSHs. 70,000. But they don’t. It’s too risky. If the server goes down, the company may go down. So, they buy redundancy: levels of back-up.

They spend KSHs. 700,000, not KSHs. 70,000. But then they become dependent on one in-house technician to run the system. It’s crazy." I told him that with this explanation, he had the makings of a direct-mail ad. He should tell this story of reduced-risk back-up for hardware but no back-up for technicians to run this hardware. Computerized

companies face a real-world problem. Anyone who has experienced a computer snafu knows. On a Christmas weekend a certain airline, had its computer go down. Over 30,000 passengers were stranded. The disaster became the main weekend news story on the networks - the worst advertising possible. The airline was already in financial trouble. This will make things worse. It is big. The industry is dependent on computers. But to the extent that a company is dependent on computers, it ought to spend money to buy back-up. This includes back-up programmers. The more proprietary the software, the more a firm needs back-up programmers who understand the system’s code.  As corporate loyalty has declined, companies have become more dependent on machines and technicians to run them. A programmer can quit for better pay. What happens to the company in the interim? It may take a new programmer six months to become familiar with even the basics of the system. I told the young man that a good ad might convince 20 companies to pay him KSHs. 35,000 to KSHs. 70,000 a month to serve as an early warning system. The problem is, he says, the enormous diversity of the proprietary systems. One service company can’t supply the repairs. What is needed, I said, is an intermediary service company that can supply routine procedures for several companies on a monthly basis, with a list of independent specialists for emergency repairs. The service company could get a finder’s fee for the specialist’s contract - say 20%. Maybe only 10%. But something.

Paying to relieve fear: Basically, a service company is like an insurance policy: it is there in a crisis. Most people won’t pay a service fee for preventive maintenance in most areas of their lives. It would be too expensive. There are a few exceptions. Local motor oil-changing companies sell what is in effect preventive maintenance. Going to the dentist is another. But how often do we go to a dentist? We usually avoid it until a tooth starts hurting. If a company refuses to hire in-house back-up computer personnel, then it had better outsource this service. In every area in which a system failure could bankrupt the company, it had better have fail-safe procedures, either in-house or outsourced. Consider your employer’s vulnerability to a system failure. Does it have back-up? If it depends for its existence on one person in the IT department, does it treat that person with deference and money? It had better do this, because its survival depends on this man. I, for one, would want a back-up person who knows the entire system. This subordinate must be paid well, just as a company pays lots of extra money for hardware back-up - or had better. You may think that you are immune from such failures. You may have great faith that your boss has considered all this and has taken steps to protect the company and therefore your job. But unless you verify this for yourself, you are staking your financial future on faith, which is defined in the New Testament as "the substance of things hoped for, the evidence of things unseen" (Hebrews 11:1). I recommend against exercising this much faith. A few discreet inquiries as to the state of the company’s back-up systems are in order. If your employer is cutting costs by refusing to insure against a major breakdown, then he is rolling the dice. As your employer, he is rolling your dice, too. To the extent that your lifestyle is dependent on your job, your employer’s decision to be penny-wise is pound-foolish. The refusal of top management to spend money systematically to upgrade technology, which includes the technical staff to maintain the technology, is an indicator of short-term thinking. It’s management on a wing and a prayer. It is indicative of a deeper problem: the failure to develop a long-term marketing strategy.

The young man I counseled is working for a company that displays this weakness. In my view, he would be unwise to consider this company as anything more than a port in a storm. But if that’s true for its employees, it’s equally true of its clients. The clients should start looking for alternative suppliers of the service. That’s why you need to investigate the condition of your employer. If things are excessively uncertain for the employees, the same is true for the clients. If the clients depart for greener pastures, you will be forced to do the same. That’s why it’s important for you to find out the condition of your company. It’s self-interested behavior to investigate the degree of risk that your employer is willing to take, because he is accepting this degree of risk on your behalf. If you are a crewman on a ship, you had better be ready to jump ship if the crucial systems don’t have back-up.

Conclusion: If you are in a dead-end job in a competitive company, you may not care. It may fit your career objectives. But if you are in a dead-end job in a dead-end company, you had better start looking for an exit strategy. Good luck and all the very best!<<<<Back<<<<

 

Author: Gary