In my previous post, I talked about licensing costs and rent-seeking behavior. I asked the question – why do companies pay licensing costs on older technology when the same thing is available without the licensing costs in the cloud?
There are, of course, many reasons for it. I believe an important one is the role of middle managers. My hypothesis is that the digital era companies need a very different kind of middle managers as compared to pre-digital era companies.
In the pre-digital era, the companies were producing goods and services. Workforce productivity was important. If the workers produced more widgets with better quality, the firm made more money. The middle managers were there to drive productivity improvements among the workforce. They implemented 6-sigma, kanban and other projects.
In the digital era, companies are building platforms. The workforce has shrunk and work has gotten smarter. Earlier productivity metrics are useless. The more sophisticated platform has less lines of code, not more. The focus is on Innovation, not productivity improvements. The cloud is the tool for innovation. For e.g., In a recent google hackathon, just 3 developers built the winning product in 10 days! The solution speeds up ML model deployment using BigQuery ML, stores it in google cloud storage, finally deploying it in cloud run using cloud build. That is the power of serverless computing, which is offered in the cloud.
In my experience, most middle managers of today still take their job to be that of improving worker productivity through kanbans (albeit, I must admit – they use digital kanbans these days). They focus on daily standups and set priorities. They try to mitigate operational project risks and communicate project status accordingly. Thanks to newer tools, they are left with a lot of free time, which they spend in unproductive meetings.
Meanwhile, the organization is facing an existential struggle to digitally transform themselves.
In the era of digital transformation, middle managers today should be, primarily, change agents. The rest is operational detail.
Their focus should be to become the pivot for digital transformation. I think every middle manager’s task today is to identify opportunities to introduce AI/ML features into whatever they are doing. This means building scalable platforms, modernizing the applications and building data lakes. They need to see legacy software, inflexible architectures and avoidable licensing costs as the biggest challenge to their transformation journey. Once we establish that, saving licensing costs would be actually the low hanging fruit, not a risk.
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