It's time to virtualize human capital

To achieve their ambitious growth objectives and fulfill relentlessly escalating client demands, managed service providers (MSPs) are aggressively virtualizing human capital.  Key takeaway: Enterprise IT organizations face very similar challenges and opportunities, and would therefore do well to embrace this same strategy.

The typical MSP has grown out of a consulting business with a relatively narrow technology focus -- say, managing Oracle databases or Microsoft Exchange deployments. Then, in response to market demand, they've expanded their offerings to build a service catalog that better aligns with customer needs.  This, of course, meant leaving the "comfort zone" of their internal expertise and allowing external factors (including customer demand and gaps in competitors' offerings) to drive their skill-sets.

But with market demand driving year-over-year growth of 50% or more, it simply wasn't possible for MSPs to on-board the skills they needed via conventional recruiting and hiring. So, to rapidly get access to the human capital they needed, MSPs began embracing the notion of virtual human capital.  Just as they learned to spin up virtual systems where and when necessary to meet demand, forward-thinking MSPs started doing the same thing with people.  They tapped into resources such as Guru and TopCoder, as well as other MSPs with complementary expertise, to fill in skill shortfalls needed on a "spot" basis to solve immediate problems and on a longer-term basis to support permanent additions to their service catalogs.  It's been pretty impressive.

This model also helps MSPs mitigate risk since they don't have to make hire commitments for skills that they may not need a few quarters down the road either because they become obsolete or because market demand evaporates.

Enterprise IT faces similar challenges.  It is being asked to deliver services to the business for which it lacks the skills, as well as the time and budget to acquire those skills.  And it too has to be careful about hiring in areas where needs may be temporary.

Just as crucial, like MSPs, enterprise IT organizations have be on guard against limiting what they can do for the business based on competency inertia.  After all, when you have a hammer, you tend to think of every problem as a nail.  So you can easily end up in serious trouble if that's not, in fact, what the problem is.

IT organizations therefore need to get as good at virtualizing human capital as their MSP peers for similar reasons.  As IT transforms itself from a build-and-own model to a service brokerage model, the virtualization of human capital will become a key enabler of agility, innovation and budget-efficiency.  So it's time for IT decision-makers to figure out how they are going to implement the operational and cultural changes necessary to make skill virtualization happen.

Chris O'Malley is CEO of Nimsoft.  He has devoted 25 years to innovation in the IT industry -- most recently growing businesses in cloud and IT Management as a Service solutions. Contact Chris via the comments below or via Twitter at @chris_t_omalley.

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