Knowledge Workers - value for money?

+Accsys (Pty) Ltd supplies software and services. We sell the software under licence and provide regular software updates and improvements, training and a phone service for assisting with queries.   Our consultants neatly fit the definition of knowledge workers.

Having spoken to other companies with similar business models, there seems to be a common thread that there are clients that see service charges as a grudge purchase. While Service Level Agreements (SLAs) may alleviate this, many companies would rather handle payment for on site service on an ad hoc basis.

The problem is that software is not tangible, and quantifying the value of the time that is being charged for services is challenging. In addition, there may be a lack of trust in the amount of time really needed to do the job.

Recently, I visited a medical specialist. I was kept waiting in reception for over an hour, and then spent 48 minutes in his rooms.

The charge was R4 800, yes, R100 per minute.

We have also had a plumber do work for us at home at a similar price, but he spent 8 hours with us, broke a basin, replaced it at no additional fee, plumbed our shower and repaired our dishwasher.

 R600 per hour, R10 per minute.

True, the plumber did not spend 9 years at university and specialise in a particular field, but he does have a formal qualification and 40 years of experience, which the market values at 10% of the doctor, who is a similar age.   

KFC's variety bucket costs R169.50.   A piece of fillet that would feed the same amount of people with a salad, and potatoes costs around the same.  Yet, we all think fillet is expensive.   

So, value is around perception.   Once we put a price to something, we attach a perceived value to it, and it is very difficult to move our view later.    We do have to take into account convenience and love of take aways, though.

The challenge for the knowledge worker is delivering a service that is recognised as a real benefit.   While so much of our lives are dominated by IT, and there is an ever growing comfort and understanding, there are still a significant number of users who require substantial support when it comes to business applications.

The combination of industry knowledge and IT skills required by a good consultant takes a long time to acquire and the development of a knowledge worker includes formal, academic training and on the job skills growth.   They also have to deal with a number of variables over which they have no control eg a specialist in Legal software might be a lawyer who has gone into IT solutions, but has to deal with:

• Networks
• Laptops or PCs with different operating systems
• Printers
• Servers
• Cloud

It is increasingly difficult to be an expert at everything.  However, the moment another specialist is called in, clients, understandably, become very concerned about the expertise of the consultant, as well as the costs.   The extensive use of the internet and Cloud have changed the game, and IT systems require trained people to manage the infrastructure.   Keeping up to date with technology is a full time job, and there is a real danger in both upgrading (now your "go to guys in the office" are out of date) or staying with legacy technology (incompatibility between your infrastructure and your applications).

Peter Drucker first talked about Knowledge Workers back in 1959 in a book called The Landmarks of Tomorrow.   His visionary thinking has become a part of our reality.   

Specialist doctors are able to charge a fee commensurate with their training, their skill and their knowledge, as are lawyers and financial advisors.   IT, with its more general usage, has lost some of its mystique, but those supplying IT skills, whether around infrastructure or applications, have an expertise which we should not undervalue.

Links, References and Notes

Accsys (Pty) Ltd

Peter Drucker

Note

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