Service economy

Because of my difficulty in describing a new type of professional service firm that had been borne out of the Internet age, I recently coined a term: "Strategic Internet Services," or "SIS."

As I wrote earlier, this group of service-based companies is essential to Internet adoption in large corporations. These new companies offer a mix of management-consulting, systems-integration, and creative services that otherwise would come from a range of niche businesses. USWeb, Proxicom, Silicon Valley Internet Partners, and Neoglyphics Media clearly fit into the new SIS category, but more companies of this type are being created every day.

Given the importance that I believe these firms will have in the future adoption of Internet technologies by large corporations, this week I'm offering readers a guide for identifying the characteristics of other Internet start-ups that might fit into this increasingly important sector.

Speed
Similar to other professional services sectors, deployment time must be directly correlated to the technology. In other words, the customer expects its professional services vendor to integrate the leading and best solution available, not a solution that is out of date by the time it has been deployed. Thus, services firms in the Internet space must operate in Internet time. They must be fluent, and flexible enough to change at the same speed as Internet innovation.

Phasing-in rather than comprehensive
While basic Internet usage (i.e. Web site presence, Web-browsing, email) might be mainstream, the actual scope of usage of Internet technology within corporations is far from widespread. Furthermore, because Internet applications leverage and exploit existing IT infrastructure, corporate customers, in many cases, expect a very different type of sell and deployment for their projects. Whereas professional services firms working on traditional client/server projects would pilot an application after one year and roll it out 18 months to three years later, SIS firms such as USWeb are expected to begin rolling out projects in a six-month to nine-month time frame. Additionally, the scope of Internet usage is a moving target because projects are broken up into phases (some of them are made generally available after only three months). In other words, the approach to defining and rolling out projects should be entirely different.

Interdisciplinary skills
As I have mentioned, I believe that corporations are still in the early stages of adopting Internet technologies, and thus require a number of different skill sets. They are demanding partners with which they can explore how to use the Internet within their organizations, rather than how to procure services for a particular skill. Consequently, corporations are looking for firms with multiple skills sets that are multidisciplinary--that can provide the entire gamut of services necessary to incorporate Internet technologies. This requires, therefore, Web-design and Web-development skills, systems-integration skills that are Internet-centric, and, finally, management and strategic consulting capabilities that ensure individual projects are in line with the larger IT architecture of the customer.

Emphasis on firm-wide knowledge and sharing of best practices
Given the rapid rate of technological change, and the overwhelming demand to incorporate Internet technologies, SIS firms prioritize setting up the appropriate infrastructure and techniques to transfer knowledge and skills. SIS firms have invested heavily in this area in order to make engagements as replicable as possible, thus enabling them to formulate specific projects as much as possible. Not only is knowledge-storage and reusability important in order to win projects, but it also is critical in improving the overall margins of services firms. The more replicable the project, the more quantifiable and predictable the resources, and, consequently, the more profitable the engagement can be.

Using these guidelines, you'll be able to identify SIS companies. Keep your eyes peeled for more of them as 1998 progresses. It's this new breed that will be instrumental in bringing the Net further into corporations.