InformationWeek

I have a small ($1 million to $2 million annual revenue) client. I'm their only IT resource and their expenditures with me, primarily on application development and support, spike up and down. I suggested to them that if they allowed me to "own" the applications instead of paying me by the hour, I would lease them back over a fixed period of time and support them at a fixed monthly rate, stabilizing their cash flow and subsidizing their up-front development costs. They would have the option to "buy" the applications at the end of the contract or renew.

This seemed like a sure win, as this company can really use technology to its advantage and is currently cash-strapped for IT investment. However, when I proposed this new business arrangement emphasizing the up-front risk I was willing to take on their future business success, it was met with much reluctance.

Am I proposing something that will sound too good to be true to most individuals or is this type of business model too new? Maybe I'm running into a control issue; clients may not feel ready to turn over the reins of their applications to an outside consultant (although most of my clients already admit they're dependent on me).

Any advice you may have the time to give would be very helpful. Thanks for writing such an interesting column.

Greg H.

Dear Greg:
Let's take a look at what you're proposing from the client's standpoint. It has paid for software that you maintain on an hourly basis. Some months, it pays you more; some months, less. Now you're suggesting that it give you ownership of its software and, for a fixed monthly rate, you'll maintain it. As part of the deal, you would give the company the option to buy back the enhanced package at a future date. In summary, you get its software for free while it gets a reduced fixed cost to maintain its operational systems.

Put yourself in the shoes of that company's management. I suspect they're concerned about what happens if you can't meet your commitment to them. If you own the package and lose interest in them--perhaps because you find another client--they're in deep trouble. You may have no plans for doing such a dastardly deed, but even so, imagine what problems they might have if you aren't careful crossing the street and ownership of the software goes to your estate.

One of the key questions that a CIO ponders in deciding whether to use an ASP is the level of confidence that the provider has the resources and staying power to keep his or her contractual obligations. In a sense, using an ASP is reminiscent of the proverbial story of the chicken and the pig going into the breakfast business of selling ham and eggs. For the chicken, it's involvement; for the pig (and the client), it's commitment.

I suggest you sit down with the principals of the firm and ask them about their concerns and abide by them. It's unlikely that the relationship will prosper if they're uneasy about it.

Sincerely,
Kelly Springer

Dear Kelly:
Changing careers always entails some risks. Two are underachieving your financial goals and finding yourself disappointed with the work. However, if you're willing to accept the unknown, I have three words of advice for you: Go for it!

Now comes the hard part: deciding the best way for you to change in your profession. Given the number of years you've been in the workforce, it would make sense to try to leverage your existing experience, if possible. Since businesses are interested in the Internet not as a technical curiosity but as a way to make money, think about which companies could use your talents after they're enhanced with additional skills.

In order to cash in on your interest and your existing knowledge, you have a variety of options. If you want more technical know-how, then there are several high-quality technical institutes that teach the details, for example, of Web-page design and network specifics. Or you can get this type of information in a college course. On the other hand, if you want more of the business side of the Internet, then several universities are offering MBAs in E-business as well as the more typical courses in computer sciences and information systems.

While I'm very much in favor of getting a college degree in your field of choice, either full-time or part-time, the industry is moving so fast that you might want to consider giving preference to getting hands-on experience while filling in the holes with advanced education as you go along. If you agree, then do an assessment of your skill set, your interests, and what's needed to fill the gaps. Talk to some friends who are in IT, as well advisers at the various schools that you would potentially attend. Make a judgment based on what you hear and what will make you happy.

Good luck, and I'd be interested to hear about your progress. There are great opportunities in IT and our profession needs a lot of new talent to design and implement the future.

Thanks in advance,
Disappointed

Dear Disappointed:
It's surprising to me that a director of IT would be so foolish as to look at pornographic material on company time and equipment. Of all people, he should know better. What would he do or say if someone walked into his office and glanced at the screen of his computer? He's either unconcerned with the risks or else he doesn't pay too much attention to industry happenings. Multiple companies (The New York Times, Dow Chemical, etc.) have fired employees for similar antics because they were offensive to other employees and against company policy. Having said that, let's take a look at how you might handle this rather ticklish situation.

First, I assume that you have a legitimate reason (other than curiosity) to review the firewall logs. I ask that question because if you pursue your concern about your boss looking at pornography on company time and equipment, you need to be able to answer it with a resounding "yes." Although many companies tell employees that they can't consider either E-mail or Internet browsing to be private, at least one company that I know of considers looking at the system logs without cause to be a breach of professional ethics.

Even assuming you were just doing your job in looking at his usage, it could be unpleasant if you confront him directly. If, as an alternative, you go over his head, you may find yourself viewed as out of line if top management in your startup happens not to view his actions as seriously as you do. After all, looking at crude pictures in private isn't the same thing as sexual harassment. In other words, it's not illegal.

As system administrator, you could simply block the sites--an action I'm sure you've considered. On the other hand, are you beyond your authority if you decide to become the self-appointed censor of your company's viewing habits?

You need to know what your company policy is on the issue of using company equipment for noncompany activities. Go to your boss and ask. If he wants to know why, say that you've seen articles in magazines about the topic. If there's a policy, ask him how you should enforce it. Regardless of how he answers, you can be assured that he'll cease his extracurricular viewing. If there is no policy, suggest there should be one. If he demurs, follow his direction and stop looking at his Internet account.

Steve Love

Dear Steve:
Knowledge management is a hot topic. It's a wonderfully ambiguous term like E-business and reengineering. Therefore, it's many different things to different people. I know from recent discussions with educators that graduate schools are still grappling with how to integrate the concept into their curricula, whether to offer it as a course of study, and at whom such a major should be aimed.

As a result, you'll have to do some work to pick what's most meaningful to you. But that shouldn't be a problem. I suppose that one of the prerequisites for being admitted to a Ph.D. program might be finding a university that offers it as a field of specialization with the emphasis that appeals to you.

In any case, because universities are continuously modifying their offerings, your best bet is to decide first whether you're limited to a certain geographic area. If so, talk to the schools within that range. If you can relocate anywhere to get your degree, I suggest you hit those two wonderful areas of knowledge management, your local library and the Internet. On the Internet, start with an organized search engine such as Lycos. Go to "Reference, Education, Colleges, and Universities" and let your fingers do the searching. Or, if you prefer, try a general search engine such as Google and search on "Knowledge Management" and "Ph.D. program." You'll have about 300 references that will lead you to what you need to know.

Herbert W. Lovelace shares his experiences (changing most names, including his own, to protect the guilty) as CIO of a multibillion-dollar international company. Send him E-mail at lovelace@home.com.