Embracing Disintermediation

Disintermediation is the removal of the middle person (intermediary) from a transaction or system. We see it regularly in our personal lives. If you want to buy a plane ticket - no need for a travel agent - go straight to United or Delta. If you’re buying a house - you can check Zillow or Redfin for local listings without first seeing a real estate agent. Effective disintermediation has two main benefits - lower cost and increased speed.

We also see plenty of disintermediation in enterprise technology, with IT or engineering teams being the intermediary removed by end users. A first large wave came with what we started calling “shadow IT” perhaps 20 years ago - employees selecting, procuring, and operating their own technology solutions outside of the purview of IT teams. This was largely because IT teams either didn’t have the bandwidth to fulfill the need or the solutions they were providing were unacceptable to users.?

Of course SaaS has been a huge driver of disintermediation - it’s simple and straightforward for someone to sign up for a free trial or enter their credit card information and start using a SaaS product that helps them do their job more effectively.

We’ve seen another wave of disintermediation through the rise of low code and no code platforms like Microsoft Power Platform, Workato, and Airtable. These platforms let non-developers create functional apps to automate their workflows and make themselves and their teams more efficient.?

And the latest wave is generative AI, with perhaps the greatest opportunity to disintermediate technology teams. End users can use generative AI to output code, create test data sets, and solve problems they’d previously needed to engage their IT and other technology partners for.?

As much promise and excitement as these innovations bring, disintermediation is not without issue. Another example from our personal lives - we’ve all been there - we’ve got an ache or a pain, or some other symptom. We start Googling or visiting WebMD to self-diagnose. If there’s something serious going on healthwise - I personally want a doctor or other health care professional involved.?

And this has a direct corollary to enterprise technology disintermediation. End users in the business are experts in their domains and know how to identify technology with the functionality they need. But what about broader enterprise concerns like security, privacy, licensing costs, data integration, legal terms, scalability, supportability, etc.? Essentially - all of the dimensions of product development and operations that IT, engineering, and security teams care about and are expert in. End users aren’t always skilled in these areas and are unlikely to be motivated to address these concerns.

That leads us to a primary concern for technology teams moving forward - how do we embrace disintermediation to reap the benefits of lower cost and higher velocity while mitigating the downside risks of technology selection, development, and operation by end users??

I have a few recommendations.

First - technology teams must recognize this trend is unlikely to reverse and that a key driver for disintermediation is a lack of trust users have in our ability to deliver usable solutions in a timely manner. IT and engineering teams no longer have total control over technology strategy and solutions - we are sharing influence and responsibility with end users who are key in the selection, procurement, and operation of technology solutions.?

Second - understand that the users we support are competent adults just trying to get their jobs done efficiently and effectively. They aren’t trying to cause security, compliance, or integration problems with their choices and actions. Users deserve autonomy and a strong voice. By building trust with users and demonstrating value, technology teams are more likely to be consulted vs. avoided.?

Third - technology teams must collaborate better with their peers on other central teams (e.g. legal, procurement, security, etc.). Each of these teams have important perspectives to bring to bear on technology selection, architecture, and operation, and we have to better speak with a single voice to make it easier for end users to work with us. If someone has to have five different meetings with five different teams to explain and justify their needs for a technology solution, can we really blame them if they choose to do it themselves??

And lastly, technology teams need to embrace the self-service that is at the heart of disintermediation. Users are increasingly comfortable choosing and using technology. We must make our solutions, best practices, guidance, and assistance increasingly available via safe and well-supported self-service. If you’ve heard me talk previously about guardrails and paved roads - this is what I mean!

Like many trends in technology, those who recognize and embrace change will be best positioned for success. Don’t fear disintermediation - embrace it and help us all find a better way forward.?