Fungible is one of those words that sounds like it should be onomatopeiac but isn’t. It does, though, represent a crucial element of what makes something a commodity: fungible means that you can swap in and out without concern.
For example, I can buy Tate and Lyle white sugar or Silver Spoon white sugar, put them in the sugar bowl and no-one will be able to tell the difference. I can even mix them up. They are fungible commodities. (I also don’t take sugar, but that’s another story).
There are plenty of fungible commodities and many more that are turned into branded products to try to make them less functional through (predominantly) emotional connection. That’s what the big Fast-Moving Consumer Goods (FMCG) companies are all about.
When, however, we look at the world of technology, things are less fungible despite the hype.
At the top of the stack, big software like ERP or CRM is notoriously difficult to swap in or out. These are things that you either never touch or maybe at most review every seven or ten years. And then hold your head in your hands at the complexity of it all.
But even when you get further down the stack, the reality is that very few things are truly fungible, either because of how organisations use the technology, or how it is interconnected with other stuff.
I speak from bitter experience having spent a fair bit of the last few years trying to look at how government organisations in the UK might use more IT in common with one another. My conclusion is that despite logically seeing commodity elements in the sorts of information technology consumed by organisations, they’re just not fungible (or at least they’re not without reverse engineering a bunch of technical legacy and debt).
For example, take the PC. A Windows 10 PC is pretty much like any other Windows 10 PC in consumer land. You might want to spend disproportionately more on higher powered processors or graphics chips or solid-state disk drives. But a cheap Lenovo will be pretty much the same as an expensive Dell – you’ll take it out of the box, connect it to your wifi, and use it for whatever you use it for.
Does that same portability exist in the business world? No chance.
There will be builds or configurations, trust relationships and all manner of other stuff in the name of security or manageability that ensure that you can’t just pluck any PC off the shelf of any shop and connected to the corporate domain. And the complexity of that configuration will be directly proportional to the risk aversion of the organisation. Greater still in those organisations that are more heavily regulated. The nature of how PCs are built and deployed in organisations is a direct consequence of the underlying cultural values of that organisation.
Ditto networks. Ditto collaboration software. Ditto just about every single piece of information technology in every bureaucratic organisation of any size. Sure there are elements of technology that can be increasingly scaled as services on demand, but that’s not the same as an actual, fungible commodity.
We take commodities and make them our own as part of the fabric of the institution. This is why that time I spent working in government organisations trying to define “common” IT drew a blank. It doesn’t really exist.
And this is why analysis of technology in isolation of the broader socio-technical structures in which that technology exists and is used is a very dangerous game. It gives you mechanical solutions, but ignores the broad social and cultural needs. Organisations are the sum of that.
X: Is this why you think value chain mapping might have some serious gaps?