Thursday, March 8, 2007

Does the internet spell doom for the expert?

From time immemorial the world of trade has been fueled by a phenomena which the economists refer to as information asymmetry. Information asymmetry happens when information or data is scattered and not easily accessible to the common man . Hence the individual who has access to a large pool of information (we shall call him an expert) is at an advantage vis-à-vis the common man (buyer). For age’s information asymmetry and the ability of some individuals to hoard information has created opportunities for experts to make money. Consider this for an example; my young friend takes up a job in Mumbai , after accepting the offer , the next problem is that of housing. She has no clue of what an apartment would cost her and based on advise from friends and colleagues, she approaches a real estate agent. The agent shows her a few apartments near to her workplace and after a few rounds she settles for one. After a few months of moving into the apartment she discovers that she is overpaying her landlord. Why did this happen to her , the answers are blatantly obvious

a) She was forced to rely on the so-called expert –real estate broker to get the only available data on the rentals market

b) There was no published information about rentals, which she could access and therefore challenge the expert

The expert relied on information asymmetry to make a neat commission on the inflated rentals .As you would all agree that this is a very common example (duped by the broker…) , while this is a very small but potent example of information asymmetry , if you look around your lives you will find many more , remember the used car dealer from whom you bought your first car ?…the examples are countless .

However the Internet and the zillions of pages of content is gravely wounding information asymmetries of all kinds. As a medium the Internet is brilliant in shifting information from the hands of those who have it, into the hands of those who don’t and therefore bringing much more equality in the expert and buyer relationship.

Consider the following websites :

http://www.indiacar.com/buyused.asp

http://www.apnaloan.com/india-loans.shtml

http://www.quotesmith.com/

All these website are examples of how Internet makes the role of the expert redundant. In the first case you know the price of used cars in different parts of India , sorted by model and location , in the second case Apnaloan.com - lenders compete against each other for your business and in the third case (Quotesmith.com), - a virtual comparative data bank of life insurance policies .

What does these three websites do to the used car salesman, the home loan dealer and the insurance policy seller ……the answer is makes him redundant !!!

Well when I spoke to my friend who is a senior consultant in the Big 4 , he said well “the Internet can make some kinds of experts redundant …not all ….we management consultants, accountants and lawyers will have no problems , the net can do no harm”.

For all of us who ascribe to this point of view here is another link which might surprise you (http://www.haygroup.com/ww/research/index.asp?Topic=2&Country=9&filterGo=Go)

these are research papers given out for free by HayGroup which is a leading global HR consulting firm . I wanted some information on Potential Assessment and in normal situation I would have sough the advise of an expert in the field , but I simply did a google with a few intelligent keywords and here I was with all the information I wanted on the subject to get me started ……..So in a nutshell , the Internet makes all of us so called experts redundant if we only trade in “information

So where does this leave all of us (the so called experts ) , here are my suggestions and would like to hear from others as well

a) Migrate from providing information to dealing with insights (Insight defines as acute observation ,deduction; discernment; perception)

b) Recognize the predict the future of your chosen field of activity , rather than perpetually analyzing the past (past data , trends etc…this will help you be ahead of the information asymmetry game …)

I would like to conclude by saying that experts in almost all walks of life are threatened by the Internet and its time for us to reinvent ourselves and provide services that are not only based on data , but also on our insights and our abilities to predict the future than in dwelling in the past …….what do you think ? , like to hear from you ..?

2 comments:

Sanjeev said...

My opinion:
Experts will always remain...but there will be change in how they are adding value. Infact at the end of the day it'a all about value addition.
There was a time (good 5-8 years ago) when just the content (answer to "what") use to differentiate experts. But this has changed drastically now. Having exposed to both sides (consultant and client), now "what" plays a very little role....thanks to googles of the world. But still experts add value by focussing on why (why not), when (when not), how (how not) and where (where not)...which has to be so very much contextual. Let me take an example...all of us can write thesis on change management using information available on net. But can we really have a fixed model for change management. Those who have hands on experience in handling large change assignments will agree that it doesn't work that way on the ground. There are so many variables involved that an Expert view becomes important. But what exactly this expert is adding value as ...ofcourse not by talking about the models of change which I am sure any fresh graduate can do a better job of. The value is added by contextualising the change programme to the need of the organisation/situation in question. It involves directing a change/facilitating a change...it involves being sensitive to the stimuli on the ground and then creating real time solutions to handle change.
All I am saying is that experts will always remain...but they will change (they have to) for providing higher level of value. Their role will be more of contextualising, integrating, creating alignment and execution.
I also see another change happening. Experts can no longer enjoy the status of fence sitters. They have to commit to business results. I also see blurring boundries of functional expertise. Folks with cross functional expertise would be in a better position to create future state of "value".

Just to share with you, this internet thing has a major impact on the higher education sector. I am working on an assignment in this area and we are all set for a drastic change in the way education is treated...it will also move from WHAT to rest of the W's and H....
Cheers!

Gautam Ghosh said...

If you look at Bloom's taxonomy for instruction, the "experts" are actually doing "analysis". The internet provides that analysis now. The expert who is the creator and the "synthesiser" will be needed in the future