Archive for March, 2009

Green Policy in Action

March 29, 2009

I was reading CIO’s Green IT Survey the other day which indicated that IT executives exhibit two primary factors in adopting environmental driven change: cost-cutting and being socially responsible corporate citizens.   Coincidentally, the article was written a year ago, which was the same time that I established a Green Policy Committee at QSR International.  It was interesting to compare the initiatives mentioned in the survey against the initiatives we have undertaken at QSR International over the past year.

The objectives of the committee were to:

  1. Increase awareness of environmental issues within the company
  2. Reduce the company’s carbon footprint
  3. Move the company towards more sustainable business practices

which were framed in light of:

  1. Australia producing 4.5 times the global average for carbon emissions on a per person basis
  2. ICT industry being responsible for 2% of global carbon emissions (equivalent to the aviation industry)
  3. Future regulatory changes that will emerge to meet Kyoto Protocol objectives

The committee was formed by requesting for volunteers across the company.  However, volunteers were predominantly IT related staff.  This in itself would have skewed how we approached the objectives and influenced the actions undertaken.  The actions that the committee were able to successfully implement included:

  • Switching electricity supply from fossil fuel energy to renewable energy from Red Energy
  • Consolidating servers by replacing physical servers with virtualized servers and a storage area network
  • Consolidating printers by retiring personal printers and reducing the total number of network printers
  • Configuring network printers to print duplex by default
  • Switching consumables to recycled paper and recyclable toner cartridges
  • Redesigning internal document templates to be less verbose
  • Improving data centre cooling facilities by installing insulation and a more efficient cooling system
  • Replacing lighting with energy efficient lighting
  • Configuring personal computers to use power management instead of screen savers
  • Configuring personal computers to automatically switch off after business hours
  • Capturing power consumption metrics to facilitate ongoing monitoring
  • Increasing the portion of staff that regularly telecommute
  • Presenting to staff on initiatives that they can undertake at home

As can be seen, the efforts to date have been primarily focused on internal efficiency initiatives, which has provided a secondary benefit of cost reductions.  Going forward, the focus will need to be more on external efficiency initiatives; that is, how we conduct business with our customers and suppliers.  Also, we will be looking into the possibility of offsetting our carbon emissions through an environmental program.  Ultimately, we want to be socially responsible corporate citizens, but also socially responsible caretakers for the future generations to come.

To finish, I quote Al Gore in his 2006 documentary film An Inconvenient Truth

You see that pale, blue dot? That’s us. Everything that has ever happened in all of human history, has happened on that pixel. All the triumphs and all the tragedies, all the wars all the famines, all the major advances… it’s our only home. And that is what is at stake, our ability to live on planet Earth, to have a future as a civilization. I believe this is a moral issue, it is your time to cease this issue, it is our time to rise again to secure our future.

Internationalization

March 16, 2009

Today I presented with Sam Soubra at the Victoria.Net Dev SIG on software internationalization.  Internationalization has two distinct aspects – globalization and localization.  Globalization is the process of developing software whose features and code design are not solely based on a single language or locale; and localization is the process of adapting software for a specific region or language.  We drew on our experiences working at QSR International where we developed our software for both globalization and localization (English, Chinese, French, German, Japanese, and Spanish). The presentation can be viewed below:

QSR International is an independent software vendor (ISV) based in Melbourne (Australia) and derives 90% of its revenue from exports.  This appeared to be in contrast to many Australian companies that I read in the local news who are currently focused on outsourcing their IT overseas.  Therefore, I thought I would look into finding some information to see where Australia is positioned in developing software for the global marketplace.

According to the Australian Bureau of Statistics, exports of non-customised software (including licence fees) in 2006-07 were $347 million (0.16%) of Australia’s $215,850 million in total exports.  This is a very small figure when compared against Australia’s $65,045 million (30.13%) in exports by the mining industry.  At the same time, imports of non-customised software (including licence fees)  in 2006-07 were $1,220 million (0.54%) of Australia’s $227,883 million in total imports.

In 2007, the World Bank listed the population of Australia as 21 million (0.32%) of the world’s population of 6,612 million.  Combining these population figures with the earlier figures, Australia imported $58.10 of non-customised software (including licence fees) for every Australian, yet Australia exported $0.05 of non-customised software (including licence fees) and $9.87 of mining goods to every non-Australian globally.  This would imply that Australia is a net consumer of non-customised software and is not a significant global player.

However, last year the Economist Intelligence Unit reported on global IT industry competitiveness and found that Australia was ranked 7th globally, behind the United States, Taiwan, United Kingdom, Sweden, Denmark, and Canada.  The rankings were based on six categories, which are listed below with Australia’s associated global rank:

  • Overall business environment – #7
  • IT infrastructure – #8
  • Human capital – #6
  • Legal environment – #2
  • R&D environment – #20
  • Support for IT industry development – #6

This poses the question – why do we have an IT industry that is considered to be globally competitive, but fails to leverage the global marketplace for software?  It is a lot cheaper and easier to produce another copy of software than it is to produce another ounce of gold.  Why does a single American company export more software into Australia than Australia can export to the entire world?  Looking at these rankings, it is evident that Australia is least competitive in its R&D environment.  Incredibly, the Rudd Government closed the Commercial Ready program in its May 2008 budget, which was a major innovation program provided by the Federal Government of Australia.  Additionally, the Australian Bureau of Statistics had to cancel its planned 2008-09 ICT industries survey due to budgetary constraints imposed in May 2008.  This does not bode well for Australia being the so called “Clever Country” as originally coined by Bob Hawke in the early 1990’s.

Nevertheless, I encourage software developers in Australia to have a more globally focused perspective.  With a greater emphasis on Research and Development (innovation) and increased entrepreneurship, we can greatly improve these national statistics.  There are great examples of Australian developers taking their software globally.  For instance, we recently changed our design software at QSR International to Enterprise Architect which is developed in Creswick (Australia) and exported worldwide.

To finish, I quote Barak Obama from the first presidential debate in 2008

We can’t just focus on preserving existing industries. We have to be in the business of encouraging new ones–and that means science, research and technology. For two centuries, America led the world in innovation. But this Administration’s hostility to science has taken a toll. At a time when technology is shaping our future, we devote a smaller and smaller share of our national resources to Research and Development. I’ll double federal funding for basic research, and make the R&D tax credit permanent.

Innovation and Outsourcing

March 1, 2009

Every week I receive unsolicited emails from IT outsourcing companies, predominately from India, who all promote their software development and IT support services on the basis of cheaper labour, broader competencies, and extensive processes.  Yet at the same time, I continue to read about Satyam’s Meltdown.  Does this imply that the lower costs or extensive processes are merely a mirage?  Do we understand the true cost of IT outsourcing on our organisations over the longer term?

From my idealistic viewpoint, IT goals should be focused on innovation, quality, and agility foremost.  IT should be of strategic importance within an organisation, a joint partner in revenue generation that builds competitive advantage.  IT must understand the business environment and be an proactive contributor within the business – meaning it requires a culture of innovation and ownership.

Software development is fundamentally about innovation, creating value for the business and delighting end-users.  Innovation requires collaboration and exploration with an understanding of both users and technology.  Why would you outsource software development when the premise and driver of outsourcing is focused around cheaper cost rather than improved innovation?

I have previously outsourced IT support functions, and found that the outsourcer’s promises far exceeded their ability to deliver on them.  In effect, they hamstrung the business through conflicting cultures where they valued process over product, control over change, and contract over outcome.  In effect they missed the mark by a country mile.   Since back-sourcing the IT support function, we have achieved significantly better results (through improved quality and agility) without an associated increase in cost.

Where I have found outsourcing works best is when working with specialist companies, that have premium resources, niche competencies, and defined outcomes.  In the traditional sense this would be considered consulting services rather than outsourcing services.  Three specialist companies that I have used successfully and would recommend are Planit (test specialist), Readify (.NET specialist), and SDL (translation specialist).  In my experience, it is worth paying the premium for a specialist; rather than the discount for a jack of all trades.

It was interesting to read this month that the down economy fuels IT outsourcing with further drive to slash fixed costs and deliver services with smaller staff numbers.  According to Gartner’s annual survey of CIOs, their business priorities in 2009 are 1. Improving business processes; 2. Reducing enterprise costs; and 3. Improving enterprise workforce effectiveness.  This contrasts with their anticipated business priorities for 2012 of 1. Creating new products and services (innovation); 2. Improving business processes; and 3. Attracting and retaining new customers.  I wonder where this outsourcing trend will leave many companies when the economic outlook improves and the focus returns to innovation rather than cost.

To finish, I quote Peter Drucker (1909-2005), writer and management consultant

Innovation is the specific instrument of entrepreneurship.  The act that endows resources with a new capacity to create wealth.