Q & A with Dane Fazakerley of AIIA (DF) researching on The biggest challenges facing the Australian IT industry

DF :What are the biggest threats or challenges that you are facing as an ICT business in Australia?

Dinesh De Silva(DDS) :  I've addressed this question slightly differently, taking a much broader view and I hope that is ok. In my mind the most significant opportunity we as a nation have, as opposed to any threat we see in the near term is articulated in more detail via a blog I wrote recently on "ICT Industry in need of vision and structure". Australia has the capability and the raw material to develop a multi trillion dollar industry. Bigger than our mining industry(big call) if we do it right! Have a read, I guarantee you it will be worthwhile.
http://dineshdesilva.blogspot.com.au/2011/04/industrial-clusters-model-for-success.html

DF :  Government (e.g. poor legislation, lack of incentives, too much red tape, etc.)?
DDS : Govt, does not understand our opportunity and we unfortunately  have no real visionaries in both sides of politics, if we did they would have linked NBN as part of the strategy to the above (vision articulated in my blog). Once we have an all encompassing strategy, everything else falls into place.  Issues of poor legislation, lack of incentives, too much red tape are all symptoms of a greater problem. The problem of not having a clear articulated vision in making ICT central to creating income streams for our nation.

DF. Cost Pressures (if so, is it the old “do more with less”, or something new) ?
DDS :All businesses need to do more with less. This has been happening for a while. At least 10 years now. There needs to be further thinking around  1) innovation(on changing the current paradigm on getting your most important jobs done) 2) Productivity (defined Producitivity is the value created in a days work, hence in an organisation individual and team focus on "creating more value in a days work will ensure more value created for each dollar spent" outsourcing low value creating work is first step towards this.
The mantra here needs to be "Resources are limited, but creativity is unlimited" as successfully used by the worlds largest steel company POSCO to grow from a little tin shed to what they are today.
Many Australian CEO's and investment analyst believe doing more with less is about just laying off people, this is a dangerous myth, our country is littered with cases of "throwing the baby with the bath water".

DF Disruptive New Technology (e.g. Cloud, Big Data, etc.)?
DDS : There are two other big changes happening here along with Cloud and Big Data, I call it the "Smart Phone/tablet tsunami", it is overtaking the world a rapid rate, especially in  developing and emerging markets due to its cheap availability (Android devices $50+). The other is Social.
Organisations operating in the old paradigm will get wiped out. Today there are 70 million Google searches a day done in Australia! It's phenomenal. Nearly 50% of these are on smart devices. So if a business is still not focused on catering to this smart device lead tsunami and still operating on the "old" web / premised based platform with their economic ecosystem (employees, customers, suppliers and others ). They WILL be left behind and wither away..

DF. Security (what specifically?)
DDS : Today there are more DDOS attacks than ever before. there are more security breaches than ever before. This is a challenge individuals and organisations need to be aware. I was talking to a security expert of a large Australian firm, they have DDOS attack(s) everyday. Not nearly, but everyday. This impacts us all. As individuals we need be a lot me careful a lot more aware..

DF. Any others? Do you think that the big companies have an unfair advantage over SMEs in the Australian market? If so, how? If not, why not?
DDS: Australia has a habit of creating and cultivating oligopolies. Not sure why! SME's have it tough, particularly because of financing controlled by the biggest of the oligop's the big ugly banks. There are a few more VC type funds available, but no where as needed. To do this, Australian small business can be supported better via industry clusters. Similar to what I am calling for via mu blog for  ICT innovation. We need to call upon the likes of Harvard business Guru,  Michael Porter to help the government in creating these clusters. Flippantly created government initiatives will not work. Michael Porter works with nations in building industrial clusters. The other team who do the same for nations very successful are  INSEAD Business school professors of Blue Ocean Strategy fame who have helped South Korea to transform (eg: Samsung, Hyundai, LG etc, etc and their continuing global achievement)  Prof Chan Kim and Renee Mauborgan.
The time is nigh! We need our nations leadership to act.


Dinesh De Silva is CEO of Nexgroup Asia Pacific, he and his team are available to speak to media /  organisations or groups as a keynote / guest speaker on the above. Contact him +612 8003 3342, via twitter @dineshdesilva or www.nexgroup.com.au 

NexGroup Asia Pacific, is a World Class Business Process Solutions business, providing Software, & Accounting, Finance and Legal BPO Services. 

image: Opensourceway

The Great Australian Broadband debate - Analysed

There is much conjecture around the coalition's broadband plan vs labour's original plan. Confusion is rife and emotions high with politics of all colours and parties with vested interest fight it out. Lets try to cut through the confusion and get some facts on the table sooner than later.

NBN Co deserves the wide criticism it has reaped for its poor handling of the broadband roll out. Execution of labour's grand vision, Australia's most expensive public works program ever, has been stymied by poor execution. Not just the NBN but the government needs to be held accountable for the cost over runs on the original estimates, which in it self was a huge drain on the public purse. The delays and size of cost over runs are inexcusable and should have been catered for.

The coalition plan on the other hand is unimpressive and lacks vision. Especially if the plan that has been articulated by opposition communications spokesman,  Malcolm Turnbull is its final plan as opposed to a phase 1 of a larger vision delivering fibre to the home. Most analyst have discounted it, and through the eyes of a strategist at first pass the coalition strategy looks fundamentally flawed.

So lets try to cut through the turbid waters of rash critique,  political argument and counter argument and get some clarity.

Fibre to the home is a noble idea, but extremely expensive particularly in a country the size of Australia.  Implementing an ambitious plan of this nature and scale is often plagued with the realities of cost blow outs and huge practical difficulty in execution. All these we have now experienced. Courage need to be admired, yet naivety of the exercise is not lost on most.

Labour plan provides 100 mbps to 93% of homes
Coalition 50-100mbps to 73% of homes and min 25mbps to 100% of homes
Labour will spend of $37.4B while the Coalition will spend $20.4B
Coalition will complete the plan 2 years sooner than labour in 2019.

Conclusion
Coalition plan needs to be fleshed out in particular to understand cost and timing impact of a next phase of delivery to ensure a larger percentage has fibre to the home/premises.
Current coalition plan has dependencies of cost and timing based on negotiation with Telstra on use of its copper infrastructure from the node to the home. More importantly costs incurred in the maintenance and performance related issues of the aging copper infrastructure needs to be researched.

Benefit of the coalition plan is that 100% of Australian public will not use the 100mbps broadband as its installed and by the time the need and demand is created a second phase will be able to be switched on fairly efficiently using newer technologies available. This will save the nation valuable capital at the outset.

Labour's grand plan is grand in it's design but like most other policies of this government eg: ETS, Mining tax,  unfortunately are hard to implement to fruition and will cost the tax payer infinitely more than its original estimates.

The broadband take up will not be 100% at the outset, in fact far lower and return on investment (ROI) will therefore be questionable and will most likely not meet original estimates. Considering cost over runs it's best our nations treasury prepares for a final bill exceeding $50+ billion on the labour plan.

My broadband vote: Labour plan is conceptually excellent, ticks all the boxes, too expensive, not implementable by current government. Coalition plan is implementable, and more prudent financially but must be phased to achieve FTTP to min 73% of premises with strong take up and 93% if take up justifies investment.

Dinesh De Silva is CEO of Nexgroup Asia Pacific, he and his team are available to speak to media /  organisations or groups as a keynote / guest speaker on the above. Contact him +612 8003 3342, via twitter @dineshdesilva or www.nexgroup.com.au 

NexGroup Asia Pacific, is a World Class Business Process Solutions business, providing Software, & Accounting, Finance and Legal BPO Services. 

Outsourcing, The New Paradigm in Productivity?

Michael Porter at World Economic Forum.

Business Strategy Guru, and Harvard professor, Michael Porter defines productivity "As the value created in a days work" and emphatically says "The value created in a days work sets the wages you can earn". How true! You couldn't articulate individual, organisational or national productivity any better. Any more clearer.

Outsourcing can help increase value created in a days work and it is my belief, organisations who strategically outsource its low value, mundane, or non core tasks can significantly increase its productivity, if done well.
By outsourcing non core activity it allows greater focus on higher value creating tasks within the organisation, the acute specialization of a firms value chain. Staff can be moved / retrained to focus on higher value creating, higher fee earning business, working closer to the customer. Companies that outsource will grow not shrink, and as they grow will create more, higher value employment opportunities contrary to to popular beliefs of increasing unemployment.

The acute specialisation of value chain achieved by outsourcing will also help firms be stronger and to withstand tough market conditions due to inbuilt efficiencies. A lot more resilient than those who are slower to move. Apple, Virgin and the major Australian banks are some of the best examples, even the global financial crisis, the worst economic times we have ever seen, they grew and all made multi billion dollar profits when hundreds if not thousands of less efficient firms were going to the wall.

Yet the words, outsourcing or outsourcers, spell fear in most ranks within firms and nationally. Most feel initiatives to outsource will increase national unemployment. When computers were being widely introduced in corporate and government organisations in the 80's and the 90's we had the very same fears. We feared that computers would take our jobs away. We would lose control of our departments and our organisations and security would be significantly weakened and compromised.

When we now look at the paradigm of efficiency brought about with advent of computers, it is cleat that unemployment which averaged around 5.2% in 2012 is nearly half of the 9's, 10's & 11's we were experiencing most of the 1990's. Computers helped transform organisational productivity and change the paradigm of work itself, in the private and the public sector. Today we can't operate without computers even in our homes let alone at work.

If you talk to a firm of accountants today about outsourcing their mundane work, the work their staff have their head buried in, their usual fears are loss of control, security and jobs. This is no different to our fears with computers back in the day. It is the same if you speak to most firms about outsourcing their software development or the mere maintenance application software. I well remember how a CFO asserted to me in the mid 80's "these computers will take away our accounting jobs and we will have no training grounds for young accountants". I wasn't brave enough to tell him as a young consultant his fears were unfounded and he was wrong but history has proven so. Especially considering the importance, and the growth of the accounting profession today. It is the same for many other professions and industries.

Outsourcing if done well, with clear objectives, implemented with skill, can bring in significant improvements in productivity and value creation for all types and sizes of organisations. Small, medium, big, and the public sector. If done badly for the wrong reasons, unclear goals or implemented poorly it will be like those bad computerisation projects we have all heard of and know. The blame we often leave with the outsourcers or the software providers and not where it belongs

If we as employers embrace outsourcing we can help our staff move up the value chain, adding greater value and creating increased opportunities for income and efficiency. I was one of those people that helped usher in computerisation to firms in the mid 80's to the 2000's.  Today I believe outsourcing   can help strategically transform organisations and its competitiveness. Like anything, to do it successfully, you need to do it right and for the right reasons.


Dinesh De Silva is CEO of Nexgroup Asia Pacific, he and his team are available to speak to media /  organisations or groups as a keynote / guest speaker on the above. Contact him +612 8003 3342, via twitter @dineshdesilva or www.nexgroup.com.au 

NexGroup Asia Pacific, is a World Class Outsourcing business, providing Software development & Accounting, Finance and Legal BPO Services.