This is 5-point-plan number 2.

Business Productivity Improvement in 2009 – another 5 Point Plan

What can you do to improve the productivity of your business? Here’s a simple checklist to consider, starting by looking at whether you should you do IT Differently?

Do your IT systems meet your business needs? Are they lagging behind competitors? Is it essential that you reduce IT opex and capex? All of the above? Now more than ever business requires adaptable IT supply that meets changing needs at a lower and more flexible cost structure. Three approaches should be explored for strategic gains...

1. Software as a Service (SaaS)

SaaS, Hosted Applications or “Cloud Computing”. Get past the hype and you’ll now find mature options for business. The concept is essentially where a supplier operates and maintains an application that you (and other users) can access and use securely via the internet.

Benefits generally include paying for what you use (fundamentally, a zero capex variable opex model), access from anywhere including mobile devices and knowing that someone else will keep the application maintained and up to date (and the infrastructure to host that application to boot).

Check out NZs Xero for your finance system, SalesForce.com for Client Relationship Management and Microsoft’s bundle of Cloud Computing products.

2. Open Source Software

In a nutshell software that is free to use. Open Source now has a huge following worldwide and the explicit endorsement of many governments and major corporates (both as suppliers of Open Source software and as users of it). From the largest of business applications to the smallest software utility it’s likely that there will be an Open Source option. Unlike Hosted Applications you still need the environment to run them and expertise to support them, but many organisations specialise in this. Visit the New Zealand Open Source Society http://nzoss.org.nz/.

3. Outsourcing

There’s a reason why the even the big players choose to outsource a large chunk of their IT expenditure when on the face of it they have sufficient requirements to justify a large IT department – there are gains through specialisation that can be shared. This helps with productivity. Whether you pursue (i) or (ii) above, or not, you will have an in-house IT environment of some form and you should evaluate whether you are the best organisation to support and maintain it.

And two points for quick wins...

4. Mobile

Does your company use Telecom and Vodafone mobiles in your fleet? Many firms do to meet specific international roaming or coverage requirements. The problem is interconnection charges between the two networks will be inflating your bill every month as your staff members talk to each other “off-net”.

With both operators working on improving roaming and domestic coverage, the time is right to single source from one provider.

5. Data

Data can be one of the most significant costs for an organisation, particularly if your business operates across more than one site and requires reliable connectivity between them. Optimising the service you are purchasing for the real quality of service you require can generate savings as well as improvements in the performance of your data network.

For example if you run a retail business operating from several sites and servicing trade customers, reliable store inventory information could be the difference between winning or losing a sale. From a data perspective you require high availability (to give the customer and immediate answer) but low bandwidth connectivity. What are you paying for at the moment? Possibly high bandwidth high availability managed data connectivity which exceeds your real needs.

  ¶ 9:41 PM

  ICT Sector Productivity Improvement - Butler 5 Point plan number 1

No one doubts we are in a time of significant economic change – but change can also bring opportunity for NZ. We applaud National’s focus on infrastructure development and see our national ICT Infrastructure as critical enabler that can help us turn ‘lemons into lemonade’. This is a time when we need new ideas and fresh thinking:

1. Public Investment: complementary not substitutive investment is required

To maximise the benefit of precious taxpayer funds, these ICT investments should look to complement existing private sector investment plans, rather than impair their worth.

Telecom, Vodafone and others are investing significantly now in fibre to the cabinet, fibre backhaul and broadband infrastructure etc. The business cases for these investments should be complemented by government investment that leverages existing networks to encourage ongoing progress and service enhancement.



2. Ultra Fast Broadband: think mobile as well as fixed

National has talked about investing up to NZD $1.5b to help achieve ultra fast broadband that seems primarily oriented toward fibre to the home/business. There may be benefits in considering mobile as well as fixed. Mobile broadband is the fastest growing service category in Telecommunications with costs falling significantly as a result of maturing 3G technology and devices. While fixed broadband services are expected to maintain a speed/capacity advantage, the productivity enhancing value of ubiquitous service at high speeds/capacity and reasonable cost may be compelling.

Whether it’s a TV camera streaming live footage, videoconferencing using you laptop or simple content download – mobile broadband is about to come of age in NZ.


3. Fragmented IT private sector must co-ordinate for better industry outcomes

The ICT industry can’t engage well with government or other jurisdictions (such as to exploit opportunities presented by new FTAs) without a representative body. This was a role ITANZ never quite fulfilled and the situation has only deteriorated since its demise. The NZICT initiative is important, and it’s important that it be more than just a lobby group – there is so much to do to grow the NZ industry.

NZ organisations need to get better at clustering and some would benefit from merging to create viable scale.


4. Hosted (Cloud) Computing - NZ centre of excellence

NZ’s IT environment is characterised by a number of largely sub scale firms looking to compete on the NZ and World stage. Increasingly for those firms in the software business, a big component of their fixed cost relates to the operation and maintenance of the hosting environment.

Now there’s no secret formula in the fact that aggregating these fixed costs and distributing them over a larger range of services will help deliver scale.

Government should investigate the options to leverage existing commercial hosting operations through a combination of industry co-ordination and possible Government agency anchor tenancy. The objective being ease of commercial access to world class high QoS hosting services at competitive prices that reflect scale.



5. Regulation – focus on sustainable customer and market outcomes that deliver productivity gains

What do we really want from regulation? – We say a stable investment environment that promotes true competition and productivity enhancing customer/market outcomes. Coupled with this regulation should curb natural monopoly effects in a small economy with a path to deregulation when criteria have been met.

For example in the context of the current economic downturn – some of the transition to equivalence criteria placed on Telecom as a result of separation undertakings are at best of marginal benefit (in terms of true competitive equivalence of industry inputs) and at worst wasteful. Does the required pace of migration of Telecom customers off the PSTN really make sense? Particularly if there are alternate services that competitors can buy at reasonable rates and provide their customers good quality calling services?  ¶ 9:59 PM