Auctionwire was founded by Josh Gold and David Romeo in early 2004 and hoped to launch the company and service as soon as May 2004. They hoped to take advantage of the growing number of online auctions such as ebay in order to open up this sales channel to both corporations and charities. (Mark, K., & Comisarow, M.B., 2006) This was clearly a very ambitious project for two young men and so it is necessary to give consideration to their business plan and the software specification which they believe is required for the business.
When considering Auctionwire’s business plan one of the first points which catches one’s attention is that Gold and Romeo planned to launch the company in May 2004, leaving themselves with only 4 months to complete all the ground work and choose a suitable software package. This is an extremely challenging task as they would have to advertise the company to ensure that enough people were aware of their existence and this would be difficult to do until they had their systems fully operational as it is highly likely that any potential clients would want to see evidence to validate the company’s promises. It is therefore possible that the business plan has not been given sufficient consideration as Gold and Romeo appear too eager to launch rather than spending time nurturing the company.
Furthermore, Auctionwire plan on managing the complete auction process, including listing items, shipping items to buyers and collecting payment. (Mark, K., & Comisarow, M.B., 2006) This is substantially more than the current dominant player (ebay) does for clients as the sellers ship the items themselves and payment is done through PayPal. (Mark, K., & Comisarow, M.B., 2006) Although this can be viewed as providing Auctionwire with a competitive edge it is also possible that sellers are not too concerned with such additional services and so may not be willing to pay the greater commission charged by Auctionwire for the privilege. This is therefore possibly a further negative aspect of the business plan because Auctionwire is looking to provide a more comprehensive service than ebay despite the huge success of ebay and the fact that this will be a new company who needs to keep things simple in the beginning in order to minimise software requirements and start up costs.
Carrying on from the above, I believe that although the software specification which Auctionwire detail will be necessary in order for them to achieve their objectives, it may actually be too complex for a start up business. Auctionwire, in my opinion, are trying to do too much too soon and should consider simplifying their business plan and therefore software specification until they are more established and have the necessary skills in place to manage such a development.
One of the options available to Auctionwire is to purchase off-the-shelf software from outside companies but this has problems because Auctionwire need their systems to be integrated and are looking for several advanced features which may not be available. (Mark, K., & Comisarow, M.B., 2006) Furthermore, the software packages which were available were originally designed for ‘Powersellers’ who are individuals which should not be in the same league as Auctionwire. It is likely that they would require much more sophisticated software and so off-the-shelf solutions may not be appropriate. However, building software from scratch is not without its problems and so the off-the-shelf solutions must be given some consideration.
The first potential supplier is SuperAuction and it displays similarities to Auctionwire in that it also looks to provide access to a number of auction websites. (Mark, K., & Comisarow, M.B., 2006) This is a major plus for this package as SuperAuction already have experience of providing this level of service and so it should be able to cope with Auctionwire’s demands. A further advantage of this package is that an offline solution is available which should minimise any downtime and this was one of the main requirements as $1000 of sales are made every second on ebay. (Mark, K., & Comisarow, M.B., 2006) This means that any downtime could have disastrous consequences in terms of lost sales and commission and the loss of future custom. Additionally, this package comes in substantially lower than the $15000 budget but this may be due to its poor quality as Gold and Romeo would still be required to add extra programming and this would still not achieve full functionality.
Canauction was another contender but being a brand new software provider may prove to be its downfall in terms of winning the contract from Auctionwire as it may not be able to provide evidence of its reliability. Furthermore, many of the bugs within the system affect major parts of the software which makes this problem even more of an issue. Coupled with the inflexibility of the package it would appear that Canauction would not be a suitable option.
Another possibility existed in the form of Blackthorne Pro but this has the same problem as Canauction due to the fact that it is so new that it is still in the testing phase. The fact that Auctionwire wish to go live in only 4 months makes this option extremely risky as it is unlikely that sufficient testing will have been carried out by this time to guarantee its reliability and sufficiency. This package also has no offline solution meaning that any downtime will be exaggerated and the software is also not yet ready to be used in conjunction with websites other than ebay.
Clear-Bid would appear to be the worst of the off-the-shelf solutions because downtime will be exaggerated by its poor customer service and it is the most expensive of the outside solutions. It would therefore appear that SuperAuction is the only possibility in terms of off-the-shelf solutions.
Auctionwire could of course develop their own software and this would allow them to tailor it to suit their needs and would give themselves a degree of control over the package which they were using. This would be particularly useful if the system ever crashed as they would be the ones to fix it. However, this can be a very expensive route to take as they cannot even provide an estimated cost and it is expected to take 200 hours just to develop the system, meaning that the system may not be ready for the May 2004 launch.
In conclusion, I would recommend that Auctionwire purchase software from SuperAuction as it has experience in this area and can be implemented in time for the launch. A tailor made solution would be useful in terms of flexibility and control over the features provided but if the company wishes to take this path it must be willing to push back its May 2004 launch as it is unlikely that any custom built solution would be ready in time.
Sunday, 23 December 2007
Monday, 17 December 2007
Compound UK Case Study
Compound UK is the selling division of a multinational pharmaceuticals company and primarily operates within the UK health sector. The reforms which took place within this market in the 1980s and 1990s led to more complex sales situations for Compound UK as hospitals became more autonomous which meant that Compound could feasibly be dealing with many different needs and conditions within the same market. In response to the changing conditions Compound UK took the decision to reorganise their business and six months after the restructuring further changes were made as it was felt that staff should share information across functional and geographic boundaries and Lotus Notes was viewed as a package which could assist with this process.
The intention of Lotus Notes was clearly to make the company more efficient and effective in their dealings with customers but with the benefit of hindsight it is possible to see that the implementation could have been managed very differently and this will now be considered.
Firstly, the introduction could have been managed differently by providing training to all reps rather than only new reps who joined the company. The training not only ensured that reps had been introduced to Lotus Notes before being allowed out to visit potential customers but also became a good social event as it allowed new employees who would normally be isolated through working from home to meet with their colleagues and develop a good team spirit. Had this idea been expanded to include current reps Compound could possibly have avoided many of the internal problems as staff would not have been so suspicious of the reasons behind the implementation and would have been more responsive to using the software properly rather than using it to further their own objectives.
Following on from the above, I would have advocated more people in senior positions following the lead of James Black as he ensured that he met with staff and got to know them as people rather than statistics on league tables. This approach was clearly successful as reps were willing to communicate fully with him, even if this meant admitting to losing a contract, and this ensured that he had the best information available to him and could give advice to ensure that future contracts would be more successful. This approach should have been encouraged throughout the company rather than allowing certain managers to encourage the "yes sir" approach used by certain employees purely to further their own careers without considering what would actually be best for the company.
A final point which should have been managed differently relates to the reward structure which was in place. Despite a new system (Notes) being implemented the reward structure remained the same and this should have been changed in order to give employees an incentive to use the system correctly. The different approaches taken by different managers simply adds to the inconsistency within this company as some employees were awarded 30% of their salary for using the shared databases fully and effectively whilst others received no credit for this and were instead judged on how many hours they had worked and if they had surpassed their sales targets. The introduction could therefore have been managed more effectively if the company had made changes to the reward structure which would make it clear what would be judged to be "proper" use of the system and would therefore encourage such behaviour.
In terms of using the functions of Lotus Notes, there are a few things that could have been done differently. One major point arises from the contact recording database: a database used to record the views, interests and requirements of particular doctors. Many reps used this contact list to make their efforts more visible by inputting a large number of contacts including all the doctors, managers, accountants and even nurses that they met in practices and hospitals. This furthered them in the league however, it was not beneficial to Compound to have this many contacts all from one practice or hospital and it also infuriated other reps who were not as motivated to further their career. Moreover, many reps that were disillusioned by this new technology simply inputted a line or a full stop. In terms of resolving these issues there could be a facility installed within the customer database to limit the number of different contacts within one hospital or practice so as to build upon the relationships already established with these contacts rather than have numerous different contacts with little knowledge on them.
Further, the use of a league facility may have gone against Compound’s favour. As can be seen from the example of school league tables, they tend to only measure one thing – results. Therefore, everything is targeted at achieving these with no focus on other aspects of the teaching environment such as extra-curricular activities or teaching quality. This is exactly the case here as the results of the league tables are based on achieving customer contacts. Therefore, it is not measuring the quality of the work being done but, rather the quantity of customers. A recommendation to improve this would be the use of multiple indicators to measure improvement or measuring the number of followed through sales from customer contact. They need to ensure that when measuring targets, the targets fit in with their overall company strategy.
The strategic selling database also caused disruption between the different reps within Compound. Many career orientated reps used these to record numerous points regardless of whether they had any complex sales issues in their territory at that moment in time. This is again similar to the point of the customer contact database in that it was focused towards quantity with the use of league tables. Again, an initiative needs to be taken to ensure that what is being inputted is relevant to complex sales rather than quantity of words that may have nothing to do with the sales. Another recommendation that could be pushed to dissolve this problem would be to monitor the usage of the regional databases to share ideas to benefit each of the reps. This part of notes was said to be used effectively by those who were not trying to further their career by exploiting the technology. Therefore, if everyone was encouraged to use this, the culture adopted by the older reps may be installed in the younger reps.
In conclusion, I feel that had Compound managed the introduction of Lotus Notes more effectively by giving consideration to the effect that a lack of training and an unchanged reward scheme and introduction of a league table would have on staff behaviour. This could have been used as an opportunity to install an overall company ethos but instead has led to a divide amongst employees. The system could be improved by the above recommendations to ensure that the targets of Compound are being met in terms of sales to customers rather than a device to input 'office politics'.
The intention of Lotus Notes was clearly to make the company more efficient and effective in their dealings with customers but with the benefit of hindsight it is possible to see that the implementation could have been managed very differently and this will now be considered.
Firstly, the introduction could have been managed differently by providing training to all reps rather than only new reps who joined the company. The training not only ensured that reps had been introduced to Lotus Notes before being allowed out to visit potential customers but also became a good social event as it allowed new employees who would normally be isolated through working from home to meet with their colleagues and develop a good team spirit. Had this idea been expanded to include current reps Compound could possibly have avoided many of the internal problems as staff would not have been so suspicious of the reasons behind the implementation and would have been more responsive to using the software properly rather than using it to further their own objectives.
Following on from the above, I would have advocated more people in senior positions following the lead of James Black as he ensured that he met with staff and got to know them as people rather than statistics on league tables. This approach was clearly successful as reps were willing to communicate fully with him, even if this meant admitting to losing a contract, and this ensured that he had the best information available to him and could give advice to ensure that future contracts would be more successful. This approach should have been encouraged throughout the company rather than allowing certain managers to encourage the "yes sir" approach used by certain employees purely to further their own careers without considering what would actually be best for the company.
A final point which should have been managed differently relates to the reward structure which was in place. Despite a new system (Notes) being implemented the reward structure remained the same and this should have been changed in order to give employees an incentive to use the system correctly. The different approaches taken by different managers simply adds to the inconsistency within this company as some employees were awarded 30% of their salary for using the shared databases fully and effectively whilst others received no credit for this and were instead judged on how many hours they had worked and if they had surpassed their sales targets. The introduction could therefore have been managed more effectively if the company had made changes to the reward structure which would make it clear what would be judged to be "proper" use of the system and would therefore encourage such behaviour.
In terms of using the functions of Lotus Notes, there are a few things that could have been done differently. One major point arises from the contact recording database: a database used to record the views, interests and requirements of particular doctors. Many reps used this contact list to make their efforts more visible by inputting a large number of contacts including all the doctors, managers, accountants and even nurses that they met in practices and hospitals. This furthered them in the league however, it was not beneficial to Compound to have this many contacts all from one practice or hospital and it also infuriated other reps who were not as motivated to further their career. Moreover, many reps that were disillusioned by this new technology simply inputted a line or a full stop. In terms of resolving these issues there could be a facility installed within the customer database to limit the number of different contacts within one hospital or practice so as to build upon the relationships already established with these contacts rather than have numerous different contacts with little knowledge on them.
Further, the use of a league facility may have gone against Compound’s favour. As can be seen from the example of school league tables, they tend to only measure one thing – results. Therefore, everything is targeted at achieving these with no focus on other aspects of the teaching environment such as extra-curricular activities or teaching quality. This is exactly the case here as the results of the league tables are based on achieving customer contacts. Therefore, it is not measuring the quality of the work being done but, rather the quantity of customers. A recommendation to improve this would be the use of multiple indicators to measure improvement or measuring the number of followed through sales from customer contact. They need to ensure that when measuring targets, the targets fit in with their overall company strategy.
The strategic selling database also caused disruption between the different reps within Compound. Many career orientated reps used these to record numerous points regardless of whether they had any complex sales issues in their territory at that moment in time. This is again similar to the point of the customer contact database in that it was focused towards quantity with the use of league tables. Again, an initiative needs to be taken to ensure that what is being inputted is relevant to complex sales rather than quantity of words that may have nothing to do with the sales. Another recommendation that could be pushed to dissolve this problem would be to monitor the usage of the regional databases to share ideas to benefit each of the reps. This part of notes was said to be used effectively by those who were not trying to further their career by exploiting the technology. Therefore, if everyone was encouraged to use this, the culture adopted by the older reps may be installed in the younger reps.
In conclusion, I feel that had Compound managed the introduction of Lotus Notes more effectively by giving consideration to the effect that a lack of training and an unchanged reward scheme and introduction of a league table would have on staff behaviour. This could have been used as an opportunity to install an overall company ethos but instead has led to a divide amongst employees. The system could be improved by the above recommendations to ensure that the targets of Compound are being met in terms of sales to customers rather than a device to input 'office politics'.
Computerising the NHS
The NHS is major part of British society but often comes under fire for failing to provide the high level of service which its users expect and demand. Most people assume that this is an argument concerning the standard of healthcare provided but in fact the issue runs much deeper and includes the background processes which enable the service to run at all. Like any modern organisation IT has a major role to play within the NHS and it has been claimed that greater use of IT is key to reforming the NHS. (The Economist, 2002) The Wanless Report provided some shocking statistics for everyone involved in the NHS: spending on IT had to immediately double if the NHS was to meet its targets and the NHS was guilty of spending less on IT per employee than any other industry sector. (Wanless Report in The Economist, 2002) It is therefore clear to see that computerising the NHS needs to be taken seriously as in order to regain its status as a 'national treasure' it is necessary to look to the future and consider how this process can best be undertaken in order to add value to the organisation and ultimately improve the level of service provided.
At the centre of the technology employed by the NHS is ‘the spine’. This is made up of a set of Care Record Services (en.wikipedia.org). Key to these care record services are a set of systems: the ‘Choose and Book’ hospital appointment booking system; the electronic prescription service; the personal demographic service and the ‘GP2GP’ records transfer system for family doctors (Shifrin, 2007). It will also allow for information from multiple sources to be available to those with authority to use it (Spronk, 2007).
In terms of controlling access to the spine, the NHS has proposed the use of personal authentication devices which will transmit encrypted passwords to ensure security (Cross, 1995). Further, full access to information will only be granted to those clinicians who need it, while administrative staff will only be allowed access to basic patient information (news.bbc.co.uk). On top of this there are plans for a website called ‘My Health Space’ which can be accessed over the internet by patients. This will allow patients to access their personal details from home through the use of ‘highly secure passwords’ (news.bbc.co.uk)
Further, crucial to the spine is the Transaction and Messaging Spine (TMS), see above diagram. This is the master ‘router’ of all the messages between the systems and is based on the HL7 Version 3 XML Messaging Standard. Message flows from local systems are routed to the NCR (see diagram above) and oppositely, if so required (Spronk, 2007).
The network that supports the spine is called ‘N3’. This is said to be a ‘fast and efficient’ network that ensures that the new systems and services run smoothly and quickly (http://www.connectingforhealth.nhs.uk/). This network uses a sufficient band-width to implement these new approaches such as transmitting digital images through the system (http://www.connectingforhealth.nhs.uk/).
Implementing IT has not always gone smoothly in the NHS and in 2004 there were worries over the NHS National Project for IT (NPfIT) which was an ambitious project to computerise the NHS. This was billed as "not just another IT project" and promised that lessons had been learned from previous fiascos such as those witnessed at the Passport Office and air-traffic control. (The Economist, 2004) However, as could be expected problems were quickly identified with this project. Computer Weekly were quick to highlight that the cost of this project could rise to £18.6billion or even a massive £31billion, substantially higher than the budgeted cost of £6.2billion (The Economist, 2002) and surely enough to send shockwaves round those in charge. This illustrates the huge problem of keeping any major project on budget. If the NHS is to be successfully computerised, the people in charge will have to ensure that all projected costs are as accurate as possible and this budget must be adhered to.
A major point for the NHS to consider when implementing a computerised system is the security of the system. The data which will be held on this system is extremely sensitive and people will understandably want assurance that their personal medical records will not fall into the wrong hands. (Cross, M., 1995) Unfortunately this point appeared to have fallen on deaf ears within the NHS as in 2000 there were concerns over the security, or rather the lack of security, in place and it was claimed that the NHS was paying insufficient attention and care to patient privacy and security. (http://en.wikipedia.org/wiki/National_Programme_for_IT#Criticisms_of_the_programme) Furthermore, in 2004 the NPfIT won the "Most Appalling Project" Big Brother Award from Privacy International because of its plans to "computerise patient records without putting in place adequate privacy safeguards". (http://news.bbc.co.uk/1/hi/technology/3933679.stm)
However, despite the existence of evidence which would suggest that computerised systems within the NHS are lacking in security this does not necessarily mean that the project will be a disaster. If immediate action is taken to correct the problems there is actually the possibility that the new system will be more secure than those used previously as currently patient notes can often be left unattended in hospital wards or consulting rooms. (Cross, M., 1995) A computerised system would therefore solve this problem because all records would be held electronically and would require the use of passwords or other personal authentication devices in order to be viewed.
The security which would be employed should be given careful consideration to ensure that it is as useful as possible. Passwords are likely to be a measure used as they can limit access to information by requiring both a unique user name and password. However, staff must be made aware of basic principles such as never writing down a password and refraining from using words or phrases which can be easily guessed i.e. names of family members or favourite sports teams. (http://en.wikipedia.org/wiki/Password#Security_and_convenience) Another aspect to consider which would make the system more secure would be to time-out after a period of inactivity and require the password to be re-entered. This would be useful because if a computer was accidentally left unattended no unauthorised personnel could gain access to the system under the guise of the original user.
A point to remember is that this is a Government project and these have a long history of failure due to their tendency to be over-ambitious and are often poorly managed. (The Economist, 2002) One only has to consider the air-traffic control NATS system to illustrate this point as this project finished millions of pounds over budget, was years late being delivered (Erskine, R., 2002) and, most worryingly, it was obsolete by the time it was fully implemented. (The Economist, 2002) Most commentators believe that the main reason for this disaster was the fact that it was poorly managed and this can most obviously be highlighted by the fact that the project made use of 3 service providers. (Erskine, R., 2002) This shows a lack of consistency and a complete failure to get the correct people on board from the beginning which ultimately led to its failure. The fact that the same situation took place with the NPfIT is of major concern as it is yet another problem within an already failing project and it is only exaggerated by the fact that the customer is the Government as providers know that this customer is highly unlikely to simply scrap a project as it has used taxpayers' money and will do anything to avoid the negative publicity which would come with such a high profile failure.
Another problem with this project is that unlike a company, for example, the NHS is not a single organisation as it consists of thousands of GP surgeries, hospitals, pharmacies and clinics. (The Economist, 2002) This means that implementation at a local level could prove to be a problem as some practices may choose to resist change and this could lead to a situation where millions of pounds have been wasted as there would still be no unity across the NHS and the level of service available to patients could depend upon their location (a problem which currently exists).
Further, the time scale of the project has also come under scrutiny. At present, the programme is already two years behind schedule with no firm implementation date set (House of Commons, Committee of Public Accounts, 2007). At present almost all acute hospital trusts should have the NPfIT patient administration systems implemented however as of June 2006 this was only the case in 13 hospitals with there being a plan to increase this to 22 by October of that year. However, by February 2007 the number was only 18. Therefore, the House of Commons Public Account Committee feels that the department should enforce a robust timetable to ensure greater confidence in the delivery date (House of Commons, Committee of Public Accounts, 2007).
Additionally, this programme is only set to computerise the 50 million NHS patients in England (http://www.bbc.co.uk/). This could be a problem for patients that regularly travel over the borders as no plan has been made in relation to Scotland and Northern Ireland. Further, Wales is in the process of implementing a programme for service and improvement through the use of IT (en.wikipedia.org). The NHS is supposed to be a National Health Service, not a service solely dedicated to serving England. Therefore, it should not only be patients in England that benefit from the increased efficiency of the system. Further, the fact that there are currently two IT improvement schemes running may make it difficult to integrate one system throughout Britain and it is therefore, possibly a wasted investment on the part of the NHS if one of the programmes needs to be scrapped to allow integration.
The project has also been criticised by civil liberties campaigners such as NO2ID who object to the state having so much personal information held on databases and The Big Opt Out who have provided patients with letters to send to their doctors to ensure that their details are withheld from the system. (en.wikipedia.org) By playing on the "Big Brother State" issue which is a hot topic at the moment such groups can ensure that many people will opt out of the system as they look to create panic and claim that the Government will soon know everything about us. Such criticisms are likely to strike a chord with many people and so it is clear that even if the project can overcome its problems it may still fail as it does not have the confidence or trust of the nation it intends to serve.
As previously mentioned, the NPfIT has only begun to look at computerising the NHS in England. One possibility for the future is that this will be rolled out through the whole of the UK. However, the stakes of the project are high. If it succeeds in its aims, the program could revolutionize the way the NHS uses information, and make significant improvements to the quality of patient care. But if it fails, it could set back IT developments in the NHS for years, and divert money and staff time from front line patient services (House of Commons, Committee of Public Accounts, 2007).
Also, in the future, further innovation in the use of IT in the NHS is inevitable. For example, a new invention of electronic patient tagging is being piloted in a hospital in Birmingham (http://www.mailonsunday.co.uk/). This involves digital photos being taken of patients as the come into the hospital who are then tagged with the information being synchronized with their electronic records. It is said to reduce human error with patients being sure that they are going into the right operation, at the right time, with the right surgeon (http://www.mailonsunday.co.uk/). It is estimated that it could save the NHS thousands in litigation. However, in the implementation of further innovation, the NHS should take on board the criticisms of this vast project and learn from the mistakes that they have encountered.
In sum, one can not comment on the over all conclusion of this project as it is not yet finished. However, they have aimed to implement some key pieces of technology designed to improve efficiency and accuracy within the service they provide. Whilst this is valid and beneficial to all those involved in running the NHS, working for the NHS and those using the service, the criticisms outlined above should be taken into consideration firstly, before the project is finished and also in future projects that the NHS and the government as a whole aim to implement. Key to these criticisms is the security of the systems put in place; the escalating costs of the project and the integration of the network throughout the UK. Further, as in a lot of governmental projects, the management of the project has come under scrutiny which should be able to managed efficiently after the lessons the government has learnt from previous projects. Therefore, although the project has already been 'rolled out' in some areas of England, these points should be considered carefully in the further integration throughout the UK.
REFERENCES
Cross, M, National Health Services I/S Network Takes Shape - UK National Health Information Network, Health Management Technology, January 1995
Erskine, R., At last a silver lining around the troubled NATS Air Traffic Control system, 2002, www.cs.mdx.ac.uk/research/SFC/Reports/TR2002-02.pdf, accessed on 3 December 2007
House of Commons, Committee of Public Accounts, Department of Health: The National Programme for IT in the NHS, March 2007, Accessed from:
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmpubacc/390/390.pdf
Shirfrin, T, NHS Data Spine will go Off-line for a Major Upgrade, ComputerworldUK.Com, November 2007, Accessed from:
http://www.computerworlduk.com/management/government-law/public-sector/news/index.cfm?newsid=5977
Spronk, R, An English National Programme, Ringholm Whitepaper, March 2007, Accessed from:
http://www.ringholm.de/docs/00970_en.htm
The Economist, Deja vu all over again?, p.36, 2004, http://proquest.umi.com/pqdweb?index=0&did=715018391&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1196683068&clientId=46002, accessed 19 November 2007
The Economist, The Health Service's IT Problem, p.29, 2002, http://proquest.umi.com/pqdweb?index=1&did=218613561&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1196683068&clientId=46002, accessed 19 November 2007
http://en.wikipedia.org/wiki/National_Programme-for_IT
http://news.bbc.co.uk/1/hi/health/6454946.stm
http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness-200405135.html
http://www.connectingforhealth.nhs.uk/systemsandservices/n3/background
http://www.mailonsunday.co.uk/pages/live/articles/health/healthmain.html?in_article_id=323718&in_page_id=1774
This assignment was prepared in collaboration with Linzi Barr.
At the centre of the technology employed by the NHS is ‘the spine’. This is made up of a set of Care Record Services (en.wikipedia.org). Key to these care record services are a set of systems: the ‘Choose and Book’ hospital appointment booking system; the electronic prescription service; the personal demographic service and the ‘GP2GP’ records transfer system for family doctors (Shifrin, 2007). It will also allow for information from multiple sources to be available to those with authority to use it (Spronk, 2007).
In terms of controlling access to the spine, the NHS has proposed the use of personal authentication devices which will transmit encrypted passwords to ensure security (Cross, 1995). Further, full access to information will only be granted to those clinicians who need it, while administrative staff will only be allowed access to basic patient information (news.bbc.co.uk). On top of this there are plans for a website called ‘My Health Space’ which can be accessed over the internet by patients. This will allow patients to access their personal details from home through the use of ‘highly secure passwords’ (news.bbc.co.uk)
Further, crucial to the spine is the Transaction and Messaging Spine (TMS), see above diagram. This is the master ‘router’ of all the messages between the systems and is based on the HL7 Version 3 XML Messaging Standard. Message flows from local systems are routed to the NCR (see diagram above) and oppositely, if so required (Spronk, 2007).
The network that supports the spine is called ‘N3’. This is said to be a ‘fast and efficient’ network that ensures that the new systems and services run smoothly and quickly (http://www.connectingforhealth.nhs.uk/). This network uses a sufficient band-width to implement these new approaches such as transmitting digital images through the system (http://www.connectingforhealth.nhs.uk/).
Implementing IT has not always gone smoothly in the NHS and in 2004 there were worries over the NHS National Project for IT (NPfIT) which was an ambitious project to computerise the NHS. This was billed as "not just another IT project" and promised that lessons had been learned from previous fiascos such as those witnessed at the Passport Office and air-traffic control. (The Economist, 2004) However, as could be expected problems were quickly identified with this project. Computer Weekly were quick to highlight that the cost of this project could rise to £18.6billion or even a massive £31billion, substantially higher than the budgeted cost of £6.2billion (The Economist, 2002) and surely enough to send shockwaves round those in charge. This illustrates the huge problem of keeping any major project on budget. If the NHS is to be successfully computerised, the people in charge will have to ensure that all projected costs are as accurate as possible and this budget must be adhered to.
A major point for the NHS to consider when implementing a computerised system is the security of the system. The data which will be held on this system is extremely sensitive and people will understandably want assurance that their personal medical records will not fall into the wrong hands. (Cross, M., 1995) Unfortunately this point appeared to have fallen on deaf ears within the NHS as in 2000 there were concerns over the security, or rather the lack of security, in place and it was claimed that the NHS was paying insufficient attention and care to patient privacy and security. (http://en.wikipedia.org/wiki/National_Programme_for_IT#Criticisms_of_the_programme) Furthermore, in 2004 the NPfIT won the "Most Appalling Project" Big Brother Award from Privacy International because of its plans to "computerise patient records without putting in place adequate privacy safeguards". (http://news.bbc.co.uk/1/hi/technology/3933679.stm)
However, despite the existence of evidence which would suggest that computerised systems within the NHS are lacking in security this does not necessarily mean that the project will be a disaster. If immediate action is taken to correct the problems there is actually the possibility that the new system will be more secure than those used previously as currently patient notes can often be left unattended in hospital wards or consulting rooms. (Cross, M., 1995) A computerised system would therefore solve this problem because all records would be held electronically and would require the use of passwords or other personal authentication devices in order to be viewed.
The security which would be employed should be given careful consideration to ensure that it is as useful as possible. Passwords are likely to be a measure used as they can limit access to information by requiring both a unique user name and password. However, staff must be made aware of basic principles such as never writing down a password and refraining from using words or phrases which can be easily guessed i.e. names of family members or favourite sports teams. (http://en.wikipedia.org/wiki/Password#Security_and_convenience) Another aspect to consider which would make the system more secure would be to time-out after a period of inactivity and require the password to be re-entered. This would be useful because if a computer was accidentally left unattended no unauthorised personnel could gain access to the system under the guise of the original user.
A point to remember is that this is a Government project and these have a long history of failure due to their tendency to be over-ambitious and are often poorly managed. (The Economist, 2002) One only has to consider the air-traffic control NATS system to illustrate this point as this project finished millions of pounds over budget, was years late being delivered (Erskine, R., 2002) and, most worryingly, it was obsolete by the time it was fully implemented. (The Economist, 2002) Most commentators believe that the main reason for this disaster was the fact that it was poorly managed and this can most obviously be highlighted by the fact that the project made use of 3 service providers. (Erskine, R., 2002) This shows a lack of consistency and a complete failure to get the correct people on board from the beginning which ultimately led to its failure. The fact that the same situation took place with the NPfIT is of major concern as it is yet another problem within an already failing project and it is only exaggerated by the fact that the customer is the Government as providers know that this customer is highly unlikely to simply scrap a project as it has used taxpayers' money and will do anything to avoid the negative publicity which would come with such a high profile failure.
Another problem with this project is that unlike a company, for example, the NHS is not a single organisation as it consists of thousands of GP surgeries, hospitals, pharmacies and clinics. (The Economist, 2002) This means that implementation at a local level could prove to be a problem as some practices may choose to resist change and this could lead to a situation where millions of pounds have been wasted as there would still be no unity across the NHS and the level of service available to patients could depend upon their location (a problem which currently exists).
Further, the time scale of the project has also come under scrutiny. At present, the programme is already two years behind schedule with no firm implementation date set (House of Commons, Committee of Public Accounts, 2007). At present almost all acute hospital trusts should have the NPfIT patient administration systems implemented however as of June 2006 this was only the case in 13 hospitals with there being a plan to increase this to 22 by October of that year. However, by February 2007 the number was only 18. Therefore, the House of Commons Public Account Committee feels that the department should enforce a robust timetable to ensure greater confidence in the delivery date (House of Commons, Committee of Public Accounts, 2007).
Additionally, this programme is only set to computerise the 50 million NHS patients in England (http://www.bbc.co.uk/). This could be a problem for patients that regularly travel over the borders as no plan has been made in relation to Scotland and Northern Ireland. Further, Wales is in the process of implementing a programme for service and improvement through the use of IT (en.wikipedia.org). The NHS is supposed to be a National Health Service, not a service solely dedicated to serving England. Therefore, it should not only be patients in England that benefit from the increased efficiency of the system. Further, the fact that there are currently two IT improvement schemes running may make it difficult to integrate one system throughout Britain and it is therefore, possibly a wasted investment on the part of the NHS if one of the programmes needs to be scrapped to allow integration.
The project has also been criticised by civil liberties campaigners such as NO2ID who object to the state having so much personal information held on databases and The Big Opt Out who have provided patients with letters to send to their doctors to ensure that their details are withheld from the system. (en.wikipedia.org) By playing on the "Big Brother State" issue which is a hot topic at the moment such groups can ensure that many people will opt out of the system as they look to create panic and claim that the Government will soon know everything about us. Such criticisms are likely to strike a chord with many people and so it is clear that even if the project can overcome its problems it may still fail as it does not have the confidence or trust of the nation it intends to serve.
As previously mentioned, the NPfIT has only begun to look at computerising the NHS in England. One possibility for the future is that this will be rolled out through the whole of the UK. However, the stakes of the project are high. If it succeeds in its aims, the program could revolutionize the way the NHS uses information, and make significant improvements to the quality of patient care. But if it fails, it could set back IT developments in the NHS for years, and divert money and staff time from front line patient services (House of Commons, Committee of Public Accounts, 2007).
Also, in the future, further innovation in the use of IT in the NHS is inevitable. For example, a new invention of electronic patient tagging is being piloted in a hospital in Birmingham (http://www.mailonsunday.co.uk/). This involves digital photos being taken of patients as the come into the hospital who are then tagged with the information being synchronized with their electronic records. It is said to reduce human error with patients being sure that they are going into the right operation, at the right time, with the right surgeon (http://www.mailonsunday.co.uk/). It is estimated that it could save the NHS thousands in litigation. However, in the implementation of further innovation, the NHS should take on board the criticisms of this vast project and learn from the mistakes that they have encountered.
In sum, one can not comment on the over all conclusion of this project as it is not yet finished. However, they have aimed to implement some key pieces of technology designed to improve efficiency and accuracy within the service they provide. Whilst this is valid and beneficial to all those involved in running the NHS, working for the NHS and those using the service, the criticisms outlined above should be taken into consideration firstly, before the project is finished and also in future projects that the NHS and the government as a whole aim to implement. Key to these criticisms is the security of the systems put in place; the escalating costs of the project and the integration of the network throughout the UK. Further, as in a lot of governmental projects, the management of the project has come under scrutiny which should be able to managed efficiently after the lessons the government has learnt from previous projects. Therefore, although the project has already been 'rolled out' in some areas of England, these points should be considered carefully in the further integration throughout the UK.
REFERENCES
Cross, M, National Health Services I/S Network Takes Shape - UK National Health Information Network, Health Management Technology, January 1995
Erskine, R., At last a silver lining around the troubled NATS Air Traffic Control system, 2002, www.cs.mdx.ac.uk/research/SFC/Reports/TR2002-02.pdf, accessed on 3 December 2007
House of Commons, Committee of Public Accounts, Department of Health: The National Programme for IT in the NHS, March 2007, Accessed from:
http://www.publications.parliament.uk/pa/cm200607/cmselect/cmpubacc/390/390.pdf
Shirfrin, T, NHS Data Spine will go Off-line for a Major Upgrade, ComputerworldUK.Com, November 2007, Accessed from:
http://www.computerworlduk.com/management/government-law/public-sector/news/index.cfm?newsid=5977
Spronk, R, An English National Programme, Ringholm Whitepaper, March 2007, Accessed from:
http://www.ringholm.de/docs/00970_en.htm
The Economist, Deja vu all over again?, p.36, 2004, http://proquest.umi.com/pqdweb?index=0&did=715018391&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1196683068&clientId=46002, accessed 19 November 2007
The Economist, The Health Service's IT Problem, p.29, 2002, http://proquest.umi.com/pqdweb?index=1&did=218613561&SrchMode=1&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1196683068&clientId=46002, accessed 19 November 2007
http://en.wikipedia.org/wiki/National_Programme-for_IT
http://news.bbc.co.uk/1/hi/health/6454946.stm
http://www.bbc.co.uk/radio4/news/inbusiness/inbusiness-200405135.html
http://www.connectingforhealth.nhs.uk/systemsandservices/n3/background
http://www.mailonsunday.co.uk/pages/live/articles/health/healthmain.html?in_article_id=323718&in_page_id=1774
This assignment was prepared in collaboration with Linzi Barr.
Sunday, 16 December 2007
Mars Incorporated Online Procurement Case Study
Mars Inc. (Mars) is one of the world’s largest privately owned businesses and recently became aware that many companies were achieving substantial savings through the use of online procurement auctions. (Bell, P., 2003) The term 'procurement' is understood to refer to the purchase of indirect goods and electronic procurement is about taking this process online with the main aim of saving costs. (Leonard, S.R., 2001) It is now necessary to consider the advantages and disadvantages of such a system and of using auctions to fix prices.
Firstly, one of the main advantages is that of cost savings and this can be illustrated by BAE Systems who claim that since they implemented their online system, Exostar, the advantages have principally been cost savings which tend to be in the high teens. (Flynn, T., 2003) Such cost savings can be very important for companies and this appears to justify Mars’ decision as they hoped to achieve cost savings in order to allow the company to grow within highly competitive markets.
Furthermore, companies can also expect to make their business more efficient as the procurement process can be made faster. This is again a major bonus for Mars because if they are looking to remain competitive in their many markets it is extremely important for them to increase efficiency wherever possible as this will allow them to stay one step ahead of the other companies. Ford recently considered their internal processes and realised that if they were to make their business more efficient they would have to consider online procurement. This pushed them to join with Oracle to design and implement a suitable system and the company strongly believe that this is the correct path to follow as they believe that within 5 years everyone will have adopted this strategy. (Kerridge, S., 1999) It is likely that this will be more efficient for Mars as it reduces the need for the current one-on-one negotiations (Bell, P., 2003) as many people can be involved at the same time and this will clearly save time.
A further advantage of online procurement for buying and selling is that it is convenient and opens the marketplace up to a vast number of potential suppliers as it can be accessed from anywhere in the world due to the use of the internet. (Onvia, 2007) This is a particularly important point to note as Mars felt strongly that they did not want to become dependant upon a small number of suppliers as they did not want to be exposed to this risk. (Bell, P., 2003) By using online procurement Mars would be able to receive bids from suppliers who may never have been considered previously and this should assist in assuring that they do not simply rely on a couple of favoured suppliers.
However, there are also disadvantages to using online auctions to buy and sell goods or to fix prices. One of the main problems is that there tends to be a “lack of sufficient online procurement experts within the company” (Attaran, M., 2001) and so companies are forced to seek outside help. This is a particular problem within Mars because their system is extremely complex as it had to satisfy a large number of criteria such as limits of the number of suppliers and allowing suppliers to combine items to make suitable bundles. This led to a number of technical problems (Bell, P., 2003) and therefore not having any experts within the company is a major issue because when problems arise time may be wasted waiting on outside help arriving and Mars may find that they do not have sufficient control over their own system.
Furthermore, many of the advantages of online procurement can quickly turn into disadvantages if they are not managed properly. It is clearly advantageous that online auctions open the market up to a large number of potential players but this may not always be the best course of action as companies quickly realise that they are faced with the problem of choosing the most appropriate bid from a huge array of choices. By considering Exhibit 1 one can see the scale of the problem which faced Mars as within an hour they had received a number of bids from 7 different suppliers, none of which were easily comparable as all suppliers offered different bundles. (Bell, P., 2003) This therefore left Mars with a huge headache as they would have to spend a large amount of time analysing the bids to ensure that the most appropriate supplier won.
Online auctions can be advantageous in terms of fixing prices as they are unlike traditional auctions in that the ‘low bid’ wins. (Bell, P., 2003) This is clearly a benefit to buyers like Mars as they get the best possible value for money as they are able to get prices which would not have been possible had they continued with one-on-one negotiations.
However, like many previous advantages this one also has a downside as Mars stated that they did not want to squeeze suppliers too far (Bell, P., 2003) as this would go against their corporate image and would lead to poor relations. Auctions, however, by their very nature tend to encourage bidders to go to their limits in order to win the contract and so Mars would have to realise that they would have to put extra effort in to managing supplier relationships as it is likely that they would resent the strong focus on price. If additional teams are required to simply manage relationships then Mars could quickly realise that any cost savings they hoped to achieve would be lost.
In conclusion, online procurement holds a number of advantages for both buying and selling and fixing prices particularly in terms of cost savings and a more open marketplace. However, these advantages must be managed correctly in order to maximise the benefits because they can quickly turn into problems for firms as they need to spend time and effort managing supplier relationships and time may also be wasted sifting through a large number of bids in an attempt to determine the winner. In many cases there may be no clear winner due to the bundles offered and this could lead to inappropriate decisions being made.
REFERENCES
Attaran, M., “The coming of age of online procurement”, Industrial Management and Data Systems, 2001, http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=A6858097A50C8B58965C3EEB719D9194?contentType=Article&hdAction=lnkhtml&contentId=850030, accessed 12 December 2007
Bell, P., “Mars Incorporated: Online Procurement”, 2003
Flynn, T., “Doing your bidding”, Director, 2003
Kerridge, S., “Ford and Oracle to develop online procurement network”, http://software.silicon.com/webservices/0,39024657,11013775,00.htm, accessed 4 December 2007
Leonard, S.R., “Electronic Procurement”, 2001, http://213.198.108.89/ebew/e2000plen/leonard.html, accessed 14 December 2007
Onvia, “Federal Government Contracts: Electronic Data Interchange for Procurement”, 2007
Firstly, one of the main advantages is that of cost savings and this can be illustrated by BAE Systems who claim that since they implemented their online system, Exostar, the advantages have principally been cost savings which tend to be in the high teens. (Flynn, T., 2003) Such cost savings can be very important for companies and this appears to justify Mars’ decision as they hoped to achieve cost savings in order to allow the company to grow within highly competitive markets.
Furthermore, companies can also expect to make their business more efficient as the procurement process can be made faster. This is again a major bonus for Mars because if they are looking to remain competitive in their many markets it is extremely important for them to increase efficiency wherever possible as this will allow them to stay one step ahead of the other companies. Ford recently considered their internal processes and realised that if they were to make their business more efficient they would have to consider online procurement. This pushed them to join with Oracle to design and implement a suitable system and the company strongly believe that this is the correct path to follow as they believe that within 5 years everyone will have adopted this strategy. (Kerridge, S., 1999) It is likely that this will be more efficient for Mars as it reduces the need for the current one-on-one negotiations (Bell, P., 2003) as many people can be involved at the same time and this will clearly save time.
A further advantage of online procurement for buying and selling is that it is convenient and opens the marketplace up to a vast number of potential suppliers as it can be accessed from anywhere in the world due to the use of the internet. (Onvia, 2007) This is a particularly important point to note as Mars felt strongly that they did not want to become dependant upon a small number of suppliers as they did not want to be exposed to this risk. (Bell, P., 2003) By using online procurement Mars would be able to receive bids from suppliers who may never have been considered previously and this should assist in assuring that they do not simply rely on a couple of favoured suppliers.
However, there are also disadvantages to using online auctions to buy and sell goods or to fix prices. One of the main problems is that there tends to be a “lack of sufficient online procurement experts within the company” (Attaran, M., 2001) and so companies are forced to seek outside help. This is a particular problem within Mars because their system is extremely complex as it had to satisfy a large number of criteria such as limits of the number of suppliers and allowing suppliers to combine items to make suitable bundles. This led to a number of technical problems (Bell, P., 2003) and therefore not having any experts within the company is a major issue because when problems arise time may be wasted waiting on outside help arriving and Mars may find that they do not have sufficient control over their own system.
Furthermore, many of the advantages of online procurement can quickly turn into disadvantages if they are not managed properly. It is clearly advantageous that online auctions open the market up to a large number of potential players but this may not always be the best course of action as companies quickly realise that they are faced with the problem of choosing the most appropriate bid from a huge array of choices. By considering Exhibit 1 one can see the scale of the problem which faced Mars as within an hour they had received a number of bids from 7 different suppliers, none of which were easily comparable as all suppliers offered different bundles. (Bell, P., 2003) This therefore left Mars with a huge headache as they would have to spend a large amount of time analysing the bids to ensure that the most appropriate supplier won.
Online auctions can be advantageous in terms of fixing prices as they are unlike traditional auctions in that the ‘low bid’ wins. (Bell, P., 2003) This is clearly a benefit to buyers like Mars as they get the best possible value for money as they are able to get prices which would not have been possible had they continued with one-on-one negotiations.
However, like many previous advantages this one also has a downside as Mars stated that they did not want to squeeze suppliers too far (Bell, P., 2003) as this would go against their corporate image and would lead to poor relations. Auctions, however, by their very nature tend to encourage bidders to go to their limits in order to win the contract and so Mars would have to realise that they would have to put extra effort in to managing supplier relationships as it is likely that they would resent the strong focus on price. If additional teams are required to simply manage relationships then Mars could quickly realise that any cost savings they hoped to achieve would be lost.
In conclusion, online procurement holds a number of advantages for both buying and selling and fixing prices particularly in terms of cost savings and a more open marketplace. However, these advantages must be managed correctly in order to maximise the benefits because they can quickly turn into problems for firms as they need to spend time and effort managing supplier relationships and time may also be wasted sifting through a large number of bids in an attempt to determine the winner. In many cases there may be no clear winner due to the bundles offered and this could lead to inappropriate decisions being made.
REFERENCES
Attaran, M., “The coming of age of online procurement”, Industrial Management and Data Systems, 2001, http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=A6858097A50C8B58965C3EEB719D9194?contentType=Article&hdAction=lnkhtml&contentId=850030, accessed 12 December 2007
Bell, P., “Mars Incorporated: Online Procurement”, 2003
Flynn, T., “Doing your bidding”, Director, 2003
Kerridge, S., “Ford and Oracle to develop online procurement network”, http://software.silicon.com/webservices/0,39024657,11013775,00.htm, accessed 4 December 2007
Leonard, S.R., “Electronic Procurement”, 2001, http://213.198.108.89/ebew/e2000plen/leonard.html, accessed 14 December 2007
Onvia, “Federal Government Contracts: Electronic Data Interchange for Procurement”, 2007
Sunday, 9 December 2007
MySQL Case Study
MySQL is an open source company with 320 employees and sales of almost $40 million in 2005. (Wittig, C., 2006) MySQL has become extremely well-known and is often referred to in the same sentence as its closed source competitors Microsoft and Oracle. (Wittig, C., 2006) With MySQL growing all the time and 15% of US businesses with 100 – 1000 employees using open source applications (Fitzgerald, M., 2006) it is necessary to consider the potential advantages and, of course, disadvantages which this technology could bring to a business.
Open source software is not just software which gives you access to the code. In order to be truly regarded as “open source” it must conform to a number of principles including free distribution, access to a source code, must allow modifications and derived works, there must be no discrimination against any persons or groups and it must also be technology neutral. (www.opensource.org/) From simply considering the definition of open source it is clear to see that a number of advantages exist as there are no licensing costs, it provides flexibility and can be used by individuals or by companies. It is now necessary to consider such advantages in greater detail.
One of the main advantages of open source software in business is that the core software is free and this is a major benefit for businesses, particularly those who are just starting out, as it cuts down on their initial capital outlay. (Bloch, M., 2007) This point can be more fully illustrated by the fact that the first users of MySQL were internet-enabled start-up companies which used this software in order to get their business off the ground. (Wittig, C., 2006)
A further advantage of open source software is that it is flexible as it allows users to adapt and modify the software (www.opensource.org/) in order to improve it and adapt it to their business needs. Again this point can be clearly illustrated by considering the situation of MySQL as their initial customers valued the opportunity this software provided as they were able to change parts of the software in order to differentiate themselves in their own markets. (Wittig, C., 2006) This is a major advantage for businesses because if they purchase closed source software i.e. Microsoft Office they are unable to make any modifications and are left with a package which may not satisfy their needs fully.
Furthermore, open source software is readily available over the internet which is advantageous to businesses as they can simply download the software with no hassle and do not have to enter into complicated license agreements which force the user to count, track and monitor for license compliance. (Williams et al, 2005) This has even been identified by large closed source companies such as Oracle as an advantage as they state that this is one of the reasons why MySQL software is impacting the competitive environment in which they operate. (Wittig, C., 2006) It is therefore clear that this must be a characteristic which is valued by businesses as it simplifies the day-to-day running of the business and is one less issue which they have to monitor and control.
Independence is also a crucial factor as companies are not tied to a single vendor and are not forced to change their system if they do not want to. (Bloch, M., 2006) When Microsoft launches a new version of Windows it phases out support for older versions, forcing customers to upgrade even if it is not necessary for their business needs whereas older versions of open source software continue to be supported in the open source community. (Scavo, F., 2007)
However, disadvantages are also present and these must now be considered in order to complete the picture.
Firstly, businesses must be aware of the fact that projects can die and they may be left with a programme which no-one is working on to improve. (Bloch, M., 2007) This is a concern to any user but is of particular concern to a business because they may find that the software they have spent time implementing is no longer available or is basically obsolete. This would mean that competitors could overtake them as they would have to waste time changing their systems. Although businesses may expect that this would not be a problem when dealing with a reputable open source company such as MySQL this is a dangerous opinion to hold as closed source companies such as IBM and Oracle have started to purchase open source competitors. (Wittig, C., 2006) This means that even if the original company wishes to develop software further the new owners are likely to have made the purchase in order to prevent competition. This situation has already occurred as after IBM acquired Gluecode it began to scale back Gluecode’s production plans. (Wittig, C., 2006) It is surely not a coincidence given that Gluecode’s software was in direct competition with two of IBM’s products.
A further disadvantage is that the support which is available tends to be through forums only or may involve the customer having to pay a subscription. (Bloch, M, 2007) This is problematic within business as forums can be unreliable and one must use the information with caution as there is often no way of knowing the credentials of those people who are in the forums. Furthermore, one may find that their business is dependent upon people actually responding to questions posed in forums and this is risky as no obligation on people to do so. This then leads to customers having to pay for support as witnessed with the MySQL Network (Wittig, C., 2006) and surely it can be argued that this defeats the purpose of open source software because in order to make full use of the software a payment is still required.
Furthermore, Oracle, Microsoft and IBM have started to lower prices in order to match MySQL’s free or low cost offers (Wittig, C., 2006) and this means that businesses may now be able to obtain a more familiar product for a similar cost and therefore the cost benefit of open source software has been lost.
In conclusion, open source software holds a number of advantages for businesses in terms of price, easy access and flexibility and is particularly advantageous to new companies who are looking to minimise start up costs and do not want to enter into complex license agreements. However, it is necessary to recognise that companies like IBM are not willing to sit back and lose custom and so their tactics are likely to harm the development of open source software.
REFERENCES
Bloch, M., Open Source Software in Online Business, www.tamingthebeast.net/articles5/open-source-software.htm, 2007, accessed 3 December 2007
Fitzgerald, M., Something for Nothing: Cool New Software Free of Charge, 2006
Scavo, F., Key Advantage of Open Source is Not Cost Savings, www.computereconomics.com/article.sfm?id=1043, accessed 3 December 2007
The Open Source Initiative, www.opensource.org/, accessed 3 December 2007
Williams et al, The Advantages of Adopting Open Source Software, 2005, http://www.informit.com/articles/article.aspx?p=376255&rl=1, accessed 6 December 2007
Wittig, C., MySQL Case Study, 2006
Open source software is not just software which gives you access to the code. In order to be truly regarded as “open source” it must conform to a number of principles including free distribution, access to a source code, must allow modifications and derived works, there must be no discrimination against any persons or groups and it must also be technology neutral. (www.opensource.org/) From simply considering the definition of open source it is clear to see that a number of advantages exist as there are no licensing costs, it provides flexibility and can be used by individuals or by companies. It is now necessary to consider such advantages in greater detail.
One of the main advantages of open source software in business is that the core software is free and this is a major benefit for businesses, particularly those who are just starting out, as it cuts down on their initial capital outlay. (Bloch, M., 2007) This point can be more fully illustrated by the fact that the first users of MySQL were internet-enabled start-up companies which used this software in order to get their business off the ground. (Wittig, C., 2006)
A further advantage of open source software is that it is flexible as it allows users to adapt and modify the software (www.opensource.org/) in order to improve it and adapt it to their business needs. Again this point can be clearly illustrated by considering the situation of MySQL as their initial customers valued the opportunity this software provided as they were able to change parts of the software in order to differentiate themselves in their own markets. (Wittig, C., 2006) This is a major advantage for businesses because if they purchase closed source software i.e. Microsoft Office they are unable to make any modifications and are left with a package which may not satisfy their needs fully.
Furthermore, open source software is readily available over the internet which is advantageous to businesses as they can simply download the software with no hassle and do not have to enter into complicated license agreements which force the user to count, track and monitor for license compliance. (Williams et al, 2005) This has even been identified by large closed source companies such as Oracle as an advantage as they state that this is one of the reasons why MySQL software is impacting the competitive environment in which they operate. (Wittig, C., 2006) It is therefore clear that this must be a characteristic which is valued by businesses as it simplifies the day-to-day running of the business and is one less issue which they have to monitor and control.
Independence is also a crucial factor as companies are not tied to a single vendor and are not forced to change their system if they do not want to. (Bloch, M., 2006) When Microsoft launches a new version of Windows it phases out support for older versions, forcing customers to upgrade even if it is not necessary for their business needs whereas older versions of open source software continue to be supported in the open source community. (Scavo, F., 2007)
However, disadvantages are also present and these must now be considered in order to complete the picture.
Firstly, businesses must be aware of the fact that projects can die and they may be left with a programme which no-one is working on to improve. (Bloch, M., 2007) This is a concern to any user but is of particular concern to a business because they may find that the software they have spent time implementing is no longer available or is basically obsolete. This would mean that competitors could overtake them as they would have to waste time changing their systems. Although businesses may expect that this would not be a problem when dealing with a reputable open source company such as MySQL this is a dangerous opinion to hold as closed source companies such as IBM and Oracle have started to purchase open source competitors. (Wittig, C., 2006) This means that even if the original company wishes to develop software further the new owners are likely to have made the purchase in order to prevent competition. This situation has already occurred as after IBM acquired Gluecode it began to scale back Gluecode’s production plans. (Wittig, C., 2006) It is surely not a coincidence given that Gluecode’s software was in direct competition with two of IBM’s products.
A further disadvantage is that the support which is available tends to be through forums only or may involve the customer having to pay a subscription. (Bloch, M, 2007) This is problematic within business as forums can be unreliable and one must use the information with caution as there is often no way of knowing the credentials of those people who are in the forums. Furthermore, one may find that their business is dependent upon people actually responding to questions posed in forums and this is risky as no obligation on people to do so. This then leads to customers having to pay for support as witnessed with the MySQL Network (Wittig, C., 2006) and surely it can be argued that this defeats the purpose of open source software because in order to make full use of the software a payment is still required.
Furthermore, Oracle, Microsoft and IBM have started to lower prices in order to match MySQL’s free or low cost offers (Wittig, C., 2006) and this means that businesses may now be able to obtain a more familiar product for a similar cost and therefore the cost benefit of open source software has been lost.
In conclusion, open source software holds a number of advantages for businesses in terms of price, easy access and flexibility and is particularly advantageous to new companies who are looking to minimise start up costs and do not want to enter into complex license agreements. However, it is necessary to recognise that companies like IBM are not willing to sit back and lose custom and so their tactics are likely to harm the development of open source software.
REFERENCES
Bloch, M., Open Source Software in Online Business, www.tamingthebeast.net/articles5/open-source-software.htm, 2007, accessed 3 December 2007
Fitzgerald, M., Something for Nothing: Cool New Software Free of Charge, 2006
Scavo, F., Key Advantage of Open Source is Not Cost Savings, www.computereconomics.com/article.sfm?id=1043, accessed 3 December 2007
The Open Source Initiative, www.opensource.org/, accessed 3 December 2007
Williams et al, The Advantages of Adopting Open Source Software, 2005, http://www.informit.com/articles/article.aspx?p=376255&rl=1, accessed 6 December 2007
Wittig, C., MySQL Case Study, 2006
Sunday, 2 December 2007
BBC Outsourcing Case Study
Outsourcing involves the transfer of management and/or day-to-day execution of an entire business function to an external service provider. (Overby, S., 2007) In the case of the BBC this involved transferring their IT subsidiary (BBCTL) to Siemens Business Services (SBS). An outsourcing contract can also be characterised by the service provider providing services back to the customer at a price and service level agreed by contract and it is not unusual for staff and assets to also be transferred. (Pinsent Masons, 2004) For the BBC this meant they were to buy back services from SBS at a cost of £1.9billion over 10 years and transferred 400 employees to the new entity.
The BBC is reliant upon the UK government in order to stay in business as the government renews the Royal Charter every ten years and provides a substantial amount of funding to the company. It is for these reasons that the BBC had to consider taking drastic action when the government placed pressure on it to cut costs and increase revenues. In an attempt to reduce costs there was talk of cutting approximately 350 jobs in the technology division but this was not accepted as a suitable proposition as BBCTL had developed a number of award winning technologies. (Kumar, 2006)
The alternative? Outsourcing. It was estimated that approximately £30 million could be saved each year by buying back IT from a 3rd party as they would no longer incur the costs and management problems associated with their current technology set-up. This illustrates why the decision was taken to outsource IT as it would help to cut costs whilst retaining employees.
The BBC selected a supplier by following EUPP procedures and advertising the bid open for all on the OJEC website. (Kumar, 2006) Although this is a requirement which would be placed on any firm it can be viewed as a positive aspect of the process employed to select a winner because it led to a huge number of bids being received. This is a major positive because it means that the BBC had a number of options to choose from rather than being forced into a contract with a supplier who does not fully meet their needs simply because no other options were identified. The fact that so many bids were received also means that the BBC would have been able to negotiate a suitable deal because the companies would be aware that they had competition for the contract.
A further positive aspect of the process is that the contract placed very specific requirements on the winner. Outsourcing will only be successful if the company knows exactly what it hopes to achieve from the contract (Srinivasan, S., 2003) and if the criteria which the 3rd party must adhere to are clear from the very beginning. (http://www.macronimous.com/resources/outsourcing_best_practices.htm). The requirements which were set out by the BBC (Kumar, 2006, p.5) were therefore extremely useful in determining the winner because they illustrate the company’s expectations and ensure that all bidders have the same information about what is expected of them; thus ensuring that anyone who does bid can assure the BBC that they meet these minimum contractual requirements.
Furthermore, the BBC’s criteria for evaluation are also a positive aspect of the process because they appear to be appropriate for a contract of this nature. These criteria include not only financial benefits but also consider cultural issues which will be important to their employees. The fact that the BBC explicitly considered cultural factors is extremely important because good staff are one of the most valuable assets in any company and so their future must be given the necessary consideration.
However, naming cultural fit as one of the evaluation criteria is only a small step, it is necessary to actually follow this up. One of the critical factors in gaining employee support for change is open and honest communication from the start (IAOP, 2007). The BBC ignored this fact to their detriment by failing to keep the union (BECTU) informed. The decision to sell BBCTL came as a shock (Kumar, 2006) and this was undoubtedly one of the most negative aspects of the process because it encouraged BECTU to make life very difficult for the BBC. By failing to communicate with BECTU the BBC failed to meet their deadline for completion as there had been threats of industrial action and the government wished to meet with BECTU before they would approve the deal. (Kumar, 2006) Although the union did not manage to prevent the deal going ahead the BBC can still learn a valuable lesson from this as the process could have been a lot smoother and quicker had they given their employees the courtesy of keeping them well informed.
Another negative aspect of the process to select a winner is that the BBC made no use of outside consultants. Outside consultants are particularly useful for assessment work i.e predicted savings because they have the huge benefit of being objective. (Klepper & Jones, 2007) Had the BBC considered this as part of their process it is likely that they would not have miscalculated the savings which the contract would provide. The National Audit Office (NAO) discovered that the BBC had overestimated savings by including a one-off cost in its calculations. (Espiner, T., 2006) This is clearly a problem because disgruntled staff are unlikely to believe that such overestimation was a genuine mistake as BECTU had warned from the start that the contract would not provide the expected benefits. Had the work been carried out by an objective outsider then the figures would have been more credible and any repercussions could be deflected away from the BBC.
Furthermore, there was inconsistency in the people used by the BBC in the decision-making process. An evaluating team of 26 core members was appointed to look after the deal but only 8 people evaluated the pre-qualifying questionnaires and more than 100 people participated in the final stage negotiations. (Kumar, 2006) It is difficult to see how any consensus view could be established when some people had not even witnessed the process from start to finish. Additionally, smaller teams tend to be more effective (Klepper & Jones, 2007) and so the process could have been more effective had the BBC accepted that outsourcing requires time and patience rather than increasing its team to over 100 in order to push the deal through on schedule.
In conclusion, the BBC was wise to outsource their IT as they have been able to save costs whilst retaining staff. Furthermore, the contract appears to be working properly as SBS have upgraded the website, the election results broadcast was a huge success, innovation has been taken seriously and the deal has become a trend-setter. It is difficult to see how this could have been more successful as it has gone beyond being a money saving technique to actually become a useful tool for the BBC.
REFERENCES
Espiner, T., “BBC Hits Outsourcing Costs Snag”, http://services.silicon.com/itoutsourcing/0,3800004871,39160280,00.htm, accessed 24 November 2007
Klepper & Jones, “Outsourcing IT Systems and Services”, www.businessforum.com/woj01.html, accessed 19 November 2007
Kumar, M., “Information Technology Outsourcing at BBC”, 2006
IAOP, 2007
Overby, S., “ABC: An Introduction to IT Outsourcing”, 2007, www.cio.com, accessed 20 November 2007
Pinsent Masons, “An Introduction to IT Outsouring”, www.out-law.com/page-501, 2004, accessed 20 November 2007
The BBC is reliant upon the UK government in order to stay in business as the government renews the Royal Charter every ten years and provides a substantial amount of funding to the company. It is for these reasons that the BBC had to consider taking drastic action when the government placed pressure on it to cut costs and increase revenues. In an attempt to reduce costs there was talk of cutting approximately 350 jobs in the technology division but this was not accepted as a suitable proposition as BBCTL had developed a number of award winning technologies. (Kumar, 2006)
The alternative? Outsourcing. It was estimated that approximately £30 million could be saved each year by buying back IT from a 3rd party as they would no longer incur the costs and management problems associated with their current technology set-up. This illustrates why the decision was taken to outsource IT as it would help to cut costs whilst retaining employees.
The BBC selected a supplier by following EUPP procedures and advertising the bid open for all on the OJEC website. (Kumar, 2006) Although this is a requirement which would be placed on any firm it can be viewed as a positive aspect of the process employed to select a winner because it led to a huge number of bids being received. This is a major positive because it means that the BBC had a number of options to choose from rather than being forced into a contract with a supplier who does not fully meet their needs simply because no other options were identified. The fact that so many bids were received also means that the BBC would have been able to negotiate a suitable deal because the companies would be aware that they had competition for the contract.
A further positive aspect of the process is that the contract placed very specific requirements on the winner. Outsourcing will only be successful if the company knows exactly what it hopes to achieve from the contract (Srinivasan, S., 2003) and if the criteria which the 3rd party must adhere to are clear from the very beginning. (http://www.macronimous.com/resources/outsourcing_best_practices.htm). The requirements which were set out by the BBC (Kumar, 2006, p.5) were therefore extremely useful in determining the winner because they illustrate the company’s expectations and ensure that all bidders have the same information about what is expected of them; thus ensuring that anyone who does bid can assure the BBC that they meet these minimum contractual requirements.
Furthermore, the BBC’s criteria for evaluation are also a positive aspect of the process because they appear to be appropriate for a contract of this nature. These criteria include not only financial benefits but also consider cultural issues which will be important to their employees. The fact that the BBC explicitly considered cultural factors is extremely important because good staff are one of the most valuable assets in any company and so their future must be given the necessary consideration.
However, naming cultural fit as one of the evaluation criteria is only a small step, it is necessary to actually follow this up. One of the critical factors in gaining employee support for change is open and honest communication from the start (IAOP, 2007). The BBC ignored this fact to their detriment by failing to keep the union (BECTU) informed. The decision to sell BBCTL came as a shock (Kumar, 2006) and this was undoubtedly one of the most negative aspects of the process because it encouraged BECTU to make life very difficult for the BBC. By failing to communicate with BECTU the BBC failed to meet their deadline for completion as there had been threats of industrial action and the government wished to meet with BECTU before they would approve the deal. (Kumar, 2006) Although the union did not manage to prevent the deal going ahead the BBC can still learn a valuable lesson from this as the process could have been a lot smoother and quicker had they given their employees the courtesy of keeping them well informed.
Another negative aspect of the process to select a winner is that the BBC made no use of outside consultants. Outside consultants are particularly useful for assessment work i.e predicted savings because they have the huge benefit of being objective. (Klepper & Jones, 2007) Had the BBC considered this as part of their process it is likely that they would not have miscalculated the savings which the contract would provide. The National Audit Office (NAO) discovered that the BBC had overestimated savings by including a one-off cost in its calculations. (Espiner, T., 2006) This is clearly a problem because disgruntled staff are unlikely to believe that such overestimation was a genuine mistake as BECTU had warned from the start that the contract would not provide the expected benefits. Had the work been carried out by an objective outsider then the figures would have been more credible and any repercussions could be deflected away from the BBC.
Furthermore, there was inconsistency in the people used by the BBC in the decision-making process. An evaluating team of 26 core members was appointed to look after the deal but only 8 people evaluated the pre-qualifying questionnaires and more than 100 people participated in the final stage negotiations. (Kumar, 2006) It is difficult to see how any consensus view could be established when some people had not even witnessed the process from start to finish. Additionally, smaller teams tend to be more effective (Klepper & Jones, 2007) and so the process could have been more effective had the BBC accepted that outsourcing requires time and patience rather than increasing its team to over 100 in order to push the deal through on schedule.
In conclusion, the BBC was wise to outsource their IT as they have been able to save costs whilst retaining staff. Furthermore, the contract appears to be working properly as SBS have upgraded the website, the election results broadcast was a huge success, innovation has been taken seriously and the deal has become a trend-setter. It is difficult to see how this could have been more successful as it has gone beyond being a money saving technique to actually become a useful tool for the BBC.
REFERENCES
Espiner, T., “BBC Hits Outsourcing Costs Snag”, http://services.silicon.com/itoutsourcing/0,3800004871,39160280,00.htm, accessed 24 November 2007
Klepper & Jones, “Outsourcing IT Systems and Services”, www.businessforum.com/woj01.html, accessed 19 November 2007
Kumar, M., “Information Technology Outsourcing at BBC”, 2006
IAOP, 2007
Overby, S., “ABC: An Introduction to IT Outsourcing”, 2007, www.cio.com, accessed 20 November 2007
Pinsent Masons, “An Introduction to IT Outsouring”, www.out-law.com/page-501, 2004, accessed 20 November 2007
Monday, 19 November 2007
Geneva ERP Implementation
Introduction
Geneva Pharmaceuticals are one of the world's largest generic drug manufacturers with revenues in excess of $300 million in 1998. Until 1996 Geneva's information systems were incompatible across business areas; for example, the accounts department could not be made available to manufacturing without re-keying the data manually. This was a major problem for Geneva because it meant that time was being wasted reproducing data and there was a high incidence of 'dirty data' - factors which lead to inefficiency and inevitably the loss of profits. Management at Geneva realised that such problems existed in their company which led to their belief that they needed a "common, integrated company-wide solution to improve data and reduce costs". Their solution? Deploy SAP's R/3 system.
Enterprise Resource Planning (ERP) systems integrate (or attempt to integrate) all data and processes of an organisation into a unified system (www.wikipedia.org). Due to the desire within Geneva for applications to be compatible across business units it is possible to see the attraction of SAP R/3.
Phase One
The main aim of this phase was to reduce the cost of operations. The SAP R/3 system would require data to be entered only once - thus saving time and money, with efficiency greatly increased.
However, despite such suitable objectives many key problems occurred. There was little communication or co-ordination amongst the team implementing the system which is clearly a recipe for disaster and it was actually necessary to bring in a new CIO in order to provide the project with better leadership. As witnessed in the London Stock Exchange it is very difficult to implement changes if you fail to consider organisational feasibility and fail to communicate effectively (Taurus v Crest) and it is likely that this contributed to these problems.
Another major decision and, ultimately, a problem at this stage is the fact that Accelerated SAP (ASAP) was chosen due to its promise of a short implementation cycle of only 6 months. This appears to be a valid decision because any company would want their systems to be running as quickly as possible in order to reap the maximum benefits however, 4 months down the line very little progress had been made; Geneva was therefore well behind schedule and this could have knock-on effects for future stages. The following quote appears to embody the thought process at Geneva: "some people want to do everything in one or two months and underestimate the time it takes for proper development and employee comprehension"(McCabe, R., 2007). By considering such an attitude it is easy to see why problems occurred because by trying to do things too quickly one can fail to notice areas which are actually struggling.
Finally, at this stage it emerged that the new system provided Geneva with problems that had not existed within the original system. This was a major blow because the system was designed to be better and more efficient than its predecessor, not worse and after so much time and money had been spent on the system it is reasonable to expect it to carry out its function properly.
Phase Two On top of this, Anna Bourgeois was assigned the overall responsibility for this phase due to her extensive knowledge in this field. Another point that was raised at this stage was the conceptual design of the system in which thirteen areas for improvement were highlighted with four emerging repeatedly. This stage was carried out by the key users who were most knowledgeable with the existing processes with help from Oliver White. The use of expertise here was important to ensure that the best design possible was established. To further this point, prototypes were used to test these emerging areas of conceptual design against any emerging problems. Also, in this phase a lot of attention was paid to the management of change in relation to the staff and training. This process was taken extremely seriously with posters, surveys and even a telephone line implemented for staff to call in relation to their worries. Further, three full weeks were devoted to training. This point of the project was undertaken meticulously possibly, with a little too much emphasis.
A key point to note at this phase is the fact that it was far more challenging than the previous phase due to the complex nature that Geneva used in dealing with customer orders, rebates and chargebacks. Due to this, a decision was made to change those managing the project as the first phase had suffered from so many set backs. Whitman-Hart was replaced by Arthur Andersen and Oliver White, consulting firms, due to Arthur Andersen’s knowledge in the technical configuration aspects of SAP implementation and Oliver Whites’ reputation.
Phase Three
A key decision of this phase was the fact that they reinstated the project manager from phase one. This could be seen as a problem as in phase one there were problems relating to communication, co-ordination and time scale.
A key benefit of ERP systems highlighted in this phase is they can save a lot of time. It was estimated that using the R/3 model for sales and operational planning (SOP) would cut this process from 20 to 10 days - an important selling point of these systems. Further, at the time of this case SAP brought out a new module - Advanced Purchase Optimiser which combined with SOP would answer the unique business needs of the company. This will then go on to help meet Geneva's targeted business improvement of having their orders 'ready to promise' which will help improve its customer service levels.
Conclusion
In conclusion, there are a number of things we can learn from this ERP implementation. Firstly, it is necessary to have the correct people on board from the start as Geneva had to implement personnel changes during the project and ERP is as much about people as it is about systems. It is also necessary to have a realistic view of the time frame required as phase 1 ran over schedule which had knock-on effects for the other stages and staff are likely to be demotivated if they are continually told different finishing dates. However, we can also learn from Geneva's successes such as spending a large amount of time and effort making staff receptive to change and training staff to ensure that they are confident in using the system, as one of the main reasons for failure is that staff often feel scared of the technology and fail to make the best use of it in their day-to-day work.
REFERENCES
McCabe, R., How to recover from a failed ERP implementation, http://www.microsoft.com/canada/midsizebusiness/businessvalue/local/failederp.mspx, accessed 14 November 2007
SAP R/3 implementation at Geneva Pharmaceuticals, Case Study
Taurus v Crest, Case Study
This assignment was prepared in collaboration with Linzi Barr.
Sunday, 18 November 2007
How will offshoring affect UK accountants?
Offshoring refers to the transfer of a business process to another country regardless of whether the work stays within the same corporation or not. (OECD, 2006) This has become a popular topic in recent years with a number of jobs being offshored to countries such as India, particularly call centre jobs. However, it is the IT boom in India which has led to a fear that even relatively high-skilled, well-paid jobs are now also under threat (OECD, 2006) and so as a fourth year accounting student it is necessary to consider how offshoring will affect UK accountants, if at all.
It has been claimed that “anything which does not involve customer face-to-face relations can and will be offshored.” (Gupta, A., 2007) This would imply that UK accountants could be greatly affected by offshoring because sectors such as taxation and accounts preparation do not require personal contact with the customer and so could easily be offshored. However, given this opinion it is likely that not all accountants would be affected equally because auditing, for example, requires not only interaction with the client but it is also necessary to visit their premises and so it is difficult to see how such a job could be offshored successfully. The fact that cultural issues are also now less important (Friedman, T.L., 2005) would appear to strengthen the argument that anything which does not require close contact could be offshored because it suggests that companies now place less significance on their accounting and financial work being carried out locally; with global accounting standards in the place the work can be carried out to the same standard elsewhere whilst saving money.
Furthermore, the fact that accountants make use of software packages such as SAGE for basic accountancy work means that this type of work is eminently suitable for offshoring (O’Donnell, A., 2007) as the work is mainly computer based and can therefore be standardised. This is further supported by the view that the jobs most at risk are financial, insurance or computer based work (OECD, 2006) because basic accounts preparation falls into two of these categories and so it is possible that offshoring could have a major affect on UK accountants.
By considering the current position of offshoring within the accountancy profession it is again possible to reach the conclusion that this could affect, and already is affecting, UK accountants. There is now an onus on UK accountants to compete with lower cost professionals across the world which is a relatively new concept for accountants to comprehend because they are accustomed to being in the fortunate position of being protected from competition in many areas due to the need for professional qualifications to carry out certain tasks i.e audits. The fact that India, for example, has a generous supply of Chartered Accountants means that work can be carried out to the same high standard but for a much lower price and in modern society that is a major bonus for businesses. UK accountants must give this issue great consideration because Prudential already have 200 staff in Bombay delivering financial accounting and it is predicted that all accounts and actuarial work will be offshored (Accountancy Age, 2007), the NHS is planning to move 2/3 of accounting and finance jobs to India (Industry Focus, 2007) and many SMEs have also decided to offshore. (Sharma, K., 2007)
It is therefore clear that UK accountants cannot be complacent because offshoring will undoubtedly affect them as many accounts and finance jobs have already been offshored and it is likely that this trend will continue due to the high skills levels and low costs available abroad. However, not all affects will necessarily be negative and it is necessary to consider the opportunities which offshoring will provide to UK accountants.
The UK accountancy firms can act as the ‘front office’ that interacts with clients whilst the work can be carried out by cost efficient Indian CAs. This allows costs to be reduced so UK firms can offer competitive services to their clients therefore discouraging companies from independently offshoring accountancy work. (O’Donnell, A., 2007) The time difference is another factor which provides opportunities because it allows work to be completed overnight (O’Donnell, A., 2007) and this will add to efficiency and customer satisfaction and therefore provide the opportunity for more work to be won. Furthermore, the fact that the work can be carried out more efficiently and for a lower cost will lead to a higher profit margin (O’Donnell, A., 2007) within UK accounting firms and this will allow UK accountants to fund additional services to their clients. It is therefore apparent that UK accountants can reap benefits from offshoring if they are willing to think outside the box and consider the opportunities it presents.
In conclusion, offshoring will undoubtedly affect UK accountants but it is up to them to make the most of this situation. It is highly likely that jobs will be transferred abroad but not all of the affects need be negative. UK accountants can use this to their advantage by allowing certain work to be carried out abroad at a much lower cost allowing them to focus on providing additional support and services to their clients.
REFERENCES
Accountancy Age, April 2007
Gupta, A., 2007
Industry Focus, February 2007
O’Donnell, A., ‘A Challenging Environment for UK Accountancy Firms’, 2007
OECD, ‘The share of employment potentially affected by offshoring’, 2006
Sharma, K., SME Outsourcing, 2007
It has been claimed that “anything which does not involve customer face-to-face relations can and will be offshored.” (Gupta, A., 2007) This would imply that UK accountants could be greatly affected by offshoring because sectors such as taxation and accounts preparation do not require personal contact with the customer and so could easily be offshored. However, given this opinion it is likely that not all accountants would be affected equally because auditing, for example, requires not only interaction with the client but it is also necessary to visit their premises and so it is difficult to see how such a job could be offshored successfully. The fact that cultural issues are also now less important (Friedman, T.L., 2005) would appear to strengthen the argument that anything which does not require close contact could be offshored because it suggests that companies now place less significance on their accounting and financial work being carried out locally; with global accounting standards in the place the work can be carried out to the same standard elsewhere whilst saving money.
Furthermore, the fact that accountants make use of software packages such as SAGE for basic accountancy work means that this type of work is eminently suitable for offshoring (O’Donnell, A., 2007) as the work is mainly computer based and can therefore be standardised. This is further supported by the view that the jobs most at risk are financial, insurance or computer based work (OECD, 2006) because basic accounts preparation falls into two of these categories and so it is possible that offshoring could have a major affect on UK accountants.
By considering the current position of offshoring within the accountancy profession it is again possible to reach the conclusion that this could affect, and already is affecting, UK accountants. There is now an onus on UK accountants to compete with lower cost professionals across the world which is a relatively new concept for accountants to comprehend because they are accustomed to being in the fortunate position of being protected from competition in many areas due to the need for professional qualifications to carry out certain tasks i.e audits. The fact that India, for example, has a generous supply of Chartered Accountants means that work can be carried out to the same high standard but for a much lower price and in modern society that is a major bonus for businesses. UK accountants must give this issue great consideration because Prudential already have 200 staff in Bombay delivering financial accounting and it is predicted that all accounts and actuarial work will be offshored (Accountancy Age, 2007), the NHS is planning to move 2/3 of accounting and finance jobs to India (Industry Focus, 2007) and many SMEs have also decided to offshore. (Sharma, K., 2007)
It is therefore clear that UK accountants cannot be complacent because offshoring will undoubtedly affect them as many accounts and finance jobs have already been offshored and it is likely that this trend will continue due to the high skills levels and low costs available abroad. However, not all affects will necessarily be negative and it is necessary to consider the opportunities which offshoring will provide to UK accountants.
The UK accountancy firms can act as the ‘front office’ that interacts with clients whilst the work can be carried out by cost efficient Indian CAs. This allows costs to be reduced so UK firms can offer competitive services to their clients therefore discouraging companies from independently offshoring accountancy work. (O’Donnell, A., 2007) The time difference is another factor which provides opportunities because it allows work to be completed overnight (O’Donnell, A., 2007) and this will add to efficiency and customer satisfaction and therefore provide the opportunity for more work to be won. Furthermore, the fact that the work can be carried out more efficiently and for a lower cost will lead to a higher profit margin (O’Donnell, A., 2007) within UK accounting firms and this will allow UK accountants to fund additional services to their clients. It is therefore apparent that UK accountants can reap benefits from offshoring if they are willing to think outside the box and consider the opportunities it presents.
In conclusion, offshoring will undoubtedly affect UK accountants but it is up to them to make the most of this situation. It is highly likely that jobs will be transferred abroad but not all of the affects need be negative. UK accountants can use this to their advantage by allowing certain work to be carried out abroad at a much lower cost allowing them to focus on providing additional support and services to their clients.
REFERENCES
Accountancy Age, April 2007
Gupta, A., 2007
Industry Focus, February 2007
O’Donnell, A., ‘A Challenging Environment for UK Accountancy Firms’, 2007
OECD, ‘The share of employment potentially affected by offshoring’, 2006
Sharma, K., SME Outsourcing, 2007
Sunday, 4 November 2007
TAURUS & CREST - Why did TAURUS fail and CREST succeed?
The London Stock Exchange is one of the oldest exchanges in the world and currently supplies real-time prices to 90,000 installed terminals in over 100 countries worldwide. (http://www.londonstockexchange.com/en-gb/about/cooverview/whatwedo/marketinfo.htm) One of the most important roles of the LSE is to ensure that share certificates and cash change hands between the parties who have traded and it is this process which TAURUS aimed to computerise in order to reduce transaction time and eliminate the need for ‘paper’ transactions. TAURUS, however, was nothing short of a disaster and it was the failure of this system which led to the successful birth of CREST. It is astounding that two systems implemented by the same company could have such different results and so it is necessary to consider why CREST succeeded where TAURUS failed.
Perhaps one of the main reasons for the failure of TAURUS was that it tried to be “all things to all men”. (Case Study, p.4) By making TAURUS compulsory for all member firms the project team dug itself into a very deep hole because this allowed companies to argue that if they were being forced to use the system they should be entitled to have their businesses processes included in the design. As a result, the system became extremely complex with 21 “Events” such as takeovers being included and even the designers struggled to understand the business requirement. (Case Study, p.4) It is therefore clear to see how the failure of TAURUS came about as if the designers cannot understand the system the program is likely to be written incorrectly and this will clearly cause problems. Furthermore, by attempting to please everyone and do everything the system was destined to become the proverbial “jack of all trades, master of none”. This can be further highlighted due to the fact that CREST took the exact opposite approach and made usage optional. This meant that companies had no leverage over the designers and so could not force changes to the system; thus the system contained only 2 “Events” – substantially less than its predecessor. This meant the system focussed on a small number of processes which were integral to the LSE and carried them out to a high standard – it would appear the design team learnt the lessons taught by TAURUS.
A further reason for the failure of TAURUS is organisational feasibility. Organisational feasibility is important because it includes how responsive people are to change (http://www.wikipedia.org/) and according to Chris Rees the people involved only wanted to maintain the “status quo”. By ignoring this very important fact TAURUS was doomed to failure whereas the CREST team took the time to ask questions which could gauge what needed to be done rather than what had always been done. (Case Study, p.6)
TAURUS again ignored the rules of software development by involving such a large team as the bigger the project, the higher the chances of failure as can be illustrated by failures such as the Fox Meyer’s ERP system. (www.slideshare.net/vinaya.hs/erp-implementation-is-the-challenge/) TAURUS included hundreds of staff and this is clearly a logistical nightmare as there is a huge potential for conflict and for too many adjustments to be made which is what appears to have happened. In stark contrast to this, CREST employed only a team of only 20 to design the programme and 4 or 5 people oversaw the whole project. This allowed for continuity, stability and ultimately a much more successful programme.
In conclusion, TAURUS failed for a number of reasons including its sheer size, the adjustments which were made to the standard package which had been bought from an outside source, the amount of bad publicity it received and its failure to consider organisational feasibility. However, perhaps the most important reason for failure was its attempt to please everybody by doing everything rather than observing the ’90-10’ rule or Pareto principle. (http://www.wikipedia.org/) The system could have been just as effective and come in on time and on budget had this principle been applied as the designers would have realised that there was no need to put so much additional effort into adding only 10% to the program. CREST was a success due the fact that its designers learnt the lessons taught by TAURUS. They focussed only on what was actually required, kept the project minimal and kept morale high. All of these factors led to this project being finished on time and within budget. In other words it was a success.
REFERENCES
Case Study (TAURUS & CREST) pp.4&6
London Stock Exchange, http://www.londonstockexchange.com/en-gb/about/cooverview/whatwedo/marketinfo.htm, accessed 31 October 2007
Slideshare, “ERP – Implementation is the Challenge”, www.slideshare.net/vinaya.hs/erp-implementation-is-the-challenge/, accessed 2 November 2007
Wikipedia, http://en.wikipedia.org/wiki/Pareto_principle, accessed 1 November 2007
Wikipedia, http://en.wikipedia.org/wiki/Feasibility_study#Organizational_Feasibility_study, accessed 1 November 2007
Perhaps one of the main reasons for the failure of TAURUS was that it tried to be “all things to all men”. (Case Study, p.4) By making TAURUS compulsory for all member firms the project team dug itself into a very deep hole because this allowed companies to argue that if they were being forced to use the system they should be entitled to have their businesses processes included in the design. As a result, the system became extremely complex with 21 “Events” such as takeovers being included and even the designers struggled to understand the business requirement. (Case Study, p.4) It is therefore clear to see how the failure of TAURUS came about as if the designers cannot understand the system the program is likely to be written incorrectly and this will clearly cause problems. Furthermore, by attempting to please everyone and do everything the system was destined to become the proverbial “jack of all trades, master of none”. This can be further highlighted due to the fact that CREST took the exact opposite approach and made usage optional. This meant that companies had no leverage over the designers and so could not force changes to the system; thus the system contained only 2 “Events” – substantially less than its predecessor. This meant the system focussed on a small number of processes which were integral to the LSE and carried them out to a high standard – it would appear the design team learnt the lessons taught by TAURUS.
A further reason for the failure of TAURUS is organisational feasibility. Organisational feasibility is important because it includes how responsive people are to change (http://www.wikipedia.org/) and according to Chris Rees the people involved only wanted to maintain the “status quo”. By ignoring this very important fact TAURUS was doomed to failure whereas the CREST team took the time to ask questions which could gauge what needed to be done rather than what had always been done. (Case Study, p.6)
TAURUS again ignored the rules of software development by involving such a large team as the bigger the project, the higher the chances of failure as can be illustrated by failures such as the Fox Meyer’s ERP system. (www.slideshare.net/vinaya.hs/erp-implementation-is-the-challenge/) TAURUS included hundreds of staff and this is clearly a logistical nightmare as there is a huge potential for conflict and for too many adjustments to be made which is what appears to have happened. In stark contrast to this, CREST employed only a team of only 20 to design the programme and 4 or 5 people oversaw the whole project. This allowed for continuity, stability and ultimately a much more successful programme.
In conclusion, TAURUS failed for a number of reasons including its sheer size, the adjustments which were made to the standard package which had been bought from an outside source, the amount of bad publicity it received and its failure to consider organisational feasibility. However, perhaps the most important reason for failure was its attempt to please everybody by doing everything rather than observing the ’90-10’ rule or Pareto principle. (http://www.wikipedia.org/) The system could have been just as effective and come in on time and on budget had this principle been applied as the designers would have realised that there was no need to put so much additional effort into adding only 10% to the program. CREST was a success due the fact that its designers learnt the lessons taught by TAURUS. They focussed only on what was actually required, kept the project minimal and kept morale high. All of these factors led to this project being finished on time and within budget. In other words it was a success.
REFERENCES
Case Study (TAURUS & CREST) pp.4&6
London Stock Exchange, http://www.londonstockexchange.com/en-gb/about/cooverview/whatwedo/marketinfo.htm, accessed 31 October 2007
Slideshare, “ERP – Implementation is the Challenge”, www.slideshare.net/vinaya.hs/erp-implementation-is-the-challenge/, accessed 2 November 2007
Wikipedia, http://en.wikipedia.org/wiki/Pareto_principle, accessed 1 November 2007
Wikipedia, http://en.wikipedia.org/wiki/Feasibility_study#Organizational_Feasibility_study, accessed 1 November 2007
Monday, 22 October 2007
Thursday, 18 October 2007
How could the ICAS website (www.icas.org.uk) be improved?
ICAS was the world’s first professional accounting body and is still one of the world’s main accounting institutes; therefore it is extremely important that its website should be welcoming and user-friendly. However, after visiting this website it became obvious that a number of problems existed and that there is plenty of room for improvement. Such improvements will now be considered.
On first impressions, the ICAS website appears to be unwelcoming, bland and pretentious. As with most situations in life, first impressions are vital and so I would recommend that ICAS should focus their attention on improving the aesthetics of the homepage in particular. This is a fairly straightforward task which could reap huge benefits as it will entice more people to continue looking through the website, thus enhancing their reputation and attracting more students.
The website allows visitors to subscribe to RSS feeds which are a useful way of providing up-to-date information but there appears to be problems with this service. Firstly, this service could be improved by giving details of how to subscribe to the feeds as people who wish to use the service may be deterred by the lack of guidance on the matter. Additionally, the feeds should be made more frequent to ensure that subscribers are being provided with information on a regular basis and this will also prevent them missing out on information which they believe to be important.
Furthermore, there is a vast amount of information contained on the homepage, particularly down the left hand side column. This is yet another issue likely to deter people from viewing the website in more detail. In order to improve the situation ICAS should consider condensing the links into a more manageable number. It would also be useful to use a larger font size to make the links more user-friendly and easier to identify.
As previously mentioned, the website appears to be pretentious and although it is easy to understand that an organisation like ICAS would wish to appear professional they could do this in a more relaxed manner. For example, their English and Welsh counterparts, the ICAEW, have successfully created a website which looks professional but which lacks the arrogance of the ICAS website. This has been achieved through injecting both colour and life into the website and highlighting different key areas through the use of different colours. Areas for members and students have been created on the homepage which clearly illustrate the range of services available. The lack of such areas is one of the main criticisms of the ICAS website because these are the people who are likely to be the most frequent visitors to the site yet they are expected to look for a small link at the side of the page and are then directed to a different page. This is a poor way to treat your most important customers and so ICAS could improve the website by considering the format used by ICAEW.
A further problem which became apparent when using the ICAS website is that it is difficult to navigate around the site and this is yet another factor which makes using the website an unpleasant experience. This situation could be improved by adding a site map to the website as this would help people to find everything they were looking for and would prevent users feeling frustrated when they have to trawl through numerous pages to find the required information.
In conclusion, a number of improvements need to be made to this website but the most important issue is undoubtedly improving the homepage to make it more welcoming for visitors.
On first impressions, the ICAS website appears to be unwelcoming, bland and pretentious. As with most situations in life, first impressions are vital and so I would recommend that ICAS should focus their attention on improving the aesthetics of the homepage in particular. This is a fairly straightforward task which could reap huge benefits as it will entice more people to continue looking through the website, thus enhancing their reputation and attracting more students.
The website allows visitors to subscribe to RSS feeds which are a useful way of providing up-to-date information but there appears to be problems with this service. Firstly, this service could be improved by giving details of how to subscribe to the feeds as people who wish to use the service may be deterred by the lack of guidance on the matter. Additionally, the feeds should be made more frequent to ensure that subscribers are being provided with information on a regular basis and this will also prevent them missing out on information which they believe to be important.
Furthermore, there is a vast amount of information contained on the homepage, particularly down the left hand side column. This is yet another issue likely to deter people from viewing the website in more detail. In order to improve the situation ICAS should consider condensing the links into a more manageable number. It would also be useful to use a larger font size to make the links more user-friendly and easier to identify.
As previously mentioned, the website appears to be pretentious and although it is easy to understand that an organisation like ICAS would wish to appear professional they could do this in a more relaxed manner. For example, their English and Welsh counterparts, the ICAEW, have successfully created a website which looks professional but which lacks the arrogance of the ICAS website. This has been achieved through injecting both colour and life into the website and highlighting different key areas through the use of different colours. Areas for members and students have been created on the homepage which clearly illustrate the range of services available. The lack of such areas is one of the main criticisms of the ICAS website because these are the people who are likely to be the most frequent visitors to the site yet they are expected to look for a small link at the side of the page and are then directed to a different page. This is a poor way to treat your most important customers and so ICAS could improve the website by considering the format used by ICAEW.
A further problem which became apparent when using the ICAS website is that it is difficult to navigate around the site and this is yet another factor which makes using the website an unpleasant experience. This situation could be improved by adding a site map to the website as this would help people to find everything they were looking for and would prevent users feeling frustrated when they have to trawl through numerous pages to find the required information.
In conclusion, a number of improvements need to be made to this website but the most important issue is undoubtedly improving the homepage to make it more welcoming for visitors.
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