Keynote: Exploring Australia's IT Landscape

by Tom Worthington FACS

For the Third Australian IT Directors' Summit, 1pm 6 July 2001, Hyatt Regency, Coolum, Australia

Some books: Buying and selling on the Internet

Contents

  1. Some Photos From the Summit
  2. MovieLink Internet
  3. Summary
  4. Introduction
  5. IT landscape of Australia
  6. Impact of the ICT Industry in Australia
  7. Outsourcing
  8. Wireless
  9. B2W: Business2Where?
  10. Knowledge Nation, Cocoon and OpenOffice
  11. References

Some Photos From the Summit

Hyatt Regency Coolum One-on-one session Lunch Radio equipped summit staff

  1. Hyatt Regency, Coolum
  2. A one-on-one session
  3. Lunch
  4. Radio equipped summit staff

MovieLink Keyboard Screen Shot of www.tomw.net.au Screen Shot of peopledaily.co.jp/english/i/

In the following presentation it is claimed the limitations of web appliances (such as wireless devices and web TVs) can be overcome by using accessibility features designed for the disabled. It turned out that the conference venue (Hyatt Regency, Coolum) had rooms equipped with MovieLink web TV appliance. These have an infrared cordless QWERTY keyboard and use a TV set for web display. The service costs about $1 per minute and appears to operate at an effective speed of about 30kbps. The browser handles frames and javascript. However, the small screen size makes frames of limited use and some javascript errors were encountered. Please note that the screen shots shown here were taken with a hand held camera and the quality of the displayed picture was much better than shown in these photos.

The usable screen height appeared to be about 400 pixels, however because the viewer sits further away from a TV than they would a computer screen the default font size needs to be larger. The effective screen size is therefore reduced to about the size of a PDA one quarter VGA) screen. Images appear to be displayed at full resolution, making them appear smaller in proportion to the enlarged text.

Web pages designed with accessibility in mind worked reasonably well. An I-mode web site in English displayed reasonably well, but no Asian fonts appear to be installed.

Summary

Australia's best know "Net traveller" takes the audience on a stroll through the corporate IT landscape of Australia. Current trends and possible future directions are explored. We will venture beyond Australia's fertile seaboard, into the apparently barren interior. But kicking over some rocks will turn up interesting and venomous issues lurking in the IT&T future. The presentation will feature a live Internet connection to explore issues raised by the audience.

Some issues:

Key clients: Nortel Networks, Citrix, Rentworks, Davnet

Introduction

This presentation was started in Australia, but completed and sent from a wireless cyber-cafe at a global Internet summit in Stockholm. This provides an interesting perspective to look at Australia's IT landscape and where it fits with current trends around the world.

Three issues I want to concentrate on are:

  1. OUTSOURCING/GOVERNANCE: The Federal Government is having some second thoughts on IT outsourcing. Is this relevant to the commercial sector. How should IT managers respond?
  2. WIRELESS: The potential of wireless Internet, including WAP is yet to be realized. Is this another dot.COM pipe dream?
  3. Business2Where?: After the disappointment of B2C and B2B, is there a future for e-commerce? Is cost saving the less exciting future which will deliver some real business benefits?
The last two issues (wireless and B2B) I will go into in detail at the workshop "B2B-or-not-B2B? IT Strategies for Surviving Recession". But before looking at the future, it would be reasonable to take stock of Australia's current IT society and industry.

IT landscape of Australia

A geographical trend which emerged last month but which drew little comment is that Nearly 1 Million Australians Work at Home, according to the Australian Bureau of Statistics (ABS) . Also 36 percent of people work in more than one location in their main job. IT Directors cannot assume that their hardware, software and data will be safely housed behind locked doors on the organisation's premises. The workers are at home, at client's premises or in coffee shops and want to use the corporate IT system there. If an official way to do this is not provided, the staff will do it in an unofficial way. The result will be higher costs, maintenance and security problems.

There were 3.9 million Internet subscribers in Australia at the end of December 2000. Of these, 512,000 were business or government; an increase of 80,000 from September. However, there were 7,000 fewer household Internet accounts and a drop in free Internet accounts of 307,000. We have probably seen the peak of home Internet use in Australia using current technology. The next increase in Internet users will need new easy-to-use, cheap devices, in place of PCs.

Australian capital cities account for 74% of Internet subscribers, and 79% of data downloaded (ABS December 2000). Only 1% of Internet subscribers accessed POPs located in remote regions of Australia. As with the physical geography of the country there is a fertile costal strip and a vast Internet desert in the interior.

From last September to December, the following changes occurred at a regional level:

Internet Subscribers and Download By State September to December 2001 (ABS 2001)
State subscribers (Thousands)

 data downloaded (million Mbs)
NSW +17 -27
VIC +65 +6
QLD -19 -7
SA +8 +25
WA No change +2
TAS +7 +2
NT +6 +1
ACT -12 -3

It looks like someone in South Australia is looking at a lot of movies on-line. ;-)

Impact of the ICT Industry in Australia

The Australian Computer Society (ACS) released a report by Professor John W. Houghton at the Centre for Strategic Economic Studies in May 2001 (Houghton, 2001). This is a good place to start our tour of the corporate IT landscape of Australia and what follows is a summary of Houghton's findings.

Houghton attempts to quantify the impact of the Information, Computers and Telecommunications industry (ICTs) in Australia, showing that:

Houghton, goes on to claim that evidence of the benefits of ICT investment and usage is now emerging.

Employment

The sliglty clumsy term "ICT jobs" includes direct employment in ICT-producing industries, ICT jobs in other industries and support jobs.

Figure 1 How ICT jobs stack up

Figure 1 How ICT jobs stack up (Source: Houghton from ABS, own analysis)

Around 235,000 Australians are employed in ICT-producing industries. This is 2.7 per cent of Australia's total employment and 6.7 per cent of the increase in jobs in Australia since 1993. These jobs are higher paying than most: $51,243 per annum, compared to the average in Australia of $29,409 in 1998-99.

Industry Income

The ICT-producing industries earned about $74 billion in 1998-99, expect to increase to $100 billion in 2000-01:

Figure 2 Share of ICT industries

Figure 2 Share of ICT industries value added in total business sector value added in OECD countries, circa 1998 (%) (Source: Houghton from OECD (2000) Measuring the ICT Sector, OECD, Paris).

The contribution of the ICT-producing industries to the Australian economy is increasing: from 5.2 per cent of GDP in 1992-93, to 7.5 per cent in 1998-99, or 13 per cent of the increase in total Gross Domestic Income.

Australia's ICT industries are a relatively small part of the economy compared to other OECD countries. Houghton argues the Australian ICT industries therefore could contribute more to the Australian economy with further development.

Expenditure on ICTs

On available measures, Houghton claims that Australians are among the most intensive users of ICT in the world; 4th among OECD countries for ICT expenditure to GDP in 1999 (behind Sweden, New Zealand and the United Kingdom). Australians spend on ICT increased from 7.2 per cent to 8.7 per cent of GDP from 1992 to 1999.

Figure 3 Ratio of ICT expenditure to GDP

Figure 3 Ratio of ICT expenditure to Gross Domestic Product, 1999 (Source: Houghton from World Information Technology and Services Alliance (2000) Digital Planet 2000: The Global Information Economy, WITSA).

Does ICT investment benefit Australians?

Houghton cites a NOIE, suggesting that increased use of e-commerce could:

This analysis suggests ICT is making an increasing contribution to productivity across the economy:

Figure 4 Contribution of ICTs

Figure 4 Contribution of ICTs to labour productivity growth due to capital deepening (%) (Source: Houghton compiled from various ABS sources. Own analysis).

Houghton claims:

Taxonomy of ICTs

Houghton divides production and use into three levels:

  1. Core: Telecommunications and Internet services, equipment manufacturing, software and multimedia
  2. Secondary: Leasing, video production, consulting, education, broadcast networks
  3. Ancillary: Users in industry, government and households.

Figure 5 ICT Production and Use

Figure 5 ICT Production and Use (Source: Houghton).

This might be more simply explained as:

  1. Hardware and software
  2. Content, support and training
  3. Use

The inclusion of TV and radio program production and broadcasting is questionable as this is still largely a separate industry. There has not been a convergence between web type content and traditional broadcasting.

Outsourcing

The Federal Government is having some second thoughts on IT outsourcing. This relevant to the commercial sector. Managers need to consider if more traditional contracting out of services would be better, with retention of more control. Alternatively a better strategy may be to outsource whole business functions, rather than just the IT component of the function.

In 1997 I was part of an Australian Computer Society team which presented evidence to the Senate Finance and Public Administration References Committee inquiry into IT Outsourcing (ACS 1997). Ian Dennis prepared a paper (Dennis & Goble 1997) for the ACS which is as relevant today as it was then.

Outsourcing is:

"A contractual relationship where an external organisation takes responsibility for performing all or part of an agency's Information Technology functions. This can involve a partial or complete transfer of staff and/or resources." (Geoff Kilby, Duesburys, Unisys U3 Conference, 1993 in ACS 1997).

In its Senate submission the ACS recommended caution on whole-of-Government IT Outsourcing, warning that it was a high risk approach, for individuals, organisations and for the community as a whole. The paper concluded that outsourcing assessment processes are a valid tool for Government and private organisations in matching operations to strategic needs. However, it is important that all those involved understand their obligations and the risks, as well as the potential benefits.

The Federal Government has belatedly recognized the position put by the ACS, with the abandonment of the centralized "big bang" approach to outsourcing:

On 12 January 2001, the Minister for Finance and Administration, the Hon John Fahey, released the report of the Independent Review of the Government's Information Outsourcing Initiative (Humphry Review). The Humphry Review made ten recommendations relating to the future implementation of the Initiative, all of which have been broadly accepted by the Government... responsibility for implementing the Initative has been devolved to individual agencies.IT Infrastructure Initiative Overview, Office of Asset Sales and Information Technology Outsourcing (Undated)

A recent Request for Information from the Department of Employment, Workplace Relations and Small Business (2001) for a B2G directory recognizes the risks of outsourcing. The ROI makes clear that DEWRSB intends to contract out the implementation, but the government will retain overall control:

"In brief the governance arrangements and overall managing of the initiative, although open for discussion and negotiation, are required to be commercially neutral and will therefore be retained by the Commonwealth".

The Internet provides new options for outsourcing, in the delivery of services and to implement business processes. This doesn't require any new or revolutionary technology: the technology is already here and the revolution is already happening. However, it requires new skills for the people involved both in the outsourcing client organisation and the outsourcing company. In particular it will require new management skills for senior executives.

Reasons commonly usually given for outsourcing are:

However many of these advantages can come just from the due-diligence needed to prepare for outsourcing, without outsourcing at all. Organisations are finding the Transaction Costs, Lack of Flexibility and lock-n, to a vendor significant.

Delivery of services via the Internet

Where a service is delivered via telecommunications, the outsourcing of the function can be facilitated. It should be noted that this only indicates that outsourcing is made possible; if it should be carried out is a wider question.

When a service is made available by phone or on-line, all the client knows is what they hear, or see on the screen. This flexibility is one reason why on-line services need special security features, such as Public Key Authentication.

An on-line service could be moved from an in-house network to an outsourced service provider. Alternatively the system could remain in-house, while the service and support of the information on the system was outsourced, or both the system and support could be moved.

To facilitate outsourcing each service would need to have a separate identity, such as a set of web pages and e-mail addresses. With this in mind, organisations might want to keep separate there general web sites and service delivery sites.

Internal communication and information can now be provided using internet technology on an internal corporate network commonly called an "intranet". There is nothing magical or special about an intranet, its just a bit of the Internet which has been cut of from the rest of the world, or hidden behind a firewall. The services could have been provided by any one of a number of technologies over the last 10 years. The Internet has just popularized, standardized and lowered the cost of what IT professionals have been trying to do for years.

While the Internet may provide the tools for on-line business, people may not necessarily know how to use them for business. The problem is to get staff to take the Internet seriously as a business tool. Staff have to have the security issues of the 'net explained to them. Backup and security of information is important.

Wireless

The potential of wireless Internet, is yet to be realized. Wireless Application Protocol (WAP) has turned into another dot.COM pipe dream. IT directors need to consider a broader wireless strategy. Recent developments with wireless standards and equipment mean that this may be incorporated into the organisation's main web strategy. The result will be an overall lower cost and complexity.

For first semester 2001 I have been teaching information technology students at the Australian National University about wireless technology and web site design. This rather academic work has had a remarkable, commercially valuable spinoff. It appears that a viable wireless strategy is to design web pages which implement accessibility guidelines for the disabled and are design to display on a one quarter VGA screen. Organisations which accept these limitations on the design of their web sites will be able to deploy to a new range of hand-held devices implementing web browsers and GPRS, with no extra investment being required.

Up until a few months ago most commentators agreed that WAP (Wireless Application Protocol) devices would be the next communications revolution. However, that has now changed and WAP is essentially dead as a product. Organisations which have implemented WAP have wasted their money, as have mobile telephone handset companies and telcos investing in WAP and 3G spectrum.

WAP came from the mobile telephone industry: mobile telephone handsets had computing capacity added, to become wireless data devices. We may see a rapid development of a wireless Internet approach from the computer industry: hand held computers will have wireless communications added to become multi-function phones. The General Packet Radio Service (GPRS) option being added to existing GSM mobile networks will provide most of the functionality of the planned 3rd generation high speed networks at far lower cost.

Wireless Application Protocol (WAP)

WAP phone from How Wireless Internet Works by Jeff Tyson, Howstuffworks.com, Inc
What is WAP?
The Wireless Application Protocol (WAP) is an open, global specification that empowers mobile users with wireless devices to easily access and interact with information and services instantly...
From WHAT IS WAP AND WAP FORUM?, Wireless Application Protocol Forum Ltd, 2001

As currently conceived WAP is unlikely to become the mainstream technology for wireless Internet applications. The limitations of current WAP devices require content to be specially designed in the Wireless Markup Language ( WML).

I-mode

I-mode provides a different, and more promising approach to a web service on a hand held device. I-mode uses a proprietary mark-up language based on HTML:

First introduced in Japan in February 1999 by NTT DoCoMo, i-mode is one of the world's most successful services offering wireless web browsing and e-mail from mobile phones. Whereas until recently, mobile phones were used mostly for making and receiving voice calls, i-mode phones allow users also to use their handsets to access various information services and communicate via email.

In Japan, i-mode is most popular among young users, 24 to 35 years of age. The heaviest users of i-mode are women in their late 20s. As of November 2000, i-mode had an estimated 14.9 million users.

When using i-mode services, you do not pay for the time you are connected to a website or service, but are charged only according to the volume of data transmitted. That means that you can stay connected to a single website for hours without paying anything, as long as no data is transmitted.

From I-mode FAQ, WestCyber Corporation, 2000 (no longer on-line)

It may be some years (or never) before a suitable standard for mobile devices is adopted. An alternative approach by the CSIRO, is to render the web content in a format to suit the display device:

Combining XML, ASP and database technology provides a powerful mechanism for the development of mobile applications. We describe the development of an application that provides name, rank and phone number information for an organization.

From "XML and Mobile Computing", Paper and Demonstration, by Ken Taylor, CSIRO Spatial Information Systems Group.

SAGEM WA3050 GSM/GPRS phone-enabled Pocket PC But a much simpler approach may be possible: Build web pages which work well on conventional web browsers and on hand held devices, without the need for changes. While this wouldn't be feasible with today's WAP phones, it is possible with the new range of PDA mobile telephones. These have a quarter VGA (320 x 240 pixels) colour or monochrome screen and a cut down web browser and GPRS data access to the Internet at speed comparable to a slow dial-up line.

The limitations of small screen size, limited keyboard and lower bandwidth connection can be overcome by using accessibility features originally designed for the disabled.

Accessibility for the disabled

Web accessibility guidelines have been developed to assist designers to make web sites which can be used by the greatest range of people. The most respected guidelines are those from the World Wide Web Consortium. Last year I used those guidelines to assess accessibility for the blind to the SOCOG Sydney Olympic Web site, in a case before the Human Rights and Equal Opportunity Commission.

Examples of use of wireless devices in motion

Palm III in Use ... Gus' Cafe was opened by Augustin "Gus" Petersilka, advocate of the outdoor Viennese cafe. ... Well after Gus' time the cafe has changed from using pencils and note paper for taking orders and now has wireless PDAs. The staff were a bit busy taking orders to stop and explain the system to me, but it appears to use standard Palm III personal digital assistants (PDAs) for taking the orders.

From Networking at Gus' Cafe, 26 January 2001

Eurostar... visit Philippe Quéau Director of Information Society Division UNESCO. This was a good excuse to try the Eurostar train through the Channel Tunnel from London to Paris .... Mobiles don't work during Channel Tunnel transit (20 minutes) and in shorter tunnels en-route (mostly in the UK). I noticed that phones do work in the London Underground. As soon as we existed the tunnel in France, I received a message on the phone from SFR welcoming me to their mobile service, which is a nice touch. I uploaded the first draft of this web site, using an GSM infrared interface. This was only just done when the battery went flat in my computer...
From London to Paris By Eurostar, 19 October 2000

Accessibility and I-mode

I-mode uses a subset of HTML, so that I-mode pages are upward-compatible with conventional web browsers. An example of an I-mode web site is the People's Daily, which displays well on a conventional web browser:

China Urges Advanced Countries to Help Developing

A Chinese central bank official on Sunday urged advanced countries to coordinate their macroeconomic policies and keep the major currencies' exchange rates stable to create an environment conductive to stability and growth for developing countries.
(04.30 14:0)
Top of Group Top Page
More complex web sites can be constructed from simpler i-mode pages.

B2W: Business2Where?

After the disappointment of B2C and B2B, there is a future for e-commerce. However, grand strategies of global market dominance through exciting B2x strategies needs to be abandoned. E-commerce can provide significant cost savings using simple technology which is an extension of conventional business practice.

IT professionals have developed many powerful techniques for the analysis of business problems. Just as business people seemed have forgotten their financial skills when investing in Internet projects, IT people seem to have forgotten all the techniques of good IT design when building web applications.

Graphic designers and marketers should be kept away from the design of serious e-commerce web sites. What is needed are analysis and design techniques from IT traditions but adapted to the web. One attempt to do this is the Web Modeling Language (WebML). WebML is a notation for specifying complex Web sites at the conceptual level.

Excerpt from a site view defined in WebML

Excerpt from a site view defined in WebML

Design Process in WebML

The process using WebML proceeds by iterating the following steps for each design cycle:

WebML Design Process

WebML Design Process

B2G Director for Australia: A candidate for Analysis

The Department of Employment, Workplace Relations and Small Business (DEWRSB) has issued a Request for Expressions of Interest to assist with an e-commerce initiative in the business-to-business and government-to-business environments :

The aim of the initiative is to build a high level electronic directory, in an electronically open and commercially neutral environment. This directory will service national requirements by providing a high quality unique electronic identification and authentication directory.

Power of the Directory

This directory will be designed to engender confidence and trust in the online business environment. A registration process will protect:

From: ( EOI2001/10, 2001)

The EOI provides an envisaged structure for the directory:

The initiative is generally seen as having a Central Directory containing ABNs and there associated tags and a Local Directory for each ABN that is actively using the Central Directory. The Local Directory, identified by its ABN will be the interaction entry point for each of the interaction made available by the business entity. Although each business entity will require a Local Directory it is envisaged that the Local Directory would be most likely be hosted by an intermediary such as an ISP and offered to individual business entities as a value added service. Businesses would access and manage their Local Directory remotely using strong authentication facilitated by a Public Key Infrastructure.
From: ( EOI2001/10, 2001)

DEWRSB try to explain this in diagrams, but this could benefit from a formal analysis such as with WebML, to make the design clearer. Such a system could be expected to have a high transaction rate and require careful optimization of the implementation, which would be aided by formal analysis of the data structures. An accessible design, implementing the W3C guidelines, would minimize network load as well as providing for the wide range of users of the system. A wireless design might be of value for small businesses using hand held and appliance web terminals in place of conventional PCs.

Central & Local Directories

Central & Local Directories

Postscript: Knowledge Nation, Cocoon and OpenOffice (5 June 2001)

  1. Share of ICT industries value added in total business sector value added in OECD countries, circa 1998 - full size 12 kb, click here The report of the ALP's "Knowledge Nation Taskforce" report (ALP 2001) was published in July 2001. It contains an analysis of the ICT Industry in Australia using similar sources and with similar conclusions as Houghton (2001). As an example both reports use the diagram from "Measuring the ICT Sector", (OECD 2000) OECD: Figure 8 (ALP 2001) Figure 2 Houghton. A discussion of the issues is available.
  2. Cocoon is a 100% pure Java publishing framework that relies on new W3C technologies (such as DOM, XML, and XSL) to provide web content. The Cocoon project aims to change the way web information is created, rendered and served. The new Cocoon paradigm is based on the fact that document content, style and logic are often created by different individuals or working groups. Cocoon aims for a complete separation of the three layers, allowing the three layers to be independently designed, created and managed, reducing management overhead, increasing work reuse and reducing time to market. The Apache Software Foundation, 1999-2001
  3. OpenOffice.org is an Open Source community project building the next generation of office-productivity software. Sponsored by Sun Microsystems, Inc., and hosted by CollabNet, Inc., OpenOffice.org provides the full infrastructure for global, Open Source community work and growth. OpenOffice.org, 2001

References

  1. Impact of the ICT Industry in Australia, the Australian Computer Society and Professor John W. Houghton, May 2001, URL: Report (pdf 143k): http://www.acs.org.au/notices/itcimpact.pdf Executive Summary (54k .doc): http://www.acs.org.au/notices/itcimpactsummary.doc
  2. "ACS Urges Caution on Whole of Government IT Outsourcing", Submission to the Senate Finance and Public Administration References Committee, Wednesday, 6 August 1997 http://www.acs.org.au/president/1997/outsrc/sensub.htm
  3. Outsourcing and contracting out of IT products and services, Ian Dennis and David Goble, ACS Paper, 6 August 1997 http://www.acs.org.au/president/1997/outsrc/paper.htm
  4. An Agenda For The Knowledge Nation, Report Of The Knowledge Nation Taskforce, Chifley Research Centre, Canberra July 2001 http://www.alp.org.au/kn/kn_report_020701.html

This document is Version 2.1 – 5 July 2001: http://www.tomw.net.au/2001/eal/

See also B2B Workshop.

Copyright © Tom Worthington 2001