Paul Wallbank – Brilliant Communications

Category: business advice

  • Reliving the Hong Kong Handover syndrome

    Reliving the Hong Kong Handover syndrome

    After Margaret Thatcher 1984 agreement to hand Hong Kong over the People’s Republic of China, the hoteliers of the British Colony sent out the message “book now, or pay dearly for rooms at the time of the handover.”

    It became perceived wisdom that the territory would be booked out for years in advance and any rooms available would cost a fortune. So people made other plans.

    As a result, Hong Kong’s hotel occupancy rate during the handover was only 45%. The “buy now or you’ll miss out” message backfired as people decided they’d rather miss out.

    In the second week of the London 2012 Olympics the same thing is happening – the regular tourist trade has been scared away and even the locals who haven’t left town are staying home to avoid the transport and other hassles.

    For London, the Olympics have backfired.

    This is what is always missed when cities or governments make bids for big events, they displace existing trade and the benefits, if any, are short lived.

    At least the Olympics do attract millions of visitors and the eyes of the world are on the host city for two weeks.

    Far worst are the pointless heads of government meetings that pop up with monotonous regularity, for a few days of fleeting notoriety a city is locked down and its citizen corralled as Presidents and Prime Ministers meet to discuss something that will be forgotten in weeks.

    The Sydney APEC meeting of 2007 was case in point, nothing was achieved for the weeks of disruption to normal business except for the spectacle of the so called leaders of the Asia Pacific region scuttling between hotels like frightened cockroaches in their armour plated motorcades.

    Governments around the world keep falling for the myth that these major events generate some sort of economic benefits when it’s clear to the population who aren’t invited to the VIP cocktails parties that their money isn’t being well spent.

    For businesses, the lesson is not to make too many “buy now or miss out” claims. If customers take you at your word then you may find your shop is half empty, just as Hong Kong did in 1997.

     

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  • Making business accessible

    Making business accessible

    Internet payments giant Paypal yesterday released a survey showing how businesses with a website grow faster than those without an online presence.

    There’s surprise to anyone paying attention that a business website is essential, but what happens if a business’ site isn’t accessible to those with impaired eyesight or a disability?

    We tend not to think about accessibility issues when building websites and that oversight might be hurting the effectiveness of our online marketing efforts.

    Access iQ was launched two weeks about by Media Access Australia, a not for profit organisation that works to improve disabled access to the media which was formed out of the sale of the Australian Caption Centre in 2005.

    Federal Disability Commissioner Graeme Innes pointed out at the Access iQ launch that accessibly makes life easier for everyone – making shopping centres and footpaths easier for wheelchairs to navigate also made those places more accessible for parents with prams, the elderly and able bodied people. Everybody, particularly the shopkeepers, won by making things easier for everybody.

    What’s true in the physical world has even more effect online, as the features which accessibility programs use are the same ones the all important search engines use when ranking websites.

    Titles, headings and metadata – the descriptions of the site, pages and images built into websites – are important as they let search engines and accessibility programs understand what a site is actually about.

    Getting your metadata right is a basic part of Search Engine Optimization and it’s key to having an accessible website as well.

    A good tool for checking how well metadata is being used on your website is the Australian diagnostic site BuiltWith, whose free service gives you a basic report on how a page is using SEO best practices.

    While how well a site uses headings and metadata is important, its also important that the site works properly. Problems with a website’s design make it run slower and can affect how it works in some browsers. So minimising design errors on a page matters as well.

    The best tool for checking a website’s underlying code is the W3C’s Markup Validation Service. This checks your site is complying with web standards and picks up an errors that might have crept into the design. Eliminating as many errors as possible means the site runs quicker while improving the SEO and accessiblity aspects.

    For checking accessiblity issues, the Web Accessibility Evaluation tool (WAVE), shows you where problems might lie in your site and steps through each part of a page highlighting potential issues.

    While a web site’s code isn’t something business managers and owners should spend a lot of time worrying about, the accessibility and SEO does matter so it’s good practice to use these tools to check how your site is performing.

    Once you’ve run these tests, sit down with your website developer and see where you can improve. The more accessible a web site is, the more it will help your customers.

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  • Outsourcing the service economy

    Outsourcing the service economy

    Through the 1970s and 80s we accepted manufacturing industries moving jobs offshore because those jobs were done by working class, blue collar workers and the future lay in white collar, middle class service industries.

    As a consequence of moving manufacturing offshore, the US, British and Australian economies became more service based. The thought in the 1980s was that while goods could be made in Taiwan, the ‘knowledge industries’ couldn’t be.

    Then the Internet came along.

    A panel on The Future of Outsourcing convened by the Indian Institute of Technologies Association of Australia last night discussed some of these issues.

    Now the service industries are being offshored, at first it was the low skilled service jobs like call centres but it didn’t take long for higher value work – such as paralegal, medical transcription and of course IT services – to follow.

    The belief that white collar jobs couldn’t be taken over by cheaper foreign labour has been proved wrong.

    It isn’t just those working in the call centres or IT departments of telcos and big banks that are being affected, those small businesses in support industries like secretarial services or design are finding their clients are moving offshore too.

    What’s interesting with all of this is how long the executive classes can resist being outsourced. Indian and Chinese managers work for harder for less than their US, British or Australian colleagues and in many cases are better educated.

    One can only wonder how long the partners of major consulting business can hold the line as well, these guys – the vast majority are men – have done very nicely charging first world rates while increasingly paying developing world rates.

    Already Indian outsourcing companies, including at least two sitting on that Sydney panel, have set up their own consulting arms that cut out the expensive middle men. Without the overheads flashy offices and big packages for entitled partners, they’ll have a pretty competitive offering.

    While we can cry for the high paid management consultants and executives who are increasingly threatened by these changes, the Anglo-Saxon economies have a real problem as service industries move offshore.

    In Australia, the Bureau of Statistic’s 100 Years of Change in Australian Industry tracks how the nation’s industries have changed – in the 1950s Australian manufacturing peaked just shy of 30% of the workforce, by 2000 it had shrunk to 11% while service industries were doubled from around 25% to 50% of the economy.

    While it’s unlikely we’d see the service sector workforce shrink by 2/3rd over the next fifty years, there’s a good chance incomes will fall in these industries unless we start to invest in education and skills which allow Australia to stake a place in the global economy.

    One of the key takeaways from the Future of Outsourcing event was that this change is happening regardless of what we think is a fair wage for our work. It’s something our government and business leaders need to start considering.

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  • So you think services are easy?

    So you think services are easy?

    ZDNet columnist Ed Bott is possibly one of Microsoft’s closest followers and among the few to defend Windows Vista, Ed though can’t be faulted for doing the hard yards including reading Microsoft’s stock market10-K  filings.

    In their most recent filing, Ed finds Microsoft has used the word “service” 73 times as opposed to 44 appearances last year.

    A key phrase in the filing is “a growing part of our strategy involves cloud-based services used with smart client devices.”

    This is consistent with the hands on previews of Windows 8 which Microsoft have been giving journalists over the last few months. Something that leaps out is the integration with online services; something that both Google and Apple have also been pushing.

    What should worry investors is that moving into services isn’t easy. Service businesses are far more labour intensive and, as a consequence, far less profitable.

    Despite having relatively low labour costs, cloud computing services are problematic as many sectors have been commoditised, which is the genius of Salesforce in establishing a profitable niche.

    The fat margins Microsoft are used to in their core software business can’t be replicated in the cloud based markets, which is one of the reasons why customers are switching to the cloud.

    Microsoft’s problem is shared by telecommunications companies who are finding their cloud offering don’t generate the same ARPUs — Annual Revenue Per User — that they’ve become accustomed to in the mobile phone market. Which means pain for executives whose KPIs are tied to historical performance.

    For Microsoft, the problem is compounded by their simultaneous move into hardware with the Surface tablets. Meaning the company’s has to deal with two significantly different business models to the ones they are used to.

    Again Microsoft aren’t alone in this, Google is having similar problems adjusting to the hardware market though its acquisition of Motorola Mobility.

    Integrating hardware with services and manufacturing isn’t impossible, we only have to look at Apple for how a company can succeed in that space although most managements struggle with the very different demands of each sector.

    During the 1980s we saw the rise of the “all business is soap” philosophy where MBAs and management consultants preached that the challenges of running a business were the same regardless of whether you sold cleaning products, soft drinks, computers or automobiles.

    Those folk were wrong. Most famously the Australian media company Fairfax hired as CEO a business school professor who preached this philosophy and managed to ignore the rise of the Internet, the echoes of the failed McKinsey ideas haunt Fairfax over a decade later.

    While its possible for a software company to succeed at services or hardware, the magnitude and complexity of the management challenge shouldn’t be understated. Both Google and Microsoft will be defined by how well their leaders succeed.

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  • Accounting for business change

    Accounting for business change

    Small businesses owe a lot to Craig Winkler – in 1991 he bought a obscure Mac based accounting package called Mind Your Own Business (MYOB) and built it into Australia’s leading small business accounting software.

    Today Craig is a director and investor of Xero, a cloud computing service which is MYOB’s fastest growing competitor

    At Xero’s Australian partner conference, Craig described how the development of business accounting software has evolved around technology opportunities.

    MYOB’s massive growth happened as desktop computers became accessible to small businesses. Prior to 1990, it was rare to find a computer sitting on a business desk and they were largely confined to large financial, engineering and government organisations.

    In the early 1990s computer prices dropped and as small businesses started using them, the need for desktop based office software exploded. This drove the growth of software like MYOB, Quickbooks and – most profitably of all – Microsoft Office.

    Today a similar revolution is happening as computing moves onto the cloud, further reducing business costs and giving small organisations access to the same resources that only big corporations could access a decade ago.

    Cloud based companies like Xero and Saasu are now threatening the incumbents like Quickbooks and MYOB who are responding with their own online products.

    Tim Reed, the CEO of MYOB yesterday discussed how his business is moving to the cloud. With MYOB’s legacy of desktop based applications which they claim is used by 40% of Australia’s small to medium businesses it isn’t a straight forward process of dropping the old software and embracing the cloud.

    Not that their customers are rushing to the cloud, Tim claims that a survey of their clients found that most want a ‘hybrid’ system where data is saved both on the cloud and on the desktop.

    MYOB are catering for the hybrid cloud demand with a pilot program of their AccountRight Live product that adds online capabilities to their desktop software.

    This is clear difference between MYOB and its cloud competitors. Xero’s founder Rod Drury maintains that those hybrid solutions are cumbersome and adds far more complexity into software. In Rod’s view, “cloud technologies are the right technologies.”

    The difference between the philosophies of MYOB and Xero is reflected across the software industry – most notably this is the difference between Google and Microsoft or Apple.

    Both Microsoft and Apple see cloud computing as an adjunct to their desktop, tablet and smartphone products. Data is synchronised between the cloud and the device while work is carried out on both.

    Google on the other hand tries to do everything on the cloud.

    Both approaches have their benefits, particularly in a world where Internet access cannot always be taken for granted which is the cloud’s biggest weakness. Although as mobile broadband becomes ubiquitous in the developed world, that disadvantage is quickly eroding.

    Regardless of the differences in the philosophies, everybody agrees that cloud services are going to revolutionise small business. Both Tim Reed and Rod Drury see how the Big Data opportunities in the cloud are going to give business much more access to real time sales, banking and expense data while being able to benchmark their operations against industry performance.

    As Craig Winkler described, we are on another big wave of change and there are great opportunities for the businesses that figure out how to use it.

    Paul travelled to Melbourne attended the Xero Australian Partner conference courtesy of Xero. He received a private media briefing from MYOB.

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