Tag: business

  • A blind faith in technology

    A blind faith in technology

    “How could this happen with all the technology these ships have?” is the first question many of us had when we saw pictures of the Costa Concordia lying on its side with a ripped hull.

    In an era where we have Global Positioning Systems, sonar, radar and sophisticated mapping technology it seems almost impossible that a ship could find itself in such a terrible situation.

    Every generation has its own blind faith in the technology of the day and almost a hundred years ago one of the greatest shipping disasters of all – the RMS Titanic – happened because of the same belief in that era’s technology.

    While the Titanic’s builders claim they never said the ship was unsinkable, popular belief held the vessel was the safest of all ocean liners with sophisticated steam engines, modern safety designs and better communications tools like the radio and Morse Code.

    Those technologies were part of the Titanic’s undoing; the improved performance of steam ships saw the shipping companies competing for the Blue Riband prize of the fastest crossing of the Atlantic, meaning captains took risks they wouldn’t have with less technically advanced vessels. This is why the Titanic found itself in an ice field.

    Once the ship was struck another problem with our blind faith in technology arose – we never foresee all the consquences.

    In the Titanic’s case there weren’t enough lifeboats – the safety rules of the day had fallen behind the capacity of the ships and, while the Titanic exceeded the minimum number required, there were barely enough lifeboats to take a third of the passengers.

    The Titanic’s sinking has some similarities in that today cruise ship companies are in an ‘arms race’ to build bigger and more luxurious liners, marketing them as floating resorts raising concerns among maritime experts that the capacity of these ships is too great for them to be evacuated quickly.

    Of course we have to be careful of drawing too many parallels between the Titanic and the Costa Concordia, the Titanic’s loss of life was several orders of magnitude greater than the Concordia’s and the Titanic happened towards the end of a period when technology looked like it would solve all the world’s problems.

    The sinking of the Titanic was also the peak of the Edwardian standards of “women and children first” and “for King and country.” Only one in six of the third class male passengers and half of that in second class survived.

    A few years later, the clash of Edwardian culture and modern technologies was starkly shown when millions died in the trenches of France, Belgium and Gallipoli as generals applied 18th Century cavalry tactics against 20th Century weapons. Another example of not understanding the effects of new technologies.

    Whenever we adopt a new technology there’s a risk we’ll get it wrong and blind faith in tools we don’t understand can lead us to a disaster.

    Even in a business we can’t just accept that because a computer says “yes”, the answer is yes. Sometimes we have to think.

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  • Strategic lessons from a security breach

    Strategic lessons from a security breach

    2011 has been the year of the IT security breach. Big and small organisations around the world ranging from major corporations like Sony through to smaller businesses such as security analysts Stratfor found their customer data released onto the web.

    The frustrating this is most of these breaches are avoidable and “hacking” is often giving too much credit for the security used by the targeted companies.

    While the ‘hackers’ themselves may be skilled, the compromised organisations are often easy targets as they don’t follow the basic rules of protecting their data.

    Standards matter

    Customer payment account details are covered by the Payment Cards Industry -Data Security Standard (PCI-DSS) operated by the PCI Security Standards Council.

    The PCI Security Standards Council helpfully has a range of information sheets for merchants of all sizes and if you are taking payments off the web you should make yourself aware of the basic requirements.

    For most businesses, the cardinal rule is not to save customer’s card details. Once the payment is approved, you have no business retaining the client’s credit card or bank account numbers.

    In Stratfor’s case, they were almost certainly processing payments manually and credit card details were being saved on customers’ records in case of errors or to make renewals easier.

    Call in the professionals

    There’s no shortage of payment companies, ranging from PayPal through specialist services like eWay to your own bank’s services. Choose the one that works best for you. If you have no idea, call in someone who does.

    One of the arguments for using outsourced services, particularly cloud computing, is how data security is a complex field that requires professional and qualified expertise. The internal systems of Sony, Telstra and Stratfor were not up to the demands placed upon. A professional service is better equipped to deal with these issues.

    Size doesn’t matter

    A major lesson from the last year’s security breaches is that it’s not just the local shop or garage e-commerce business that is careless with data. Some of the world’s biggest companies and government agencies have been compromised.

    If anything, Sony’s experience has shown the double standards at work in the application of security rules; there’s no doubt that had a local computer shop been as thoroughly compromised as Sony were, they would have been shut down on the second breach and the management would have been carted off to jail well before the twelfth.

    For the management of Sony, there seems to have been little in the way of sanctions of the people nominally responsible for this incompetence. This has to change both within organisations and by those charged with enforcing the rules.

    The lesson for customers is you can’t trust anyone with your data; don’t assume the big corporation is any more secure than the serving staff at your local sandwich shop.

    Passwords matter

    Every time one of these breaches happen we hear about password security, with “experts” pointing out that some of the subscribers were using passwords like ‘statfor’ or ‘password’.

    For customers, this actually makes sense if you can’t trust third parties with your details so specific, disposable passwords for each site should be used. There’s little point in having a complex password if some script kiddie is going to post your login details onto 4Chan.

    Naturally your passwords for banking and other critical websites should be very different and far more secure than those you use for sites like Stratfor and the Sony Playstation Network.

    Will 2012 be any different?

    Given the data embarrassments of 2012 for businesses and government agencies, can we expect lessons to be learned in 2012?

    While many businesses are going to learn specific lessons from these breaches, there’s a management cultural problem where any spending on information systems is seen as a cost that has to be minimised.

    This cost cutting mentality lies at the core at many organisations’ failure to secure their systems properly and until a more responsible culture develops we’ll continue to see these lapses.

    Good managers and business owners who understand the importance of guarding their organisation’s and customer’s data are those who are ahead of their competition. Over time, these folk who will have the competitive advantage.

    For customers, the sad lesson is we can’t trust anyone and a layered approach to security along with keeping a close eye on our bank accounts and credit card statements is necessary.

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  • The death of local newspapers and media

    The death of local newspapers and media

    The bankruptcy of Lee Enterprises, publisher of 48 newspapers across the United States, is the  latest episode in the steady decline of local  printed media. Is the newspaper, particularly the local publication catering for a smaller market, dead?

    Futurist Ross Dawson certainly thinks so, last year predicting US newspapers won’t exist as we know them by 2017 with them being replaced by digital platforms like the web, iPad and Kindle.

    The problem for the media industry is how to fund news gathering in a digital environment. Newspapers are dying because advertisers have moved online, so Google now makes $30 billion a quarter on the income the local paper has lost in classifieds and display advertising.

    For web surfers, this is also a problem as much of what appears on the net — in blogs, Facebook, on Twitter and circulated around message boards — comes from newspapers and largely subsidized by their rapidly eroding print revenues. Take out the traditional media, and many of the authoritative online sources disappear.

    Much of the free web content we’re seeing is a transition effect as we evolve to paid online models, something that is going to be driven by advertisers following consumers’ eyeballs to the net.

    For the publishers who don’t go broke in the meantime, this will probably save them in whatever form they evolve into.

    Cutting costs to survive the current lean period is essential for newspapers, the tragedy is many are following other industries in cutting the very areas that give them their competitive advantage while keeping antiquated and expensive management who hang on to failed strategies.

    Poor management is probably a bigger threat to the news empires, as it is for many other industries.

    The damage done by poor business leadership is far greater than the cost of outsized management salary packages and entitlements. Until shareholders address the number, cost and suitability of the managers charged with running their investments, the future for these organisations is bleak .

    Local journalism is going to change as we start seeing old media’s economies of scale being replaced by cheaper technology that allows local people to reclaim their news and community stories.

    They will be doing this through blogs and social media while using their mobile phones and cheap cameras to capture and document local news.

    For the local newspapers and media outlets who understand and harness their community, they’ll remain valued local commercial citizens; for those who see their readers as a mass of dumb consumers, they’ll be lucky to last the decade.

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  • Fading markets, falling margins

    Fading markets, falling margins

    “They don’t pay for us to go to trade shows anymore,” lamented a journalist at a recent industry PR event. The era of international trips and freebies is over for most technology journalists and its passing is mourned by many of them.

    Media junkets, industry conferences in exotic locations and management retreats to exclusive resorts are what businesses with fat profits can afford. Most of the tech industry is past that point as most of the sector becomes commoditised.

    Slowly, vendors come to understand what a commoditised market means as Acer have with their announcement they will stop selling cheap systems while others, like Apple, have managed to avoid that trap entirely.

    As technology changes, cheaper manufacturing locations appear and consumer preferences change many businesses will find their markets change. Some will identify those changes early and change course while others will wonder what has happened to their fat margins and why they can’t afford management, client or media trips to the Pacific or the South of France anymore.

    That’s good for consumers, but a terrible thing for those managers who are little better than corporate bureaucrats and their friends in the media.

    Interestingly, it’s the jobsworths and the overfed incumbents who are the slowest to recognise when their businesses are changing which is why there’s so much opportunity for smaller, smarter enterprises.

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  • Business is fine

    Business is fine

    “I don’t need high speed broadband,” snarls the businessman in a country town, “business is fine as it is.”

    A hundred years ago this year the iconic Australian horse coach company Cobb & Co went into its first bankruptcy as it declined from being the dominant transport service of rural Australia.

    Cobb & Co was founded in 1854 by four young Americans in the Victorian gold rush and grew around the expansion of Australia’s rural farming and mining industries. By 1900 the company had 9,000 horses travelling 31,000km (20,000 miles) every week.

    By 1924 Cobb & Co was gone. Displaced by the motor car and restrictive state government rules designed to protect their railways.

    Many businesses, including the management of Cobb & Co, thought the motor car was a fad. No doubt many at the time also thought electricity was dangerous and unnecessary.

    Business worked fine as it was when stagecoaches carried the mail and bullock carts carted the crops, steam engines were fine to power the farms and businesses while the telegraph was just fine for those times when a three month letter to your customers or creditors in London or New York wasn’t quick enough.

    All those businesses went broke. They didn’t go broke fast, it was a slow process until one day owners realised it was all over and then the end came surprisingly quickly.

    That’s where many of us our today – cloud computing might be the latest buzzword, social media might be a distraction for coffee addled children of the TV generation and the global market might be just a way to dump cheap goods and services on gullible consumers – but markets and societies are changing, just as they did a hundred years ago.

    Sure, your business doesn’t need fast Internet. Business is fine.

    Stage coach image courtesy of Velda Christensen at http://www.novapages.com/

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