Decoding the new economy

Extraordinary failure

“It is extraordinary that in six years of Labor talking about Australians having inadequate broadband they never bothered to do the work of actually identifying where services were good, bad or indifferent,” said the minister at the announcement.

Turnbull’s comments are correct, although the criticism is just as valid of previous Liberal and Labor governments who’ve all made incredibly poor decisions in the telecommunications portfolio without considering what was actually happening outside the ministers’ offices.

A bigger lesson though is that before commissioning a project the size of the NBN – estimates have put its cost anywhere between twenty and eighty billion US dollars – it’s a good idea to know where you are are and where you want to go.

Big Hairy Audacious Goals

To put the comments that follow into perspective, I was a supporter of the NBN concept although I thought it was a Big Hairy Audacious Goal.

In the shadow of the Global Financial Crisis the NBN project ticked all the boxes; it put cash into the economy, it employed an army of workers and upgraded Australia’s telecommunications network that had been neglected by thirty years of incompetent government policies mixed with incumbent telco greed.

Australia could have afforded ten NBNs during the mining boom of the 2000s; it was an opportunity to rebuild the nation’s ports, roads, railways, schools and tax system that all needed reinvestment and reinvention to meet the needs of the 21st Century.

Building a middle class welfare nanny state

Rather than reform the economy or build modern infrastructure, the Howard Liberal government decided to spend the mining boom’s proceeds on building a middle class welfare state.

Keen students of Australian politics crack a wry smile that the recently elected Abbott Liberal government, of which Turnbull is a member, proposes a paid parental scheme that will complete John Howard’s grand vision of a Middle Class Welfare Nanny State.

One of the tragedies of the populist and cowardly Gillard and Rudd Labor governments that succeeded Howard was neither had the courage to dismantle the Liberal party’s middle class welfare state.

At least though both Rudd and Gillard were prepared to make some big infrastructure investments, even if they weren’t fully thought through and chronically underfunded.

Failing to think through the needs, scope and costs of the project meant the National Broadband Network project quickly collapsed into a managerial mess exacerbated by the dribbling incompetence of the company’s executives, government officials and contractors, which bought us to Turnbull’s announcement today.

A project in search of a scope

The project’s failure is a worrying commentary on the abilities of Australia’s management elites in both the private and public sector, however the lesson for the entire world is understanding both where you are and where you want to go to is essential for a project’s success.

Spending on well planned and necessary infrastructure is good, but to avoid disasters like Australia’s NBN it’s good to start with understanding the problems you want to fix and a project scope that clearly identifies the work that needs to be done.

Unfortunately too many governments and businesses don’t know where they are or where their plans will take them.

The benefits of crowdsourcing services

Crowdsourcing services like Design Crowd and Freelancer have benefits traditional outsourcing services don’t have.

Alec Lynch describes these as reduced expense, speed and risk. A broad range of cheap, accessible suppliers mean businesses aren’t locked into costly contracts with the attendant risks while they can bring projects to fruition in days.

Until recently, globalisation only bought benefits for major corporations with manufacturers contracting work out to China, back office functions to India and software development to Eastern Europe.

The rise of web based services where smaller, one off projects could be paid for by credit card has bought global outsourcing into the small and medium sized business markets.

Now local businesses are affected by business practices that, until recently, were the concern of those working for large organisations.

This is bad news for local service businesses; the suburban web designer or bookkeeper is now finding themselves competing with individuals who, as Matt Barrie points out, have a very good weeks’ income for the equivalent of a day’s pay in Australia.

Basically the same forces that drove most low value manufacturing offshore are now driving services and white collar jobs the same way.

Responding to the threat

There are major downsides for clients using these project based outsourcing services; for instance designing a logo is only part of a much bigger branding exercise which in turn has to be considered against the orgainisation’s longer term objectives.

Often, most of us don’t know what we don’t know and that’s the real reason why we hire an expert to explain why a logo should look a certain way, an expense should be allocated to one specific cost centre and not another or why we should one software package over another.

When we outsource our services, particularly to a low cost provider, we lose that expert insight and end up with someone just carrying out a task; it is up to us to supervise something we probably don’t understand ourselves.

Part of that supervisory role is project management, in the design field managing creatives can be like herding cats. This is why experienced project managers are worth their weight in gold.

Like many essential skills, project management is one of those which most of us don’t have and is chronically undervalued but when a business is outsourcing to a freelancer in Estonia or Eritrea then this service is essential.

Providing those skilled supervisor and management roles is where the opportunities lie in a crowdsourced market place.

In many ways, we’re seeing the end result of the post-industrial society. Just as we offshored the manufacturing industries through the 1970s and 80s then the low skilled office work in the 1990s and 2000s, we’re now outsourcing local services to low cost countries.

Whether ultimately this is a good thing or not is a big question but for local businesses, the trend is clear and much of the basic work is going offshore. Those who choose to whinge rather than adapt will be left behind.

Tag: project management

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