Archive for the 'Efficiency' Category

Lobby Groups, Vested Interests and Short Sightedness

Published by Ben Kepes on December 11, 2009 in Business and the Environment, Compliance, Economic Development, Efficiency and New Zealand. 21 Comments

(Warning – off topic, but still important)

Despite statements to the opposite, New Zealand is a country that gains significant wealth from agriculture and horticulture. That we do so, such a long distance from our main markets, is in part testament to the fact that we’re blessed with significant rain which mean significant grass. We can turn grass to meat, milk and fibre in a relatively low impact way.

Having spent significant amounts of time in Northern Europe, and trawling the aisles of the Whole Foods stores in the US, I’m painfully aware of how consumers are becoming more and more aware of food miles and the general impact of the food they consume. In this climate and, once again given our distance from markets, it would seem that New Zealand’s only two points of difference can be the *purity* of our produce, and the application of smart science to agriculture.

The latter is a vast topic, that I’ll come back to some other time, but the former is of vital importance right here, and right now. You see three companies are applying for consent for 16 proposed dairy farm developments managing nearly 18,000 cows housed in cubicle stables. The rational for the stabling is the dual issues of an extreme cold climate and low rain fall.

Now the sensible among us would say that anywhere with an inhospitable climate and low levels of the primary resource needed for dairying (ie rain/grass) is, by default, an inappropriate place to even think of dairying. However, these business people disagree.

Surprisingly, and refreshingly, Fonterra have come out in opposition to the plan, smartly realizing that cubicle grown milk places an extreme threat to New Zealand’s competitive advantage when it comes to the world markets. Unfortunately, that great big red neck brigade, Federated Farmers, is blindly supporting this proposal.

In a statement released a couple of days ago, FF claims that it wishes to advocate for the right of these farmers to make an application but, as I mentioned to Federated farmers directly, over half of the paragraphs in the press release actively advocate for factory farming. They’re still adamant saying:

Capture

I’ve clipped the release below, the paras I consider to go beyond merely advocating the right to due process have been marked in grade a red-neck ink. You’ll see that it’s a statement that goes entirely beyond their mandate to protect their members rights to due process, it in fact advocates this project and in doing so, creates a significant risk for the majority of its members who would potentially lose out medium to long term if this project were to go ahead.

fedfarm

So, without wanting to get all political. this is an issue that needs everyday New Zealanders 9and interested foreigners) to put their hands up. Submissions to the application are due December 18 and further information can be obtained from the Environment Canterbury website – here.

The blackout campaign which turned around the s92a decision shows that the voice of the people can make a difference – I urge you all to use your voices in this case to.

Commoditization… and the Tragedy of the Commons….

Published by Ben Kepes on November 23, 2009 in Business and the Environment, Economic Development, Efficiency and New Zealand. 1 Comment

My good friend Ruth has started blogging and, in what can only be likened to a “butterfly from the chrysalis” moment, we get to see the thoughts her previous employment have rendered her unlikely to utter. Her latest post looks broadly at the Emissions Trading Scheme and questions the strategy of levying a financial charge on those who pollute as a way of reducing that pollution.

Ruth says that;

what REALLY ends up happening is that those who get the so-called “right” to manage what was a common asset make gizillions of $$ out of it, behaviour doesn’t change, and we (“we” as in humanity) seem to be racing each other to use the resources up as quickly and profitably as possible.  Meanwhile the “few” seem to be quietly divvying out licences to make money out of the next lot of public goods, off the back of the “many” consumers who are either oblivious or content to let this commodification of the commons take place.

Ouch!

I rarely disagree with Ruth but this time I might just do so. Not in relation to the ETS, but in relation to water rights, our continuing over extraction of the water reserve and the intensification of dairy farming in arid climes.

I was reminded of a letter I wrote recently to the Christchurch Press, regarding a proposed irrigation scheme in my back yard, North Canterbury. As I said;

I write with respect to the current application for the Hurunui Water Project. I am involved in a large water extraction and storage scheme in North Canterbury and, as would be expected, am a proponent of the concept of flood flow storage. I’ve also seen the work that the interested parties have done leading up to this application – while I support the scheme, I believe our regulatory framework misses, almost entirely, the point of resource allocation.

In correspondence about the proposed scheme, project manager Amanda Loeffen has made  the somewhat contradictory statements that dairying isn’t the focus of the scheme but that around 40% of potential users have looked at the prospect of dairy conversions.

Many people are of the view that dairying, being such a high volume user of water, has no place in a drought prone and difficult climate such as North Canterbury. At a broader level however, we live in a regulatory environment where the right to take an asset can be granted, but no conditions can be put on its use.

In North Canterbury we have some excellent examples of efficient water use and some travesties – farmers using overhead irrigation on marginal value crops in dry (and often windy) North Canterbury summers. Until such time as the framework is changed to reflect the use of the resource, and to incentivise greater levels of efficiency in use, any allocation model is inherently flawed.

While charging for water usage is anathema to most rural folk, it’s hard to see any valid argument to justify granting the use of a scarce resource without charging for it. History has shown that there is little will to drive efficient resource utilisation unless those who use the resource pay for their consumption.

Making this sort of change will take broad stakeholder buy-in, and an acceptance that future users, as well as those of today, should be considered. For the sake of our environment, our economy and our collective future, we have no option.

So.. there’s times when commoditizing a resource might just be the smart approach to ensure some of that resource stays around for our kids… and their kids…. and their kids…

Our Health System Can be Fixed Through Technology, Process and Governance

Published by Guest on July 28, 2009 in Efficiency, Governance, IT, New Zealand, Society and Strategy. 4 Comments

A little while ago I posted, venting my frustration at the New Zealand health system. One of my friends at IBM New Zealand saw my post and wondered firstly whether my criticisms were justified and secondly what solutions there are that could solve some of the health system woes. She invited a healthcare specialist from IBM to respond to my post.

Murray Price is healthcare and life sciences business manager at IBM in New Zealand. The following is his own opinion and should not be taken as IBM company policy.

As much as the New Zealand health system appears to be broken, it is, in fact, still one of the most advanced health systems in the world. Obviously our health system is not perfect, but there aren’t many systems that are any better. There is a general misinformation and lack of understanding in the general public about our health system, including our current international standing and the measures being taken to improve health care.

New Zealand GP’s are some of the most computer literate in the world; over 99% use computers in their practice both to manage patients and to manage their business. The figure in the US is around 30%. This means we can send patient information between clinicians to help improve the treatment process. Our system isn’t perfect, but we are more advanced than most. We deliver better health outcomes for the dollar spent than most countries. We are behind Denmark and literally a handful of others, but ahead of Australia, the UK, and most of Asia, and way ahead of the US. In fact everyone is way ahead of the US despite their leadership in health research.

Our District Health Boards are provided a pool of money to deliver healthcare to their geography within broad guidelines provided by the Ministry. The current bulk funding situation needs to be refined if we are to make improvements to the system, and the health sector needs to make significant changes to reduce costs across the public sector. The initiatives that are underway will make a difference, but they appear to be disjointed.

Our health system can be fixed through a combination of technology, process and governance.

Technology
Technology is easy, it exists today, and it is proven. In fact, advanced technology is being used to improve health systems all over the world, in places like Canada, Denmark, Scotland, Sweden and the US. In Canada, a research hospital is automating the gathering, managing and updating of critical research data and applying analytics to speed childhood cancer research and improve patient care. In Denmark, healthcare providers are using predictive health systems with advanced telemetry to monitor elderly patients in their homes, sharing data instantly. And in the US, a new initiative is enabling individuals and families to store and track their health information and stream data from medical devices.

Technology alone will not solve the problems in our health system; however, one of the essential elements for delivering effective care is developing a fully functioning ‘digital backbone’ to interconnect doctors, hospitals and
patients. A digital backbone will give primary care doctors an essential tool to function in their vital role as the first line of defense against major illness. The ability to exchange information quickly can help reduce medical errors and administrative costs, and improve patient-doctor communication.

The irony today is that we use more advanced technology to listen to music on MP3 players than to keep track of the medical records that save lives. When we need to withdraw cash from our bank accounts, we can use an ATM card anywhere in the world, but when a specialist needs our medical histories, those records are usually tucked away in a paper file in our primary care doctor?s office. Applying technology to our health system provides a clear ROI in lowering costs, and more importantly improving patient safety. And this is achieved when information is unified across a ’system’ thus allowing the right information, to get to the right person, at the right place, at the right time.

Process
The more difficult question in fixing our health system is process. Do we fit the technology to the process of providing care, or the process to the technology, or redesign the process and the technology together? Delivery of healthcare globally is fundamentally the same with local variations based on population types, density, maturity, and funding. Our processes work for New Zealand and a potential danger is we implement technology that doesn’t fit our process.

There is no ‘one size’ fits all and there is no way we should put up with a ‘one size fits most’ option. But our processes can be improved and we might find technology plays a part in that. We need to keep an open mind and have informed debate to plan the way forward.

Governance
However, the most difficult question facing our health system right now is governance. Who owns the patient record? Who has access to it and for what reason? How do the rights of the individual vs. the clinician vs. the funder vs. the planners inform the overall policy? Again, there is no ?one size? fits all and what is ‘right’ overseas may not be right for New Zealand. There is a real danger that the rights of the individual will be decided by others and we need to be very careful this does not happen. It will be almost impossible to get the lid back on Pandora’s Box if we get the governance aspect wrong.

It?s time for healthcare organizations, business and academic institutions to take action toward creating an overall smarter ecosystem for health care delivery. We need a vastly smarter health care system to see improvements in costs, patient outcomes and overall quality of life in New Zealand.

Our Health System Sucks. Seriously!

Published by Ben Kepes on July 7, 2009 in Efficiency, New Zealand and Society. 10 Comments

Warning – this will sound like an off-topic rant. It is, but it’s a cathartic one.

My mother had a fall last year during which she fractured her pelvis. This, and a historical neck-of-femur fracture sustained in a fall 15 years ago have led her surgeon to determine that a total hip replacement is needed. She’s rather frail, and losing mobility by the day, so I’ve undertaken to advocate on her behalf. Here’s a run down of the couple of hours I spent on the phone today. (for non New Zealanders here is a run down on the New Zealand Accident Compensation System)

Specialist – I spoke with the PA of her specialist who advised that the referral letter to ACC had not been written. This despite it being some 12 days since my mother saw the specialist and he dictated the letter. Two thoughts here;

  1. Voice to text works rather well these days
  2. If a typist cannot type a one page letter in 12 days perhaps they want to look at the skill level of their staff

Finally I was told that the referral would be finished in the next 24 hours and faxed to ACC

ACC – ACC would not divulge any information to me until I had authority to act on my Mother’s behalf (bleedin’ Privacy Act). This was duly obtained and I re-contacted them. A very process driven ACC call centre staffer read me the claims process description at least three times. After explaining to him twice that a lengthy claims process, coupled with my mother’s frailty, could likely result in a far more serious ACC claim and that expediting the process would be beneficial for all, he finally reverted to someone else. The someone else explained to him the claims process description which he then (helpfully, just in case my Alzheimers was kicking in) proceeded to relay to me yet again.

The one glimmer of information I got from him was that full medical notes would be required before ACC could even begin the approval process (which takes around four weeks once information is complete).

Specialist – I re-called the specialist to ask for all the case notes to be sent directly to ACC along with the application for treatment. The specialist’s offsider informed me that was impossible as the case notes resided at the public hospital while they were a private hospital. She also told me that the PA had requested the case notes from the public hospital who had entirely ignored her request.

Public hospital – I contacted the records department at the public hospital who told me that everyone had gone home for the day and that they’d try and contact me in the morning. Whether I’ll be able to facilitate them faxing the records to either the specialist or ACC is anyone’s guess.

So… our system is broken. Globally we can look at the US and the UK at either end of the spectrum – in one country you can be dying but without insurance you’ll not be treated, while in the other the public system provides for all. At least one knows where one stands! Here in New Zealand we have this bizarre combination which slows down treatment, bottlenecks communication and results in bad situations for the people we’re meant to be looking after: the patients.

So there’s my rant – let’s see what tomorrow brings…

Government 2.0 – A Way to Go

Published by Ben Kepes on June 15, 2009 in Economic Development, Efficiency, Governance, IT, My businesses, New Zealand, Society and Strategy. 2 Comments

Jim posted the incredible story of the New Zealand Immigration Service (NZIS) proposing a $117 million upgrade of IT infrastructure, a sum that equates, from Jim’s reckoning, to $234k per NZIS process worker.

It’s a sorry tale and one that, as Jim points out, smacks of desperation, silo building and vested interests. Given the somewhat depressing post I thought I’d revisit a success story for Government 2.0.

I’ve long been a fan of New Zealand’s Ministry of Economic Development – long before co-founding a community site for New Zealand small businesses, I was involved (and continue to be so) with economic development and advisory work for SMEs as well as running my own small businesses – in my dealings with the various branches of the Ministry of Economic Development (MED), I found them to be effective and efficient. This impression was strengthened with their wholesale adoption of modern communication channels in order to engage with their “clients”. it doesn’t matter which channel you look at – if their constituents embrace it, it’s a sure bet that the various MED departments will soon be there.

Recently I met with another Government department that I’ll leave anonymous. They’re also striving to engage with their constituents. The people I talked to were invariably passionate advocates for the enabling force that engaging with their client base can be – unfortunately their department has some silos within it, people who for whatever reason attempt to block the sort of initiatives their colleagues over at the MED embrace. The result? Frustrated staff, programmes that lack the reach they could otherwise attain and, most importantly for those who evangelise the democratizing power of Government 2.0, inefficiencies that affect the very SMEs these departments are set up to help.

So circling back to the genesis of this post – the NZIS plan for IT upgrading, I’m sure there’s some people within the service who have been flying the flag for quick and relatively economic solutions to the inefficiencies apparent in the system – and you can bet they’re blocked at every turn by anti-progressive and institutionalised individuals who can’t see past the status quo.

Shame…

Another Local Payroll Entrant

Published by Ben Kepes on February 12, 2009 in Business, Efficiency, IT, New Zealand, New business and SaaS. 0 Comments

Awhile ago I wrote about iPayroll, a local SaaS payroll provider. New to the scene comes Flexitime, another payroll option.

Whereas iPayroll is an official IRD intermediary, meaning that they can act as a company’s proxy when dealing with the IRD, Flexitime is a standalone service which means companies will still do the traditional cheque sending to the IRD.

In use Flexitime is simple, pretty and intuitive. I’ve gone on record saying that I’m a bit of a fan of applications built on top of flex, in my experience it just seems to increase the chances of creating an application with a great user experience – I’m not sure why but it’s just my observation.

I’ve attached some screenshots below to show how it works. Robert Owen, founder of Flexitime, sent me an email the other day to say that they now allow file downloads for ASB, ANZ, BNZ, National Bank and Westpac. For payroll files.

Go have a look – Flexitime costs $20/month or up to five users. It’s also fully integrated with Xero, creating another time saving (no more horrible journal entries to reconcile an archaic payroll system with an equally archaic accounting system!)

The pay window – probably the first window you’ll see each week;

Enter the hours for an employee – pretty simple;

The all important payslip;

And a nice, correctly formatted PAYE return for the IRD;

Diligent – The End Is Nigh

Published by Ben Kepes on January 21, 2009 in Business, Efficiency, IT, New Zealand, New business and SaaS. 1 Comment

Diligent Board Member Services (lots more info here) yesterday announced that they’d been successful in raising another round of funding. Diligent is positive saying that;

[Diligent] hat its ability to raise capital under such severe market conditions underlines the quality and potential of its Boardbooks product. This investment will strengthen Diligent’s financial position through the current fiscal year so it can continue to drive sales and build its corporate governance focused business.

But funding at what cost?

Looking at the terms it seems like a pretty predatory sort of a deal – vulture-some even

  • Spring Street Partners gained 20000000 shares at 10cents a pop – remember that original investors paid $1. SSP shares are also preferential further eroding the investment of the original shareholders
  • SSP receives a guarantees 11% dividend. This despite no dividend being paid to other shareholders – win/win for SSP: if diligent flies their shares rocket and if it doesn’t they still get to scrape all the cash out of it
  • The SSL shares rank a higher priority both in the event of a liquidation and a general dividend payout
  • SSL can require Diligent to convert it’s shares into cash any time after 60 months
  • Get this – upon a liquidation of DIL, a sale of the majority of DIL’s issued stock or assets, or a merger by DIL with another entity, DIL will be obliged to make a cash payment to Spring Street equal to 1.5 times the face value of all Preferred Shares, after which point the Preferred Shares will convert to common stock and participate pro rata with common stock in distributions to stock holders
  • SSL must consent to a liquidation, a change to the constitution, new borrowing or the issue of more equity

The tale of two listings huh – at the same time that Diligent listed so to did hometown success story Xero. One has built a global product and is ramping up revenue in number of markets, while the other is struggling for its very survival.

A Press Release Isn’t a Blog Comment

Published by Ben Kepes on January 14, 2009 in Business, Efficiency, IT and SocialMedia. 3 Comments

I always welcome comments on my posts from vendors – after all they’re the ones with the in-depth domain knowledge about areas I’m writing about.

I can even live with a bit of a commercial bent to the comments – after all there is a reason the vendors spend their precious time writing comments, it’s only fair that they get to push their own message a little.

But when the commenting system gets subverted and becomes a complete public relations exercise it’s time to call the offending party out.

So today’s brickbat goes to Interprise and specifically Evolve Systems that distributes the Interprise product in Australasia. On two of my recent posts (here and here) they used the opportunity to comment on a SaaS accounting related post of mine. Unfortunately the opportunity to comment with a relevant and pithy observation was replaced with the pasting in of a glib press release pushing their product.

Guys – social media in general, and blogging in particular is a fantastic opportunity to capture the thoughts and needs of the community and to join them in a dialogue relevant to your business – when you use that opportunity however to shove marketing spin down their throats you immediately lose and “new paradigm” mojo you might have had.

Sorry, but that’s a fail…

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Running a School – Who Does It Best…

Published by Ben Kepes on December 18, 2008 in Efficiency, Governance, New Zealand and Society. 0 Comments

I’ve got two school-age sons and I’ve spent a fair amount of time observing the way New Zealand schools are run.

By way of background, the Labour government of 1984 put in place the “Tomorrow’s Schools” ethos. Part of this new way of thinking was a move to Boards of Trustees being formed to govern schools. The thinking went that it is the parents of the children at a school who are best placed to run that school – regardless of their knowledge of education, finance, governance or employment.

It’s a model that has come under a fair amount of criticism, clearly running a business is a difficult job. Running one with dozens of employees, sometimes hundreds of students, funding constraints and a robust central Government regulatory structure all conspires to make it a difficult job.

My brother is the chairman of a primary school board of trustees, and he also has two sons at a high school that is in the process of coming through a $1.7million budget deficit. yesterday on National Radio he and a couple of other people were interviewed about the high school issues in particular, and school governance in general.

It’s a really interesting interview – check it out here (it’ll probably only be available for the next week)

What Part of Rampant Consumerism do People Not Get?

Published by Ben Kepes on December 16, 2008 in Business, Business and the Environment, Economic Development, Efficiency, Manufacturing, My businesses and Society. 2 Comments

Doing the rounds at the moment is a UK Sunday Star Times story about an undercover operation at an Amazon warehouse. Basically the reporter discovered terrible working conditions, very high demands on staff and not allowance for sick days off.

The thing that caused the shock for people (we all seem to have grown accustomed to near-slave labour in Eastern countries) was that this warehouse was in the UK – Milton Keynes to be precise.

Dennis Howlett posted about the incident saying;

If companies like Amazon can get away with this kind of exploitation then what next? Is this something that a civil society should tolerate? I don’t think so.

Reputation matters and to date, Amazon has ridden a wave of enthusiasm for its innovative approach to product distribution. But if exploitation is what it take to keep prices low then I’d rather pay a few coppers more if it ensures that workers are offered decent conditions.What the Times discovered does not qualify, even if it is technically within the law. What is the matter with Amazon management? Are they becoming the latest victims of excuse based decision making where if the law says it’s OK, then it’s OK?

Dennis is a fantastic guy and I bow down to his enterprise software pedigree but when it comes to the downstream effects of international trade and a consumer society, he is hopelessly naieve. As I said by way of comment on his post;

Dennis – I hate to say it but the fact that you’re surprised completely floored me. This Amazon story is a natural result of relentless downwards pressure on price. The move of (almost) all production to the east, and the rise of the super-consumer society has created a demand for low cost/high efficiency operations like Amazon – and how do they remain efficient and drive prices down? By sourcing goods from the lowest cost manufacturing countries and treating staff like disposable commodities.

Don’t people see that this is our fault? Amazon are just fulfilling a demand…

And that from someone who still proudly owns a business manufacturing 100% in the West (in this case http://www.cactusclimbing.co.nz and production entirely in New Zealand – well paid staff, clean /light/airy workplaces and a fun environment all included)

Of late I’ve bitten my tongue while those around me espouse the undeniable benefits of international trade. I too am a proponent of trade – but there is a difference between trade per se and fair trade. This is borne out by comments like this one;

The prices Amazon chooses to offer should have no bearing on whether they operate like slave camp owners. That’s a well understood business principle. People don’t realize this kind of thing is going on. That matters.

Price charged and cost structure are inextricably linked. As a society we have driven down the price we are wiling to pay but tried to ignore the social toll that the cost reductions needed to achieve that price have caused.

We shouldn’t blame the vendors for that.