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"We consider ourselves to be a technology driven boutique operation. We control the banking service-bus, the middleware. Control of the middleware, our API, is the heart of the bank."
"Engagement over the tendering process was crucial; and what clinched it for us was culture matching. The culture match between us was crucial. Plus, we wanted a supplier that wasn't too large, one in which it mattered to them, that we were special, that we are big enough to appear on their corporate radar, that we matter."
"We can outsource services, but we can't outsource our obligations. Because of that it cannot be a 'black box', you can never really step away from it. My approach is to 'see' but don't touch. Let the SLAs and KPIs work for you but it shouldn't be a black box, the box should be transparent. I want to see inside, if it's steam coming from a working engine or smoke from a fire."
"The problem with success" thought Gordon Eubanks “is you need to keep changing the game to keep winning".Gordon had achieved outstanding success in the software market in the US in a host of software product and utility categories (programming languages, antivirus, disk management and more). The company had developed in-house products and acquired competitors such that it was now the dominant supplier of these products in the US. What was left was the rest of the world; the question was how?
Gordon pondered, “does success follow the money... or is it that money followed success?"
"The switch to Java and internet in the late 90s put a huge strain on our capability, we just weren't staffed up in those areas. Stupid hiring freezes across the civil service. There were restrictions on hiring new programmers into the civil service, the Department of Finance had no problem giving permission to pay consultancies 100K or 150K a year for bodies, but point blank refused to sanction recruitment of graduate programmers at 30K (even if we could get them). The net result of the ban on being able to hire in people was to choke off our civil service tech capability in Java and Internet. [Customs]"In 1997 EDS, the global IT services company, secured a number of lucrative multi-annual service and development outsourcing contracts with the Australian Customs Service (ACS). EDS (Electronic Data Systems, founded by Ross Perot) specialises in business process and IT outsourcing services. Prior to the outsourcing contract with EDS the ACS managed, developed, deployed and delivered its core back-end systems almost wholly in-house. After the outsourcing deal, responsibilities for the ACS's core IT systems transferred over to EDS with gradually less direct involvement by ACS internal staff.
The new supplier had no interest in involving Tradegate, you might say they went out of their way to ignore them. [Tradegate member]
We're all the victims of the tendering process. It was driven by the Department of Finance, the Tax Office. It was all about finance, cost savings, and Tradgate got slated. [Customs]One consequence of the ACS-EDS deal was that the ACS lost more and more of its own specialist Customs IT expertise as employees transferred into EDS and then gradually moved on into other areas in EDS globally. Staff transfers from ACS to EDS also altered the apparent cost structure for getting regular work done, for example the ACS paid contractor rates for the services of EDS consultants, many of whom had previously been public servants for the ACS.
Customs IT people had opportunities to join EDS, a lot of them did, a civil servant's pay isn't great, but some stayed, for different reasons. [Customs IT]
It creates tensions, side by side, people you used to work with but now they're getting paid more, a lot shipped out, our knowledge has a value elsewhere in the organisation [EDS]. [ex-Customs IT now EDS consultant]CMR and ICS
They [EDS] send in the 'A-Team' to get the CMR and ICS deals. They won. The 'A-Team' gets the deal the 'D-Team' gets to deliver it... people moved, Customs was hollowed out. [Customs IT staff]
It was a huge strategic shift, going from a 'community portal' sitting on top of Customs' EDI interfaces on mainframes to Customs outsourcing development and delivery to EDS. [Industry observer]After over five years of development, delays and an increasingly fraught relationship between the ACS and EDS, ICS finally went 'go-live' on October 12 2005. Its users were compelled to switch over to the new system from an electronic trade management system that had served them for over 15 years.
...they brought us in for training three months before go-live. [Trader]
Only a couple of the biggest importers were involved in user acceptance, I'm not even sure they were involved at the early stages for user requirements. [Trader]
ICS has the requirements of other government departments: Border Protection, Statistics, Taxation. But no business logic worth talking about. [Trader]The operation of the new system was marred by widespread problems. Security access flaws allowed users to access and view other Traders’ import documentation, revealing confidential information like price, supplier details, quantities and delivery dates. The system was also perceived to be unreliable, badly designed, slow and buggy.
Errors come back ages after you make a clearance request. Why didn't the computer system pick up on it first? [Trader]
The error handling has problems, delays, I'm still waiting for responses to messages [in the system]. I might have 20 messages queued somewhere, meanwhile our containers are sitting on the tarmac at Kingsford-Smith (Sydney Airport). [Trader]
I need Customs clearance to move them out of the port. [Trader]
That's the power of Customs, we are just pleased if we get their attention. [Trader]The spectre of vessels (sea and air traffic) unable to disembark cargo was now a fact, Australia’s connections with the international trading system had seized up.
The system has fallen apart. Traders are getting seven days turnaround instead of seven minutes. In COMPILE declarations had 98% success on first time entry. In ICS, at roll-out we started with 60%, that's 40% fail! It improved slowly, 60%, 70%, 80%. [Tradegate employee]
Let me put it like this, ICS was already a couple of years 'late'. Even when the pilot roll-out started in March 2005 it was obviously generating problems. Parallel running was a complete failure because no one was going to switch over until they shut down COMPILE. There was a push to switch people in July and then finally they shut down COMPILE in October and the problems grew and grew with the shipping volumes. For traders the run up to stocking Christmas shelves starts in August and goes exponential. That's when we found ourselves in a full-blown crisis; Airports 'chock-a-block', container terminals full, container ships parked off-shore unable to unload. Worse and worse, so no, we did not have a happy Christmas! [Trader]
"The Cargo Management Re-engineering project, which was part of the trade modernisation agenda will be remembered as one of the all-time greatest implementation failures of a government project in Australia’s history. Its budget blew out to ten times the original estimate, it saw constant delays and, when finally switched on, it nearly brought down Australia’s trade industry." [Senator Joe Ludwig (Lab)]
"So the first wave of our outsourcing experience was a massive learning process. We chose a strategic partner, and then switched, and then switched again. Partially driven by Government policy, partially driven by necessity. Each partner was basically giving us a Rolls Royce approach. But as it turned out they were also using us as a kind of training centre for their new hires. We ended up being the first post for their graduates and internships. They'd be trained for a year or more on our systems, processes, tech skills, management skills then ship out to consultancy gigs elsewhere. [Customs]"
"Since then we've taken a different approach. We've hived off little pieces. The way we wrote our tendering would allow an incumbent to continue (rather than switching at each renew), but we also started to divide out the work. Now we split it across roles rather than systems. They (suppliers/vendors) supply so many people as system architects, business analysts, programmers. But we keep control of the systems, they're our systems, we own them. [Customs]"
"We have gradually ended up with two strategic partners and loads and loads of smaller external vendors. That has worked really well. While X are our dominant partner we have loads of small specialist partners, local, Australian. It plays out well politically but it has really paid out with a regional ecosystem of expertise. [Customs]"
"We now build, deliver, operate (and own) everything. The internal team is just 30 people, pure technical excellence, constantly training up on new tech, deep knowledge of our architecture. But it scales because we're a programme management operation. It is our own Customs system framework, we own, develop and manage it. My team work side-by-side with the vendor people. There might be ten or twenty times as many vendor people around but we're in charge. It took us 5 years to reach this point, building internal capability and having a capability for the future. [Customs]"
"yes code is intellectual property but you can't be precious about code. For me it's the relationship with my client, building up a joint understanding of how we want a 'thing' to work. To be honest I couldn't care less about the code as something I own".The CMS project was a nice earner in 2005 but now five years later, it is becoming a bit of a headache. The original developer had moved to America but passed the source code to Tom who in turn contracted a firm in India to maintain and develop it. The Indian firm was founded by Suhas and a number of partners who were IT professionals and had worked together previously in Europe. Suhas had taken on the CMS contract almost as a favor to Tom and the original developer, a personal friend. As it happened neither Suhas nor the developers on his team had ever met Tom in person or dealt directly with Tom's clients (CMS's customers and users). Tom managed all contact with India, usually through Suhas but occasionally contacting the developers assigned to the CMS by email, Skype or phone.
"knowledge has power, but it takes time to acquire and it is only useful if it is shared and used!"
"I always feel that we can not be threat to our clients because the end customer always prefers to have a local company to deal with which can outsource the work to outside world."The CMS project has a history, characterised by periods of intense involvement (development and delivery work) followed by gaps of months at a time with little or no contact. The engineers who had worked on it over the years were often overwhelmed, picking up where the project had left off and working on fixes or new features with few opportunities for feedback with the end customer. A release could be delivered after which it might take Tom a week or more to report back on the quality or its acceptance. This sort of stop-start, delayed back and forwards was not typical for Suhas's other contracts. Suhas felt that the CMS was a perfectly good application that already satisfied the requirements, however Tom's point of view was that the customer was always right, if the customer was unhappy then it was a bug and it had to be fixed. For Tom, just understanding a customer's problem took time and effort, explaining it to Suhas or one of his engineers complicated things further. In spite of this Tom was concerned to keep the customer at 'arms length' from India, after all, if they dealt directly with each other what was the point of having Tom in the relationship? Suhas felt there could never be an issue of 'going behind' Tom, he reasoned that Tom owned the CMS, it was Tom's property. What Suhas wanted was for his engineers to communicate directly with the end-user so they could clarify the requirements, satisfy them completely, identify and fix bugs, get on with the job and get paid.
COMPILE was very forgiving, I enter code '32' in the box and it always goes through.[Trader]Tradegate was funded by member fees, a per transaction charge for portal use and fixed costs for network access and the ACS held a statutory directorship on the board. Tradegate's executive, its members and its board considered themselves to be partners with the ACS, providing a stable, secure and effective service and a key enabler for Australia's international economic success.
In the old days Tradegate and Customs had indirect avenues. The Tradegate guy was probably playing golf with this guy, he could walk upstairs and have a chat. They got things done. [Trader comment]
The new supplier had no interest in involving Tradegate, you might say they went out of their way to ignore them. [Tradegate member]
"Contact with the key technology and service development staff [has] virtually ceased. The ability to progress externally beneficial service improvements through regular contact and 'brain storming' sessions came to an end with all contact placed on a formal basis presumably due to the dictates of the ACS-EDS contractual arrangements."It was apparent that the ACS-EDS deal altered to the detriment the relationship between Tradegate and ACS, that the previously close contacts were disrupted and not re-established when EDS entered the equation.
We're all the victims of the tendering process. It was driven by the Department of Finance, the Tax Office. It was all about finance, cost savings, and Tradgate got slated. [Customs]An unexpected consequence of the ACS-EDS deal was that the ACS lost more and more of its own specialist Customs IT expertise as employees transferred into EDS and then gradually moved on into other areas in EDS globally. Staff transfers from ACS to EDS also altered the apparent cost structure for getting regular work done, for example the ACS paid contractor rates for the services of EDS consultants, many of whom had previously been public servants for the ACS.
Customs IT people had opportunities to join EDS, a lot of them did, a civil servant's pay isn't great, but some stayed, for different reasons. [Customs IT]
It creates tensions, side by side, people you used to work with but now they're getting paid more, a lot shipped out, our knowledge has a value elsewhere in the organisation [EDS]. [ex-Customs IT now EDS consultant]CMR and ICS
They [EDS] send in the 'A-Team' to get the CMR and ICS deals. They won. The 'A-Team' gets the deal the 'D-Team' gets to deliver it... people moved, Customs was hollowed out. [Customs IT staff]
It was a huge strategic shift, going from a 'community portal' sitting on top of Customs' EDI interfaces on mainframes to Customs outsourcing development and delivery to EDS. [Industry observer]After over five years of development, delays and an increasingly fraught relationship between the ACS and EDS, ICS finally went 'go-live' on October 12 2005. Its users were compelled to switch over to the new system from an electronic trade management system that had served them for over 15 years.
The 'refreshed' systems roll-out, it was called ICS. They presented it like an update of COMPILE, like it was a version upgrade but it should have been called something else. [Trader]
They were supposed to have launched in March, last year or the year before![Trader]
...they brought us in for training three months before go-live. [Trader]
Only a couple of the biggest importers were involved in user acceptance, I'm not even sure they were involved at the early stages for user requirements. [Trader]
ICS has the requirements of other government departments: Border Protection, Statistics, Taxation. But no business logic worth talking about. [Trader]The operation of the new system was marred by widespread problems. Security access flaws allowed users to access and view other Traders’ import documentation, revealing confidential information like price, supplier details, quantities and delivery dates. The system was also perceived to be unreliable, badly designed, slow and buggy.
Errors come back ages after you make a clearance request. Why didn't the computer system pick up on it first? [Trader]
The error handling has problems, delays, I'm still waiting for responses to messages [in the system]. I might have 20 messages queued somewhere, meanwhile our containers are sitting on the tarmac at Kingsford-Smith (Sydney Airport). [Trader]
I need Customs clearance to move them out of the port. [Trader]
That's the power of Customs, we are just pleased if we get their attention. [Trader]The spectre of vessels (sea and air traffic) unable to disembark cargo was now a fact, Australia’s connections with the international trading system had seized up.
The system has fallen apart. Traders are getting seven days turnaround instead of seven minutes. In COMPILE declarations had 98% success on first time entry. In ICS, at roll-out we started with 60%, that's 40% fail! It improved slowly, 60%, 70%, 80%. [Tradegate employee]
The chairman of the Customs Industry committee said 'it was chaos', 'blood on the ground'. [Trader]
Let me put it like this, ICS was already a couple of years 'late'. Even when the pilot roll-out started in March 2005 it was obviously generating problems. Parallel running was a complete failure because no one was going to switch over until they shut down COMPILE. There was a push to switch people in July and then finally they shut down COMPILE in October and the problems grew and grew with the shipping volumes. For traders the run up to stocking Christmas shelves starts in August and goes exponential. That's when we found ourselves in a full-blown crisis; Airports 'chock-a-block', container terminals full, container ships parked off-shore unable to unload. Worse and worse, so no, we did not have a happy Christmas! [Trader]Postscript
Press Report: "Australian Customs Service chief executive Michael Carmody has promised an 'open and frank' exchange with industry on how to fix continuing problems with its troubled Integrated Cargo System. The former Tax Commissioner said he would share with the industry the results of an independent report on how to squeeze more benefit from the system, which Customs commissioned last month from consultancy Booz Allen Hamilton. Mr Carmody said the $A200 million system was still a long way from delivering the benefits that had been expected - either for the import-export industry or Customs..."[Riley, 2006]On 9th June 2006 a $A300,000 report by Booz Allen Hamilton on how to fix the $A200 million Customs Integrated Cargo System was handed to government. The report examined the circumstances leading up to and following the deployment of ICS, the core system controlling the movement of imports and cargo into Australia. The introduction of ICS had “caused havoc at Australia’s wharves and airports in October last year” (Mitchell 2006), with on-going implications for the Australian government such as facing “$A9 million in compensation claims, mainly for extra storage costs incurred when containers were left sitting on the wharves unable to clear customs” (Hayes 2006). Australian importers carried the cost of security shortcomings, delays, storage charges, lost business, reduced performance and increased workload.
"The Cargo Management Re-engineering project, which was part of the trade modernisation agenda will be remembered as one of the all-time greatest implementation failures of a government project in Australia’s history. Its budget blew out to ten times the original estimate, it saw constant delays and, when finally switched on, it nearly brought down Australia’s trade industry." [Senator Joe Ludwig (Lab)]References
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"...one of the reasons is [the China office] adds value to the company. If we think about the four of five possible strategies for a growing tech company, well, having a foothold in your market, plus smart people, smart customers, high profile, high value projects. It ticks all the boxes."
"Establishing a centre of excellence in China is a dream project in many ways. When you acquire a company you have to work with a pre-established team. But setting up a green-field R&D centre, like now, it's a clean slate, new office, new hires, using our 'foreign' methodology."
"Our in-house development methods and practices are inspired by the Agile and Lean movements. Projects, operations and development use our own take on the Scrum or Kanban style of process. I have decided to use our in-house methods from the start. The local engineers might look on it as a 'foreign' approach but I don't think we'll see resistance. They are open to learning about it."
"My view is that Agile is a strict discipline; it's more disciplined than other methods if you do it in a highly structured way, get rid of the 'ad hoc' style that seems to be associated with it. Start your stand-ups at 10am (not 5 past 10), finish strictly at 10:15am. The stand-up conversation should be structured; specific challenges approaching, specific problems you are facing, you've either run or written a test case. Programmers will like that. There's 'do or don't', 'did or didn't', no ambiguity and you need these type of conversations. Agile brings this to the front."
"But yes, I am worried about the difference in culture, particularly problems with 'face'. How do you get engineer's admitting to difficulty or failing to achieve something?"
"When you set up an office in another country, there's a fear among your people at the home base! You immediately create the potential for a social divide that applies when you move to an offshore site."
"Imagine, your company sets up an office in China where the engineering costs are lower. Do you want a situation where you say 'designed in California, made in China'? What does that say about a social divide in the company? That's the choice you have to make."
"In China software engineering career has quite a lot of respect."
"In general, software engineers work long hours, often seven days a week, starting early, leaving late."
"International companies might have more formal policies, leave work at 7pm, come back in the morning. But they might not be as flexible as smaller companies that expect working around a project. If an emergency comes in a small company they might have to work all night."
"Yes, there is a lot of employee turnover. Conditions can be bad, the overtime, bad management, working away from home."
"Now Agile is well known in China. In the real implementation there are some cultural differences that might make it feel different to an implementation in the US. But a company, should not admit some failure to its customers."
"Let me put it this way; In western countries, people like to treat work like playing games. But here in China, a manager here is something like the parent, not childlike."
"I don't accept the childish approach. Engineers think 'we are not kids, we are adults'. So Agile can inspire engineers in the West because it is playful, but in China, I don't know?"
"If your company commits to something your business lives or dies by it. But that's business in China, completely different to the West. Completely different."
"So Jo, tell me what it was like in the Mothership?" said Ian.
"Great, yeah. You know, like the 'one company' slogan, it was great." said Jo.
"Right, yes, 'one company.' Look, I want you to be frank, don't hold back, I need to understand what it was really like, off the record." Ian replied.
"My impressions?"
"Your impression of the differences between the two sites, between the groups in Dublin and the Mothership, how things really work."
"Ok, since you've asked" Jo said. "So you're familiar with the organisational structure here in Dublin..."Jo started to draw a sketch of Nordic’s organisational hierarchies in Dublin and at Mothership in Scandinavia (Figure 1 below).
Ian started: "In Dublin the feature set (FS) teams report into one of the the SysArch committees who report into the Release Div (Unified Systems Release Division) and Subsystem Group."
It's a bit flatter at HQ" Jo continued. "SubSys (Subystem) teams report into the local Subsystem Group, the Release Div there seems to work more like a service group. The Product Architecture Board sits at the top of it all of course, same as here."
Something I didn't expect while I was there; the SubSys teams, although they're like our FS teams, they manage whole code blocks rather than just down to feature level. Mothership's SubSys teams manage the feature deltas so they also manage old versions within the team. My experience of the approach in Dublin couldn't have been more different. In Dublin SysArch keep the feature design deltas to themselves, SysArch hand down design documents with feature work specified from 'soup to nuts', engineers have nothing to do, SysArch have done it all - "here's how you prep, here's how you deliver, here's how you pass the exam!" Let me put it this way... On my team at the Mothership, the design document might be a 'use case' diagram and a flow chart, a picture and two sentences. I had to talk to the others to get anything done, there was so little detail to the design documents it was scary! Contrast this with Dublin, a design document for feature deltas is massive, 300 pages. One of Dublin's SysArch told me "I'm proud of our design docs, I really am," but 300 pages for one subsystem? You can't read it!
In Dublin some FS teams can avoid getting involved in supporting old versions at all, Support chase down the engineer who touched the code, who then hands over to the build group and then Test; the process is managed by Support using the issue tracking system. Mothership use the same issue tracking system but SubSys engineers rotate on bug fixing and the assigned engineer follows a problem through to its resolution. In Mothership the bug 'stays on you,' but of course the SubSys team is there to back you up because it's ultimately the team's responsibility. The way it goes in Dublin - the bug bounces from one person to the next, from one team to the next - Dublin's strength is the strength of the system process.
What I thought worked well at Mothership was having a test engineer and a support engineer working on rotation in the SubSys team. In Dublin the support and test groups maintain an almost clinical separation between themselves and the engineering teams; it leads to a bit of finger-pointing at times. In contrast at Mothership the rotation gives the engineering team a 'tame' tester and support person, there's no delay in getting feedback. I also heard from the test and support guys that they learnt more this way, about new features, or if there were problems later on they'd have a direct line into the engineering group.
There's no appreciable difference between the sites in how product is released. To me it felt like the exact same process globally.
Overall I think Mothership's SubSys teams have a lot more autonomy, that's not to say it's better. Sometimes it's just plain scary, it feels like you've got complete authority but the responsibility can be daunting. They relied on you going out and figuring it out for yourself. On the other hand, Dublin's FS teams often don't have a lot to do because the guys in SysArch have done all the design thinking for you. I think it's this way because we hire so many graduates straight out of college, inexperienced. At Mothership the teams are definitely older, more mature; a team of 20 might have 5 junior or graduate engineers whereas in Dublin it would be 10 or more. Sharing information, but also learning, is always the problem. In smaller groups I think it works better, knowledge growth. In Scandinavia we had set it up, that mix of senior and newbie, smaller groups to learn in.(the 'Ask')
"So Ian, why the interest?" asked Jo.
"Well... this is just a 'heads-up' as they say Jo but next quarter expect to hear head office announce that your team's code block at Mothership, plus a few others, will be relocated here, to Dublin." said Ian.
"Outsourcing to Dublin?"
"In as many words."
"But the teams at Mothership, what'll happen to them, they'll think I knew all along? And how's it going to work in Dublin?" asked Jo.
"Don't you worry about Scandinavia," said Ian, "but as for Dublin, you're going to be in charge!"
"Me? Responsible for bringing a large complex feature set from head office to Dublin?"