Q: How does an organisation with limited Web-based e-business experience and IT infrastructure deliver on a lucrative but politically sensitive government B2B e-commerce contract where time is of the essence and failure totally unacceptable?
A: By improving the specifications to help the government avoid a potential overload, moving at lightning speed to upgrade its own infrastructure - making scalability a prime criteria - then using connections forged on a cruise to overcome the IT skills shortage that might otherwise have spelt its downfall.
When Leigh-Mardon Security Printing won the contract to deliver the redeemable certificates being offered by the federal government to ease SMEs into the GST, it had virtually no experience in e-commerce. It had an infrastructure where e-business had not moved beyond sophisticated EDI or direct dial-up capability, and its e-commerce skills base was non-existent. Nor could it find an Australian third party willing to partner it for the work, at least in the timeframes required. Yet delivering on the GST Start-Up Assistance Office contract would involve forging sophisticated B2B links with Treasury and the Australian Taxation Office (ATO) and delivering to potentially every SME in Australia.
None of this deterred IS head John King in the slightest. Seldom can winning such a sensitive government contract have meant moving so fast into new areas of expertise. With neither the infrastructure nor skills at hand to deliver, King had just three hours to find a third party to write the application then quote on the contract, and less than six weeks from the day he received the outline to deliver on the first part of the deal. Leigh-Mardon delivered in full.
It all goes to show that given the will, sufficient bravado and management support, any organisation can gear up for e-business at lightning speed - at least if the incentives are great enough.
The Commonwealth government estab- lished the GST Start-Up Assistance Office in an atmosphere of high anxiety over the GST. Set up to help the education and community sectors and SMEs get ready for the new Tax System, the Start-Up Office knew failure wasn't an option as it geared up to distribute $200 certificates to GST registrants.
The redeemable certificates, designed to encourage early registration, were to be made available for small and medium businesses and not-for-profit entities to exchange for appropriate goods, services and specifically integrated packages to help them implement the GST. Eligible organisations could put the certificates towards the purchase of point-of-sale equipment, computer hardware and software and computer-based or manual accounting packages. They could also redeem them for financial or accounting advice or assistance or training by registered suppliers that could help them prepare for their first Business Activity Statements.
Certificates were to be issued to all eligible organisations that registered for an Australian Business Number before 31 May, 2000. Each recipient would also get a list of registered suppliers able to redeem the certificates in exchange for products and services to help them to become GST-ready. And they were to be issued fast, starting as early as possible in January 2000. So when the Office announced the issue of the one-millionth GST Start-Up Certificate in early May, it was in one sense a tribute to Leigh-Mardon's ability to shift quickly and conquer new and unfamiliar territory. To the few initiated, it also spoke volumes about the power of selective outsourcing as a substitute for in-house expertise.
The system developed by Leigh-Mardon had two components. First the GST Start-Up Assistance Office would go out and identify suppliers willing to take the certificates, then send that information to Leigh-Mardon. It would then send those suppliers details about the scheme, information about how to redeem the certificates and finally claim forms for them to attach to the certificates when they returned them for processing. That was the starting point for the entire system, with the first dispatch of information to registered suppliers to begin on January 7.
Next, the ATO would send Leigh-Mardon full details of the SMEs, other enterprises and individuals registering for the GST. Leigh-Mardon would then process that data, creating a database containing the details about each company or individual. Then it would allocate a voucher number, print a voucher and post it out to them.
"We would take those files every fortnight, under the original plan (it later changed to every week) and we would then send out to those people their voucher and all the information about how to use it, including a booklet of the companies that had registered as suppliers," King says. "But we would also have to cater for uneven flows of work, ranging from 100,000 database entries a week to more than double that."
That meant Leigh-Mardon not only had to plan for maximum flexibility but also determine and act to protect against problems likely to arise from that risk. Yet from the time the organisation received the outline for the system during the last week in November it had just six weeks, until January 7, to deliver on the first part of the contract.
"This all started for us back in the last week in November," King says. "I had an outline system dropped on my desk with some pretty tight timelines on it. The way it transpired, it hit my desk and I had about three hours to quote it. So the first thing I did was to get the specification up onto my whiteboard in a flow chart format, and have a bit of a look through the thing with two of my managers to make sure it all fitted together as per the specification."
The original specification called for a LAN/ WAN environment, apparently on the grounds of the need to provide help desk capability. Immediately recognising the impossibility of anticipating the level of help desk support required until the system was in place, King decided he needed to convince the Start-Up Office to alter the specification to embrace a Web-based system. "The reason for that was that with this sort of system, you can't foresee how much help desk you require, and by putting it on the Web it means they can have one or two people to start, and hundreds later if they need to."
Next King began to ring around for a third party who would be willing to write the application, knowing right from the start that the internal IT team didn't have the required skills to do the job in the required time frame. "When I took this thing on I knew that we couldn't do it so we had to seek outside development work," he says. "I think you've got to know what your limitations are if you're trying to take something on in such a short period of time."
To his regret, no Australian organisation was prepared to take the work on given the extremely short time frame. Fortunately, King had other options, having made contact with a New Delhi company called NIIT on a cruise for CIOs he had recently attended. "I rang them, read the specification off the whiteboard, then they had somebody else ring me back and read back the specification word for word and then they quoted me for the job. You can appreciate, I was looking for a fair amount of comfort here, but they clearly understood what I was after."
NIIT also mentioned that the people who would come to Australia to work on the GST Assistance project had just completed a project for American Express. "I thought: you don't have to be Einstein to work out that the Amex project was a lot bigger and has all the controls in it that we were looking for'. These people would understand that side - the audit/traceability side that the government was after.
"But the biggest thing for me was the fact that I specified the thing on my whiteboard, did that in a flow chart, read that out to them over the phone, and they had somebody else ring me back, to ensure that he had a clear understanding. He had it down pat, he didn't miss out anything, so I just had enough confidence at that point that these people understood what I required, and went for it," King says.
On that basis Leigh-Mardon signed the contracts with the GST Start-Up Office, then King signed the contracts on 5 December with NIIT. "After that they had a group of three people operating out of our office starting here on 20 December, and we worked all the way through. I mean, there was a lot more development past 7 January, but that was the drop-dead date with a fairly hefty financial clause for us if we didn't hit it."
In one sense Leigh-Mardon was the obvious choice for the work. A wholly owned subsidiary of American Banknote Corporation, one of the world's largest private sector security printers, Leigh-Mardon operates as an autonomous entity responsible for the Asia-Pacific region with an all-Australian management and board of directors.
The security printing and payments instruments innovator claims an unequalled range of services and expertise. It also describes itself as Australia's most multifaceted organisation, whose offerings affect every Australian who has ever written a cheque, used a FlyBuys, Visa, MasterCard or Telstra Phonecard or used EFTPOS at a BP petrol station or Harvey Norman Superstore.
Its traditional market is the production of chequebooks, credit cards and passports. It also does work involving barcodes, as well as billing for Victorian Workcover, Telstra and others. Yet in another sense an organisation with more experience in e-commerce might have been an easier choice. While Leigh-Mardon's base experience meant the company already had good links to customers for transfer of confidential data, most of those jobs involved no more than about 5 per cent IT work.
"Taking the data and manipulating it so that the printers could use it is what Leigh-Mardon called IT and that was where its legacy business was," King says. It was fairly old-fashioned and even though you could still classify it as e-business and we had been doing that for a long time, there hadn't been a lot of development made in that area. It was all done with EDI or direct dial-ups using FTTP servers and so on.
"So we ended up buying a lot of hardware and very quickly transforming a room down the back into a development room. I put a development server and four PCs in, we loaded up all the latest version software with all the software tools and things and then we bought a new production server and made that into a Web server as well."
King says that despite needing the production system on short notice, and knowing exactly the box they wanted, Leigh-Mardon had to compromise on a system where some of the components were not immediately available. "We had to take less than what we needed but because we use hot swappable we were later able to upgrade that without too much difficulty.
"It was important to me to make sure that we had a good base. I didn't want to go backwards and have to redo anything. We at least started out with the right structure of box. Because the data came through in small numbers at first we were able to get away with a lot less disk space and a lot less processing, but since then we've upgraded both the processor and the disk."
School of Hard Knocks
King may not have had much experience with e-commerce, but more than 30 years in IT had convinced him the rules don't change whatever the paradigm involved.
After several years working with unit record equipment and then 8K single-operation machines, King in 1977 became the youngest IT manager IBM had ever worked with, when he became MIS Manager for Freighter Industries. There he implemented IMP manufacturing and ABS3 financial system. Before joining Leigh-Mardon last year he was project manager for Industri-Matematik, out of Sweden, an Oracle partner, where he project managed installation of Oracle's CPG system.
"They were one of Oracle's partners and they were installing Oracle CPG - a big system which was high volume, low value. Carlton United run it here," King says. "I helped sell it into President Foods in Taiwan - a huge system, that's now being installed. I only got out of IMI because IMI shares, like a lot of the ERP systems, just crashed last year."
He says the net sum of all that experience has given him a strong grasp of the real fundamentals of IT. "To me the rules are exactly the same whether you're talking e-commerce or any other IT project. And the main rule is that can't build your house on sand. You need the right people, and you need to trust them."
King freely admits he's not technically qualified enough to stand behind those people and badger them to get the work done - but he also insists that that matters not a jot. What does matter is having the ability to recognise the danger signals if things start to go wrong. "If you know what you're looking for and you know how to manage people and manage processes, then you know when a project is going okay. Because you can see all the green lights, and you can ask enough questions and check enough things to know that it's progressing the way you want it to. So it really is just the school of hard knocks, I think."
Picking the right people is vital, he says. It's not bureaucrats that are needed in project management, but doers. Both Leigh-Mardon and the GST Start-Up office had the right people.
"Strong project management experience is absolutely vital. People just underestimate two things in IT, and have for 100 years. One is training and education, and the other is project management," says King. "It's a term that gets floated around, but you see very few projects where they actually have it under full control. And by project managers I don't mean the kind of people who spend their time looking for reasons why a project is going to fail so that when it does, they've got their backside covered. I'm talking about the being out there, being out the front, taking responsibility, taking it on the chest if it doesn't work, which means that you make the damn thing work.
"I understood what was required then I made sure I had a team of people that I was confident could do the job."
Leigh-Mardon has proved its ability to move into the e-commerce environment. The company is now in the process of validating and authorising payment to service providers across Australia with total payments of around $400 million.
"We've had an enormous amount of excuses not to do move into e-commerce," King says. "We had Y2K, which for Leigh-Mardon was a huge job considering our customer base, then we had GST. So in relative terms I could have come up with enough excuses so the business didn't do this until probably until third quarter [this year].
"But this was something which was such an opportunity that the senior management group to which I belong agreed with me that this was a winner. And we were right. This was just what we needed as a catalyst to push us into that business and to make us confident enough that we could then go back to our existing client base and handle the transition for them from where they are to where they should be."
And there is more e-commerce business on the horizon, with several joint ventures currently being negotiated by CEO David Head. Leigh-Mardon has been busy negotiating with leading e-commerce transaction companies to build the platforms for secure end-to-end e-commerce transactions in the Asia Pacific Region.
One such venture includes creating a secure business-to-business electronic payment system which will be part of a global network of secure payment exchanges and will operate throughout Australasia. With the same partner, Leigh-Mardon is also establishing a secure payment system and gateway for use on mobile telephones. A secure electronic document presentment and payment service is also being established with a local Australian partner.
"The GST office transaction was a showcase of the e-commerce skills which Leigh-Mardon has been busy developing and has enabled us to make an exciting and critical transition," Head says.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.