Impending changes to Australian Industry Participation Plan requirements to impact the Enhanced Project By-law Scheme - 12 April 2012

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With an unrivalled knowledge of customs, excise and trade law, we work with organisations ranging from SMEs to major multinationals. Our focus is to minimise duty costs, supply chain improvements, assist with dispute settlements, liaise with the various authorities and trade policy agencies, and respond to compliance needs with creative strategies and solutions in order to reduce compliance costs.

Working with you, our team will deliver positive results for your business, which include: minimising your customs duty costs by our shared planning skills & innovative solutions, such as our Customs Duty Analyser tool. enhancing your trading performance by optimising the supply chain and representing your best interests with the Australian and International Customs authorities and trade policy agenciesresponding to your compliance needs with creative strategies and solutions to reduce your compliance costs advising on all aspects of excise including classification, refunds/remissions, fuel tax credits, warehousing, internal controls, reporting and complianceSecuring customs duty exemptions through various duty concession mechanisms, such as the Enhanced Project By-Law Scheme and Tariff ConcessionsAdvantageous tariff classifications to lower duty ratesReducing customs duty costs by employing WTO-based customs valuation rules to enable planning strategies and price unbundlingEfficient and optimised import/export processingCompliance “health checks” in order to mitigate the risks that can accrue as a result of non-compliance Implementation of procedures, drafting of manuals and assessment of internal controlsTechnical assistance and strategic advice in managing auditsSecure advance rulings In-house customs, excise and trade training and awareness workshopsAssist companies to take full advantage of customs duty savings and enhance trade facilitation under preferential trading arrangementsMonitoring emerging FTAs so that future planning and benefits can be taken into accountTrade intelligence reporting covering WTO, WCO, ASEAN, FTAs and country specific customs and trade issues globallyIndustry protection- submissions and Advice on Anti Dumping and Countervailing MeasuresCross border advice on trade impediments, such as intellectual property protection (trademarks and copyright) non-tariff barriers and discriminatory taxesAustralian Industry Participation Planning and strategy

Data-Driven Tech Industry Is Shaken by Online Privacy Fears

In Silicon Valley, a place not used to second-guessing the bright future it is eternally building, there was a palpable sense of dismay.

“Most of the people who developed the network are bothered by the way it is being misused,” said Les Earnest, a retired Stanford computer scientist who built something that resembled Facebook nine years before the inventor of Facebook was born. “From the beginning we worried about governments getting control. Well, our government has finally found a way to tap in.”

The technology world has always strived to keep Washington at a certain arm’s length. Regulation would snuff out innovation, the entrepreneurs regularly cried. Bureaucrats should keep their hands off things they do not understand, which is just about everything we do out here.

So the first mystifying thing for some here is how the leading companies — including Microsoft, Google, Yahoo, Apple and Facebook — apparently made it easier for the National Security Agency to gain access to their data. Only Twitter seems to have declined.

The companies deny directly working with the government on the project, called Prism. But they have not been exactly eager to talk about how they are working indirectly and where they would draw the line.

Entrepreneurs around Silicon Valley are publicly urging more disclosure.

“The success of any Silicon Valley consumer company is based not only on the value their products bring to users but also on the level of trust they can establish,” said Adriano Farano, co-founder of Watchup, which makes an iPad app that builds personalized newscasts. “What is at stake here is the credibility of our entire ecosystem.”

It is an ecosystem that thrives on personal data. Prism, which collects e-mails, video, voice and stored data, among other forms of Internet information, was exposed at a moment when the very possibility of online privacy seemed to be in doubt.

New technologies like Google Glass are relentlessly pushing into territory that was out of reach until recently. From established behemoths to new start-ups, tech companies are bubbling with plans to collect the most intimate data and use it to sell things.

“We’re pushing our government to protect us, and we’re also busy putting more and more of our information out there for people to look at,” said Christopher Clifton, a Purdue computer scientist who has done extensive work on methods of data collection that preserve privacy. “The fact that some of that data is indeed going to be looked at might be disturbing but it shouldn’t be surprising.”

Edward Snowden, a former Central Intelligence Agency worker who disclosed on Sunday that he was the one who leaked government surveillance documents to The Guardian newspaper, ranks high among the disturbed. In an interview with the newspaper, he called the Internet “the most important invention in all of human history.” But he said that he believed its value was being destroyed by unceasing surveillance.

“I don’t see myself as a hero,” he told the paper, “because what I’m doing is self-interested: I don’t want to live in a world where there’s no privacy and therefore no room for intellectual exploration and creativity.”

President Obama, trying to play down the uproar, said Prism targets only foreign nationals and that it was worth giving up a little privacy for more security.

“I think that’s a dangerous statement,” said Bob Taylor, a computer scientist who played a major role in the 1960s in formulating what would become the Internet. “The government should have told us it was doing this. And that suggests the more fundamental problem: that we’re not in control of our government.”

For some tech luminaries with less than fond feelings for Washington, the disclosures about Prism had special force. This was personal.

Bob Metcalfe, the acclaimed inventor of the standard method of connecting computers in one location, wrote on Twitter that he was less worried about whatever the National Security Agency might be doing “than about how Obama Regime will use their data to suppress political opposition (e.g. me).”

But if Silicon Valley is alarmed about the ways that the personal data now coursing through every byway of the Internet can be misused, it has been a long time coming.

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MTLI: Education of the Industry, by the Industry and for the Industry

The Medical Technology Learning Institute (MTLI) is the education department of AdvaMed, an association whose member companies produce nearly 90 percent of the medical devices, diagnostic products, and health information systems purchased annually in the US and more than 50 percent of those marketed worldwide.

That AdvaMed includes education as part of its activities-unlike the pharmaceutical and biotech associations-stems in part from the very different characteristics of the medical technology industry: device companies number in the tens of thousands, ranging in size from multinational corporations to mom and pop shops, producing everything from adhesive bandages, tongue depressors, wheelchairs and hospital beds, to implantable defibrillators, MRI machines, surgical lasers, and artificial joints.  FDA's Center for Devices and Radiological Health (CDRH) also has jurisdiction over diagnostic tests, and, oddly, over such quirkish products as medicinal maggots and therapeutic leeches.

MTLI was founded in 2000 to satisfy the dual purpose of working with FDA to foster voluntary compliance by clarifying regulatory rules through education, and to help the diverse spectrum of medical technology companies share knowledge and best practices so that all might improve their procedures and work more efficiently and effectively.  Unlike the highly competitive drug industry, where a relatively small number of companies make a fairly limited set of similar products, one can assemble a room full of medical device industry professionals who do not directly compete on product lines but who face similar regulatory, reimbursement, and other practical challenges, and who can benefit from one another's experience.  It is a generous industry, which makes collaborative teaching and learning both possible and productive.

In nine years, MTLI has dramatically increased the number and scope of its educational programs, from six regulatory courses the first year to more than 35 in-person conferences and workshops per year today, plus audio conferences and webinars on narrowly focused topics such as specific new laws, regulations, guidance documents, or other timely issues.  In addition to the original workshops on 510(k) submissions, FDA inspections, and specific aspects of the Quality System Regulation, MTLI now offers regulatory programs on such topics as statistics, medical device software, pediatric devices, clinical trials, combination products, supplier controls, molecular diagnostics, health hazard evaluation, risk management, recalls, standards, and advertising and promotion.

As the educational arm of the industry's largest association, MTLI's mission is to provide the programs most important to industry needs.  New programs are developed and old ones are modified by working closely with industry leaders, key authorities from FDA and other government agencies, AdvaMed policy staff, and eminent outside consultants.  Speakers are selected not only for their expertise in the core material, but for their skill in using case studies, breakout exercises and open discussions to help attendees apply abstract knowledge to practical working situations.

Alongside its comprehensive regulatory education, MTLI currently offers five distinct medical technology reimbursement programs, including conferences on global reimbursement strategy, evidence development, and its three-day Reimbursement Professionals Workshop, the industry's finest introduction to the concepts, strategies, and tactics for managing a product's myriad reimbursement issues throughout its life cycle. MTLI also offers programs on doing business overseas, particularly in China, Japan, and Europe, and various legal, business, and marketing programs addressing fraud and abuse, product liability, due diligence, outsourcing, sales force management, and the legal and ethical guidelines for responsible sales and marketing.

In addition to drawing upon FDA speakers for all of its regulatory workshops, a number of MTLI programs are formally co-sponsored with the Agency.  For the past two years MTLI and FDA have co-sponsored the only conference specifically dedicated to medical device and diagnostics statistics.  In December 2008, a high level group of regulatory, academic, and industry experts assembled for a joint conference on gender issues in cardiovascular device clinical trials, and MTLI has co-sponsored two risk management congresses with FDA and Virginia Tech.  Most important, since 2005, MTLI, working with CDRH and FDA's Office of Regulatory Affairs, has organized three programs per year specifically aimed at small manufacturers.  These "everything you ever wanted to know" primers grew out of a 2004 discussion with Thomas Gardine, then Director of FDA's Philadelphia District Office, who lamented the often tragic fate of many small companies with good potential products and wonderful intentions but a crippling lack of regulatory knowledge combined with a fear of FDA.  These were companies founded by the innovators one wants to encourage, who devise the medical technologies of tomorrow, but who may not recognize that in becoming medical product manufacturers they have entered a new, highly regulated world.  The two-day primers that resulted cover all FDA regulatory issues and provide an overview of reimbursement, legal, and ethical compliance issues, while offering companies the chance to meet and speak in a non-confrontational setting with the District Director, investigators, compliance officers, and representatives from CDRH and the Division of Small Manufacturers, International, and Consumer Assistance (DSMICA).  Over the past five years hundreds of companies have benefited from these programs in ten of FDA's twenty districts.  In 2008, FDA honored the MTLI/ Agency team that devised this project with its Leveraging Collaboration Award.

MTLI continues to expand its repertoire of courses into new areas.  As part of its ongoing effort to serve the medical technology industry, MTLI welcomes suggestions of all types of programs that can help companies not only understand and comply with the laws and regulations, but generally reduce risks, expand opportunities, and improve organizational effectiveness.  Tell MTLI what you want, and they will try to comply, because they are doing it for you.

For more information on MTLI, its programs, and recordings of selected past workshops, or to sign up for the MTLI mailing list, go to www.advamedmtli.org.

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Medical Device and Drug Theft: An Emerging Source of Property & Products Liability for the Medtech Industry

?Both FDA and industry groups have identified the theft of medtech products as an emerging threat to public health. Likewise, the theft of these products is an emerging source of liability for the companies that manufacture and distribute them. Learn more about theft and how it is impacting the medtech industry. 

Why your product is vulnerable to theft during transit and tips for minimizing cargo theft; andStrategies for maintaining control of foreign suppliers and thereby minimizing product liability risk.Joseph A. Coray is the Vice President and Leader of The Hartford's Technology & Life Science Practice and Marine Practice.  He is responsible for all execution activities of the two groups, including overseeing field sales, underwriting and strategy for The Hartford's insurance work for biotechnology, medical technology, and pharmaceutical industries.Joe joined The Hartford in 2005 and has been in the insurance industry since 1987. He has a bachelor's degree from Saint Francis University, and master's degree from St. Bernard's Institute. He has earned Associate in Insurance Management designation from the Insurance Institute, and is certified Six Sigma Green Belt. Sara E Dyson, Esq. is the Assistant Vice President of Loss Control for the Medmarc Insurance Group. Her primary responsibility is to develop products and services to assist companies control products liability risks, losses, and associated costs.In 2012, Sara was invited to join the Health Sciences Council for Underwriter's Laboratory (UL). She will advise UL on safety trends for medical devices.Sara received her law degree from the University of Wisconsin Law School and is a member of the Wisconsin and Virginia Bar Associations. She is also a graduate of the University of Michigan, where she received a bachelor's degree.
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Industry editorial makes outlandish claim about impact of medical devices

Minnesota is the home of several medical device makers.  So there’s been a lot of editorializing about the medical device tax in the Affordable Care Act. There has been some criticism of Minnesota politicians over whose interests they represent on the issue.

Today’s Star Tribune carries a commentary from an industry spokesman – Dale Wahlstrom, president and CEO of LifeScience Alley. He retired from Medtronic in 2006 after 24 years.  His commentary includes this claim:

Medical devices save and improve lives. Between 1980 and 2000, medical device technology slashed the death rate from heart disease by a stunning 50 percent and cut the death rate from stroke by 30 percent. As a result, life expectancy was extended by more than three years.

Please note: I’ve written to a contact at LifeScience Alley asking for the source of that data.  In fairness, he hasn’t had much time to respond but I don’t expect an answer on the data source because I don’t think there is one. I’ll be happy to post an amendment/addendum if/when an answer is forthcoming. That editorial has been published for hours already and I think it’s important to publish even this quick analysis as quickly as I can.

This quote attributes ALL cardiovascular health improvements to devices rather than siphoning off the mere fraction that might be attributable to devices versus drug therapies versus lifestyle changes.

One analysis published in the New England Journal of Medicine concluded:

Approximately 47% of this decrease (in coronary disease death rate) was attributed to treatments, including secondary preventive therapies after myocardial infarction or revascularization (11%), initial treatments for acute myocardial infarction or unstable angina (10%), treatments for heart failure (9%), revascularization for chronic angina (5%), and other therapies (12%). Approximately 44% was attributed to changes in risk factors, including reductions in total cholesterol (24%), systolic blood pressure (20%), smoking prevalence (12%), and physical inactivity (5%), although these reductions were partially offset by increases in the body-mass index and the prevalence of diabetes, which accounted for an increased number of deaths (8% and 10%, respectively).

So a little less than half is attributable to changes in risk factors.  A little more than half to ALL treatments – including drugs, surgery, etc.

The largest reductions in deaths came from the use of secondary-prevention medications or rehabilitation after acute myocardial infarction or after revascularization (a total reduction of approximately 35,800 deaths) and from the use of initial treatments for acute myocardial infarction or unstable angina (approximately 35,145 deaths), followed by treatments for heart failure and hypertension, statin therapy for primary prevention, and treatments for chronic angina.

The editorial is more than a matter of playing loose with the numbers; it is a vast overstatement and a distortion of the evidence. There’s no question that medical devices have contributed to the decline.  It is disingenuous to attribute ALL of the benefit to devices.

I’m not going to comment on the medical device tax.  For now, I’ll leave that to the politicians and special interests.

But on this site, we address and try to correct any misleading claims about medical interventions whenever we see them – whatever the source.  And this editorial made a whopper!

I only hope that such whopping misleading claims aren’t misleading politicians into positions they wouldn’t take if they evaluated the claims.

View the original article here

Industry editorial makes outlandish claim about impact of medical devices

Minnesota is the home of several medical device makers.  So there’s been a lot of editorializing about the medical device tax in the Affordable Care Act. There has been some criticism of Minnesota politicians over whose interests they represent on the issue.

Today’s Star Tribune carries a commentary from an industry spokesman – Dale Wahlstrom, president and CEO of LifeScience Alley. He retired from Medtronic in 2006 after 24 years.  His commentary includes this claim:

Medical devices save and improve lives. Between 1980 and 2000, medical device technology slashed the death rate from heart disease by a stunning 50 percent and cut the death rate from stroke by 30 percent. As a result, life expectancy was extended by more than three years.

Please note: I’ve written to a contact at LifeScience Alley asking for the source of that data.  In fairness, he hasn’t had much time to respond but I don’t expect an answer on the data source because I don’t think there is one. I’ll be happy to post an amendment/addendum if/when an answer is forthcoming. That editorial has been published for hours already and I think it’s important to publish even this quick analysis as quickly as I can.

This quote attributes ALL cardiovascular health improvements to devices rather than siphoning off the mere fraction that might be attributable to devices versus drug therapies versus lifestyle changes.

One analysis published in the New England Journal of Medicine concluded:

Approximately 47% of this decrease (in coronary disease death rate) was attributed to treatments, including secondary preventive therapies after myocardial infarction or revascularization (11%), initial treatments for acute myocardial infarction or unstable angina (10%), treatments for heart failure (9%), revascularization for chronic angina (5%), and other therapies (12%). Approximately 44% was attributed to changes in risk factors, including reductions in total cholesterol (24%), systolic blood pressure (20%), smoking prevalence (12%), and physical inactivity (5%), although these reductions were partially offset by increases in the body-mass index and the prevalence of diabetes, which accounted for an increased number of deaths (8% and 10%, respectively).

So a little less than half is attributable to changes in risk factors.  A little more than half to ALL treatments – including drugs, surgery, etc.

The largest reductions in deaths came from the use of secondary-prevention medications or rehabilitation after acute myocardial infarction or after revascularization (a total reduction of approximately 35,800 deaths) and from the use of initial treatments for acute myocardial infarction or unstable angina (approximately 35,145 deaths), followed by treatments for heart failure and hypertension, statin therapy for primary prevention, and treatments for chronic angina.

The editorial is more than a matter of playing loose with the numbers; it is a vast overstatement and a distortion of the evidence. There’s no question that medical devices have contributed to the decline.  It is disingenuous to attribute ALL of the benefit to devices.

I’m not going to comment on the medical device tax.  For now, I’ll leave that to the politicians and special interests.

But on this site, we address and try to correct any misleading claims about medical interventions whenever we see them – whatever the source.  And this editorial made a whopper!

I only hope that such whopping misleading claims aren’t misleading politicians into positions they wouldn’t take if they evaluated the claims.

View the original article here

A Rewarding Career in Travel & Tourism Industry

The global tourism industry is booming presently. Number of domestic as well as international arrivals has more than tripled. The tourism industry accounts for more than $1000 billion and is expected to grow by 200% in next five years.

Tourism also in a major way contributes to the economy indirectly through its association with other sectors such as horticulture, agriculture, poultry, handicrafts and construction.

Career in Travel & Tourism

Travel and tourism is United States' 2nd largest service export industry, 3rd largest trade industry and one of the largest employment providers. There are various courses available that can help you become a part of this sector.

If you love to interact with people, travel to various places and be a part of the service industry, then a career in tourism is ideal for you. You can choose to become a travel agent, guide, tourism manager, tour operator, adventure travel guide, airline service staff and so on.

You can either join a diploma or a certificate course in tourism and travel. You can choose a Travel Agent Certificate program, Tour operator Certificate course, Airline Certificate course, Cruise Line Certification course, Hospitality courses, Tourism Management and so on.

What you get to learn?

One needs to have a good business sense to be in the travel industry. A course in tourism will teach you all aspects of becoming an effective travel professional. Some of the topics covered are:


National and International Air travel
Cruise Lines
Railway Reservations and travel
Lodging & Accommodations
Tour packages
Fare and reservation structures
About various Destinations
Quality Management
Project Supervision
Basics of Tourism Management
Organizational Behavior
Marketing Strategies

Various jobs opportunities are available within the public and private sectors. In the public sector, you can be employed with tourism department or directorates. A lot of interesting opportunities can be found with the private sector like Airlines, Tours Operators, Travel Agencies, Hotels and so on.

Job Profiles for Various Sectors

Tourism Department

In the tourism department, employment can be found in reservations, counter staff, marketing and sales, tour planners and tour guides. One can also be with the directorates and department of tourism. You get to be involved with the planning and promotion of tourism activities.

Airlines

Airlines provide a glamorous and rewarding job option. You can find employment as Traffic Assistant, Reservation Staff, Bookings Manager, Air hostesses & Stewarts, Sales and Marketing personnel etc.

Travel Agencies

Travel Agencies use agents to promote tour packages. They make arrangements of travel, accommodations, currency conversions, budgets, special needs, tourist attractions and planning. Tour operators organize tours to the various tourist spots and manage the travel and stay of the tourists.

Hotel Industry

One can find ample opportunities within the hotel industry in various departments. You can be a part of Operations, Front-office, House-keeping, Accounting, Maintenance, Public Relations and many more interesting departments.

Transport

Besides Airlines, travels include rail services, coach operators and car hire companies. Transport includes air, road, railways and sea. Job profile for people employed with rail and road transport includes planning, chalking out the tour program, calculating costs, arranging accommodation and other facilities like food and entertainment.

Personality Traits required to be a part of Tourism Sector

People who are a part of the tourism industry interact with people on a daily basis. There are certain personality traits required to efficiently handle the various responsibilities and tasks in the travel and tourism sector.


Good Inter-personal skills
Effective communication
High level of patience
Hardworking & Responsible
Good Marketing Skills
Creative Abilities
Ability to handle Emergencies
Organizational skills

Job Outlook for Travel & Tourism Industry

Experience, Marketing Skills, Communication skills and the Size and Location of the organization determine the salary of a travel agent/professional.

Full-time employee positions at travel companies are well-paid. Job prospects both in public and private sectors are excellent.

However, the most rewarding jobs for qualified tourism professionals are in the private sector with travel agencies, tour operators, airlines, railways, hotels, transport and cargo companies etc.

Jobs in the travel & tourism industry offer good remuneration and benefits, which include free travel for employees and their families. Salaries can vary depending on the industry and are higher in foreign airlines and agencies.

If you like traveling and have the ability to mingle well with people, tourism industry can take you places!

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How to Create a Resume For the Travel & Tourism Industry

and tourism industry is booming and jobs and positions are available and are fun and surprisingly, pay very well. So, it is no surprise that securing a position in this industry can be rather difficult. The competition is fierce and a lot of people want the job.

To get a job in this industry, it is imperative to get ahead of the competition. Being passive and unmindful will leave you hoping in futility. Aside from improving your qualifications by educating yourself and getting certifications, you must know how to impress the potential employer with your resume. The resume will usually bring out first impressions. And when applying for a job, especially in travel and tourism, first impression is vital.

It is important to know the general likings of employers in the industry. You will base your resume making on this knowledge. Think of resume as an advertising information sheet. The goal is to generate appeal and professionalism.

When creating a resume, the key is highlighting the most relevant details. This is why you should know every company's preference when it comes to hiring applicants. In general, travel and tourism employers want someone with substantial people and organizing skills. They will also base hiring decisions on whether or not you have previous experiences in the industry and of course, relevant training and certifications as well.

If you are trying to break into the industry without any experience, consider using a functional or combination resume. That way, you can put the emphasis on your transferable skills and other applicable expertise you have. However, if you have vast experience in travel and tourism to date, the best format for you to use is a chronological resume.

List your previous accomplishments but don't make a laundry list of everything you've ever done. It is better to pick a few positions that are pertinent to your potential employer's liking. For instance, in your past work, put emphasis in the situations in which you helped solved a problem using your people and speaking skills. In your resume, state the accomplishments that draw attention to your ability to organize and manage difficult circumstances.

If possible, use numbers that can quantify your skills and feats. For example, write something like, 'An increase of 40% buyer turn out has resulted by implementation of sales pitch and promotional campaign that I helped develop.' Doing this, shows that you're results-oriented.

Create a section where you can put your other skills. The travel and tourism industry is a broad field, and the range of professional positions is extensive: receptionists, tour guides, hotel managers, convention planners, travel agents, accountants, and much more. You'll never know which skills can help you land a job. These kinds of skills could be good interpersonal skills, exceptional dependability or the ability to operate office machines such as copiers, fax machines and computers.

An impressive educational background should be exhibited if you have one but a college education is not always necessary If you have finished a number of relevant courses and acquired certifications, put them in your resume. You will give an impression that you are giving an effort to improve yourself. Thus, showing that you dependable and trainable.

Current Management Opportunities and Challenges in the Software Industry

During the past 30 years the world went through a very dynamic technological transformation. In retrospective, it can be stated without exaggeration that the emergence of electronic devices and the Internet have greatly impacted daily life as well as managerial practice to an unforeseen extent. The computerization of multiple business processes and the creation of large scale databases, among many other radical technological advances, have lead to enormous cost savings and quality improvements over the years. The interconnection of financial markets through electronic means and the worldwide adoption of the Internet have greatly reduced transaction and communication costs and brought nations and cultures closer to one another than ever imaginable. Computers are now fundamental tools in almost all businesses around the world and their application and adaptation to specific business problems in the form of software development is a practice that many companies perform on their own. In the past, such computerization and automation efforts were very costly and therefore only practiced by large corporations. Over the years, however, the software industry emerged to offer off-the-shelf solutions and services to smaller companies. Today, having survived the massive dotcom crash of the year 2000, software development businesses established themselves as strong players in the technology industry.
The emergence of numerous computer standards and technologies has created many challenges and opportunities. One of the main opportunities provided by the software sector is relatively low entry barrier. Since the software business is not capital intensive, successful market entry largely depends on know-how and specific industry domain knowledge. Entrepreneurs with the right skills can relatively easily compete with large corporations and thereby pose a considerable threat to other, much larger organizations. Companies, on the other hand, need to find ways to reduce turnover and protect their intellectual property; hence, the strong knowledge dependence combined with the relatively short lifespan of computer technologies makes knowledge workers very important to the organization. Knowledge workers in this industry therefore enjoy stronger bargaining power and require a different management style and work environment than in other sectors, especially those industries that have higher market entry capital requirements. This relatively strong position of software personnel challenges human resource strategies in organizations and it also raises concerns about the protection of intellectual property.
The relatively young industry is blessed with sheer endless new opportunities, such as the ability of companies to cooperate with other organizations around the globe without interruption and incur practically no communication costs. In addition, no import tariffs exist making the transfer of software across borders very efficient; however, the industry with its craft-like professions suffers from lack of standards and quality problems. The successful management of such dynamic organizations challenges today's managers as well as contemporary management science because traditional management styles, such as Weberian bureaucracies, seem to be unable to cope with unstable environments.
Challenges in the Software Industry
Many studies indicate that present-day software development practices are highly inefficient and wasteful (Flitman, 2003). On average, projects are only 62% efficient, which translates to a waste of 37 %. The typical software development project has the following distribution of work effort: 12% planning, 10% specification, 42% quality control, 17% implementation, and 19% software building (2003). There are many possible interpretations of the nature of this distribution of resources. First, the extraordinarily high share of 42% for quality control purposes can indicate a lack of standards and standardized work practices. This large waste of effort may also be the result of inefficient planning and specification processes. Because the share of 19% for software building is a function of software complexity, hardware, and tools used, there is a chance to reduce it by carefully managing and standardizing internal work processes. The disappointing share of only 17% for implementation, however, should be alarming to business owners, since implementation activities are the main activity that results in revenue. The relatively low productivity level reported by Flitman (2003) seems to be also reflected in the fact that the average U.S. programmer produces approximately 7,700 lines of code per year, which translates to just 33 per workday (Slavova, 2000). Considering that a large software project, such as Microsoft Word, is reported by Microsoft to require 2 to 3 million lines of code, it becomes obvious how costly such projects can become and that productivity and quality management are major concerns to today's software businesses. The challenge for contemporary software managers is to find the root of the productivity problem and a remedy in the form of a management practice.
A plethora of recent studies addresses software development productivity and quality concerns. Elliott, Dawson, and Edwards (2007) conclude that there is a lack of quality skills in current organizations. Furthermore, the researchers put partial blame on prevailing organizational cultures, which can lead to counterproductive work habits. Of the main problems identified, project documentation was found to be lacking because documents are deficient in detail and not updated frequent enough. Quality control in the form of software testing is not practiced as often and there seems to be a lack of quality assurance processes to ensure that software is built with quality in mind from the beginning. Organizational culture was found to be deficient in companies were workers tend to avoid confrontation and therefore avoid product tests altogether (2007).
Since knowledge workers are the main drive in software organizations, creating a fruitful and efficient organizational culture constitutes a main challenge to today's managers. The relationship between organizational culture and quality and productivity in software businesses was recently investigated by Mathew (2007). Software organizations tend to be people-centered and their dependency on knowledge workers is also reflected by the enormous spending remuneration and benefits of more than 50% of revenue. As the industry matures and grows further, the challenge to organizations is that larger number of employees need to be managed which brings culture to the focus of management. Mathew (2007) found that the most important influence on productivity was achieved by creating an environment of mutual trust. Higher levels of trust lead to greater employee autonomy and empowerment, which strengthened the existing management view that trust and organizational effectiveness are highly related. Those companies with higher trust and empowerment levels benefitted from more intensive employee involvement and thereby achieved better quality products (2007).
Product quality, however, depends on other factors as well that reach beyond the discussion of work processes. Relatively high employee turnover was found to have a detrimental effect on product quality and organizational culture (Hamid & Tarek, 1992). Constant turnover and succession increase project completion costs, cause considerable delays, and expose organization to higher risks because their development processes can be severely disrupted. While human resources strategies should help find ways to retain key personnel in the company, organizations need to nevertheless be prepared for turnovers and minimize their risks. One of the greatest risks for people-centered, knowledge worker organizations is the loss of knowledge when employees leave.
Knowledge management has evolved into a relatively new discipline in the last two decades but is mostly practiced by large, global organizations only (Mehta, 2008). As corporations realized the importance of knowledge management activities to mitigate the risk of know-how loss within their organizations, they started employing chief knowledge officers and crews with the goal of collecting and organizing information. By building custom knowledge management platforms, companies can benefit from increased transfer, storage, and availability of critical business information. Such activities can help companies innovate and build knowledge capital over time (2008). The challenge remains, however, to set up such systems and to elicit employee support for knowledge management systems. In addition, these systems leave another critical question open. What happens when top performers take all the knowledge with them when they leave?
Another crucial variable affecting software product and service quality is top management involvement. Projects in the software industry commonly fail due to one or a combination of the following three major causes: poor project planning, a weak business case, and lack of top management support and involvement (Zwikael, 2008). Software projects are similar to projects in other industries by focusing on timely project completion, budget, and compliance to specifications, the industry requires specific support processes from top management to facilitate projects. These processes are summarized in Table 1. Key support processes, such as the appropriate assignment of project managers and the existence of project success measurement, indicate that successful companies demonstrate a higher level of project progress control than others; however, Zwikael acknowledges that top managers rarely focus on these key processes and instead prefer to deal with those processes that are easier for them to work on personally.
Table 1
The ten most critical top management support processes in the software sector (Zwikael, 2008). Those processes marked with an asterisk (*) were found to be the most important.
Support Process
Appropriate project manager assignment *
Refreshing project procedures
Involvement of the project manager during initiation stage
Communication between the project manager and the organization *
Existence of project success measurement *
Supportive project organizational structure
Existence of interactive interdepartmental project groups *
Organizational projects resource planning
Project management office involvement
Use of standard project management software *
Opportunities in the Software Industry
The advent of low cost communication via the Internet and the diversification of the software industry into many different branches brought a multitude of new market opportunities. Some of the main opportunities are rooted in the low costs of communication, while others originated from the possibility of geographic diversification and international collaboration.
One major opportunity which especially larger organizations seek to seize is geographic diversification in the form of globally distributed software development. Kotlarsky, Oshri, van Hillegersberg, and Kumar (2007) have researched this source of opportunities that is mainly practiced by multinational companies; however, an increasing number of small companies is also reported to be benefitting from dispersed software development across national boundaries. The study revealed that software companies can achieve significantly higher levels of productivity by creating reusable software components and reducing task interdependencies. By reducing interdependence, the produced modules are more likely to become useful in future projects on their own; furthermore, this reduction of intertwined computer code also has a positive effect on project teams. Teams in companies that globally distribute their developments benefit from increased autonomy and reduced communication requirements. The authors point out, however, that the prerequisites to distributing software development are not only good project planning but also the standardization of tools and development procedures. Without such prearrangements it may become almost impossible to manage and consolidate the various distributed team activities (2007). Especially for teams working across countries away from one another, it may pay off to deploy video or other Internet-based conferencing technologies and exploit huge savings potentials. But are these means of communication effective?
In the last decade a new form of organization has emerged that has taken the most advantage of the Internet. Virtual organizations exist entirely in cyberspace and their team members communicate mostly, if not exclusively, via the Internet using webcams and messaging software. The challenge for managers in virtual organizations is to exploit the new technology but also to find ways to motivate and direct the workforce and work processes. A study by Andres (2002) compared virtual software development teams with face-to-face teams and identified several challenges and opportunities for virtual managers. Managing work from a different time zone can be problematic due to the lack of physical presence. Communication will need to be asynchronous or can only occur at work hours that overlap in both time zones. Virtual teams facilitate this process by using email and voice/text messaging but more importantly by reducing the interdependency of tasks. Andres (2002) suggested that these types of communication have lower "social presence" meaning that humans have a need and ability to feel the presence of others in the group. The problem with many computerized communication channels is that visual clues, utterances, body language clues and clues from the person's voice are missing. When placed on a social presence continuum, the various communication types rank as follows from the lowest to the highest: email, phone, video conferencing, and face-to-face meetings. Andres' comparison between development teams using video-conferencing versus face-to-face meetings revealed that the latter group was far more efficient and productive, even though the video-conferencing team benefitted from reduced travel costs and time.
The study conducted in 2002, however, has several shortcomings. First, it is already seven years old and Internet costs have dropped and speeds have improved significantly since then. Considering the improvements in video quality and availability and computer speeds, this form of communication became more feasible recently. In addition, today's managers are just now starting to learn how to use these means of communication efficiently. For example, even though email technology has been around for two decades now, many managers still find that emails can create a lot of ambiguity. The challenge to future generations of managers will be to change their writing style to match the limitations of email and other text messaging technologies. Another important factor to consider is that written communication may be stored indefinitely and have legal consequences; hence, more often than not, managers may intentionally prefer to avoid such communication channels for political or legal reasons. The study by Andres (2002), however, resulted in a negative view of video conferencing probably because the technology was not yet matured and the team members were not yet comfortable with it.
For video conferencing to work well, all participants need to be knowledgeable of the peculiar characteristics of that technology and adjust their communication style and speech accordingly. Regardless of meeting type, another important factor is preparation. What could be researched in conjunction with Andres' study in the future is the degree of preparation of the group. Do team members invest enough time in preparing questions and answers for their teammates before coming to the meeting? Video conferences may require more preparation than face-to-face meetings in some circumstances.
Another opportunity for software businesses and challenge for managers worldwide is outsourcing. In the year 2007, $70 billion were spent globally for outsourced software development (Scott, 2007). Given the extreme shortage of IT skills in the U.S. and Europe, many companies take advantage of globalization by choosing international suppliers for their software development tasks. Outsourcing, however, requires elaborate coordination between the organization and its many supplier groups. The idea is that in total, coordination costs and problems are less costly than in-house development; however, this goal is not always achieved. While outsourcing, when it is deployed and coordinated correctly, can result in 24 hour development worldwide and thereby provide continuous services to the organization around the clock, it may result in the loss of intellectual property. While mechanic parts are patentable in most countries that support intellectual property rights, software is not patentable in most countries outside North America.
In addition to the challenge of managing outsourcing, software organizations exploit technologies in various ways to save costs, for example by offering remote access, telecommuting, and service-oriented architectures (SOA) (Scott, 2007). Remote access and telecommuting has increased six-fold between 1997 and 2005 and resulted in $300 million annual savings due to a reduction of office space (2007). SOA is a similar concept and involves a software rental for customers. Instead of buying, installing, and maintaining software and servers, customers can rent a service online and reduce the total cost of ownership because these activities are no longer required on the customer side. Gradually the virtualization of the software business opens new horizons and provides further opportunities but it also presents managers with endless challenges.
Some of the strengths and weaknesses of offshore and virtual team development were studied by Slavova (2000). In the year 2000, India and Ireland were the largest offshore software development locations. Offshore companies can offer up to 60% cost reduction, a faster completion of development tasks by distributing them around the globe, and specific domain knowledge which they acquired over the years providing similar services to other customers. The integration of work from external sources, however, constitutes a major hurdle. Furthermore, language and cultural issues can cause serious communication problems that put the project at risk, especially when misunderstandings cause misinterpretations of project specification documents. Slavova (2000) found that the most common remedy and strategy avoiding problems with offshore suppliers is to visit them frequently face-to-face; however, this tactic results in higher travel costs and disruptions of the managers' workflows and hence may offset the benefits gained for outsourcing altogether. Managers in the software business need therefore to balance the risks and opportunity potentials before engaging in outsourcing because for many companies this strategy failed to pay off in the end.
A huge opportunity that emerged in the last decade is online innovation. The collective innovation effort of many individuals and companies is generally known as open-source on the Internet and it has lead to many advances in the computer technology, such as the free Linux operating system. At first businesses felt threatened by this wave of developments on the market because the businesses perceived that open-source solutions were in competition with their products. In many cases this was and still is in fact true; however, a couple of companies, including IBM, are exploiting this new way of innovation for their own and for a common benefit (Vujovic & Ulhøi, 2008). Because software companies operate in an increasingly instable environment, they struggle to create continuously new and better products. By exposing the computer code to the public on the Internet, companies can benefit from ideas submitted by the public, especially other companies. Furthermore, companies benefit from free bug finding and testing by external users but one of the primary reasons for "going open-source" is the quick adoption and spread of the company's technology at a relatively little or no cost. The spread of IBM's open-source technology, for example, is also free marketing for the company. But how can companies make money by offering something for free?
The closed innovation model (the traditional model of providing software without revealing the software code) can be combined with open-source, so the company can charge for the product. In other cases, the company can reveal the technological platform on the Internet for free and then sell specialized tools which utilize the new platform. The big money savers are obviously the shared development, testing, and maintenance costs since many interested parties work on the same project.
The knowledge-sharing model of open-source is nothing new, however. The philosophy and the benefits of open innovation models have been already realized in the third quarter of the nineteenth century. Back then, open innovation was practiced in the UK iron and
US steel industry. The cooperation of many industry players ended the domination of proprietary technologies for which costly royalties were due (Vujovic & Ulhøi, 2008). Given the dynamic environment of the IT industry and the short lifespan of computer technologies, the adoption of open innovation models gained much more popularity. By analyzing the largest open-source players in the market, Vujovic and Ulhøi put together a list of supportive strategies, which is shown in Table 2. Several of these strategies are quite relevant from a top management perspective as well, such as deploying open-source to block a competitor and using the open model as a gateway for greater market share.
Table 2
Strategies for adopting the open-source approach (Vujovic & Ulhøi, 2008).
Business Strategy
Obtaining higher market share
Obtaining market power
Better adoption of a product and thereby establishing standards
Shifting competitive advantage to another architectural layer
Making the product more ubiquitous
Delivering faster time-to-market
Spurring innovation
Complementing a revenue core stream
Blocking a competitor
Conclusion
Reviewing the rather recent emergence of the IT industry and the software industry in particular, several parallels can be drawn to management history. While Taylor's scientific management was a highlight in the evolution of management science (Wren, 2005), the software industry seems to be lagging behind such great advancement. Due to its high level of complexity, the software development discipline is still plagued with quality problems stemming from a lack of standardization. Similar to Taylor's efforts, managers need to analyze software development processes and develop industry-wide standards and measures. Once such measures and procedures exist, this will help make software projects much more predictable.
Much of today's software industry practices would have been a déjà vu for Taylor, if he was still alive. In addition, the anomie and social disorganization concerns during the social person era apply today more dramatically than in the past. Mayo described in the 1940s how managers overemphasized on technical problems in the hope of raising efficiency ignoring the human social element (p. 296). The same situation is now evident to a larger degree in the computer industry. The rapid technological advances have created many opportunities and changed the work environment drastically. At the same time, however, management was unable to prepare for these dramatic shifts technology would bring to the workplace. At best, managers are simply reacting to technological advances because the consequences are mostly unpredictable given the complexity of human nature. For example, email brought several benefits such as low cost and simple asynchronous communication; however, many email messages are misunderstood because they are not written appropriately. Moreover, IT knowledge workers are struggling to keep up with the vast number of messages received per day as they constitute a severe disruption of the daily workflow.
As knowledge workers are becoming more and more essential to an organization's survival and as organizations in this industry mature and require greater headcounts, the span of control is becoming an issue for managers to handle correctly. As discussed in Wren (2005), as the team size increases, the number of interrelations to be managed rises astronomically (p. 353). Managing larger teams poses a great problem because the sheer number of interrelations makes it also more difficult to develop trust within the team. Motivating large groups of knowledge workers can hence be tricky, especially because creative tasks can require a large degree of collaboration. Work design is hence a major hurdle for future managers to overcome. Much emphasis has been on hygiene factors and not on motivators of the workforce. Flexible hours, telecommuting, empowerment, and increased responsibility may help in the short-term but for the long-term management will need to find new strategies for retaining knowledge workers.
Product quality remains a big issue. Deming's ideas are good but quality assurance in the software world is difficult to implement due to the lack of standards and measures. The open-source innovation model may provide some relief in this respect because the greater involvement of external developers can help improve overall quality. On the other hand, however, open-source projects are hard to manage for the same reason. Since open-source projects are self-directed and not owned by anyone in particular, those projects sometimes suffer from uncontrolled, tumorlike growth.
Several of Deming's deadly sins (Wren, 2005, p. 463) apply directly to the software industry. Most products are made from scratch rather than from components and there is little standardization in software organizations. Since software developers have a tendency to see their job as a craft they defy standards and procedures. In addition, the rather complex environment with its dynamic requirements and the push for meeting deadlines make it easy for practitioners to lose sight of quality improvements through the preparation of organizational standards. High turnover and individual performance measures continue to be industry practice, even though many scientists, such as Deming, have argued for long that such measures are counterproductive.
Future managers need to find ways to compensate for the high turnover, if they cannot find a way to avoid it. The division of labor might work well for the company but it is not well perceived by the workforce which tends to require constant challenge. Top performers disfavor mundane tasks and prefer to walk away with all their knowledge. IBM has successfully deployed job enlargement for some time to combat this phenomenon (Wren, 2005, p.332). Unfortunately, this strategy might not work for every company and it can only be used within certain boundaries of the organization. Given the developments of the last two decades, managers will need to confront the discipline of knowledge worker management and find a workable solution for their organization.
The integration of management science with the advances in psychology and sociology may provide a route towards the solution of the knowledge worker management problem. It is crucial for managers to have an accurate understanding of the motivational drives for this particular group of the workforce. These employees enjoy higher income, greater flexibility and freedom, and greater bargain power. This puts them in a gray zone between the traditional, lower skilled employee and an owner in the company because knowledge workers create intellectual capital in the company. Because most of this capital is lost and remains with the employees when they decide to leave the organization, turnover can be much more damaging than with traditional workers. Managers can therefore not simply apply conventional strategies to this dissimilar group of employees; rather, they need to seek for more creative incentives for motivating and retaining knowledge workers.
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