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The idea behind Freecycle is sound. It is an online forum where you give away unwanted items and not dump them in a landfill site. There are local Freecycles around the world. I tried the one in Auckland, New Zealand.

In my case, I listed items I no longer need. People who want the items email their interest, arrange a meet up and deal with the item. There’s an alternative approach where people who need things can ask for them.

It sounds simple enough and I’ve used it to unclutter my garage before a house move, but I’ve run into problems with Freecycle, which make me question its value.

Freecycle problems

Problem 1: Can’t be bothered. I’ve offered a number of items on Freecycle, had them requested and the person at the other end of the deal fails to pick up the item. I guess because an item is free, it has little perceived value by the recipient. Maybe there are other reasons. Either way, my first three forays into Freecycle resulted in receivers not picking up the items they requested.

Problem 2: Slackness. This is closely related to problem 1. Receivers make appointments to pick up items, I wait at home for them, they don’t turn up. Then they make more broken appointments etc. While  rescheduling is fine, we’re talking about people who constantly shuffle appointments.

Problem 3: Greed. I’ve noticed some of the receivers turning up to pick up items ask for more. In one case the picker-up wandered into my open garage asking if he could take items than were clearly not for recycling. This makes me uneasy with the process. I also don’t like it when I offer item X, and get tons of emails asking if I’ll also be giving away a loosely related item Y.

Problem 4: Inefficiency. When someone requests an item, I post a taken message on Freecycle. The matter should end there, but emails pour in for days and weeks after, asking if the item is still available. Not taking notice of “Taken” posts is just plain rude.

Problem 5: Venality. Some of the stuff I’ve distributed via Freecycle has turned up for sale on TradeMe (if you’re outside New Zealand this is the local equivalent of eBay). On one level I don’t care when happens to the items I’ve given away. Once they’ve gone, they’ve gone. On the other hand, I suspect some Freecycle users are professional scavengers – which disturbs me. Apart from anything else this undermines the idealism of the project.

Have you run into problems with Freecycle? Or are you happy with it? I’d love to hear your opinion.

Panda Cloud Antivirus is hard to beat for free PC security.

Unlike other security tools, Panda does its work in the cloud – it is software-as-a-service. Panda sends data about dangerous looking files to its servers for closer inspection.

Because your computer doesn’t do the hard work, Panda imposes almost no overhead.

When I benchmarked my PC there was no performance difference between the system running the software and having the software switched off. If there’s a network overhead, I couldn’t measure it.

Panda’s other big advantage is the malware checking database is always up-to-date. There are no signature files to download.

One issue I have with Panda is the program is so trouble-free, it is easy to forget. You barely notice it. I previously described Microsoft’s Security Essentials as “barely there” – Panda Cloud is even less noticeable.

Panda is better than other free anti-virus products at trapping malware. I previously ran it for a month without any issues and have run it for the past three or four days with no ill effects.

I’d say it is the most promising free anti-virus application on offer. At some point the developers will need to make some money. I’ll be interesting to see how. For now, this is possibly the best free choice.

Of course, you may prefer not to leave your computer’s protection in the hands of free software makers.

Rob O’Neill’s front page story on today’s Computerworld draws on research by US-based Objectwatch saying the total cost of IT failure in New Zealand is $5.4 billion a year. The story is not online at the time of writing.

Objectwatch’s CTO, Roger Sessions calculated the cost globally, for the US and for New Zealand saying the number includes the indirect costs as well as direct costs.

The number seems large for two reasons:

  • First. For a country with around 4.3 million people Sessions’ waste amounts to around $1280 per person or roughly three percent of GDP*. In plain English that means IT failure wastes one out of every 20 dollars earned in New Zealand.
  • Second. According to IDC numbers in a press release issued in August New Zealand’s total IT market was worth $5,911 million in 2008 and is growing at 3.6 percent. So Sessions’ statement could be interpreted as saying the money spent on IT is wasted.

On this basis we’d be better offer dumping computers and switching back to trusty old adding machines.

From the Australian Financial Review 11 April 2001
From the Australian Financial Review 11 April 2001

Web hosting operations in Australia and other western countries face a nasty double whammy in coming months. Not only are the various Internet markets in these countries heading towards saturation, but at the same time, many of the national economies are facing a slowdown. Asia on the other hand is, in Internet terms, so massively underdeveloped that any economic hiccups are unlikely to hinder regional web hosting growth prospects.

According to Forrester Research, by 2004 some 99.7% of US small businesses and 83% of America’s medium-sized companies will have some kind of web presence. Australia lags behind the US – but not by much. Although there’s still a long way to go before the saturation point is reached, web hosting operations can see an end to the rapid growth in customers and sites that has characterised their industry until now.

As far as Australian hosts are concerned, there are three likely drivers for further growth. First, there’s the option to sell a broader range of products and services to existing customers. Although there is plenty of scope for offering value-added services, this strategy largely depends on the still unproven ASP business model.

A second option is to expand by acquisition. In global terms the web hosting market could certainly do with a round of industry consolidation. There are currently more than 1000 hosting operations selling to international markets and while the intense competition has delivered low prices and spurred innovation there’s doubt about the long-term viability of many players.

The third option is to expand existing hosting operations into new geographic markets. Given that Europe and North America already have mature web hosting operations, for most Australian companies this means looking north to the Asian market.

Leading the charge is WebCentral. The company is Australia’s leading hosting business with 700 servers and around 40% of the local hosting market.

There’s certainly a strong business case for selling to Asia. According to a report by eMarketer and Dataquest, the Asian Internet market is still in its rapid growth phase. In 2000 there were some 49 million users in the region, by 2004 this will swell to 174 million users – that’s a compound annual growth rate of 38%. During the same period, Asian users will go from being 21% of the global online community to around 27%. More importantly e-commerce revenues are forecast to climb from US$39.4 billion to more than US$338 billion.

This is all very promising, but behind these numbers are even more compelling statistics for would-be Asian hosting operations. By world standards Asia has very low levels of business-to-consumer eCommerce – an area of great interest to web hosting companies. During the four years to 2004 this is set to rise twelve-fold. And according to Ovuum, a European-based research company, only 7% of Asian companies use web-hosting services compared with 37% of European companies.

Australian hosting companies will find the Asian Internet landscape is vastly different from the local scene. For example, compared with Australia, most of Asia has considerably less access to fixed line telephone systems. This means that for many consumers their only practical route to the web is through the wireless telephone networks. And the online experience for wireless users is considerably different to that for users with personal computers, modems and fixed telephone lines.

Another problem for local web hosting companies planning to expand into the region is that, while there is not a strong indigenous hosting industry throughout the region there are pockets of strength. For example, India already has a well-developed hosting market.

What’s more, many of the world’s largest telecommunications and Internet players already have their eyes on the yet to blossom Asian market. For example, last year Japan’s Nippon Telegraph and Telephone announced its intention to dominate the Asian hosting market when it acquired the US-based Verio hosting operation.

In December, France Telecom subsidiary Global One opened a major regional hosting operation in Singapore. This January saw Exodus Communications buy the GlobalCenter web hosting subsidiary from Global Crossing. The two companies formed a joint venture to supply web hosting services to Asia – a business which is expected to generate some US$4 to 5 billion in revenues over the next ten years.

From the Australian Financial Review 11 April 2001

If you listen to some of the companies selling customer relationship management (CRM) software applications, you could get the impression it is an all-or-nothing proposition needing to be implemented big-bang fashion.

The problem with this approach is that the era of disruptive, large-scale information technology projects with headline-grabbing budgets is very much in the past.

These days, if firms are spending anything on IT development, they choose smaller projects. Typically, these will take three to six months and deliver modest, but real, benefits from day one. New projects are usually fully integrated with existing systems.

Larger technology programmes are not unknown, but nowadays they are generally implemented piecemeal in small bite-sized chunks. Each incremental step has to deliver usable functionality and often needs to be justified in terms of a quick and demonstrable return-on-investment before further stages are implemented.

This contrasts with some of the noise coming from CRM vendors. They often ask prospective customers to rebuild their entire IT infrastructure in order to accommodate the software packages that allow firms to forge closer customer ties. At the same time vendors may argue that a CRM software implementation also requires sweeping business process changes across an entire enterprise.

It’s ironic that there should be such an apparent contradiction between the way companies selling CRM applications approach the market and the way real world firms actually roll out new technologies. After all, CRM is supposed to be all about getting closer to customers, understanding customer needs and delivering beyond their expectations.

In practice there’s less of a contradiction than it may seem. Rod Bryan, PwC Consulting’s Asia Pacific leader for CRM Solutions says that while CRM is definitely an all-or-nothing proposition, that doesn’t make it an all-or-nothing technology proposition. The all-or-nothing part is about committing to a way of doing business, not to a set of tools. The key to success lies in the strategy, not in the software.

He says, “It’s absolutely not about technology. Technology just happens to be a valuable piece of the equation. You just need it to realise the strategy.”

Bryan emphasises just how wide the gulf is between CRM technology and strategy. For example, he says, “You can have two competing organisations, let’s say they are banks, they might be exactly the same size and have more or less the same product set and customer base. The two banks might both go and install exactly the same CRM technology, but if they are using different CRM strategies they will get very different results. Buying CRM systems does not take away the responsibility for setting that strategy.”

This view jars with the way CRM technology vendors peddle their wares (see other story). Their marketing often confuses the strategic aspects of CRM with the delivery mechanisms. Not surprisingly brochures, advertisements and PowerPoint presentations show software enabled workers delivering great customer relations.

Bryan says the vision is good, but something often gets lost along the way; the idea that firms need to make the technologies work for them rather than the other way around.

Gartner research director, business applications Kristian Steenstrup says in reality there’s less dissonance than you might expect between the vendor approach to CRM and the pigeon step development now favoured by most firms.

He says, “You need to have a vision of how you view the market and how you would like to be seen by the market. Then once you have this in place, you can start implementing the various reorganisation and training programmes along with the technology projects that help work towards that vision.”

Steenstrup says there’s no technical problem adopting the piecemeal approach; companies can simply undertake their smaller projects within the framework of a bigger plan. He says that it is possible to roll-out a series of smaller three to six month projects that each deliver various CRM functions and reach various return-on-investment milestones.

The only real difficulty with this approach lies in the way individual projects are justified. He says, “It was always easier to do this with ERP (enterprise resource planning) projects because 90 percent of them delivered measurable efficiency gains. There still are efficiency gains with CRM, but 80 percent of the gains lie in effectiveness – for example you might want to get a better yield from your customer base.”

Another trap in the short-term gain approach to rolling out CRM is that successful implementation often requires an in-depth planning process that might stretch beyond the attention span of senior managers expecting three-monthly progress reports. Rick Clark, director of strategic consulting for MSI Business Solutions, Australia’s largest home-grown CRM player, says, “You should never be in too much of a hurry to implement CRM”.

Clark thinks the piecemeal development approach makes a lot of sense, but he warns that there needs to be a lot of spade work done before any projects are started. “It’s vital to get the information architecture correct from the beginning. A number of CRM programmes have failed because the firms got halfway through developing their systems only to find that the data isn’t structured correctly.”

In his view the danger is that a company shoot a few short-term small-project goals, only to find further progress is impossible.

He says organisations often fail to spend enough time defining the business problems before starting, he says the pressures to show quick returns means they can end up implementing systems rather than solving problems.

For example, they might start out worrying about getting a single customer view or building applications that help provide opportunities to up-sell to individual customers. “In fact they should start by asking themselves what kind of relationship we have with customers and what kind of relationship do we need, how can we increase the value of each customer.”

The danger here is that by looking for a quick return-on-investment a company might interpret the idea of increasing customer value as ‘let’s sell them another product’. Clark says it can work, but in some cases a ham-fisted attempt to sell an existing customer an extra product might draw the wrong kind of attention to the firm and cause them to put their business elsewhere.

This is what Clark calls ‘a moment of truth’. He says, “Most valuable customers can be lost for ever in a single moment of truth. For example, you might be happy to continue doing business with a bank that treats you badly for year after year. They might make a lot of money from you. But the moment they bounce a cheque or hit you with an unexplained charge, you’ll move your account.”

He says it’s not uncommon for companies to rush into a CRM programme and quickly build a system that gives a single view of the customer. This might provide information about which products each customer has purchased. The list is then handed over to a telesales department who are asked to fill in the blanks, up-sell or cross-sell more products to people. When this doesn’t work the company concludes that CRM doesn’t work, but the truth is such as system is simply managing customers and that’s not the same as managing relationships with customers.

This brings us back to the mismatch between the way CRM vendors approach the market and the way companies actually implement and use the tools. The all-or-nothing and big-bang aspects are real enough, but they apply to CRM in its broader sense, not the technology. There’s no inherent problem with a piecemeal approach to developing technology and rolling out systems, but it’s important not to be in a hurry and neglect the initial planning stages.

This story was published in the Australian Financial Review in July 2002.