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Karl Reed/acs NationalConf 2004-off shoring

OFFSHORING-HOW TO PROTECT THE AUSTRALIAN SOFTWARE INDUSTRY BY REALLY TRYING

Chair IEEE-Computer Society Tech. Council on Software Engineering Governor, IEEE-Computer Society(1997-1999,2000-2002), Director, Computer Sys. & Software Engineering Board, ACS, Department of Computer Science & Computer Engineering, La Trobe University

by Assoc. Prof. Karl Reed,FACS, FIE-Aust., MSc,ARMIT

“The only places where there are level playing fields are on flat earths and in Australia” apologies to Barry

Jones

Rve 1.0 27/10/2004Rve 1.1 6/12/2010

“Those who fail to study history are bound to repeat it”

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Karl Reed/acs NationalConf 2004-off shoringThis Panel Contribution….This Panel Contribution….

1. A Bit of History…..

2. The Issues…

3. The Threats…

4. What Australia should do?

propose the Australian Sports Development Model..

-talent-id

-nature`,protect and research

-invest

-competeSome questions. What is the T.O. of Ericssons?

~US$15B

What is the population of Sweden?

9m

WHY DOESN’T AUSTRALIA HAVE (IT) TRANSNATIONALS OF THAT SIZE?

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Karl Reed/acs NationalConf 2004-off shoring1.1. A Bit of History….A Bit of History….

1. During the Industrial Revolution, British spinning and weaving mills wiped out the Indian (home-spun) cloth industry… Offshoring is a two-edged sword?

2. The Australian Software Industry, and our large-scale computer users produced many major “firsts” or equalled them, in terms of major software developments…-Earliest “Builder” style tools developed in Australia in late 1970’s

-World’s first on-line TAB mid 1960’s

-Early large-scale on-line banking (SSBV,mid1970’s)

-Early large-scale OO commercial systems (CML-smalltalk)

-First AS-400 development tool (Aspect,mid 1980’s)

-Large-scale student record system (Callista, ~2000)

3.The industry was a regional leader in the 1980’s and early 1990’s

4. NEVER received government support of the kind provided to industries in other fields,and in other countries

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Karl Reed/acs NationalConf 2004-off shoring2.2. The Issues…The Issues…

1. Loss of industrial capacity in a critical enabling and product related technology= loss of opportunity for national profit-taking

2. Loss of job-opportunities and investment opportunities

3. The industry was a regional leader in the 1980’s and early 1990’s

4. NEVER received government support of the kind provided to industries in other fields,and in other countries

- research deficit, government purchasing policy generally unfriendly

5. Industries in some “offshoring” countries receive government assistance..e.g. China, fixed currency

6. Main problem with offshoring.. Distributed development is difficult, and a largely unsolved problem!

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Karl Reed/acs NationalConf 2004-off shoring3.3. The Threats…The Threats…

1. Research in Software Engineering addresses the problem of distributed development-

-computer supported cooperative work

-improved system requirements gathering,and description

-internationalisation will lead to a break-down of nation-specific domain expertise

-improved system description techniques will permit real-handover between development phases.

2. Quality of SE education & research in developing countries will improve at least as fast as ours will.. Maybe faster

3. Main problem with offshoring.. Distributed development is difficult, and a largely unsolved problem!

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Karl Reed/acs NationalConf 2004-off shoring

System Test

Programming

Unit Test

Program Design

Systems Analysis

Feasibility Study

Requirements Analysis

System Integration

Optimal task allocation, observed <1970 one or two people

Waterfall S/W Process Model

No need for ‘third-party” readable work products!

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Karl Reed/acs NationalConf 2004-off shoring

4. What Australia should do?propose the Australian Sports Development Model..

-talent-id

-nature`,protect and research

-invest

-competeHAVE A GOAL, THE CREATION OF AUSTRALIAN TRANSNATIONALS OF THE SIZE OF ERICSSON?

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Karl Reed/acs NationalConf 2004-off shoring4.4. What Should Australia Do?What Should Australia Do?

A. Protect and Nature’….

-Develop Australian standards that are super-sets of our competitors, mandate them and help local companies reach them,

-Block Offshoring for a period of five-six years, using the reverse of the US approach to beef in the FTA.. Reduce protection gradually.. (Plenty of precedents for this….)

-Ensure government outsourcing contacts go to local companies to allow then to grow…

-Encourage venture capital.. (~$40Binvested in”old” industries in the last 15 years for little new economic activity)

-Establish a world-class research centre in IT Economics, and intelligence buerau.. Commonwealth Govt.Bureau of IT Industries.. As good as the Tiawanese III

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Karl Reed/acs NationalConf 2004-off shoring4.4. What Should Australia Do?What Should Australia Do?

B. Invest….. Largely in R&D to develop new products and development methods..

- IT-Security systems,

- Dramatically raise productivity..- product-line and reuse techniques,

-cross-domain isomorphisms

-encourage domain specialisation

-component based development techniques

- High(er) quality products.. This means product quality standards,Safety Critical Systems Techniques

- Zero Adoption Impact Applications (Reed, 2003)..

- Develop skills and products for the re-vamp of web-sites that will come soon..

- High-yield,high efficiency testing

- Establish collaborative “skunk-works” to develop proof of concept demos of new product ideas.