In the second part of Computerworld's Q and A interview with Xero and Pacific Fibre founder Rod Drury he discusses the desirability of a standard business number, the difficulty of selling online accounting to schools and the role of social media in business.
Computerworld: What are the most important recent developments in your view in the ICT sector in general in New Zealand?
Rod Drury: Well the things we are working on at the moment [concern] how you really improve productivity for small business. We’re working on eliminating the retyping of invoices; that wastes millions of [person-]hours per year. Things like a single business number.
Now we have cloud-based business systems, we could accelerate that by having an online identity for each business. We are doing a lot of work around being able to send invoices electronically between small businesses or from small business to large business.
A lot of the strategic work and the lobbying we are doing with government is around a single business number and electronic business identifiers. We are expecting to see some improvements there.
The latest thinking on that is probably not [to use] the GST number because that’s a very NZ-centric identifier. We’re hoping to see a paper up in the next month or so which talks about deploying an international standard of business numbering for all New Zealand businesses – not just companies, but sole traders. That has got to be a big accelerator to commerce and will improve productivity.
Do other countries have a standard business number?
Yes; Australia has the Australian Business Number. There’s one in the US, though it’s not widely used; the European countries have one. But now that we’ve got accounting software providers of scale online – like Xero – the industry is saying “wouldn’t it be great if there was a unique identifier for every business electronically, which would allow us to do things like sending invoices electronically between businesses and avoid all of that non-productive data entry work that the software can just solve.”
That is the next phase of productivity that comes from cloud-based applications. The other side of that, is more web services available from government.
We are watching the Making Tax Easier project from the IRD and hoping they’ll be able to develop web services for the payment of GST, PAYE and those sorts of things.
So we see a lot more business-to-government web services as an exciting opportunity for productivity over the next few years.
Outside your own immediate area of business, what do you see as the important developments in ICT? How do you see the whole question of government ICT reforms?
We are a small country and some of this cloud-based computing will lead to a lot of centralisation. Looking at schools, for example; under Tomorrow’s Schools each school has to make its own decisions on IT.
If we could say: look, here is the standard cloud-based file-server or mail-server or accounting software or truancy management [application] and have a couple of choices [for each] available for central purchasing, that would save tens of millions of dollars per annum.
So I think there is a lot of productivity options around cloud computing, but at the moment the government spend is very fragmented. And I think some of the social networking tools and online forums, like LinkedIn, allow groups of school administrators or other government groups of people to start talking to one another and sharing notes, and quite quickly finding the best-of-breed solutions to their problems.
And I think the opportunity for central procurement – as has happened with the rollout of fibre to schools – [will] save some real money.
The combination of cloud-based applications [and] social networking sites that allow experts right across the country to have deep dialogue about solutions that will work for them, provides some great opportunities around government IT.
School accounting is one we’ve been focussing on. At the moment each school picks their own software. It’s a very hard market; you have to sell 2500 of them and it’s a very fragmented, very expensive sales process.
What do you think of the rise of social networking and the corporate use of social networking tools? Do you think any corporations or government agencies have strategy and tactics sorted out yet?
We are getting to a stage where people have dabbled with a lot of stuff for the sake of doing it and now they’re asking themselves ‘what is the real business value’? Facebook is kind of interesting, but we don’t find it a useful business tool; whereas LinkedIn has really become a valuable asset for finding staff, building relationships with people and having business discussions with large groups of users.
We are finding Twitter is becoming your open customer-care queue and a great source of referral business; it accelerated the word-of-mouth effect.
There is a new [sense of] reality around what these tools do. I have been playing with FourSquare; it is interesting but that sort of stuff is hard to monetise. Whereas with LinkedIn we are not finding it hard to monetise, by forming quite deep business relationships and finding talent. The business networking is evolving quite nicely.
The [growth of] coupon sites [offering on-the-spot, cut-price deals] amuses me; that seems very much like a fad at the moment. There won’t be lots of those around next year.
There are lots of fads still, but looking around, there is a reality about what creates value.
On the New Zealand tech scene we have been really good at the technology for a while; now we are beginning to learn and understand and building new roles around global online marketing and working out what works. I think we aare seeing a new capability in our local industry as we start to build global businesses.
What sort of capability?
We have formed relationships with Telstra in Australia, with British Telecom, ANZ in Australia and a number of partners we are working with in the US. [New Zealanders] are getting pretty good at doing those global development relationships and marketing partnerships from this country – working out how to do it remotely and have good relationships.
We’re now getting pretty good at selling online, at deep analytics, search-engine optimisation, pay-per-click [and] creating sales funnels using outbound content creation.
Local tech companies, like Sonar 6 and Workflow Max, VendHQ, Scott Bradley at VoucherMob; a number of tech businesses are quite savvy and all the founders and key staff know each other pretty well.
How do you see the mobile market developing? What do you use yourself?
I am fond of the Apple stuff, because it just works. I am very conscious of how quickly the Android stuff is catching up, by volume; but it isn’t as good a user experience.
We are still investing in the HTML5 open web stuff rather than native mobile applications, but we are keeping a very close eye on [the latter]. That is a natural pathway coming from the web.
In our next phase we may start developing native applications. The only two [relevant] platforms now are the IOS Apple stack and Android.
Part one of the Q and A with Rod Drury here.