Ray Richards is founder of Mindspan Consultants and a technology journalist hailing from Ottawa, Canada

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Globalization

Last month if you recall, we undertook an investigation of the various vector graphic options available to the web designer, contrasting Macromedia's proprietary SWF format and the new SVG open standard championed by Adobe. This time around I'd like provide commentary on a timely subject in light of the Summit of the Americas in Quebec city: globalization.

Obviously the socio-political ramifications associated with the trend toward lowering of trade barriers on a global scale is beyond the scope of this publication, however; the technical and core business challenges inherent in effectively implementing these endeavours certainly are.

Realisation of this all-embracing corporate dream would at its foundation include the ability to enable access to global resources such as labour, capital, raw materials, intellectual capital and international markets — all in a manner transparent to the corporation as far as technology, tariffs and time are concerned. A typical hi-tech scenario might play out along these lines:

A software engineering firm, in an effort to bring a product to market in a more efficient and cost effective manner, might employ a variety of methodologies to facilitate this endeavour. Many of these require a global perspective and reach, foremost among them  access to talented personnel. To this end, the corporation employs subcontracted resources from India — a country possessing a wealth of competent programmers and yet comparatively low labour costs. This enables 24-7 operations without running costly, non-standard shifts by virtue of the 12 hour time difference. The Indian team is augmented by a smaller group of programmers and project managers based in North America which review code, coordinate operations,  define project vision and set logical milestones... all over the Internet. As the project progresses, the company finds themselves lagging behind production projections and consequently acquires bridge financing from a Swiss venture capital fund secured by way of Internet reverse auction — thus receiving the most favourable terms available. As the project nears completion, the corporation employs the services of beta testers across the globe whose sole remuneration is a free copy of the final product — significantly reducing the costs associated with the quality assurance process.

Once the final has been completed, it is marketed, sold and distributed exclusively online. Support, product patches and revisions are handled in like manner, significantly reducing associated expenditure. As time goes on and the product achieves significant marketshare, the company implements a pay-per-use model utilising regional Application Service Providers  — concurrently circumventing translation expenses by way of multi-national franchising agreements which include franchisee translation services as a core requirement for program  participation.

While many organisations have embarked on corporate quests to realise the myriad benefits foreshadowed by comparable visions, most have thus far failed to surmount the scores of challenges presented them. Trade barriers aside, we certainly have the ability to accomplish these tasks today — so what's the problem?

Well for starters, as was detailed in a previous article, the lack of cohesive standards which has been a barrier to technology convergence has effectively put the kybosh on many of the best laid plans for globalizing corporate operations. Let's take an example from my recent experience. On an excursion to Thailand, not wanting to be out of touch with the office, I contacted Bell Mobility in an effort to divine a solution to the CDMA vs. GSM situation. I was informed of an existing service which would rent me a GSM phone with a number based out of the U.K. for about $100.00 a week. Great! I thought. The Bell rep told me I'd be able to forward my existing cell number to this new one and I'd be in business. Upon contacting the service however, the representative was less than enthusiastic about the prospects of this strategy's success. "Well... we don't guarantee that you'll receive any incoming calls..." was his response to my query in reference to the solution proposed by my guy at Bell. "So I might miss some calls — but I'll receive most right?" I asked "Well...that's Bell Canada's domain." In short, he was telling me the service was of no use whatever for the purpose I required — but would cost me $100.00 plus over $2.00 per minute for the privilege. If we can't even receive a simple cellular telephone call just because we happen to be in another country, what hopes do we have when attempting to negotiate more challenging obstacles?

The Internet, as standards driven as it is, still faces many difficulties which render solutions which exclusively leverage its facilities to deliver products and services prone to disaster. For starters, a prime exposure for e-commerce enabled web properties comes not from technology, but bureaucracy. Due to the "wild-west" mentality and jurisdictional conundrums which go hand-in-hand when it comes to conducting commerce on the ‘net, there are extremely few web properties which collect tax of any kind. Some countries, such as the US, have enacted legislation which provides for a tax collection exemption for web properties over a specified number of years. This is certain to end once a) the uproar from brick-and-mortar establishments over the unfair competitive advantages enjoyed by online vendors receives the attention it deserves and b) the governments can simply figure out how it should be done. Once this occurs, existing web properties must undertake an effort to include taxation provisions in their e-commerce systems... not a simple matter — surely costing millions and potentially driving those unprepared out of business.

These issues however, merely form the very tip of an enormous iceberg. Stay tuned for next month's continuation of this exploration of the real challenges to globalization business is facing in the 21st century.

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