IT Opportunities due to the weaker Dollar

The dollar, currently valued at about two-thirds of a Euro, has been continuing on this trend for the last two years. With future interest rate cuts all but inevitable, and the likelihood of interest rate increases or holding steady in Europe in the near future, this trend is likely to continue.

From the Economist:
The ECB is managing an economy that has relied much less heavily on rising house prices to fuel consumption. As Jean-Claude Trichet, the ECB’s president, made clear, the main worry is about higher inflation, which is currently at 3.0%, well above the target of a bit below 2%, rather than lower growth.

The cheap dollar brings about a number of arbitrage opportunities, since goods and services produced in the US, but consumed in Europe are likely to be significantly cheaper. Retailers and the tourism industry in the US have already seen this trend, and opportunities for technology goods and services cannot be far behind.

S-as-S and Web 2.0 markets

Web-based services developed and hosted in the US may have significant cost advantages over European counterparts. Building in multiple language and multiple currency support early should be a key priority for most S-as-S companies because of easier monetization opportunities.

IT equipment

While large semiconductor plants like the one built by AMD in Dresden employ 2,000, labor costs account only for a fraction of operating expenses. However, other costs - including transportation and other costs may make large projects like this unviable if their primary market is outside Europe. More companies are likely to build manufacturing plants in the US because it may now make economic sense to do so.

Outsourced IT Services

IT and BPO outsourcing firms are likely to face pressure in face of rising salary costs in emerging economies and lower revenues due to a weaker dollar. For companies considering or using outsourced IT services, increased prices or lower quality of services are inevitable.

For application development, processes like LEAN and Scrum help projects move forward faster, but aren't geared towards geographically distributed teams. ALM tools (ECF, Microsoft Team System, Serena) and application frameworks (.Net 3.5, Django) drastically improve software developer productivity. In many cases, it may therefore make more economic sense to develop software locally rather than using offshore teams.

Voice recognition and self-service technologies have also developed significantly and are widely used by many large firms, and while not as personal, may be an adequate replacement for Tier 1 offshore call-centers. Canadian firms may also find it easier to outsource IT work to the US.

Customers

European and Asian customers in emerging markets, who are used to paying significantly higher prices for technology products and services, may find services from US firms (particularly S-as-S) cheaper and more customer-friendly. It may also be difficult for internet firms to geographically segment customers.

While the falling dollar may mean some increased costs for some, many opportunities like the ones mentioned exist for firms seeking to exploit such opportunities. While arbitrage opportunities exist in exports from the US to Canada, Europe and Asia, the Pound is also likely to depreciate against world currencies due to lowering of interest rates fueled by the deflating housing bubble there.

TCO for software implementation projects

Understanding factors contributing to high TCO's for software projects and helping customers eliminate these adverse factors will enable ISVs and their channel partners to create and capture additional value.

Lengthy RFP Process: Complex RFP processes that drag along for months are expensive and erode value of projects and increase TCO.

Causes of delay: complex licensing structures, lack of clear list of capabilities,  perceived execution risk, cost of implementation

Implementation Costs: Professional services, which are complementary to software, in the same way as mortgages and houses, or hot dogs and mustard, account for a significant portion of the cost of the project. Remote customization and implementation templates provide the promise of reducing implementation costs. Reducing the cost of complements with automated migration solutions and help ISV's capture more of the value created, albeit at the expense of the party providing a less automated migration service. Automated migration solutions also eliminate switching costs that an incumbent may have built to retain some competitive advantage.

Causes: Migration/Rollout costs, complex dependencies between software - impact is usually broad; training and learning curves for corp IT developers and end users.  

Costs of "Lights On" Operation: Periodic maintenance expenses, if not automated require systems administrators and increase chances of failure in systems when they are least expected. Periodic maintenance also has to be scheduled to fit into enterprise change management windows. 

Non-Profit websites

About 6 months ago, I was looking for alternatives to a poorly designed and rather unmaintainable shtml web site for a non-profit I am deeply involved with. Seattle Youth Garden Works has an annual operating budget of about $450,000, and after a restructuring, I volunteered to maintain the web site.

The CMS.

I decided on Drupal after evaluating a few Open Source and proprietary content management systems. Joomla was a close second, and I chose Drupal because

1. Already established in the non-profit world.
2. Had plugins that I needed.
3. Other research regarding future support etc.(IBM, forums)
4. The ability to add blogs, forums etc if necessary.

If you are looking for alternatives, Joomla, Magnolia or DotnetNuke are all good CMS choices depending on your comfort or choice of application stack.

The host.

Dreamhost, a widely popular hosting service is large enough to have professional support available 24x7, and has a user community that helps you solve most problems before going to technical support.

They provide free hosting for non-profits - which is an absolutely sweet deal, and they are carbon-neutral - which many of our donors like.

They also support PHP/MySQL and provide root access for their non-profit account - a very useful feature. My only gripe is that MySql queries on Dreamhost are rather slow.

The Modules

I recommend using Drupal 5.0 because most commonly used modules exist for this version. I used a number of modules including Event, Volunteer Timeslots and FCKEditor to enable employees to make changes to the website directly without having to request a webmaster. Contact me if you are looking for a list of modules to install along with a Drupal installation for your non-profit.

The Result

Check out the website to see what it looks like.

The Next Steps

It would be a useful feature to have donors commit to and donate online. Although CiviCRM integrates well with Drupal, changing donor management software is disruptive and may adversely affect fundraising activity. Enabling social networking feature for volunteer management would also be a cool feature, and would ensure a more engaged group of volunteers.