Update Jan 2005

Making Cost Effective Software Purchasing Decisions

In recent months many shipping companies have taken an interest in purchasing software.The main driver has been TMSA while after this comes the somewhat greater availability of budget. It is interesting to consider why the availability of budget to buy e-mail facilities, laptops, mobile phones, internet connections and the like has not had to wait for a once in 20 years or once in 50 years charter market. The answer is probably that the benefits expected of these facilities was easier to accept and thus easier to assign budgets.But what is it about purchasing systems, maintenance schedulers, asset management systems, personnel systems, document management and co-ordination systems, that breed apprehension in maritime companies when it comes to buying, so that they need an all time boom to apply any budget? Is this the same in land-based only industries? Is there a factory without an equipment and inventory management system? Are there hotels without personnel management systems? The difference is the nature of the users in the marine business and the dispersed fleets. It is absolutely true that the challenge to apply software in shipping is greater than that in other industries. Specifically the challenge of usability and easy adoption is far greater in shipping. In the past shipping companies have approached software as if this usability challenge did not exist. The results were disappointing and thus the apprehension has spread, especially since the route cause was not widely understood. For those still wondering what the route cause of earlier software failures were, consider websites such as those for booking tickets online. They must be easy enough to use otherwise people will use a travel agency. However using a professional travel agent’s software facilities for booking a ticket would probably take days of training. The difference is that the occasional user needs a far more ergonomically sophisticated software package because he or she will never get sufficient exposure to get used to a conventional software package that would work for a travel agent. In the marine industry the master, chief engineer, chief officer, 2nd engineer, superintendents, quality managers and operators, are involved in so many other tasks besides information management that they are in need of the highest level of ergonomic sophistication in the software design.They need sophistication in how the software fits with what they are about to do. It needs to fit with their flow of thought and expectation, they need sophistication in removing confusing features designed for other users, they need seriously sophisticated configuration facilities to keep the system up to date, they need information without doing searches etc. Otherwise costs may well overcome the benefits. If an Internet ticket transaction took too long people would simply call the company to book it over the phone. This is what happens in shipping when reporting requirements are awkward; reports come in any shape or form, or none at all. It all comes down to cost versus benefit.In the following we summarise where the real issues of cost and benefit lie in maritime software.

A) HIDDEN COSTS

Software License Fees are less than a quarter of the total lifecycle cost. Software Lifecycle costs are listed below:

  1. License Fees: Cost of purchasing
  2. Data & Databases: Database population cost & data integration.
  3. Deployment: Installation and upgrade cost.
  4. Maintenance Fees: Annual service fee as a percentage of license fee
  5. Training: Cost of training users, initially and during lifecycle use, especially on board.
  6. Usage: Cost in time people spend handling the software in order to get value from it.
  7. In-house Maintenance: Cost in handling and in remedial action to correct usage errors.

The last 3 costs, which together constitute over 75% of the lifecycle cost, are directly related to how easy (usable) the software is to handle properly.

Lifecycle Cost: You want to eliminate it? Usability is the most important factor influencing costs. What to Consider?

B (i) TO ELIMINATE THEM WE MUST CONSIDER WHO IS THE USER

On Board  Users:On board crew are critical to many processes ashore, so make sure they like the software. The users at the beginning of the information supply chain in any process are the most important to satisfy otherwise you will get no data for the remaining steps in a process.
Multi Tasking Users V Clerical Users: Multi Tasking users such as managers, senior officers on board and other occasional users are the most difficult to satisfy because they have other priorities and cannot tolerate mediocre ergonomics. Dedicated users such as accountants are the least troublesome because they get lots of practice, have low turnover and have few greater priorities than to populate and use the system properly.

(ii) SO, WHAT WE MEAN BY USABILITY IN SHIPPING SOFTWARE?

  • EASY TO ADOPT / FAMILIARIZATION
  •  EASY TO USE / PRODUCTIVITY
  • DEGREE OF USE / RELIABILITY - COMPLIANCE
     

(iii) TASK ORIENTATION IS THE PREREQUISITE FOR USABILITY IN AN ENTERPRISE SYSTEM.

  • Task Orientation is the availability of adaptation facilities within the software that ensure software functionality precisely suited to each user and each users specific step in a process.
  • Unlike conventional software, which expects users to substantially memorise the navigational entire layout of the product so as to link the steps to completion of a process, Ulysses software using highly configurable Task Orientation, matches the navigational layout to the way each role/user thinks through a task or step in a process. This saves valuable time and preoccupation for multi tasking employees, which is by far the most costly expenditure in software lifecycle costs, while offering the highest level of process control.
  •  

C) LETS GO BACK WHERE WE STARTED:

The effect Of Usability on LIFECYCLE COSTS

  • 1. Training Costs: Differences in training costs between software packages can typically be equal to the entire license cost or $2000 per vessel per year.
  • 2. Configuration Cost: Allowing designated non-specialist personnel to understand configure and improve the configuration.
  • Very different between two systems. Can typically equal half the license cost or $1000 per vessel per year.
  • 3. Annual Maintenance cost for error correction: Understood and maintained by the customer side information systems people. The difference: $2000 per vessel per year.
  • 4. Annual Usage cost: The highest cost over the life of the software. Huge affect on transaction time and therefore usage loss. Can range from 5 to 10 times license cost or $10,000 to $20,000 per vessel per year.
     

D) CONFIGURATION AUTONOMY: SOFTWARE INCLUDES CONFIGURATION FACILITY.

A tremendously large part of software product development lies within the facilities of configuring a standard product to comply with company Structure (departments & roles), & Data (ships particulars, crew particulars, fleet breakdowns etc). A well-designed product has easy to use and easy to understand configuration means that can be operation to a very extensive degree by non IT specialist client personnel. Doing this work without reliance on vendors is a tremendous logistic aid to the success of software. The ability to eliminate middlemen in the initial or refining stages of configuration is paramount to maintaining an up to date and credible information base which in turn is essential to success. A marine software system with rudimentary configuration facilities will likely be as successful as a bulk carrier without in built facilities for machinery overhaul.