Update Dec 2002

How Do We Buy Software Today?

Background
There are many ways to manage information electronically on board and ashore. Today, you can find numerous designs of Document Management Systems, Planned Maintenance Systems and designs of Purchasing etc.

Do companies have such diverse goals that they each need to manage information differently? There answer would be ship operators don't work that differently, however to exercise their competitive edge this becomes a key factor. So how does this relate to information technology?

Common goals of ship operating companies
To use information as competitive a tool

Common differences between ship operating companies
The use of information as competitive tool

Maybe we are being too simplistic however, in essence most tools are bought to make us more competitive. We may all use the same tool, however this does not mean we all achieve the same results, as we know with violin players. Therefore, if the goal is ultimately the same, why do companies settle for different systems?

Are information systems a discretionary purchase like clothes? Surely not. Nothing fancy, exciting or inspiring about a software system. It's not soft, you can't wear it, and when you look at the screen it makes your face paler, reversing the benefit of quality time spent in the outdoors. The answer in our opinion is there are differences in perception of how to manage information so as to enhance competitive edge.

Differences in perception
Software provides us control of information: Absolutely correct. However, we must be sure that this is not just a promise. If we buy software and we still don't have control, how good is that?

Software is a necessity that comes with the modern enterprise: True. However, unless we recognize the benefits and measure whether we have achieved them we are likely to expend time, money and corporate cohesion.

Software is a necessary evil: Correct again. It can be evil and more necessary than some people imagine. The trick is to avoid the evil by avoiding the hard lessons learnt by others.

Software has a long way to go before it is mature
A true statement. One must start by looking at the most stable and enduring aspect of the software. People and the enterprise are the most enduring part of the information system, not the buttons, controls, and software features. The people will function in a similar way for a long time to come as regards how they think, remember and work intuitively.

A successful business needs to make money and save money. First priority therefore is to evaluate the business value of what an information system can provide. As for progress, this is fairly irrelevant in the technology industry. Do banks and airlines have the latest software? All one must do is anticipate when the software industry is ready to make another quantum step to solve another stubborn business problem. What is required in the shipping industry is a different criterion. We need real business benefits, endorsed and scrutinized by real users, as the banks would do.

Bad software can be worse than no software and by a huge margin
Again a true statement. Primarily it is disruptive in the way it affects many users, while software total cost is several times more than license costs. Less important reasons are many, for example, it' s easier to read a hard copy manual than one viewed on a computer screen, unless having an electronic manual offers considerable benefits and a few important features.

By reducing the lifecycle costs such as cost of training and cost of user errors is at least twice as important as worrying about license costs. Software is unlikely to be easy to use or easy to populate if it is bad software. Why? Because bad software still has to win the competitive bid on price and features. Price and features will be fine, however the reality that is found out later, will be of less quality. Two days spent re-organising data on board or ashore following damage caused by handling errors can ultimately prove more costly than the software license itself. Training crew to use difficult software, again can cost several times the license price.

A software purchase is like any other, you get quotes and you compare features
Correct. However, there are approximately 200 major features in a typical module, as there can be hundreds of major features in the specification of a ship. This in turn causes the bidding process to be laborious both in time and effort, therefore only 3 alternatives are usually considered. The bid is mainly won on price and specification features. Would you buy a ship by comparing specifications and price? Yes. However, yard reputation would be paramount and reputation is paramount for software. There is a small added wrinkle, software features, like ships features, may be available for 20 years before they actually succeed in consummating the business benefit they promise. Did mechanically operated hatch covers succeed in keeping cargo dry in the 1960s? In the 1970s? In the 1980?. Well they started to be quite efficient in the eighties. Before that, you were better off with tarpaulins if dryness was your aim, and "tons per square meter on the hatches" was less important to you.

For a more high tech example, not even word processing succeeded in improving the productivity of typing pools for many years. Certainly it made a greater number of less skilled people write better, but the word processor did not actually provide bottom line productivity benefits until later designs.

Today, we provide up to 4 major software applications for people to use on board. Do they use them properly? Do we have a tough time getting the software populated? Do we have problems getting the reporting we want? Do we get consistently good results from a variety of users?

Regardless of how reputable the software vendor, or hatch cover vendor for that matter, some solutions work badly for years until the design improves. There are many other perceptions that we can analyse, but is there a thread through all of this? Yes there is, in our opinion:

What to ask other users
When you ask other users of a software system if they are happy with their purchase, ask them more specific questions, as you might do about hatch covers. E.g. do they leak in the corners? Do the rubber seals end up like wooden seals? Do you need a fitter onboard to work on them continuously, does the term OBO in the context of hatch covers affect your sleeping habits? Are you a Platinum club client of the Ram Nek Corporation. After asking such questions you may find that one of the vendors you are talking to produces a side rolling or folding type cover that has none of these problems.

As with hatch covers, software can work, but you may be working more than you need to work, to make it work.

This extra work is at corporate head quarters as well as all the other offices and ships. Sending people from a low cost center to fix the problem does not make amends with the corporate folks who have been working to fix things for themselves for some time.

Questions for experienced users of a Quality System or Document Management System

  • How may forms do they handle on board before running into confusion about which form to fill for which job?
  • Can you refer to the readings on a dada form so as to respond to an e-mail, or is that a conscious effort. Is it better to recall the reading that you read when the form arrived?
  • Will the readers of your e-mail have to retrieve the form? Will they have the time?
  • Do the engineers on board find those technicians reports from 9 months ago or is that something they can do only when they have finished all their other urgent duties?
  • Do users prefer to use the forms in your system or would they rather use paper forms or e-mail to communicate?
  • Can you show your fleet manager or financial officer that you save about $70,000 per vessel per year using your document management system?
  • What are the salary levels of senior people who use the system and what is the opportunity cost of their time when learning to use the system?
  • If the system is used to assist in procedural compliance, how do you measure the results of this system compared to a paper system?
  • Do they actually use a paper system on board (printouts) and therefore circulate uncontrolled documents? This is often the case because manuals are not something easy to read on a computer unless you are reading at the most one paragraph at a time and more importantly the time when you are paying attention to that particular subject.
  • Do your clients or vetting inspectors ask you to show how you achieve continuous improvement through your SMS system?
  • Do they ask the crew questions about procedures in the manuals and then read them to check if the crew is aware, especially of changes?
  • If you are operating over 25 vessels and therefore you are not personally related to most of your crew base, do you worry that the procedures written in the electronic manuals may not actually succeed in keeping your crew aware of what has been written in your SMS system?
  • Is compliance with company procedures a goal you ever contemplated when you implemented an electronic document management system?

PMS system, Purchasing system, Crewing system

  • Is it populated yet?
  • Do new recruits need to be trained on the software or can you succeed without classroom training or sending the company software expert on board?
  • Is it deployed yet?
  • Do crews find it easy to use?
  • Can the users on bard and ashore work out who does what in for example requisition approvals and workflow, or is the workflow something only the software expert understands?
  • Do you worry about it as much as you worry about other expenses of $2000 per year per vessel, or do you find its easier to monitor other expenditures of this magnitude, such as a coat of paint on deck (excluding preparation)?

To conclude:
Software may work very well or it may work as well as some of those hatch covers on a mid seventies OBO, or a mid seventies multi purpose vessel. Luckily it costs less to change software, probably less than 2 coats of paint on the topsides of your fleet, (without surface preparation or at least not more than a fresh water wash).