This article was published on 6th November 2009 in the Ceylon Daily News, and subsiquently on 22nd November 2009 in the Lakbima News, and on the 15th November 2009 in the The Nation newspaper.
Sri Lanka has been a pioneer in computerization in the region and we have spent heavily on computer hardware and software, but the productivity of these heavy investments have become questionable in comparison with our nabours. Most of the public sector institutions have not used computers as a tool to drive their functions effectively and would have been purposly neglected to maintain a comfort zone for the bribery and curruption at these institutions.
“Almost all Sri Lankan institutions have considerably invested in IT hardware and software. But only a few sectors such as banking and apparels have achieved their competitive advantage via computerization”
Sri Lanka has been a pioneer in using information technology in our region. We have been heavy users of computer for the past 40-50 years. The government passed a special act in 1962 and invited IBM to establish their local branch to improve the data processing function of the insurance corporation.
Many leading government institutions such as the Ceylon Petroleum Corporation, Insurance Corporation, Department of Census and Statistics, and Department of Examinations purchased IBM accounting machines in 1960s and upgraded to IBM System-36 mainframe computers from 1970s. After 1977, many new players entered the market and computer usage increased at a rapid pace in Sri Lanka.
In today’s context, a personal computer has become basic household equipment, a laptop is an essential requirement for almost all executives, and enormous amounts are spent on upgrading computer systems.
Office automation and ERP(enterprise Resource Planning) have become popular fancy terms used by mangers in many establishments.
Almost all our executives are allocated with personal computers on their tables. Thus it is important to find out whether we are really using our information Technology (IT) to its optimum benefit.
The important questions to be asked are:
- Are we using the computer as a management tool?
- Can you rely on your computer system for all your IT needs?
- Are you maintaining a parallel manual system in addition to your ERP?
- Has it improved the service quality of your business?
- Can your computer provide timely and accurate information for decision making?
- Have you reduced your staff cost after computerization?
- Has it eliminated non-value adding activities in your business processes and also reduced the work –load of your staff?
From our experience we all know the answer for above questions. Further most our important institutions cannot provide a good customer service due to their limitations/non availability of computer systems. Some of them are as follows:
Department of Inland Revenue (DIR) – many tax payers are having difficulties in reconciling their tax liability with DIR computer records. Due to non-availability of integrated computer systems, DIR is unable to access the taxable earnings from different sources. There had been many delays in resolving taxpayer disputes due to non-availability of timely information.
Land Registry- Manually updated ledger binders are used to register land title deeds. Adequate inbuilt controls are not being introduced to minimize errors in updating land registries. Manual procedures are being applied in title deed registration and it is a time consuming process. The only evidence on deed registration is the confirmation sent by the Land Registry and the deed owner has to presume that it is properly registered in Land Registry.
Municipal societies- Manually updated binders use to record municipality rates and others municipal taxes. Survey plans are registered manually and taxpayers face problems in obtaining non-vesting and street line certificates. Integrated software with the Land Registry could resolve most of the limitations.
Police Department- Manual processes are being followed in executing motor traffic offences and these procedures cause some delays. For example a motorist from Colombo may commit a traffic offence in Kataragama and relevant fines will be imposed by police officials and money has to be paid to the Kataragama Post Office and the dispute needs to be settled at Kataragama Police Station.
If it is a holiday, this motorist has to do another additional trip to Kataragama for this settlement.
The Judiciary System – Almost all documentation work in courts are done manually and it delays the dispute resolution process. Recording judgments in court day-books are done manually; sometimes the plaintiff has to file the same evidence repeatedly. Time-consuming litigation process has become an unbearable cost to the society.
Government departments- Some government institutions still follow 18th century manual procedures introduced from the colonial era in executing and recording transactions. Issuing receipts, and offering customer services, and some still use large ledger binders to record transactions.
But at the same time some have heavily invested in computer hardware and software the real productive usage of IT investment has become a big question mark.
Almost all Sri Lankan institutions have considerably invested in IT hardware and software. But only few sectors such as baking and apparel have achieved their competitive advantage via computerization. However, most of the other sectors have not adequately derived their required ROI (return on investment) from investments in information technology.
Proper feasibility studies have not been carried out in most of hardware installations and computer hardware has not been utilized for their optimum level and mostly they are heavily under-utilized. Further, business processes were not analyzed and the involvement of operational staff was not considered before introducing new computer software.
Certain software vendors have not spent adequate time in studying client’s business processes to tailor the software to meet their specific needs.
In contrast, they market their software as products with ‘Best-Practices’ and insist that the client should change their business processes to meet package requirements. Thus, the operational staff have to use a parallel manual system in addition to their software. Due to these reasons, some institutions could not reduce staff even after computerization. ERP is a packaged business software system that process transactions on a single software platform and a single source of data. Managers’ general perception is that ERP could solve all limitations in business processes and it can be treated as “the medicine for all illnesses”.
Therefore companies have heavily invested in ERP, but most of them were unable to improve their efficiency of business processes and also, have not become competitive in the market. Many studies point out that 40 percent to 60 percent of ERP implementations failed to meet expectations.
Well-known causes for ERP miseries are as follows; lack of top management commitment, poor understanding, inadequate resources, poor ERP package selection, unrealistic time frame expectations, inadequate training, and internal resistance (professor Terrance Perera 2008).
Further, certain managers and executives have not given up their secretaries even after receiving laptops and personal computers. A secretary and a laptop have become entitlements for senior management grades.
Compared to us, India is a late entrant to the IT industry, but its IT vision appeared to be more focused than Sri Lanka. Indians have achieved world-class standards in IT training education and software development. Also India is world famous for IT professionals, software companies such as Infosys Business Consulting/IT services develops software to US and European countries. IT usage in India is very effective, India has become a hub for Business Process Outsourcing (BPO) and even Indian housewives are involved in downloading information from companies in other countries and process their back-office operations.
Delhi has become the capitol of call-center operations, and also, IT is effectively used even in small restaurants and their stewards use iPod (palm top) to get customer orders and they have on- line access to kitchen order tickets, bar orders and the customer’s master bill. The Bangalore City became known as the Silicon Valley in India and US IT giant Microsoft has made US$ 1.7 billion IT investments in India.
I humbly propose following recommendations to our IT industry.
- IT education and training institutions must understand the country’s needs and develop professionals to meet market challenges.
- Our institutions must formulate prudent IT visions follow –up with IT strategies of practical nature.
- The commitment of senior management and the involvement of operational staff are essential in IT investments.
- IT investments should not be merely a profitable business for the vendor, but also, it should give the required competitive edge to the user’s business.
- Integrated software connecting different databases/ a centralized database of government institutions will improve the efficiency of public sector decisions.
- E.g.: (a) The Police Department should be able to accomplish their investigations on Motor Traffic Offence from any locality, if they are provided with an integrated software connecting RMV-database (information on vehicle registration and drivers licenses), and NIC information, and also a database on previous motor traffic offences. This is a common facility available in most of the developed countries. Police officers can retrieve the required information pertaining to motor traffic offences from the computer system installed in their vehicle.
- The Department of Inland Revenue could improve its efficiency from similar integrated software connecting RMV, Land Registry, and Immigration databases.