Has New Zealand turned an ICT corner? Michael Foley looks at the signs and considers the road ahead.It’s sometime in the year 2015. We’re gathered at the 14th Annual Digital Strategy Summit hosted by the Connected New Zealand Foundation, the custodian of the New Zealand’s Digital Strategy.From the outside, New Zealand doesn’t look a whole lot different. Still (mostly) clean and green, lots of sheep and MMP still prevails despite efforts of the two-term National-led government to get a mandate from the electorate to revert to FPP.But things are different. Fundamentally different. We have a leaner, slicker public sector. Agencies work smart together to deliver public good outcomes, sharing core services and infrastructure while retaining their raison d’etre and focus on the needs of the constituency. Taxes are lower. Hospital waiting lists are shorter and we’re seeing an increase in community healthcare providers accessing specialist expertise and services through a network-connected health sector that has, under National, thrown off the shackles of self-perceived uniqueness that imbued the DHBs for so long and undermined efforts to work smarter for the benefit of patients.There is a fast growing base of weightless industry – development of ideas, research and concepts for a content-hungry world. Delivery of services to a global market. Services proven in a Kiwi test-bed at the bottom of the world.New Zealand ranks seventh in the OECD broadband standings, and second equal in terms of uptake. Fibre optic is now the primary connectivity medium, even in rural areas where enterprising communities have rolled up their sleeves and got on with the job of ‘helping themselves’.There aren’t telcos as we used to know them. Telecom is gone as an entity, but lives on strongly in new forms. Telstra’s Kiwi experiment finally got too hard and in a triumph of logic over egos, Vodafone and the TelstraClear merged then restructured into operating units more suited to slugging it out with the old incumbent in the service delivery battleground. IBM, HPEDS (yes, that marriage of strange bed-fellows went ahead), Datacom, Unisys and a raft of other traditional IT providers now play in the challenging layer that turns raw ICT capability into usable services for end-users. Open source is mainstream. Smart techie expats who fled our shores for greener pastures in their droves in the ’90s through 2008 are steadily streaming back, lured by the opportunity to viably establish niche ICT service development businesses able to access national and global markets from lifestyle locations. Real broadband (not the ‘fraudband’ we were used to for so long) has underpinned that tide reversal.David Cunliffe is back after six years on the opposition bench. Not only is he as fired up as ever to see a digitally-powered New Zealand take on the world, but as Leader he has made this the central policy plank of the sixth Labour government’s drive to propel the country out of it’s culture of dependency.As we look to the future we reflect on the year that heralded the turnaround. A defining year for New Zealand’s economy and for the long-term outlook for our people. The year the ‘digital revolution’ in our everyday lives finally dawned on the national psyche and we started taking this stuff seriously. The year was 2008. Agents of changeA bit of tongue-in-cheek speculation on where we might be in seven years perhaps, but there’s a whole lot about this year that defines it as a key change point: a bunch of diverse but interrelated factors that have customers and service providers alike working out their own answers to the question “What does this mean for me/my organisation and the country?” Let’s take a look at some of the biggies.Broadband and election yearIt’s not often we feel inclined to thank the Aussies for anything, but in the case of broadband we quite possibly should. The Rudd-led Labor Party swept to power on a platform that included a massive broadband infrastructure investment. So close to home, and against the backdrop of the New Zealand Labour government’s sweeping regulatory reforms culminating in the operational separation of Telecom, it is small wonder that broadband became an election issue in this country. And that has made it mainstream for an increasing number of New Zealanders.The detailed policy positions of the two main parties are actually of secondary importance. The big step forward is both openly acknowledge that effective high-speed broadband network infrastructure is a cornerstone of broad-based economic transformation and that the supplier community is unable to adequately provide that in a manner that is in the national interest. The result? There will continue to be near unanimous support in parliament for measures that:A.    encourage investment in new infrastructure,B.    prevent that investment from being cornered by any dominant telco provider or providers, andC.    enable healthy and vigorous competition at the layer that delivers services to end users, business and consumer.Capability will improve on the back of better infrastructure with a steadily greater footprint. Price and performance – the measure of what you get for your buck – will improve year on year as the effects of real competition bed in and technology capability continues to march inexorably forward.So whether there is a change of government or not in November, and current polling seems to suggest that is likely, the course has been plotted. Election year is traditionally characterised by a slow-down in decision-making. This year doesn’t have that feel about it in terms of ICT. Public sector ICTIt is a fact that the size of the public sector has increased significantly in recent years. Whatever the reasons, it seems clear from a variety of indices that bigger is not necessarily better when it comes to delivery of public value.The current government is already making moves to do things smarter in the public sector – particularly in respect of the leverage of ICT capability. The government’s backing of the Government Shared Network and its more recent State Sector Broadband Demand Aggregation initiative are examples of that emerging drive.A change of government will likely only see an acceleration of initiatives that position public sector agencies to leverage the scale of the State to influence the provision of ICT capability, and use that capability to work smarter in the delivery of services to the public.This will be particularly evident in the high consumption areas of health, education and social services where finite resources need to be channelled as effectively as possible into direct outcomes for constituents.The establishment of a Government CIO is a great move and one that will increasingly, through the functions scoped in that office, see a more strategic approach being adopted to the smart leverage of ICT capability across the public sector. Many of these models will have application in the private sector where smart (that word again…) approaches will increasingly be required to address industry issues such as the next on the ‘biggies’ list. ICT skills shortageIt will be obvious already to any reader of IT Brief that New Zealand is suffering an acute skills shortage in the ICT arena. And this is at a time when:*    the ICT industry substrate is changing fundamentally,*    technological advances continue on a steep trajectory, and *    organisations are facing market conditions that, if not recessionary, are at best constraining.This is the sort of environment that demands a focus on new approaches to better leverage the market conditions and mitigate risks presented by them. That all adds up to a demand for good skills and experience. People who can think laterally with the benefit of experience, and people who can make things happen.And if that’s not enough, all this money that looks like getting biffed around by the BIF (Broadband Investment Fund) and public/private investment vehicles on broadband infrastructure is going to need a home. Current assessments predict we would not be able to physically spend all the National Party’s $1.5b of promised broadband funding, plus the private sector’s one-for-one contribution in the five-year window contemplated. There aren’t enough people who know how to bury fibre optic cables in the ground! The skills shortfall is due to two main factors.Firstly, the pool has been depleted because we have not focused sufficient attention on promoting ICT as a desirable career choice for our young people. There are simply not enough people coming in at the bottom layer. Our professional bodies and associations have noticeably weakened in the past 10 years or so. And the ICT focus in our education system has appeared (to one with kids recently through their secondary schooling) to be more on ‘how to use’ skills than on serious consideration of ICT as a career.To add insult to injury, this already depleted skills base is further eroded by a continuing exodus to offshore markets. As a country, we haven’t taken ICT seriously as an enabler of economic development until pretty much right now. That has manifested in poor infrastructure, limited opportunity to innovate and, relatively speaking, low remuneration potential.Telecom separationThere’s been plenty of publicity and hype over the operational separation of Telecom. Many mistakenly believe that with the passing of Separation Day on 31 March, the job was done.While there are a number of areas where the implications of this fundamental change in the modus operandi of our biggest, and by definition most nationally important, telecommunications services provider are becoming clearer, I’ll focus in on just one that concerns particularly tier one organisations.The principle of ‘equivalence of inputs’ is a cornerstone of the separation regime. It means that the ‘raw materials’ provided by Telecom’s wholesale arm to both Telecom itself (including the business services arm Gen-i) and other service providers must be provided on identical terms – both service standards and price. This enables those service providers – including Telecom’s – to innovate at the level of services wrapped around these raw inputs.At the tier one enterprise layer, we have become accustomed to negotiating customised service standards with service providers. This is an important assessment criteria when evaluating the merits of competing telecommunications services proposals. There would appear to be a real risk that Telecom’s ability to deliver such tailoring of service standards as a differentiator may be undermined by equivalence. This is not a constraint faced by other service providers that have their own infrastructure.On the face of it this would appear to be an unintended consequence of an otherwise desirable regime, and one that enterprises would do well to explore the implications of in their individual contexts. The messages in thisWe have a bit of a saying at Voco: “When the rules are changing, change the rules.”In a national sense, we really are on the cusp of change. We’re emerging from a supply environment characterised by a “this is what we sell, therefore this is what you’ll buy” culture where suppliers made the rules. We’re now getting into a space where the balance of power is shifting steadily towards the customer. But you have to claim that territory.Stand back and have a really good look at what’s happening out there. Give some serious consideration to the directions being taken in the public sector to work out how you can use the factors to your advantage, and to the country’s advantage. The two are fundamentally linked.Get involved with the industry. The newly constituted Digital Development Forum and Council would be a good starting point. Despite all the debate over form and structure, this looks as good a bet for joining the policy makers up with where the rubber hits the road and its outcomes will only be as good as what customers and suppliers put into it. Specifically, industry needs to get its collective act together to reverse the skills drain that will undermine all other advances in ICT-enabled economy. If the DDF/DDC addresses itself successfully to nothing but this, it will have created a legacy of extraordinary national value.In the telecommunications space specifically, don’t be too quick to jump into what look like really attractive deals offered by the traditional telcos. We’re into the second or third rounds for big enterprise contestable sourcing processes, so there should no longer be any illusions about the colour of the grass that skirts the fences. Give careful consideration to the implications of the separation of Telecom for your sourcing outcomes – the consequences, both intended and unintended, in terms of cost, flexibility and service standards are only beginning to emerge from the mist. Look at how crafting and owning your service management architecture can open opportunities for you to access a fast-developing ‘whole-of-market’ capability and turn it into relevant business capability for your organisation.Adopt some healthy scepticism and get on the front foot to challenge assertions that an ‘n-year deal’ is in your best interests. Despite my light-hearted punt, I’m not sure I’ll be putting too much money on what the world will look like in 2015!But the bottom line is that as a nation, we do need to be thinking long term about where the world will be and what we want New Zealand’s place in it to look like. We need a national vision to give context to our digital aspirations, and developing that is the job of all of us.