Pragmatic provision

Difficult economic times are forcing ports to sweat assets like never before and cash-strapped IT departments are being asked to look at what they already have and make better use of it, with strict financial prudence governing all new purchases.

Associated British Ports' policy is to buy off-the-shelf software packages wherever possible. Eddy Hooper, group IT manager, says commercial software undergoes constant development and tends to be bug free. Only where nothing suitable off-the-shelf is available will ABP pursue a bespoke option.

An example is when ABP began an import-export new vehicles operation for a major European manufacturer. It had to provide substantial feedback to the customer, so a software development company was commissioned to produce the specialist software needed.

“We might have been able to adapt some existing packages, but we don't retain the kind of IT resources in-house to undertake what can be prolonged development in order to get things right,” says Mr Hooper.

He concedes that commercial packages often contain additional functions that the group will probably never use, but points out that most software houses offer a modular approach, which means that the core product can easily be customised to meet the group's needs.

Before procuring new software, a “requirement catalogue” is put together, listing those functions that are definitely wanted; those that are desirable but not absolutely necessary; and those that, in an ideal world, would also be included. These are then prioritised in an invitation to tender document. Any responses are score-carded, with perhaps two supplies invited to do a workshop to determine whether their offer matches up to the original requirements.

“If the software meets our needs and gives value for money, we then acquire it. Our policy is to be highly conservative; we leverage as much value as possible from installed systems before discarding them. However, we do upgrade existing software to be as current as possible. We want proven solutions that meet the needs of the business, whilst being stable and reliable. Upgrading can involve significant testing to make sure things work and that can be time consuming.

“While there are definitely benefits to acquiring new hardware and software, operators have to pay significant attention to amending the processes that the software and hardware is meant to support. Staff may not always exploit new features and functionality correctly. Instead, they will often continue to apply established processes when using the new software and then find it doesn't work as they envisaged. So, introducing new software can require a radical revamp of processes, too.”

Before replacing a piece of existing software, ABP looks at various factors first. In the case of legacy software, it may be that platforms used to run it are now defunct or are no longer supported. New statutory changes can also make existing software obsolete.

And an initial business justification is required prior to any new acquisition. “New software must either reduce costs, increase revenue or reduce business risk; otherwise, it may help compliance with a new statutory requirement. In addition, a customer may well demand it. In that case an inter-reliance between terminal and customer develops, resulting in a modest tie in.”

Even a software purchase to realise new business opportunities has to be closely looked at. The Port of Cardiff, for example, recently attracted new export steel products traffic, involving the use of RFID tags and bar code reading as part of a warehousing function. New IT investment was considered, but an existing package used for third party warehousing eventually proved adaptable.

At the Port of Tyne, the UK's leading port trust, consultant Waterston was brought in to undertake a review of its existing IT provision. The port had a number of disparate legacy systems in place, many of which were working well. However, the subsequent review of the port's IT strategy provided an opportunity to re-examine these objectively and look for opportunities to update and rationalise what was in use.

According to Waterstons director Sally Waterston, the Port of Tyne recognised that the successful use of their IT provision could enable it to add value and contribute to the success of the organisation, helping it achieve its aim of 'creating a vibrant and sustainable Port'.

She points out that, on the whole, ports are an amalgam of many disparate functions: warehousing, stevedoring, port management, stock control, asset management, QHSE (quality, health, safety, environment) and finance. These functions require specialist systems which need to talk to each other and share critical information. In the case of Port of Tyne, it had been formed from the merger of a number of other businesses, so some of these applications were replicated and there was a case for rationalisation.

“The main technological challenge Waterstons faced came in facilitating integration between the different business applications. Some of the systems needed to be esoteric and designed specifically for operation in ports,” she explains.

Asked whether it was a question of changing hardware or software or both, she explains that the Port put no barriers or constraints on ideas and recommendations, with the exception that a return on investment had to be demonstrated for each project. Waterstons therefore made recommendations for investment in both hardware and software, as well as suggestions regarding process improvement and identifying areas for potential re-engineering.

The eventual IT strategy included several large projects, as well as a number of quick win tasks which could be accomplished using existing tools and systems already in place at the Port. The quick wins, says Ms Waterston, support the long term recommendations made, ensuring that both the financial and time investments made will continue to add value to the Port.

“In order to gain a thorough understanding of the Port’s operations, we spent a great deal of time interviewing key users and running workshops. A business strategy review and process mapping of current operations and applications was carried out, with Waterstons working with the Port to identify areas with opportunity for improvement and defining key performance indicators, which could be used to measure success going forward,” she notes, adding that further time was spent researching different options in terms of suitable software and technology.

One key recommendation, which has already made an impact, is the formation of an IT steering group, the role of which is to examine and prioritise all potential projects and measure return on investment. This group will be made up of a cross section of senior managers.

“I want to stress that that Port already had in place a competent and efficient IT department who were enthusiastic about potential change. Our task there was not one of fixing problems," says Ms Waterston. "Port of Tyne has grown considerably and has gone through a number of changes in recent years and strongly believes IT can play an important role in helping to achieve its aims and objectives.”