Tuesday, April 12, 2005

Orkut Flaw

Orkut, the premier online social networking software, has a serious flaw. While trying to update my profile photo, I discovered that there was no way to delete the previous profile photo. The only way to change the picture was to upload a new one. Hence, replacing the older one.

So what happens to the old picture? Surely, implementing a delete algorithm is not difficult and requires a few lines of code. Clearly, it is far less expensive than other routines such as uploading a photo or managing communities. So why has orkut left out the delete facility from profile photos section?

I could, ofcourse, only come up with a cynical answer - orkut does not want to miss out on any data which could later be sold. So make sure you people only upload a photo that you know you could share with others. Apparently, if you do upload a non-sharable photo, you are up at a loss when you try to delete it.

Is it a bug or a deliberate move to archive all the data?

Tuesday, March 15, 2005

The Freedom of Information Act

The Freedom of Information Act is probably the biggest hindrance to e-government efforts in Pakistan. As of now, anything declared as classified by the federal government is considered out of bounds. Technically, this means each and every piece of information could be excluded from public scrutiny. It does not take a lawyer to figure out how such vague laws could be misused.

The e-government efforts seem like a mere icing on the cake to me. Even though they do not lack substance are generally being implemented using sound technological solutions, their implementation is still questionable -if not objectionable. For one, technology does not promise a 100 percent solution to our democratic woes. As technology rules go : it is 20 percent about the technology and 80 percent about the people and processes. Hence, we would not accomplish much if the same indifferent and callous attitudes are remained intact. Character building and personality rejuvenation are needed before any more investments in e-government solutions.


Tuesday, March 08, 2005

Corporate Blogging and Financial Treatment

Blogs are proving to be an excellent communications tool. By forging one-to-one relationships with customers, organizations have discovered a new medium to retain the customers. Organizational theories have confirmed that retention is more financially feasible than exploring newer ones. This is claim is backed by research and known to all executives.

Uusing a blog often signifies the redefinition of corporate strategies that are targeted at the customers. As such, some changes in financial statements are quite obvious. If a corporation does decide to use a blog to further its goals, should such proceedings be recorded as an expense (recorded in an income statement, or an asset (recorded in the balance sheet)?

Clearly, blogs provide some tangible as well as intangible benefits. Most tangible benefits (such as profit) are long term, while intangible benefits (goodwill, customer satisfaction, retention, valuable feedback for pennies) could usually be seen in shorter-terms. Note that the defintion of long and short term varies. For this post, readers could consider a period longer than a year as long term, and anything less as a short term. If these benefits could be realized, recording blogs as an investment in an asset seems obvious.

On the other hand, blogs incur expense. These expenses are usually rather insignificant - even less than the petty cash expenses in some cases.

To have a better idea of what I mean, please examine the following treatments. The first image is where the blog is recorded as an expense. The second image shows treatment as an asset.

It is clear that blogging should be treated, if at all, as an investment in an asset. It is an investment that paysoff in the long run. Whether it should be classified under current or fixed assets depends on how quick the blogging mechanism is at generating cash for the organization. Managers can still use conventional risk evaluation and feasibility techniques such as NPV, IRR or Payback Period to determine the relationship between the cost and the eventual ROI. In the case of blogs, the initial outlay is quite insignificant, unless equipment such as server machines and a custom-built blog software are purchased.

Note: If a business blog is setup by a sole propreitor (or a small partnership), it could also be recorded on the Statement of Owner's Equity - rather than an income statement or a balancesheet. This does not seem to be practical, however, in the case of corporations.

Whether blogging should be recorded as an expense or as an investment is largely a matter of choice for organizations. There is no fixed rule. Factors such as the organizational committment to technology, financial executives' knowledge of IT, IT department's willingness to convey the potential blogging benefits are just some of the many that may lead to the adoption of one method over the other. However, a blog is surely an investment. As such, the responsibility lies with the CIO and the IT department to proof this. Proving this would also lead to the justification for the IT department's existence and encourage more resource allocations to the department.

I would appreciate comments from all the readers about this post. Please do forward your suggestions, criticism (negative criticism is more than welcome), and any errors in the templates of the financial statements shown. Thank you.