ICT-NZ – Discussion Paper for Council Meeting of 13 October 2006

Background

InternetNZ had discussed the potential of facilitating the establishment of an umbrella organization for ICT bodies, with its primary aims to encourage collaboration between industry groups, and to avoid collisions of events.

The discussions lead to InternetNZ attempting to establish the umbrella organization “ICTUS”, and Jim Higgins was contracted to assist. A web site was launched in late 2004 for this purpose. Details at:

www.internetnz.net.nz/about/news/040922-ICTUS-launch.html

A simultaneous stream, lead by Government, was seeking to create a more all-encompassing ICT organization, and it became obvious that at least some of the industry bodies were seeking more than just an umbrella organization. ICT New Zealand Incorporated (ICT-NZ) was established in December 2004 and InternetNZ was one of the founding signatories to the constitution establishing this organization. ICT-NZ started to get some traction in early 2005. See www.internetnz.net.nz/about/news/050314ICTNZ.html for a March 2005 press release. The ICT-NZ constitution is currently being revised, so I have not included reference to this, but attached is “About Us” information from their website.

Sean Weekes, then Councillor of InternetNZ, was the InternetNZ appointee to the ICT-NZ board, in a “watching” role, and provided updates of progress to our Council meetings, with a presentation to the 17 December 2005 meeting explaining the structure and purpose of ICT-NZ. Doug White, CEO of the Computer Society provided a presentation to the 28 April 2006 Council meeting, informing Council of NZCS’s intended engagement in ICT-NZ. Sean resigned from the ICT-NZ Board in June, and I was appointed to the board as InternetNZ representative at that point.

I believe the main levers that lead to the formation of ICT-NZ included the following:

• The Government (including the Minister of ICT, and MED &NZT&E staff) were expressing the desire for industry groups to merge so that Government would have a single unified consultation body, and also a single organization for any Government funding.

• The commercial organisations who have traditionally sponsored industry events indicated a preference to provide funding to a single industry body, rather than having to assess large numbers of applications for small amounts of funding from the various industry bodies.

• InternetNZ’s promotion of the ICTUS concept, an umbrella organization for ICT in NZ.

It would be fair to say that while Government have suggested they only wish to deal with a single industry body, as yet there is no evidence that this is any more than a desire, but a risk of not engaging with ICT-NZ might ultimately be being left out of the loop in Government industry consulation.

But conversely, there is evidence that some commercial sponsors (e.g. Microsoft, IBM etc) are firming in their resolve to provide less “rats and mice” sponsorship funding of industry events, perhaps in preparation for a fuller sponsorship engagement with ICT-NZ in the near future.

It has been stated that there are 96 ICT industry organisations, but I have never been able to find an exhaustive list. The industry groups currently represented at ICT-NZ board level other than InternetNZ include The Software Association, NZCS, ITANZ, Hi Growth, Wireless and Broadband Forum, Canterbury ICT Cluster, Health ICT Cluster and NZT&E. Industry organisations that appear to have a strongly held view to not engage in discussions at this stage include TUANZ and Women in Technology.

Some 18 months after its incorporation, ICT-NZ has been struggling to actually gain traction from industry players. However recently the Software Association has resolved to wind up and transfer its assets, and individual members to ICT-NZ. I understand that ITANZ are in the final stages of doing the same. NZ Computer Society appeared ready to fully engage but some negativity has been encountered from some members.

ICT-NZ will have a range of membership options, ranging from around $200 per annum for individual members, through to corporate based membership determined by financial turnover.

Currently ICT-NZ is advertising for an Executive Director, and is about to launch on its website recruitment of members.

ICT-NZ Proposed Structural Model

ICT-NZ have been through a number of model iterations attempting to find an acceptable model for stakeholder engagement. It would not be unfair to say that this is the dilemma for the organization, as there is no obviously compelling “carrot” to require engagement at this stage, and as yet only veiled “sticks” through the suggestions from Government that it will restrict industry consultation and funding to ICT-NZ, and that some sponsors may find funding ICT-NZ a more attractive option than funding component industry groups.

The ICT-NZ constitution has been through some changes in recent times, and further changes are on the agenda for next Friday’s board meeting, primarily to allow individuals to join the organization.

It therefore appears that the model and constitution are becoming fairly firm and are unlikely to be extensively alterable as time goes by.

I will provide a verbal update to Council from the board meeting, and also talk through the current operational model, but will anticipate that Councillors have studied this paper in some depth and have developed a greater understanding of the issues for InternetNZ in considering its engagement. I have attached a copy of the ICT-NZ Powerpoint, which I will run through with Council, as it is not patently obvious from the slides on their own as several require some further explanation.

The most compelling reason for industry groups including ours to engage with ICT-NZ is probably that the entire industry is totally underrepresented by members. With around 50,000 people employed in the ICT-NZ sector, it is likely that less than 10% of this number are actually members of industry organisations. Contrast this to other professions, notwithstanding that some (lawyers, accountants, engineers) make it virtually (or actually) compulsory to be a member, and the low representation becomes more apparent.

While the potential for corporate sponsors to withdraw smaller fundings to industry groups, in order to better support ICT-NZ is possible, this may not be considered a particular threat to InternetNZ given our financial model, but it should be noted this could reduce our ability to find alternate revenue streams, which has of late become a more strongly held desire by members and Council.

A simple and non-exhaustive SWOT analysis for Council to consider includes:

Strengths:

• Easier to attract interested parties to a single ICT body (better marketing plans).
• Greater engagement from stakeholders through forums on issues InternetNZ wishes to consult / develop policy on.
• Better opportunity for industry self regulation.

Weaknesses:

• InternetNZ objectives do not have to be followed, therefore possible dilution of strength of our positions through broader “membership” model

• Loss of autonomy for our organization

• Subject to hijacking or stonewalling from industry sponsor members etc
  

Opportunities:

• Allows InternetNZ to debate some non-core issues in a broader environment

• Allows our knowledge and policy principles to be more readily communicated to the broader industry

• Reduces the opportunities for “capture” of InternetNZ

Threats:

• Watering down of policy

• Possible compromise of .nz delegation if not well fire-walled upon engagement

• Possible dysfunctional relationship with key stakeholders e.g. Government, ICANN

Issues for InternetNZ to consider

Obviously those organisations who’s members merge with ICT-NZ early will have far greater influence in determining their desired directions from those who engage late. Therefore it is important to note that the greatest opportunity to influence the overall direction of ICT-NZ is now. If ICT-NZ is successful in becoming the significant industry representative body, any remaining independent organizations will find they will have far less ability to influence the purpose and direction of ICT_NZ.

Conversely, as time goes on, if ICT-NZ is successful as an merged industry body, its aims and objectives and the values of membership will become increasingly obvious.

Tenet 1: That the opportunity to influence ICT-NZ’s strategy and direction will diminish over time
Tenet 2: That as more organisations merge into ICT-NZ, the value proposition for engagement
will increasingly clarify over time.

InternetNZ has the specific issue of its “.nz” delegation. It is unlikely that the members of InternetNZ would wish to lose control of this delegation, which would have to be the outcome of a complete merging of InternetNZ into ICT-NZ. Notwithstanding the unlikely possibility that InternetNZ members would choose to merge fully into ICT-NZ, there would be a significant process of re-delegation within ICANN, and significant discussion and consultation with the NZ Government, .nz registrants, registrars, INZ & subsidiary staff and other stakeholders before any moves could be made. Given that even a speedy timeframe to achieve this might be 2 years, and the already unlikely prospect of member approval, we should assume that any closer relationship with ICT-NZ does not involve any change to the .nz delegation.

Tenet 3: That InternetNZ does not foresee engagement with ICT-NZ that involves the re-delegation of .nz.

Options for InternetNZ

Taking the above 3 tenets into account, there are still many alternatives that arise, should InternetNZ wish to more fully engage with ICT-NZ, which would not involve any change to the .nz delegation. The options could range from no engagement whatever, through to a full engagement on all aspects of InternetNZ’s activities except for the operation of the .nz namespace. Some examples follow.

Scenario 1 (Fullish Engagement):

That InternetNZ could “freeze” its membership at the current level, and use the members in some form as “trustees” for the assurance of the continuation of the Society as the .nz delegate. InternetNZ could then embark upon a process through which its members also become members of ICT-NZ (subsidized membership fees?). This would enable InternetNZ to run “Forums” within ICT-NZ, on such public and technical policy issues that InternetNZ may wish to have debated in the wider industry arena. This option would provide InternetNZ the opportunity to extend its consultation process more widely in the industry, thereby rising above the old issue sometimes raised, that InternetNZ needs more members in order to increase its credibility.

Scenario 2a (Minimal Engagement):

That InternetNZ could become a “corporate” member only of ICT-NZ, for around $5,000 subscription per annum. The subscription could be “tagged” for use, for example, on Internet policy related issues within ICT-NZ. This would give InternetNZ voting rights, but would dilute our influence in board member elections.

Scenario 2b (Medium Engagement):

That as well as engagement as per Scenario 2a: InternetNZ could also subscribe up to 14 Councillors and the ED as individual members to ICT-NZ, which on top of the corporate membership, would amount to a total of $8,000 per year. Similar voting rights and election of directors issues arise as stated in Scenario 2a above.

Scenario 2c (“Questionable Ethics” Engagement):

In addition to either Scenario 2a or 2b, InternetNZ could offer to the public a subsidized joint membership to ICT-NZ. Given the individual joining fee for ICT-NZ is $200 per year, InternetNZ could choose to offer a combined membership at say $180 to join both ICT-NZ and InternetNZ, essentially subsidizing $41 from our own reserves. If we could recruit 500 additional members through this means, the subsidy would equate to the $20,000 budget we have for membership recruitment purposes. This would likely attract members of other industry organisations to abandon their affiliations to gain the cheaper pricing offered by InternetNZ. The ethics of this option would therefore need to be carefully evaluated.

Scenario 3 (Least Engagement):

InternetNZ could simply do nothing in terms of further engagement with ICT-NZ, and could either require the ED to resign from the ICT-NZ board, or request the ED to maintain the directorship and keep a “watching” role and report progress back to Council. Failure to engage at any level might lead ICT-NZ to want to have the InternetNZ appointed directorship terminate.

Keith Davidson

6 October 2006

Background, from www.ict-nz.org.nz/project/index.html

About ICT-NZ

ICT-New Zealand (ICT-NZ) is a non-profit organisation focused on developing, growing, promoting and representing: New Zealand ICT people, New Zealand ICT companies, and the New Zealand ICT Industry.   

ICT-NZ's formation recognises that New Zealand's ICT sector is heavily fragmented and needs to change if ICT companies are to improve their performance in an international marketplace.

As such, a single national organisation that harnesses the value already created by industry organisations, but represents the wider interests of the New Zealand ICT industry, provides a more attractive doorway into New Zealand for ICT buyers and delivers spin-offs for ICT-NZ members.

Key initiatives include a comprehensive ICT industry directory, international business development, skills development and member business services such as event management and trade show support, special interest groups and forums.

ICT-NZ aims to achieve this by:

• Providing a comprehensive view of New Zealand's ICT industry and increasing global

• visibility.

• Becoming a recognized brand for marketing and promoting New Zealand's ICT

• industry as a world leader.

• Improving return on funding through shared expertise and costs - PR, marketing,

• administration, facilities, etc.

• Catering for special interest groups or forums within ICT through multiple views,

• eg wireless, health IT, software developers.

ICT-NZ's value to members is about growing the market - promoting and continually developing the industry and ICT-NZ members so the cake is always getting bigger, which translates to better profits, more jobs, and securing a better long term future for the industry.

This will be achieved by minimising industry overlap and duplication through fostering existing member special interest groups and forums, and streamlining supporting administrative structures using a shared services model.