Sunday, February 16, 2020

From 1988 - A Typing Service Plan

See: The plan.

I’m reviewing and disposing of detritus accumulated over a lifetime. It’s interesting to see what’s changed and what hasn’t. My engineering lecture notes of 35 years ago aren’t that much different to what my son, studying engineering now, is familiar with. The foundation subjects are pretty much the same but his handwritten lecture notes are less extensive. We used to take notes as it was explained, where now the notes are mostly online. Those notes were a useful reference for me, even years later but are useless now as the quality of search results is so much better than old lecture notes. To me, that the same things are taught 35 years later is an indication of the quality of what engineers learn. So much other stuff taught in universities 35 years ago proved to be  faddish. Amongst the detritus, I came across my plan from 1988 to start an international typing service. The internet didn’t exist, international phone calls cost the earth and fax machine adoption was growing fast.

Graph of adoption of fax machines versus time illustrates the actual and calculated adoption of fax from 1980. By 1994 approximately 59% of the potential market had actually adopted fax.  Source: Lyons, Michael & Adjali, Iqbal & Collings, David & Jensen, Kjeld. (2002). Complex Systems Models for Strategic Decision Making.
It was possible to rent a permanent satellite voice link to the Philippines for $A400 per day (A$950 in 2019 dollars) and send data over that link at the piddling rate of 9600 bps. Typist, even as a job description, no longer exists but typing services were big back then. Mostly the work arrived hand written and typists in the Philippines earned much lower wages than Australian typists. Modelling suggested it would be very profitable to provide an offshore typing service but the high fixed costs meant it had to be done on a large scale and  if I got it wrong and failed it would be painful. I also had the opportunity to move to an engineering role in the iron ore industry and that in the end is what I chose, so the plan was never tested.

Reviewing the plan with the benefit of 30 years of hindsight:-
  1. It would have been exciting to have tried but the level of risk looks as scary now as it did then.
  2. To minimise risk a slow start up strategy was planned that didn’t offer enough advantage to customers in the first instance. That in itself creates the risk that the service will never get to the stage where it works. If I did it now it would be boots and all or don’t bother trying.
  3. The format which followed what I’d been taught at a TAFE business course still looks good.
  4. In retrospect it would have been an opportune time for such a service. There was nothing like it and the technology it required was subsequently adopted widely. The early internet was only a few years away which would have reduced costs dramatically and typing service businesses lasted long enough for the service to have more than recouped costs. It might have been a good structure for adding other forms of outsourcing as they developed and translation is considered in the plan.
  5. It was a comprehensive plan. I was trying hard to get everything right as a risk reduction strategy. A plan that detailed would change a lot in adoption but changes as they occurred could be made to the financial model to provide early indications of likely results.
  6. Almost all typists were women with many leaving the job to raise children and not returning. This wasn’t controversial back then but it would be now.
  7. Typists were earning about A$12 per hour at the time and the typing services were charging about A$25. The model estimated overheads of one third which I know for most businesses today is too low. I understand a rule of thumb is hourly cost is twice the hourly pay rate and CSIRO for example, when I was there was 2.7 times. Have overheads risen in the past 30 years or was my estimate too low? If double the hourly rate was appropriate back then typing services would have been struggling to make money at the prices they were charging.
  8. Letters were expensive to produce back then which made them far more likely to convey useful information than the bumf we are deluged with today.
  9. Mechanical typewriters no longer exist but it wasn’t that long ago and more than 80% of typing was done mechanically at the time. The use of word processing was predicted to double in the next year which is probably close to what happened, as mechanical typewriters disappeared fast.
  10. Governments didn’t use external labour much in those days so typing for government wasn’t considered an accessible market. These days governments seem to outsource almost everything. The places I worked at the time all had typing pools and I still remember the fear of having to ask for something to be retyped to fix a drafting error. 
  11. The marketing plan looks crude. I doubt that was ever my raison d'etre and I’ve since come to the view that quality marketing is usually more important than a quality product.