Management will always get what it measures, but not always what it wants.
In the town I grew up in, they used to measure the fire department by the number of runs they did per day. It wasn't long until the fire chief started rolling a 30 foot truck for every fender bender in the city. A 30 foot truck did wonders for traffic already snarled from the fender bender.
Poorly chosen metrics are worse than no metrics at all and poorly chosen managers love poorly chosen metrics. It gives them comfort in managing an organization that they don't really understand. It also keeps them from having to "be a manager" and making hard decisions. The metrics can decide who gets a raise and who gets the additional headcount.
How would the world be different if the Pope had measured Michelangelo's progress in the Sistine Chapel by the square feet painted per day? Maybe the number of feet painted per day?
Maybe a manager could measure the productivity of pregnant women by the number of months to make a baby?
I'm not saying that you shouldn't have metrics. Have tons of metrics! Some things should be measured all the time (like system uptime) and some should be sampled occasionally (like user satisfaction). But, all metrics need to be interpreted by a competent manager instead of an excel formula.
Management by metrics only works for people too stupid or too honest to not manipulate the metrics.
Lots of crazy implications here by taxing online sales. Funny, if this goes through the US will be creating for the states the same issues the WTO created for the US.
The US has complained bitterly to the WTO that indirect taxation acts as an export subsidy/trade barrier. When exporting from an area with direct taxation (property/income taxes) to an area with indirect taxation (sales taxes/VAT) the customer is taxed twice. The first tax is the direct taxes which are included in the price of the product and the indirect taxes which are added at the time of sale. This is largely why VAT rates in the European Union have moved from 2-3% in the 1950's to 20-30% today. It's also one of the reasons the Europeans were the first to attempt to collect VAT on digital goods.
The US government has tried to work around these distortions by rebating taxes for exports but has been slapped around by the WTO every time. States with high sales taxes and no or low property and income taxes will become very attractive for internet retailers. I wonder if the US government would be sympathetic with a state that started rebating taxes for its internet and catalog retailers.
The big push is from brick-and-mortar retailers who want to "level" the sales-tax playing field. The Direct Marketing Association (DMA) which represents e-commerce and catalog retailers opposes the initiative. Amazon is carefully neutral.
The current proposal is a huge burden on small businesses. The biggest problems with the current proposal are:
Each participating state wants me to remit the collected sales tax to them separately. Why can't I send in one payment to my state and then they can make sure the money gets distributed fairly?
The use of certified (meaning expensive) tax software is required. If the program is "streamlined" why do I need $50,000 dollars worth of software to figure out how much tax to collect?
Each participating state wants the right to audit me. What happened to that whole "No taxation without representation thing?"
Product and service definitions are insane. For example, a Twix bar is a cookie but a Snickers bar is candy. In some states buying a Twix bar is tax free while a buying a Snickers bar is not.
It's a lot simpler to re-locate a rack of servers to a more tax friendly state than a brick and mortar retailer. But, hey, maybe re-locating to a small Caribbean island wouldn't be so bad?
It's also possible for two different buildings to have a voltage difference between ground (I know sounds weird). The voltage difference can cause current to actually run from one building to another through the neutral wire in the ethernet cable. Usually the currents are pretty small but they can vary wildly.
I know this because I had the unfortunate luck to work in a building where the co-location room had more than one grounding point. The computers were connected to one while the phone switch was connected to another. A serial cable connected the phone switch to voice mail running on a server. It worked great until a new UPS was installed that dumped excess voltage to ground at startup. Blew out the server, chared the serial cable, and blew out a card in the switch (30K in all)
Funny, I did the same thing three bunch of sparc 10's that were in a colo across town. Machine one was console of machine two, which was console of machine three, which was console of machine one.
Worked great until I went on vacation and a process on the first machine hung. The stand-in admin called the colo and had the machine power-cycled. The power-cycled machine sent a STOP-A request over serial port to the console of the other machine. The STOP-A request dropped the next machine into boot monitor mode. The stand-in admin then had the second machine power-cycled which caused the third machine to drop. Power-cycling the third machine caused the first to drop again.
The stand-in admin was sure that I'd set it up as a practical joke.
In my area, homes went up faster than the loans needed to pay for them. Over the last decade people in the US have been actually *paid* to live in their homes through increased home prices. As long as the Central Banks of the world continue to print money to support asset prices, it's a one-way-bet!
Of course, in the US at least you are also financially penalized if you want to build a very expensive smaller home. When a real estate agent prices a home they use a formula that looks mostly at per-square-foot sales prices of other homes in the area. That means that your homes value is mostly based on how nice your neighbors homes are.
This creates and incentive for builders to build as large a home as cheaply as the market will allow. Builders can also "game" the system by putting a really big, cheap, crappy house in the middle of a nice subdivision. The builder is essentially "stealing" value from the homes in the areas which goes directly to his bottom line. That's the reason that home owners associations and builder covenants are common in the US. No builder wants to end up being the "sucker" in the dollar per square foot race to the bottom.
This is why homes in the US are usually built without super-efficient furnaces, extra insulation, passive solar design, or other energy efficient features that in most cases would pay themselves back in 10 years. A builder would never put that kind of thing in a spec home because it doesn't factor into the real estate agents formula. A home owner who puts it in is penalized if they move from the home before the pay-back period.
The problem being that not all processors support it yet (ours doesn't).
The other problem is the impact that it has on the cart close ratios. People just can't remember their darn passwords. I have six cards, all Verified-by-Visa enabled and I don't remember a single password on any of them. The password requirements were so strict that I couldn't use any password that I would have a chance of remembering.
own an online retail business. If someone disputes a purchase and we lose the dispute, the credit card processor simply takes the money back from *us*. We're out the money. Nobody else.
That doesn't apply to brick-and-mortar merchants. A brick-and-mortar merchant is 100% protected against fraudulent chargebacks as long as they can show a valid swipe of the magnetic strip or carbon imprint of the credit card and a signature.
A lot of credit card security is in the card itself (holograms, printing, signatures). Since online merchants have chosen to bypass that additional security the banks require that they accept the additional risk.
The banks launched Verified by Visa and MasterCard Secure Code last year to provide online merchants with the same fraud protection that retail merchants enjoy. With Verified By Visa a customer is passed to the banks website to enter a pin number before completing the transaction. If an online merchant passes the transaction through Verified by Visa or MasterCard Secure Code they have 100% protection against a fraudulent chargeback.
Somebody, somewhere, must be making good money for maintaining a database of local sales taxes.
http://www.taxware.com/ sells a product that will compute sales tax for the US and Canada. Entry level packages start around 50K(USD).
Taxware doesn't really solve the hard problems. You are still required to correctly classify all your products for each tax jurisdiction. For example in Iowa, where I used to live, food is tax exempt, but candy is not. Twix bars are tax free, but Snickers and Reese's are taxable. Carmel apples are tax exempt, but chocolate covered raisins are taxed. I'll leave caramel coated pop-corn with nuts as an exercise for the reader (exempt).
Taxware also doesn't offer any sort of remittance services. The internet merchant is still required to register and remit sales tax separately to each sales tax jurisdiction. For small merchants, this probably will exceed the cost of the sales tax collected.
And, the biggest problem is that when state coffers run low state auditors love to shake down out-of-state businesses. My father-in-law gets hit by the State of California about every five years because his company does construction work in the state. No matter how well he keeps his books, they always hit him for about 10K.
1. Buy a cheap collocation server based in the US ($50-$100 per month).
2. Ask for an additional IP address (free).
2. Install OpenVPN on the server and your desktop (free).
3. Connect to your Chinese ISP and connect to your VPN.
All your outbound desktop traffic is now encrypted and passed through a UDP tunnel to your collocation server. The collocation server decrypts the traffic and passes it to the internet. Return traffic is re-encrypted and passed back to your desktop machine through the encrypted UDP tunnel. Looks just like traffic from corporate travelers connecting back to their home offices.
Extra bonus points for configuring your Linux firewall to encrypt all traffic from your home office and block any stray packets.
No, they're not about tariffs. They're about maintaining a historical privacy culture that someone like you would never be able to understand.
It's funny that EU citizens believe they have "privacy" culture and then gladly fill out government income tax and census forms that provide every detail about their religion, charitable affiliations, income, address, occupation, and number of children. Why are governments considered "safe havens" for data? It was governmental census data that was used to identify ethnic and religious targets of the Holocaust.
Why are EU citizens so proud of new privacy laws give government's more access to their personal data then they had before? Flying the banner of privacy "enforcement", governments can now "spot check" any database or data flow without showing warrant or cause.
These regulations aren't about privacy; they're the tariffs of the 21st century.
The EU uses its Data Protection Directives to keep high paying service jobs from leaving the country. Data needs DBA's to house it, system admins to protect it, programmers to expose it, network admins to make it accessable, and managers to analyze it. None of those jobs in the EU are going to India. Or to the US, now that the Euro is pushing $1.30.
I think Warren Buffet may have explained it best here in an article about why BerkShire Hathaway was investing in foreign currency for the first time in its history.
Take a wildly fanciful trip with me to two isolated, side-by-side islands of equal size, Squanderville and Thriftville. Land is the only capital asset on these islands, and their communities are primitive, needing only food and producing only food. Working eight hours a day, in fact, each inhabitant can produce enough food to sustain himself or herself. And for a long time that's how things go along. On each island everybody works the prescribed eight hours a day, which means that each society is self-sufficient.
Eventually, though, the industrious citizens of Thriftville decide to do some serious saving and investing, and they start to work 16 hours a day. In this mode they continue to live off the food they produce in eight hours of work but begin exporting an equal amount to their one and only trading outlet, Squanderville.
The citizens of Squanderville are ecstatic about this turn of events, since they can now live their lives free from toil but eat as well as ever. Oh, yes, there's a quid pro quo -- but to the Squanders, it seems harmless: All that the Thrifts want in exchange for their food is Squanderbonds (which are denominated, naturally, in Squanderbucks).
Over time Thriftville accumulates an enormous amount of these bonds, which at their core represent claim checks on the future output of Squanderville. A few pundits in Squanderville smell trouble coming. They foresee that for the Squanders both to eat and to pay off -- or simply service -- the debt they're piling up will eventually require them to work more than eight hours a day. But the residents of Squanderville are in no mood to listen to such doomsaying.
Meanwhile, the citizens of Thriftville begin to get nervous. Just how good, they ask, are the IOUs of a shiftless island? So the Thrifts change strategy: Though they continue to hold some bonds, they sell most of them to Squanderville residents for Squanderbucks and use the proceeds to buy Squanderville land. And eventually the Thrifts own all of Squanderville.
At that point, the Squanders are forced to deal with an ugly equation: They must now not only return to working eight hours a day in order to eat -- they have nothing left to trade -- but must also work additional hours to service their debt and pay Thriftville rent on the land so imprudently sold. In effect, Squanderville has been colonized by purchase rather than conquest.
But I guess that Warren Buffet doesn't have "even a trivial background in international economics."
Think about what you said.. you just said they'll take the money and invest it in the united states.. and that's a bad thing.
Ah, you must be a fan of the US Treasury Secretary John Snow. I think he was the guy who said our $500 Billion dollar yearly trade deficit was a good thing because it meant that the US was such a good place to "invest".
I may be able to agree with you if the US were actually investing that $500 Billion a year in research, roads, infrastructure or education like we did in the 50's. Seems to me, the US is mostly "investing" in housing, SUVs, and widgets from Wall Mart. How are these "investments" going to help us pay the bills when the debts come due? Maybe we will all be able to convert our big houses into bed-and-breakfast inns for foreign tourists!
And I'm not sure that foreign investment is going to make us better off than a country with a high savings rate like Japan where domestic savings are enough to cover domestic investment needs and buy assets overseas.
It's not like when you buy something from India it just magically turns into Rupees. Somebody takes the American money and gives them rupees
In many cases its India's central bank that takes those dollars and turns them into Rupees. And central banks don't buy US products and services, they buy US Government debt. Debt which will need to be paid back, resulting in a temporarily inflated standard of living for those today, and a lower standard of living for our children, their children, and their childrens children.
Slashdot Mirror
Management will always get what it measures, but not always what it wants.
In the town I grew up in, they used to measure the fire department by the number of runs they did per day. It wasn't long until the fire chief started rolling a 30 foot truck for every fender bender in the city. A 30 foot truck did wonders for traffic already snarled from the fender bender.
Poorly chosen metrics are worse than no metrics at all and poorly chosen managers love poorly chosen metrics. It gives them comfort in managing an organization that they don't really understand. It also keeps them from having to "be a manager" and making hard decisions. The metrics can decide who gets a raise and who gets the additional headcount.
How would the world be different if the Pope had measured Michelangelo's progress in the Sistine Chapel by the square feet painted per day? Maybe the number of feet painted per day?
Maybe a manager could measure the productivity of pregnant women by the number of months to make a baby?
I'm not saying that you shouldn't have metrics. Have tons of metrics! Some things should be measured all the time (like system uptime) and some should be sampled occasionally (like user satisfaction). But, all metrics need to be interpreted by a competent manager instead of an excel formula.
Management by metrics only works for people too stupid or too honest to not manipulate the metrics.
Hmmm....
More cosmic rays, more clouds, less sunlight, lower temperatures, lower temperatures, less bio-diversity.
The US has complained bitterly to the WTO that indirect taxation acts as an export subsidy/trade barrier. When exporting from an area with direct taxation (property/income taxes) to an area with indirect taxation (sales taxes/VAT) the customer is taxed twice. The first tax is the direct taxes which are included in the price of the product and the indirect taxes which are added at the time of sale. This is largely why VAT rates in the European Union have moved from 2-3% in the 1950's to 20-30% today. It's also one of the reasons the Europeans were the first to attempt to collect VAT on digital goods.
Trade groups like the National Textile Association have been lobbying to move the US away from direct taxation (income, property taxes) and toward VAT as a way of balancing the playing field.
The US government has tried to work around these distortions by rebating taxes for exports but has been slapped around by the WTO every time. States with high sales taxes and no or low property and income taxes will become very attractive for internet retailers. I wonder if the US government would be sympathetic with a state that started rebating taxes for its internet and catalog retailers.
Let the first internal US trade wars begin!
The current proposal is a huge burden on small businesses. The biggest problems with the current proposal are:
Each participating state wants me to remit the collected sales tax to them separately. Why can't I send in one payment to my state and then they can make sure the money gets distributed fairly?
The use of certified (meaning expensive) tax software is required. If the program is "streamlined" why do I need $50,000 dollars worth of software to figure out how much tax to collect?
Each participating state wants the right to audit me. What happened to that whole "No taxation without representation thing?"
Product and service definitions are insane. For example, a Twix bar is a cookie but a Snickers bar is candy. In some states buying a Twix bar is tax free while a buying a Snickers bar is not.
It's a lot simpler to re-locate a rack of servers to a more tax friendly state than a brick and mortar retailer. But, hey, maybe re-locating to a small Caribbean island wouldn't be so bad?
It's also possible for two different buildings to have a voltage difference between ground (I know sounds weird). The voltage difference can cause current to actually run from one building to another through the neutral wire in the ethernet cable. Usually the currents are pretty small but they can vary wildly.
I know this because I had the unfortunate luck to work in a building where the co-location room had more than one grounding point. The computers were connected to one while the phone switch was connected to another. A serial cable connected the phone switch to voice mail running on a server. It worked great until a new UPS was installed that dumped excess voltage to ground at startup. Blew out the server, chared the serial cable, and blew out a card in the switch (30K in all)
Funny, I did the same thing three bunch of sparc 10's that were in a colo across town. Machine one was console of machine two, which was console of machine three, which was console of machine one.
Worked great until I went on vacation and a process on the first machine hung. The stand-in admin called the colo and had the machine power-cycled. The power-cycled machine sent a STOP-A request over serial port to the console of the other machine. The STOP-A request dropped the next machine into boot monitor mode. The stand-in admin then had the second machine power-cycled which caused the third machine to drop. Power-cycling the third machine caused the first to drop again.
The stand-in admin was sure that I'd set it up as a practical joke.
In my area, homes went up faster than the loans needed to pay for them. Over the last decade people in the US have been actually *paid* to live in their homes through increased home prices. As long as the Central Banks of the world continue to print money to support asset prices, it's a one-way-bet!
Of course, in the US at least you are also financially penalized if you want to build a very expensive smaller home. When a real estate agent prices a home they use a formula that looks mostly at per-square-foot sales prices of other homes in the area. That means that your homes value is mostly based on how nice your neighbors homes are.
This creates and incentive for builders to build as large a home as cheaply as the market will allow. Builders can also "game" the system by putting a really big, cheap, crappy house in the middle of a nice subdivision. The builder is essentially "stealing" value from the homes in the areas which goes directly to his bottom line. That's the reason that home owners associations and builder covenants are common in the US. No builder wants to end up being the "sucker" in the dollar per square foot race to the bottom.
This is why homes in the US are usually built without super-efficient furnaces, extra insulation, passive solar design, or other energy efficient features that in most cases would pay themselves back in 10 years. A builder would never put that kind of thing in a spec home because it doesn't factor into the real estate agents formula. A home owner who puts it in is penalized if they move from the home before the pay-back period.
The other problem is the impact that it has on the cart close ratios. People just can't remember their darn passwords. I have six cards, all Verified-by-Visa enabled and I don't remember a single password on any of them. The password requirements were so strict that I couldn't use any password that I would have a chance of remembering.
That doesn't apply to brick-and-mortar merchants. A brick-and-mortar merchant is 100% protected against fraudulent chargebacks as long as they can show a valid swipe of the magnetic strip or carbon imprint of the credit card and a signature.
A lot of credit card security is in the card itself (holograms, printing, signatures). Since online merchants have chosen to bypass that additional security the banks require that they accept the additional risk.
The banks launched Verified by Visa and MasterCard Secure Code last year to provide online merchants with the same fraud protection that retail merchants enjoy. With Verified By Visa a customer is passed to the banks website to enter a pin number before completing the transaction. If an online merchant passes the transaction through Verified by Visa or MasterCard Secure Code they have 100% protection against a fraudulent chargeback.
If you mirror the optics on a guided missile, it'd be blind!
Maybe a reflective missile with some sort of a selective wavelength mirror. Maybe a dichroic mirror or holographic notch filter.
Taxware doesn't really solve the hard problems. You are still required to correctly classify all your products for each tax jurisdiction. For example in Iowa, where I used to live, food is tax exempt, but candy is not. Twix bars are tax free, but Snickers and Reese's are taxable. Carmel apples are tax exempt, but chocolate covered raisins are taxed. I'll leave caramel coated pop-corn with nuts as an exercise for the reader (exempt).
Taxware also doesn't offer any sort of remittance services. The internet merchant is still required to register and remit sales tax separately to each sales tax jurisdiction. For small merchants, this probably will exceed the cost of the sales tax collected.
And, the biggest problem is that when state coffers run low state auditors love to shake down out-of-state businesses. My father-in-law gets hit by the State of California about every five years because his company does construction work in the state. No matter how well he keeps his books, they always hit him for about 10K.
1. Buy a cheap collocation server based in the US ($50-$100 per month).
2. Ask for an additional IP address (free).
2. Install OpenVPN on the server and your desktop (free).
3. Connect to your Chinese ISP and connect to your VPN.
All your outbound desktop traffic is now encrypted and passed through a UDP tunnel to your collocation server. The collocation server decrypts the traffic and passes it to the internet. Return traffic is re-encrypted and passed back to your desktop machine through the encrypted UDP tunnel. Looks just like traffic from corporate travelers connecting back to their home offices.
Extra bonus points for configuring your Linux firewall to encrypt all traffic from your home office and block any stray packets.
Why are EU citizens so proud of new privacy laws give government's more access to their personal data then they had before? Flying the banner of privacy "enforcement", governments can now "spot check" any database or data flow without showing warrant or cause.
Isn't it interesting that one of the first enforcements of EU privacy directives wasn't to protect citizens data but to slap Microsoft with thousands of dollars of fines over a disagreement about font types and sizes in Windows 98?
Hmmmm, doesn't impact privacy but it does impact trade.
These regulations aren't about privacy; they're the tariffs of the 21st century.
The EU uses its Data Protection Directives to keep high paying service jobs from leaving the country. Data needs DBA's to house it, system admins to protect it, programmers to expose it, network admins to make it accessable, and managers to analyze it. None of those jobs in the EU are going to India. Or to the US, now that the Euro is pushing $1.30.
But I guess that Warren Buffet doesn't have "even a trivial background in international economics."
I may be able to agree with you if the US were actually investing that $500 Billion a year in research, roads, infrastructure or education like we did in the 50's. Seems to me, the US is mostly "investing" in housing, SUVs, and widgets from Wall Mart. How are these "investments" going to help us pay the bills when the debts come due? Maybe we will all be able to convert our big houses into bed-and-breakfast inns for foreign tourists!
And I'm not sure that foreign investment is going to make us better off than a country with a high savings rate like Japan where domestic savings are enough to cover domestic investment needs and buy assets overseas.