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Satyam: A warning to IT outsourcers everywhere

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Well holidays are nearly over.  The beard lasted two weeks or so before I decided to go back to my good old cleanshaven self.  At least I know now that I’m about two weeks from a dreadful beard and three weeks from a really bad one.

First topic that catches my eye at the moment is the Satyam issue.  I nearly choked on my weet bix the other day reading about the absolute gall of the Satyam conglomerate by basically making up 90% of their cash reserves.  I think it may be a lesson for people that outsourcing to another country may seem good on paper (that is, cheaper), but when its entire governance regime is completely different there are going to be some hurdles that just can’t be met.

It will be interesting to see if this becomes a house of cards and all the other IT outsourcers out there are doing pretty much the same thing.  I noticed incidentally that the auditors, PWC, are suddenly distancing themselves from their Indian affiliate.  It will highlight the role of the auditors, once again, as watchdogs not bloodhounds, and further that it is virtually impossible for an auditor to find out something if a Director is looking to hide facts and lie.

Still I’ll not be surprised to discover that there is a major case to answer at PWC for an audit that clearly missed something. And of course Ernst & Young gave this bald-faced liar an award as entrepreneur of the year not all that long ago.  I have a theory that it is incompatible to have an audit and assurance role and to hold that role at the whim of the very people who can cause such an audit to be based upon a pack of lies – it isn’t going to be helpful to hide behind standards and process reviews when a bad outcome like this happens.

And still, I wouldn’t be an audit partner under the current regime for quids.

As for people who are IT outsourcing as well as offshoring, I’m sure they’ve got a bit of a tight knot where their stomach used to be hoping that their IT outsourcer is not doing the same thing (or, if they are with Satyam, how the hell they’re going to extract themselves from the mess).

Image from Flickr User jill – glossy veneer.  Some Rights Reserved.

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Me, unshaven and wondering how long it will last

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Me, unshaven some more., originally uploaded by Micheal Axelsen.

This is about day 10 of no-shaving. I’m thinking of buying suspenders and growing a beard for that full academic look.

I think I look like a young Leonard Maltin with a terrible beard. Don’t know how long it will last – previous best effort is about two weeks. I suspect I’ll be clean-shaven all next year.

Season’s greetings from Micheal Axelsen & applied insight pty ltd

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Click here for a full screen version of the eCard.

Just for you, I’ve created my very own Australian-themed Christmas card this year, complete with the Kingswood I had in 1992.  We’d gone on a trip to Northern New South Wales, mis-read a Refidex, and what can I say – apparently Kingswoods aren’t four-wheel drives, but I do like the photo.

applied insight pty ltd specialises in working with clients to deliver significant improvements in the governance, management and development of their business information and data.

applied insight pty ltd’s consulting services are all about using business information better –building good and useful databases, using social networking and online sharing tools for business results, and helping users create and retrieve documents and information more powerfully.

applied insight pty ltd increases the maturity of the client’s enterprise governance of information.

The third of three types of ambiguity: imaginary ambiguity

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Imaginary ambiguity occurs when a word with a fixed meaning seems to have a different one.  Imaginary ambiguity derives from the optional interpretation that the recipient of the communication places on the information received.  Two distinct types of ambiguity can be categorised as imaginary ambiguity:  emphatic and suggestive. 

Emphatic Ambiguity

The question of ambiguity deriving from accent, or emphasis in speaking, is an ancient one (Hamblin 1970).  When a phrasing is rendered in the written form, the verbal emphasis may only be crudely indicated.  Significant meaning and context is lost.  Rescher (1964) provides the following example of emphatic ambiguity: 

The intended meaning of the democratic credo "Men were created equal" can be altered by stressing the word "created" (implying "that’s how men started out, but they are no longer so"). 

The verbal emphasis creates an inference of meaning that is a legitimate interpretation of the phrasing.  That is, changes in intonation can yield different interpretations. 
In the case of an information request, emphatic ambiguity occurs in the example information request of "A report of our good clients".  Ambiguity can derive from placing different emphases on the words.  Depending on the context or on emphasis used, "good clients" could be legitimately interpreted to be clients that pay on time or clients that have the highest dollar-value sales.  Indeed, with an ironic emphasis on the word "good", this request could be interpreted as a list of our worst clients – those that do not pay.  The information necessary to resolve the ambiguity is often difficult to convey using only printed media. 

Suggestive Ambiguity

Despite the apparent clarity of the sentence in question, suggestive ambiguity creates diverse implications and innuendos that can produce different implications (Walton 1996).  Fischer (1970) provides an example: 

The First Mate of a ship docked in China returned drunk from shore leave, and was unable to write up the ship’s log.  The displeased Captain completed the log, adding, "The Mate was drunk all day".  The next day, the now-sober Mate challenged the Captain over the entry, as it would reflect poorly on him.  The Captain responded that the comment was true, and must stand.  Whereupon the mate added to that day’s log, "The Captain was sober all day".  In reply to the Captain’s challenge, the mate responded "the comment is true, and must stand" (derived from Trow 1905, pp 14-15). 

The phrase "The Captain was sober all day" contains suggestive ambiguity.  As a further example, the statement, "The President is now an honest man", is perfectly clear, and yet considerable innuendo exists.  The fact that the President’s current honesty is worthy of comment implies that the President was previously dishonest.  

Both phrases are perfectly clear, and, indeed, true.  However, considerable innuendo exists.  The fact that the Captain’s sobriety, or the President’s honesty, is singled out for special comment implies that such a state of affairs is unusual (Walton 1996).  The statements are suggestively ambiguous. 

In the case of an information request, an example of this ambiguity is, "A report of the clients of this accounting practice that have lodged taxation returns in the past five years in accordance with the requirements of the Australian Taxation Office".  The request for information is quite clear.  By definition, however, all taxation returns should be lodged in accordance with the Australian Taxation Office’s requirements.  The extra phrase introduces suggestive ambiguity into the information request by suggesting that the report will not consist of all taxation clients, because some clients may not have complied with the Tax Office’s requirements. 

Image from Flickr User only alice.  Some Rights Reserved.

The second of three types of ambiguity: actual ambiguity

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Actual ambiguity refers to ambiguity that occurs in the act of speaking.  It arises when a word or phrase, without variation either in itself or in the way the word is put forward, has different meanings.  The statement does not contain adequate information to resolve the ambiguity, resulting in a number of legitimate interpretations.  Two distinct types of ambiguity are categorised as actual ambiguity:  pragmatic and extraneous. 

Pragmatic Ambiguity

Pragmatic ambiguity arises when the statement is not specific, and the context does not provide the information needed to clarify the statement.  Information is missing, and must be inferred.  An example of pragmatic ambiguity is the story of King Croesus and the Oracle of Delphi (adapted from Copi and Cohen 1990):

"King Croesus consulted the Oracle of Delphi before warring with Cyrus of Persia.  The Oracle replied that, "If Croesus went to war with Cyrus, he would destroy a mighty kingdom".  Delighted, Croesus attacked Persia, and Croesus’ army and kingdom were crushed.  Croesus complained bitterly to the Oracle’s priests, who replied that the Oracle had been entirely right.  By going to war with Persia, Croesus had destroyed a mighty kingdom – his own."

Pragmatic ambiguity arises when the statement is not specific, and the context does not provide the information needed to clarify the statement (Walton 1996).  The information necessary to clearly understand the message is omitted.  Due to the need to infer the missing information, pragmatically ambiguous statements have multiple possible interpretations (Walton 1996).  Croesus interpreted the Oracle’s statement as indicating his success in battle – the response he desired.  As noted by Hamblin (1970), Croesus’ logical response to the oracular reply would have been to immediately ask the Oracle, "Which kingdom?"  Further information is needed to resolve pragmatic ambiguity. 

In the case of an information request, pragmatic ambiguity exists in the request for "A report of all the clients for a department."  The ambiguity is that the request does not refer to a specific department.  The end user could legitimately prepare a report for any department.  Further information is needed to resolve this actual ambiguity in this case.

Extraneous Ambiguity

In contrast to pragmatic ambiguity, in which information necessary to clearly understand the message is omitted, extraneous ambiguity arises from an excess of information.  Clearer communication arises where the minimally sufficient words needed to convey the message of the statement are used (Fowler and Aaron 1998).  Where more words are used than necessary, or where unnecessary detail is provided in the communication that is not part of the message, ambiguity arises.  The excess detail obscures the essential message and contributes to different emphases or interpretations.

The use of passive voice, vacuous words, or the repetition of phrases with the same meaning all contribute to lack of clarity (Fowler and Aaron 1998).  The use of clichés and the over-use of figures of speech add volume to the statement, but add little or no meaning.  Pretentious and indirect writing also adds to the bulk of the statement, but without adding meaning.  Fowler and Aaron (1998) provide the following comparative example:

  • Pretentious:    To perpetuate our endeavour of providing funds for our elderly citizens as we do at the present moment, we will face the exigency of enhanced contributions from all our citizens.
  • Revised:    We cannot continue to fund Social Security and Medicare for the elderly unless we raise taxes. 

The extra volume contributes to vagueness in the first statement, and adds to the multiplicity of legitimate interpretations of the statement.  The first statement exhibits extraneous ambiguity.  The second statement communicates forcefully and concisely. 

An example of extraneous ambiguity in an information request is "A report of all clients (and their names and addresses only) for the Tax and Business Services department.  Some of those clients are our biggest earners, you know".  The last sentence is extraneous, and contains detail that is redundant, uninformative, or misleading relative to the fundamental message.  In information theoretic terms, extraneous ambiguity is "noise" in the communication (Axley 1984; Eisenberg and Phillips 1991; Severin and Tankard 1997). 

Image from Flickr User tsmyther.  Some Rights Reserved.