Tradenet case

1. Singapore TradeNet Case Analysis Group No 2B Ankit Kesri (B10068) Ankur Maheshwari (B10070) Fasil Sagir (B10078 ) Karanbir Singh Satija (B10084) Megha Chaturvedi (B10088 )

2. Singapore: Key facts Sustained economic growth during 1970s and 1980s On verge of becoming a developed nation Advantage due to geographic location (strategic port) L argest port in gross tonnage, 2 nd largest in container handling globally Among top 20 trading nations in world

3. Rationale behind developing TradeNet Problems with the existing methods Number of documents to be processes was high and rising Handled 10000 and more declarations each day As high as 20 forms needed to be processed in complex cases Inefficient operational processing High Turnaround time, with the average of around 2 days High costs of trade documentation: around 4% to 7% of value of good shipped Error prone transactions (half applications had errors)

4. Results in streamlined processes Right Timing Government’s emphasis on establishing Singapore as an IT society Would help attract more FDI by providing transparency and efficiency Cost efficiency Providing competitiveness in external trade Cost efficiency achieved through: Low Manpower requirement and Low overseeing expenses Futuristic Provides Scope for analysis of data Provides Traceability of documents Provides easier accessibility of older records Other Benefits of using TradeNet Rationale behind developing TradeNet

5. Selection(1/2) Formation of Committee on National Computerization (CNC ) Report on how Singapore could emerge as world leaders using IT systems Business Process Re-engineering Transformation of all trade documents into a single document Creation of TradeNet Steering Committee to oversee all required procedural reforms of all the departments Involving Pricewaterhouse Coopers Study of market for TradeNet Conducted survey of basic information processing requirements within the trading community

6. Selection(2/2) Selection of Vendors Based on size of operations carried out and experience in the domain Formation of Singapore Network Services(SNS ) Purpose was to own and operate TradeNet Retention of original TradeNet committee members

7. Adoption Government Computerization Project: IT infrastructure already in place in various agencies Response exceeded Target 850 of 2200 subscribers joined by 1989 TradeNet made mandatory by 1991 Joining Costs: Connect Charge: US$375 – Transaction Cost: US$.25/kb of information Monthly Costs : US$15 – PC Cost +Software Cost: US$4000 Larger Firms – Joined Early Small and Medium Firms – Steps to increase Adoption Tax Write offs on purchase of Computer Hardware Facility of Service Centres Option of going to TDB offices Public Terminals in convenient offices: Assistance at modest fees Year Target Actual 1989 15% 45% 1990 40% 92%

8. Exploitation Key Indicators Before TradeNet After TradeNet Processing Time/Permit 4hrs to 2-7 days 10 minutes Submission of Documents Multiple Submission Single document through a single interface By dispatch clerks From comfort of office Within office hours only Available 24 hours daily Number of Documents 3 – 35 Documents 1 Document Trade Documentation Fees S$10 – S$20/application S$2.88/application Dutiable goods handling Separate documents for customs processing Same electronic document routed to customs Customs duties Collection By cheque Automated bank deductions Controlled goods handling Separate documents to different Controlling Agencies Same electronic document routed to Controlling Agencies

9. Freight Forwarders Air Cargo Agents Shipping Agents Traders TDB Customs Controlling Agencies PSA, Jurong Port CAAS Multiple Complex Connections Structure Before TradeNet

10. Freight Forwarders Air Cargo Agents Shipping Agents Traders TDB Customs Controlling Agencies PSA, Jurong Port CAAS TradeNet Structure After TradeNet

11. Risks Undertaken In Building TradeNet Technological Factors Lack of vendors with experience in EDI in the local environment Subcontracting of certain modules to local software house, CSA Lack of skilled manpower for the implementation Task Factors Tight deadlines for the implementation of TradeNet High involvement of government finances Market Factors Risk of rejection by the local trading community Organizational Factors No single government agency had the expertise to implement TradeNet

12. Evaluation of TradeNet Project

13. Time targets Target time announced in Dec 1986 was 2 years 1 st transaction in Jan 1989; all components in place by June 1989 Institution of Engineering Change Procedure(ECP) and postponement of enhanced capabilities Involvement of SNS engineers throughout development phase Fast decisions by SNS management

14. System Performance Turnaround time for a transaction reduced from 1-4 days to 15 minutes Low cost of transactions – around the same as paid by traders before Tradenet SNS was able to breakeven in the 2 nd year of its operations, 3 years earlier than anticipated

15. User Adoption 850 out of 2200 subscribers within 1 st year handling 45% of all trade transactions; target was 15% of all transactions Most of the larger firms had joined by the end of 1989 Overwhelming success prompted TDB to phase out paper-based transaction by early 1991

16. Organizational Impact Better utilization of resources by companies Savings of 25%-30% in handling trade documentation by freight companies Larger firms were able to integrate their internal systems with Tradenet thus making them more efficient and competitive Govt agencies like Customs improved their performance and compliance

17. Critical Success Factors Commitment at Highest level Minister of Trade & Industry Trade Development Board Multi-agency Steering C ommittee Establishment of a corporate entity (SNS) Concurrent development of IT infrastructure Experienced technical service provider IBM Establishment of Document Service Centers

18. Thank You