Singapore TradeNet Case Analysis

Group No 2BAnkit Kesri (B10068)Ankur Maheshwari (B10070)Fasil Sagir (B10078)Karanbir Singh Satija (B10084)Megha Chaturvedi (B10088)

Singapore: Key facts

Sustained economic growth during 1970s

and 1980s

On verge of becoming a developed nation

Advantage due to geographic location

(strategic port)

Largest port in gross tonnage, 2nd largest in

container handling globally

Among top 20 trading nations in world

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)

• 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

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

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

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%

ExploitationKey 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 goodshandling

Separate documents for customs processing

Same electronic document routed to customs

Customs dutiesCollection

By cheque Automated bankdeductions

Controlled goodshandling

Separate documentsto differentControlling Agencies

Same electronicdocument routed toControlling Agencies

Freight Forwarders Air Cargo Agents Shipping Agents Traders

TDB

Customs

Controlling Agencies

PSA, Jurong Port

CAAS

Multiple Complex Connections

Structure Before TradeNet

Freight Forwarders Air Cargo Agents Shipping Agents Traders

TDB Customs Controlling Agencies PSA, Jurong Port CAAS

TradeNet

Structure After TradeNet

Risks Undertaken In Building TradeNetTechnological 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

Evaluation of TradeNet ProjectTime targets

System Performance

User Adoption

Organizational Impact

Time targetsTarget time announced in Dec 1986

was 2 years1st transaction in Jan 1989; all

components in place by June 1989Institution of Engineering Change

Procedure(ECP) and postponement of enhanced capabilities

Involvement of SNS engineers throughout development phase

Fast decisions by SNS management

System PerformanceTurnaround 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 2nd year of its operations, 3 years earlier than anticipated

User Adoption850 out of 2200 subscribers

within 1st 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

Organizational ImpactBetter utilization of resources by

companiesSavings of 25%-30% in handling trade

documentation by freight companiesLarger 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

Critical Success FactorsCommitment at Highest level

◦Minister of Trade & Industry◦Trade Development Board

Multi-agency Steering CommitteeEstablishment of a corporate entity (SNS)Concurrent development of IT

infrastructureExperienced technical service provider

IBMEstablishment of Document Service

Centers

Thank You