Tradenet case


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Tradenet case

  1. 1. Singapore TradeNet Case Analysis<br />Group No 2B<br />Ankit Kesri (B10068)<br />Ankur Maheshwari (B10070)<br />Fasil Sagir (B10078)<br />Karanbir Singh Satija (B10084)<br />Megha Chaturvedi (B10088)<br />
  2. 2. Singapore: Key facts <br />Sustained economic growth during 1970s and 1980s<br />On verge of becoming a developed nation<br />Advantage due to geographic location (strategic port)<br />Largest port in gross tonnage, 2nd largest in container handling globally<br />Among top 20 trading nations in world<br />
  3. 3. Rationale behind developing TradeNet<br />Problems with the existing methods<br /><ul><li>Number of documents to be processes was high and rising
  4. 4. Handled 10000 and more declarations each day
  5. 5. As high as 20 forms needed to be processed in complex cases
  6. 6. Inefficient operational processing
  7. 7. High Turnaround time, with the average of around 2 days
  8. 8. High costs of trade documentation: around 4%to 7% of value of good shipped
  9. 9. Error prone transactions (half applications had errors)</li></li></ul><li>Rationale behind developing TradeNet<br /> Other Benefits of using TradeNet<br /><ul><li>Results in streamlined processes
  10. 10. Right Timing
  11. 11. Government’s emphasis on establishing Singapore as an IT society
  12. 12. Would help attract more FDI by providing transparency and efficiency
  13. 13. Cost efficiency
  14. 14. Providing competitiveness in external trade
  15. 15. Cost efficiency achieved through:
  16. 16. Low Manpower requirement and Low overseeing expenses
  17. 17. Futuristic
  18. 18. Provides Scope for analysis of data
  19. 19. Provides Traceability of documents
  20. 20. Provides easier accessibility of older records</li></li></ul><li>Selection(1/2)<br />Formation of Committee on National Computerization (CNC)<br />Report on how Singapore could emerge as world leaders using IT systems<br />Business Process Re-engineering<br />Transformation of all trade documents into a single document<br />Creation of TradeNet Steering Committee to oversee all required procedural reforms of all the departments<br />Involving Pricewaterhouse Coopers<br />Study of market for TradeNet<br />Conducted survey of basic information processing requirements within the trading community<br />
  21. 21. Selection(2/2)<br />Selection of Vendors<br />Based on size of operations carried out and experience in the domain<br />Formation of Singapore Network Services(SNS)<br />Purpose was to own and operate TradeNet<br />Retention of original TradeNet committee members<br />
  22. 22. Adoption<br />Government Computerization Project:<br />IT infrastructure already in place in various agencies<br />Response exceeded Target<br />850 of 2200 subscribers joined by 1989<br />TradeNet made mandatory by 1991<br />Joining Costs:<br />Connect Charge: US$375 – Transaction Cost: US$.25/kb of information<br />Monthly Costs : US$15 – PC Cost +Software Cost: US$4000<br />Larger Firms – Joined Early<br />Small and Medium Firms – Steps to increase Adoption<br />Tax Write offs on purchase of Computer Hardware<br />Facility of Service Centres<br />Option of going to TDB offices<br />Public Terminals in convenient offices: Assistance at modest fees<br />
  23. 23. Exploitation<br />
  24. 24. Structure Before TradeNet<br />Freight Forwarders<br />Air Cargo Agents<br />Shipping Agents<br />Traders<br />Multiple Complex Connections<br />CAAS<br />TDB<br />Customs<br />PSA, Jurong Port<br />Controlling Agencies<br />
  25. 25. Structure After TradeNet<br />Freight Forwarders<br />Air Cargo Agents<br />Shipping Agents<br />Traders<br />TradeNet<br />CAAS<br />Controlling Agencies<br />PSA, Jurong Port<br />TDB<br />Customs<br />
  26. 26. Risks Undertaken In Building TradeNet<br />Technological Factors<br />Lack of vendors with experience in EDI in the local environment<br />Subcontracting of certain modules to local software house, CSA<br />Lack of skilled manpower for the implementation<br />Task Factors<br />Tight deadlines for the implementation of TradeNet<br />High involvement of government finances<br />Market Factors<br />Risk of rejection by the local trading community<br />Organizational Factors<br />No single government agency had the expertise to implement TradeNet<br />
  27. 27. Evaluation of TradeNet Project<br />
  28. 28. Time targets<br />Target time announced in Dec 1986 was 2 years<br />1st transaction in Jan 1989; all components in place by June 1989<br />Institution of Engineering Change Procedure(ECP) and postponement of enhanced capabilities<br />Involvement of SNS engineers throughout development phase<br />Fast decisions by SNS management<br />
  29. 29. System Performance<br />Turnaround time for a transaction reduced from 1-4 days to 15 minutes<br />Low cost of transactions – around the same as paid by traders before Tradenet<br />SNS was able to breakeven in the 2nd year of its operations, 3 years earlier than anticipated<br />
  30. 30. User Adoption<br />850 out of 2200 subscribers within 1st year handling 45% of all trade transactions; target was 15% of all transactions<br />Most of the larger firms had joined by the end of 1989<br />Overwhelming success prompted TDB to phase out paper-based transaction by early 1991<br />
  31. 31. Organizational Impact<br />Better utilization of resources by companies<br />Savings of 25%-30% in handling trade documentation by freight companies<br />Larger firms were able to integrate their internal systems with Tradenet thus making them more efficient and competitive<br />Govt agencies like Customs improved their performance and compliance<br />
  32. 32. Critical Success Factors<br />Commitment at Highest level<br />Minister of Trade & Industry<br />Trade Development Board<br />Multi-agency Steering Committee<br />Establishment of a corporate entity (SNS)<br />Concurrent development of IT infrastructure<br />Experienced technical service provider IBM<br />Establishment of Document Service Centers<br />
  33. 33. Thank You<br />