Georgetown School of Business

MGMT 550 Information tEchnology and Business Strategy

Ewan Sutherland

draft

Some notes on our discussion of Electronic Data Interchange in Singapore

Note: HBS updated the case, so there is now only one case.

Business-Government relations

It seemed clear that business-government reltations were radically different in Singapore from those in the USA. To such an extent that the lessons would be hard to translate to North America. However, they were strong similarities to those found in other countries in the region -- Singapore's principal competitors. There were also parallels in European countries operate with the Rheinland model (e.g., Austria, Germany, Netherland and Belgium).

There was a clearly articulated strategic vision for the city-state Of Singapore. It was to achieve the status of a "developed" nation by the year 2000, but not to stop there.

Figure Gross Domestic Product in Singapore

YearGDPGrowth
(US $ Billions)(percentage)
199067.78.8
199174.56.7
199280.66.0
199391.310.1
1994105.310.1

[Source: Economic Intelligence Unit (1995) "Country Report: Singapore".]

Figure GDP per capita Purchasing Power Parity (US Dollars)

YearSingaporeUnited Kingdom
19838,16110,010
19848,76410,468
19858,70511,175
19868,94011,807
19879,92712,803
198811,34613,827
198912,96714,729
199014,88815,354
199116,32515,548

[Source: United Nations "Statistical Yearbook" 39th Edition.]

Singapore has direct rivalry with Hong Kong as a trade centre. It has numerous competitors in the region: South Korea, Taiwan, Malaysia, Philippines, Indonesia, Vietnam and so on.

The small size of the state was clearly influential. People knew each other, their influence and their ability to deliver on the committments they make. In particular there was the dominance of one family. Lee Kwan Yew is now the "senior minister", formerly the Prime Minister, a position held since the independence of Singapore in 1966. One of his sons was Trade Minister, BG Lee (Brigadier General), while another runs Singapore Telecom.

The role of Singapore is as an entrepot. There is an explicit strategy for economic development.

Education is seen to have a vital role in economic development. Singapore has no alternative to relying on it "human resources". In the short term, skills in information technology are seen as adding to the economic performance of Singapore. Schools and universities took an active part in developing these skills, creating new departments and courses. In early 1995 all fourteen juniour colleges and twenty-four secondary schools had access to the Internet. By the end of 1995, it is intended that a further fifty schools (primary and seconday) be connected. Teachers are taking a one-day course provided by the Ministry of Education.

However, this implies access to information which is a subject of some political sensitivity in Singapore. Many leading publications from the USA and Europe have had problems with the Singaporean authorities. Satellite television from Asiasat beams down on Singapore and the rest of Asia, the decadence of Baywatch and music videos such as Madonna and Red Hot Chilli Peppers. Access to the Internet will further open up availability of information and knowledge of alternative life styles which challenge traditional values.

EDI was seen to be importation in the facilitation of trade.

One measure which is a good proxy for GDP per capita is "Tele-density", the number of telephone lines per one hundred population. As the following figure shows, Japan and South Korea have shown not only rapid growth, but sustained growth. Their stated aim is to overtake "developed" countries.

Figure Tele-density in selected countries

[cute graph]

Source: International Telecommunications Union.

Automation in shipping

Since the 1960s there has been massive automation of ports and of ships. The result has been the loss of jobs in docks (dockers, stevedores, longshoremen, etc). Much of the loading and unloading is handled automatically with machines moving containers from trucks and railway wagons onto ships and barges. The containers themselves are filled and emptied at sites which are often far inland. This cut the time to load ships and eliminated losses caused by damage and theft.

Consequently, ships are "turned around" much faster. With the elimination of long loading and unloading periods, any delay was being caused by the documentation.

Now automation has been extended to documents, hence Electronic Data Interchange.

Management issues

Many of the stakeholders were resident in Singapore. For example, insurance is based in London, through Lloyd's.

Rapid adoption of systems was achieved.

Use was made of an existing global standard in EDIFACT.

Benefits

Encouragement of:

Four to seven percent of costs.

Faster turnaround time, to match automated handling of containers.

Why bother encouraging SMEs?

World Wide Web resources

Copyright © Ewan Sutherland, 1995.

Ewan Sutherland's home page

http://www.georgetown.edu/sutherland/mgmt550/edi_sg.html