I. Introduction

" In the 21^st century, we can build much of our prosperity on innovations in cyberspace in

ways that most of us cannot even imagine," said President Bill Clinton during a ceremony

marking the release of a policy report on eCommerce.

The Singapore Government is pumping in S$ 82 million to set up a nation-wide

communications network which will link every home on the Island, electronically, with

government agencies and commercial organization, Called Singapore One – or Singapore

One Network for Everyone- the new multimedia network will give Singaporeans access to a

wide variety of services like video-conferencing, high-speed internet, teleshopping,

entertainment-on-demand and electronic libraries, from the comfort of their homes.

The new network is expected to be ready by 1998. The pilot phase, from 1996-2000, would

cost S$ 32 million, and would focus on four areas: government, education, home and

business, as the network would provide new channels for buying and selling, fuel electronic

commerce and boost the local SMEs as well. (Source: Adapted from NPB, Singapore One project profile)

By Dec 1997 onwards, the world’s first secure electronic credit card payments with Visa

and MasterCard have been made in Singapore for one million cardholders.

Netrust Pte Ltd., a Joint venture company set up by the National Computer Board and

Network for Electronic Transfer (Singapore) Pte Ltd. The first South East Asia Certification

Authority to issue electronic identification certificates for identification and verification of

individuals and organizations in Network transactions.

Netrusts public key certification infrastructure will be able to facilitate secure electronic

transactions and services over the Internet where the identities of the users have to be

verified. Examples of such services include secure on-line finance transactions, cyber-

shopping, secure electronic mail, on-line healthcare services, as well as on-line government

transactions and services. It ensures consistent and reliable mechanism for the identification

of users across different applications, especially in the government, retail and financial

services. Service providers can use the system to provide secure on-line services, enable

electronic payment and reduce the incidence of fraud.

Netrust will offer various classes of Digital Certificates, differentiated by the level of

assurance they provide. Gold Certificate are issued only on smart cards or other certified

security tokens and will provide the highest level of user and server security identification for

electronic commerce and high value transaction. Silver Certificate are issued on diskettes or

stored on hard disks and can use for lower-value transactions and authenticated access to

on-line services. ( Source: Adapted from Transport Distribution & Logistics, Third quarter 97 issue.)

establishment of new directions for SMEs in Singapore is therefore timely, and contribute

to development of Singapore as the Electronic Commerce Hub of the Asia Pacific region.

The drivers for electronic commerce are both technological ( under the tremendous

pressure of innovation in the above mentioned fields) and business oriented. Some feel

that technological drivers are the only real ones, and business driver are vague.

My goal here is to show that there is a solid business evidence to show that this is

not a fad.

In this paper, I propose a structural framework to analyses the explosion of eCommerce

on the business activity through Internet usage survey & strategic recommendation.

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II. What is Electronic Commerce (eCommerce)?

"Electronic Commerce is a general term applied to the use of computer and telecommunications technologies, particularly on an inter-enterprise basic, to support trading in goods and services. It is defined as the use of information technology to effect the linkages among the functions provided by participants in commerce." The exchange of value through a universal and ubiquitous electronic network" The exchange of value is not limited to simply buying and selling and also represents service & support. Business people know what it means to exchange values; to buy, sell, exchange information and to collaborate with a partner."

Definition by Mr. James Ehrhartan associate partners with Anderson Consulting.

A year 2001 scenario of eCommerce in Singapore by Mr. James.

1. Common transactions like banking will be largely done on line.

2. People will have more flexibility to work outside the office, either from home or on the road.

3. The net will become a serious contender with the TV as a channel for entertainment. Increasingly, edutainment, which is a considerably more valuable form of entertainment.

4. It will become increasingly cheaper and easier to use the internet to keep relationships active and growing, than using technologies such as video conferencing and mail.

Seen from a buyer-seller perspective and using a lift-cycle model, eCommerce can be

used in all the phase of a commerce transaction.

Figure 1.

Technologies and its convergence with business drivers.

The technologies that include electronic commerce are not limited to the internet and

the world-wide-web. Although they are the most widely used technologies in today

consumer electronic commence systems and will often be used in my examples.

eCommerce would consider all interactive media technologies, i.e. the combination of an

intelligent device, supporting multimedia data (text, sound, picture, video, etc.) connected

to an open networks. As such, multimedia kiosks and interactive television fit well as

electronic commerce channels.

Business value framework & its competitive advantage

This section presents a framework detailing the value of electronic commerce, especially

the World-Wide-Web component (Web) of the internet, for commercial organizations

dealing with end-customers. A common way to evaluate the value of the Web is to look

at the potential of selling products or information on-line. However, as we’ll

demonstrate, restricting the value of electronic commerce to direct sales only ignores a

major part of the business value. Evaluated by direct sales only, the internet as a

distribution channel cannot compete today with other direct-marketing channels.

Making money from direct sales is certainly the first way to getting value out of

electronic commerce. Nevertheless, there are many values as listed in the table below.

Figure 2.

The components of the business value of electronic commerce

eCommerce improves, transforms and redefines an organization structure in the global

business model and the impact in term of business results.

Transforming an organization requires more creativity, more work, an additional level of

risk and a different timeline than simply improving it. Obviously, the expected rewards

match the additional burden.

Next, we describe the ten components of the business value.

Proposition 1- Product promotion

Through a direct, information-rich and interactive contact with customers, electronic can enhance the promotion of products. The first use of electronic commence is to provide product information to customers, through on-line electronic brochures or buying guides. This can be seen as an additional marketing channel, allowing to reach a maximum number of customers. The advantage of electronic commerce as a way to deliver product information is its availability anytime, anywhere, provided the customer has the right infrastructure to access this information. Using an electronic medium also allows for interactivity and customization. The different ways to customize the advertising content, based on the customer profile or input, are to change the content description, display only a range of products which are relevant to a particular customer, change the price, allow for new functionalities in some cases or change the path used to navigate in the service.In a world with products being increasingly harder to differentiate, shrinking life-cycle,an abundance of traditional media messages and customers having too little time, electronic commerce offers an opportunity for new promotion strategies, enhancing the branding of products. As such, the quality of the " advertisement" is the primary value in product promotion.

Proposition 2 – New sales channel

Due to their direct reach to customers and their bi-directional nature in communicating information, electronic commerce systems represent a new sales channel for existing products.Considering electronic commerce, and in particular the World-Wide-Web, as a sales channel make sense for two kinds of products:

• Physical products, sometimes also sold in conventional stores, which can be advertised and / or ordered on-line, such as computer hardware or wine.

• Products which can additionally be delivered over the electronic medium, such as information or software.

Proposition 3 – Direct saving

By using a public shared infrastructure such as the Internet and digitally transmitting and reusing information, electronic commerce systems can lower the cost of delivering information to customers.

Proposition 4 - Time to market

Due to their instantaneous nature, electronic commerce systems allow a reduction of the cycle time associated with producing and delivering information and services.In some markets or for some products, the ability to distribute or receive a product as soon as it has been created is of primary importance. This is obviously the case for information distribution. Companies such as CNN & Finance Time, distribute information on hundreds of topics using electronic mail or the Web, to make sure it reaches its targets as soon as it is available.

Proposition 5 – Customer service

Through intelligence built into systems and the extended availability of intelligence support systems, electronic commerce systems can enhance customer service.The ability to provide on-line answers to problems, through resolution guides, archives of commonly encountered problems, electronic mail interaction ( and in the future audio and video support). 24 hours a day, 365 days a year, builds customer’s confidence and retention. Monitoring how customers use this support information also provides insights on improvement areas in current products and the list of issues encountered with products can be a significant source of product feedback for the design of new product. As consumers start using these systems in growing numbers, industries other than software will take note of these opportunities and deliver online customer service.

Two likely development in this area are

• products which diagnose themselves, and use an on-line connection to call a support specialist which can arrive on-site, either physically or electronically, with the full knowledge of the problem that needs fixing.

• knowledge-based systems which assist customers in finding solutions for their problems.

Proposition 6 – Brand or corporate image

Electronic commerce systems will become one of the components of a brand or corporate image, especially while targeting technology-friendly customer segments. This might be one of the most intangible aspects to measure, but building a brand or corporate image is of prime interest in some industries with commodity products or faces high competition. For instance , the soft-drinks industry, Coca-Cola and Pepsi spend huge amount of money to try to differentiate basically similar products. All these brands use their Web presence as a way to affirm their corporate identity and brand image, in addition to providing product information, etc.

Proposition 7 – Technology learning & organizational laboratory

Rapid progress in the area of electronic commerce will force companies to adapt quickly and at the same time offer them an opportunity to experiment with new products, services, structure and processes.If it is true of the above mentioned, it will have a large and durable impact on the strategies of most organizations. Therefore, it is critical that these organizations become familiar with the technology as soon as possible. The learning curve of mastering such technologies, and understanding their power to reshape customer relationships, is steep and can’t be achieved overnight. It is very often an interactive process, requiring organizations to try new offerings, and tweak them according to customer feedback. In a similar fashion, new technologies require new organizational approaches. For instance, the structure of the group dealing with electronic commerce might have to be different from the one typically used in the organization, in order to be more flexible and responsive to the market, or new processes have to be put in place, for instance to deal with authorization of publishing corporate information on the internet. This type of corporate change needs to be planned and managed, and before getting it right, organizations might have to struggle with different experiments. The value of both types of learning resides in the new capabilities the organization acquires, and the potential of using these capabilities in the future, as the market develop and customer expectations become clearer. The product and process innovation which appears in one corporate division is also positive, as it can be reused across divisions if success is achieved.

Proposition 8 – Customer relationships

Electronic commerce systems will allow for more personalized relationships between suppliers and their customers, due to their ability to collect information on customers needs and behavioral patterns.According to Rayport and Sviokla " in today’s world of overcapacity, in which demand,not supply, is scarce" there needs to be a shift from supply side to demand side thinking, and organizations need to "sense and respond" to customers desires rather than simply make and sell products or services. The focus is therefore on establishing relationships with customer, based on learning their needs and desires, proposing the right products and keeping these relationship active throughout the years. The role of technology in learning about customers is the ability to record every event in the relationship, such as customers asking for information about a product, buying one, requesting customer service, etc. Throughout all these interactions, either over the phone, in person or on-line, the needs of the customer are identified and will feed future marketing efforts. All that data acquired about customers also provides a switching barrier, as customers would have to "teach" a competitor all that information. Moreover, a historical analysis of the data will reveal who are the most profitable customers and products, there by reducing the scope of products tofocus on the most profitable ones, and extend a product line by adding products likely to cater to the needs of these profitable customers. Then, by understanding this segment of customers who are most interesting, specific marketing efforts can be targeted to similar individuals, who are currently non customers. Becoming a trusted partner of a customer is key to maintaining these relationships, It can be achieved by providing him or her with valuable information. This pro-activity is likely to generate additional sales.Pro-activity is the ability to use the direct channel with the customer to inform him of specific offers which match his/her needs and buying patterns.

Proposition 9 – New product capabilities

The information-based nature of the electronic commerce processes allows for new product to be created or existing products customized in innovative ways.

Proposition 10 – New business models

Changing industry structures and electronic commerce systems allow for new business models to be formed based on the wide scope of information available and its direct distribution to end-customers. (Source: Adapted from Michael Bloch, Yves Pigneur & Arie Seger (Mar 96), University of Californa and University of Lau sanne- Switzerland)

Electronic commerce and its competitive advantage.

Using Michael Porter’s concept on industry analysis as a framework, I will to map

above 10 business value components to

• generic competitive strategies

• new entrants and substitute products

Figure 3.

1. Generic competitive strategies

Porter’s three generic strategies are cost advantage, product differentiation and focus. Focus means concentrating on one segment of the firm’s customers and providing them with an extremely well-targeted set of products, excellent service Offers a cost advantage through less expensive product promotion (P1-product promotion), cheaper distribution channels ( P2-new sales channel) and direct saving (P3). This emphasizes how the Internet allows small companies to act as much larger ones, by using a "free" or very low-cost infrastructure to promote their product on a global basis. As such, the Web can be seen as a great equalizer, replacing an often costly distribution network by a public or widely shared infrastructure.

Helps a company to differentiate itself not only through product innovation (P9 – New Product capabilities), time to market (P4) and customer service (P5). Allows for customer focused strategies through better customer relationships(P8).This is the idea introduced at proposition 8 on focusing on a specific set of customers and delivering the best service to them. Electronic commerce enables this strategy for a larger number of specific segments, by using information technology for personalized service on a larger scale and mass-customization of products.

2. New entrants and substitute products

Allows SMEs to enter into traditionally hard to access markets much easier, due to less expensive product promotion (Proposition 1), new sales channels (Proposition 2) and reduced capital requirement (Proposition 3). Allows SMEs to raise the entry barriers in some markets through extensive customer learning (Proposition 8) ( which makes switching more expensive). Product differentiation ( Proposition 4, 5, 9) and experience (Proposition 7). Facilitates the introduction of substitute products in a market due to product innovation (Proposition 6).

eCommerce and Industry value chain transaction cost theory

Today’s successful manufacturing companies face ever-increasing productivity combined

with overall transaction cost cutting. Companies that survive in the present global

competitive environment show a heightened awareness to customer’s needs and see

product flexibility, and mass customization as a necessary means for survival.

Transaction cost theory helps us to understand how markets and hierarchies are chosen.

In free market economies, one can observe two basic mechanisms for coordinating the

flow of materials and services through adjacent steps in the value chain: markets and

hierarchies (Source: from Maloneet al., 1987; Picot & Kirchner 1987).

Williamson (Source: from 1981, pp.1545-1551) classifies transactions into those that support

coordination between multiple buyers and seller, i.e., market transaction, and those

supporting coordination within the firm, as well as industry value chain, i.e., hierarchy

transaction.

The price a product is sold at consists of three elements:

• Production costs

Production costs include the physical or other primary processes necessary to create and distribute the goods or services being produced.

• Coordination costs

Coordination costs include the transaction (or government) costs of all the information processing necessary to coordinate the work of people and machines that perform the primary processes. For example, coordination costs include determining the design, price, quality, delivery schedule, and similar factors for products transferred between adjacent steps on a value chain.

• Profit margin.

Economic theory and actual market behavior assert that firms will choose transactions that economize on coordination costs. As information technology continues its rapid cost performance improvement, firms will continue to find incentives to coordinate their activities electronically.

It is important to explore how purchasing and selling transaction patterns are likely to change

and how selling prices will be affected. Figure 1 depicts three variants of traditional value-

added chains and the resulting growth in value added and selling price.

Three Variants of Alternate value added chains

Figure 4

may be even higher than depicted here. The first chain depicts the traditional chain of market

(Source : Adapted from Rolf T.Wigand and Robert I. Benjamin, Syracuse Unversity.)

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III. The SMEs in Singapore

Local SMEs account for a large share of the Singapore economy. There are over 80,000 small

and medium Enterprises (SMEs) in Singapore today. They make up of more than 90 per cent

of total establishment in the manufacturing, service and commerce sectors in Singapore,

44 per cent of total employment, 24 per cent of value added and 16 per cent of direct export.

The definition of a small and medium-sized enterprise follows the eligibility criteria used

By EDB (The Economic Development Board) to qualify an SMEs firms.

An SME is a company with at least 30 per cent local equity and not more than 8 million

in net fixed asset investment if it is in manufacturing, or employs not more than 50 workers

if it is in commerce or services.

Nevertheless, they lag behind their foreign counterparts in productivity, management skills,

marketing and technology.

The rapidly changing economic environment especially information technology, poses new

challenges to business, regardless of company size or market share. To survive and grow,

local enterprises need to acquire the capacity and capability to apply appropriate technology

and adopt sound management practices to make the difference better.

For Singapore to attain the status of a developed country by the turn of the century, we must

have a core of high-calibre entrepreneurs and world class enterprises capable of matching

their counterparts in industrialised countries. These local enterprises shall then become a

driving force contributing towards a vibrant, resilient and highly developed economy.

Local SMEs shall become a source of innovation and entrepreneurship. They shall build up

and develop themselves into specialty manufacturers, marketers or service companies for the

world markets. In addition, local enterprises shall be a receptacle for international technology

and knowledge transfer, and a link in the value chain of global business.

Entrepreneurship, innovation, strong customer orientation, sound management practices, high

value added and technological content, as well as a global perspective shall be the hallmarks

of Singapore enterprises.

The Challenges and Opportunities Ahead – Singapore SMEs

The rise of Japan and the Asian Newly Industrializing Economies (NIEs) has been one of the

most significant international developments. If they sustain their growth rates, their

combined GNP could well exceed that of Western Europe and approach that of the USA by

the end of this century. The dynamism of the Asia-Pacific region is marked by rapidly

growing intra-regional trade and investment, spurred by the massive domestic restructuring

of Japan, Taiwan and South Korea and the pursuit of an open door policy by the People’s

Republic of China to develop her economy. The Asean countries, especially Thailand and

Malaysia, are expected to grow strongly, and Singapore is well placed to capitalise on these

major development.

 

The trend towards forming economic blocs is also set. This is being led by the proposed

establishment of the single European market by 1992, North America Free Trade Agreement

( Nafta) and Asean Preferential Trade Arrangement.

Furthermore, major changes are taking place at the corporate level. The emphasis of MNCs

is now on managing for value. As a result, a new Asian strategy has evolved. The Asia-

Pacific is no longer viewed solely as a low cost production centre. Many MNCs are

developing a clear vision of the role the Asia-Pacific region should play in their overall

corporate strategy. This has led to increasing commitments in the region and the development

of fuller business systems.

 

Technology has exerted a strong influence on economic performance affecting all walks

of life. It will continue to do so in future. The increased research and development (R&D)

effort worldwide have led to many major breakthroughs and advances in technology, and

spawned new commercial applications. Technology adoption has become a principal policy

measure for developing local enterprises. At the same time, automation is becoming more

pervasive, giving a new basis for local enterprises to reduce production costs and labour.

 

Information technology (IT).

Some industry analysts predict that the commencement of the Internet could research more

than U$ 200 billion by the end of the century and up to US 1 Trillion in business per

year by 2010. IT is accelerating the pace of globalisation. With the use of IT, information

can now be accessed easily and quickly. Increasing capabilities, decreasing costs and

greater connectivity have made IT a strategic tool for business. In order to stay ahead,

companies are exploiting IT to increase efficiency and introduce high quality

products and new services. Information systems, image and voice processing, portable

computer power, communication networks, artificial intelligence " smart" cards and so on are

rapidly transforming the internal operations of businesses as well as the markets in which

they operate. Many companies are now moving towards direct marketing, sales and delivery,

non-store retailing and integrated distribution. As a result, a whole range of new activities

such as value added network services and personalised financial and banking package

have emerged.

The Clinton administration’s decision to turn the Internet into a " Global free-trade zone" for

sales of products and services, uncontrolled by national governments and open to unregulated

flow of information and business transactions, reflects Washington’s recognition that it lacks

the political and legal power to regulate cyberspace.

 

Globalisation has led to companies becoming more interdependent for survival and growth.

Forging business partnerships has become an important means for local enterprises to go

International. Today we live in a " global village ". Rising income and particularly, access to

information through TV, travel and advertising messages have created common demands and

expectations in all countries. Common demands have created the opportunities for common

suppliers. Now, since every business faces global competitors, SMEs all have to consider

themselves as international businesses. A new form of business collaboration has also

emerged amongst companies in the same value chain but engaged in different activities.

The traditional focus on " economy of scale" has been shifted towards " economy of

scope". Moreover, there is growing emphasis on forging closer ties between the MNCs and

their suppliers, with more integration, technology transfer and even the undertaking of joint

projects.

 

Consumerism is fast emerging as a major force and has led to the breakdown of the mass

consumer society. Winning the customer’s love has therefore become the empirical factor for

business success. Customer orientation is a state of mind that every world class company

possesses.

 

Fashionisation. In the past, fashion was identified with women’s clothing. But, today more

and more market – watches, motorcycles, beer, cars, cinema, music, electronic goods, even

management courses – are characterised by annual model changes, rapid obsolescence and an

unpredictable and fickle demand. Companies that cannot handle novelty, rapid model

replacement, fashion and style see their market share slipping and their profit margins

eroding as their products look increasing dull and old-fashioned to customers. New models

and services have become the key to maintaining or enhancing prices or margins. Without

novelty and continual feature enhancement, the company will see its prices and market share

relentlessly chiselled away.

 

Commoditisation. Today’s specialty products are tomorrow’s commodities. Services that

customers today regard as special, tomorrow will be seen as standard. Profitable and market

niches invariably attract new entrant which copy the successful innovators and compete for

market share by lowering prices. As customers gain familiarity with using products and

services, they look upon them increasingly as commodities and price becomes more and

more important. Unless companies can keep moving the goalposts through faster innovation,

profit margins invariably decline.

Source :

• SME master plan 1995
• Peter Doyle " Marketing management & Strategy" 1994
• Leon Heder, The writer is Business Times, Washington correspondent

 

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IV. The Singapore Government Commitment of IT 2000 – A vision of an

Intelligent Island.

Singapore has once again been ranked as the world’s most competitive country. The

Republic came out on top for the second consecutive year in the Global

Competitiveness Report 1997, has over taken the US last year, The US occupied No.

1 position in 1995 and 1994. The new 1997 global ranking by the Swiss-based World

Economic Forum (WEF) was released on 20 May 1997.

The World Competitiveness Report has, in recent years, placed Singapore among the

Top nation in the world in terms of strategic exploitation of IT by company, computer

literacy of workers and telecommunication infrastructure.

Over the past decade, Singapore has deliberately prepared herself to meet the new

challenges of the information age. Singapore has developed substantial national

information technology (IT) capabilities. A positive environment exists for private

and public sectors to collaborate in exploiting IT for national competitive advantage.

Singapreans will be able to tap the into vast reservoirs of electronically stored

information and service to improve their businesses, to make their working lives

easier, and to enhance their personal, social, recreational and leisure options. Text,

sound , pictures, video, documents, designs, and other forms of media can be

transferred and shared through the high capacity and high speed nationwide

information infrastructure made up of fibre optic cables reaching all home and

offices, and a pervasive wireless network working in tandem. This information

infrastructure will also permeate physical infrastructure making mobile

tele-computing possible, and at homes, work places, airport, seaport and surface

transportation systems" Smarter" . A wide range of infrastructure service, linking

government, business and the people, will be created to take advantage of new

communications and tetherless network technology.

According to Singapore vision, some 10 years from now, Singapore, the intelligent

Island, will be among the first countries in the world with an advanced nationwide

information infrastructure. " Singapore One", It will interconnect computers in

virtually every home, office, school, and factory. The computer will evolve into an

information appliance, combining the functions of the telephone, computer, TV and

more. It will provide a wide range of communication means and access to services.

The vision of the IT2000 is based on the far-reaching use of IT.

Singapore One is defined, as a national initiative to build a high-capacity broadband

network. Singapore One will break the bandwidth barriers of current Internet

technologies. It’s a major step towards the future’s realistic, on-line environment

where interactive audio and video and multidimensional graphics are common

place. Singapore One offers an ideal research and development environment,

sophisticated urban user base and a springboard to the emerging broadband markets

to Asia and the world.

Singapore One will play a key role in delivering advanced IT applications and

services to every sector of society. It will help Singapore to stay at the cutting edge

of the digital age, redefining lifestyle, reinventing work and leisure and powering the

country’s economic engine.

The Singapore Government is fully behind the Singapore One initiative. As an

Indication of its firm commitment, an initial S$ 32 million has been committed

for Phase 1 with another S$ 50 million earmarked for Phase 2. The Government

is also funding fiscal and financial programs for Singapore One business partners

driving user growth and demand is also a key priority. For a start, Ministries and

government agencies will be anchor tenants of Singapore One. They will provide

public sector services in their most complete form, anywhere, any time.

The Government has also set up a pioneer club to encourage early participation in

Singapore One. Under this program, early adopters will be offered a host of

incentives and preferential tariffs, with additional support from other existing

incentive schemes.

The Government has also invested heavily in creating an IT-literate society and

high technology infrastructure, with these investment continuing in the future. It

has created a global thinking and transparent business environment. The Singapore

government’s long-term commitment to stability and prudent fiscal management

has made the nation an excellent base for local, regional and worldwide business.

Singapore One data carrying capabilities are light years ahead of the Internet.

It incorporates the latest digital technologies in an optimised, integrated network.

With its huge amounts of bandwidth, Singapore One will deliver information to

subscribers at speeds greater than dial-up or even many dedicated line Internet users

could ever hope to achieve.

A growing number of applications and services that fully utilise Singapore One

capabilities will emerge. An amazing array of new services will be available only

to Singapore One users with broadband connections to their homes and offices.

Internet access will simply be one of the many applications that Singapore

One offers. Singapore One users will have the best of all worlds.

Singapore One will use some Internet technologies such as browsers to deliver its

broadband applications and services. Unlike the Internet, these browsers will also

offer multimedia applications such as CD-quality audio, live broadcast quality video

and interactive 3D in a rich, real time environment.(Source : Adapted from National Computer Board,

Singapore . Singapore One Project profile).

Singapore One and SMEs competitive advantage

Michael Porter, Harvard Business School professor and eminent author in the field of

business strategy, has written " the information revolution is affecting the nature of

competition in three vital ways:

• Changing industry structure

Changing the industry structure creates competitive advantage for the

SMEs that lead the change and can have devastating effects on slow

moving companies that to react.

Changing the structure of an industry involves changing the premises on

which companies compete, in particular the ways that customers buy from

companies and suppliers interact with buyers.

SMEs can alter the rules of competition through increasing the power of

buyers, for Instance, products / services customized and treated to

high-tech/high touch approaches to respond to the market, raising barriers

to entry, and influencing the threat of substitution.

• Creating competitive advantage

By giving companies new ways to out-perform their rivals…by lowering

costs, enhancing differentiation and changing competitive scope.

• Spawning new businesses

          Making new businesses technologically feasible, creating derived demand for

        new products and creating new businesses within a company existing  operations.

( Source : Adapted from N. Caroline Daniels, "Information technology-The management challenge")

Assistance schemes for Computerization from Singapore government.

Although Singapore SMEs now use IT more extensively, many still do not fully

understand and appreciate how IT can help them address major business challenges

and exploit new opportunities. To help SMEs fully realise the benefits of IT, the

National Computer Board (NCB) has set up the Local Enterprise Computerization

Programme (LECP). To help encourage SMEs to invest in IT usage and get into

eCommerce, the NCB offers SMEs up to 70% support to cover the cost of engaging

IT consultants for the feasibility and implementation phase of the project. In addition,

SMEs can apply for low interest loans for the acquisition of IT solution under the

local Enterprises Finance Programme, administered by the Economic Development

Board (EDB).