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B2B Collaboration Creates Business(HKTDC Hong Kong Trade Services, Vol 01,2004)

Vol 1, 2004

IT & E-Commerce

B2B Collaboration Creates Business

Protecting Your Business

B2B Collaboration Creates Business

Electronic commerce (e-commerce) over the Internet is here to stay, having rapidly become a de facto way of integrating supply chain processes that also opens up vast business opportunities for companies in any industry.

Like other well-developed economies, Hong Kong has been transforming its business commerce online. An advanced telecommunications infrastructure and wide availability of broadband access mean information and communication technology is now an essential investment in Hong Kong, rather than an unnecessary expense.

Hong Kong companies have, as usual, been quick to spot a winning trend, with many large corporations leading an increasing movement towards ordering goods or services through electronic means.

However, many small and medium-sized enterprises (SMEs) have yet to adopt business-to-business (B2B) e-commerce strategies and are thus losing a competitive edge.

The government is moving to address this problem and encourage wider adoption of e-commerce by implementing comprehensive promotion programmes and facilitation activities to enhance awareness and understanding.

The question remains, however, why are SMEs so hesitant to adopt e-business with its proven competitive advantages? Obviously in the current stagnant economy, SMEs are very conscious of investments in equipment and human resources and changes in workflow.

However, SMEs must take into serious consideration the fact that B2B e-commerce is a modern business investment to further tighten and strengthen collaboration with trading partners, rather than a pure expenditure without return.

Technology in practice

Many people think that e-commerce is only suitable for modern enterprises, but few realise that small companies in traditional industries can also implement e-business technology at minimal cost.

Tinenin Co Ltd, for example, is a traditional SME vegetable wholesaler that has operated in the Cheung Sha Wan vegetable market for a number of years. The company has, however, become an industry pioneer by transmitting important trade data to customers in electronic data interchange (EDI) format.

Riding on the well-established EZ*TRADE EDI B2B document exchange platform operated by the Hong Kong Article Numbering Assn (HKANA), Tinenin receives purchase orders from one of its major buyers in a fault-free and timely manner, thereby enhancing work efficiency and data accuracy. Currently, more than 2,500 POs are transmitted through this common platform everyday. (See box story)

EZ*TRADE supports traditional EDI as well as web-based EDI capability, so trading partners can conduct EDI transactions over the Internet without installing additional software or acquiring further technical training. These electronic transactions accelerate all business processes, from ordering to invoicing.

All messages sent by EZ*TRADE are based on the international EANCOM(r)/EDIFACT standard to ensure global compatibility and enable automatic processing of information by different computer systems in any country. As a result, it benefits both buyers and sellers in minimising the cost and possibility of human error in the process of data re-entry.

The Tinenin case is a classic example of the myriad ways in which efficient and effective modes of communication can be adopted in such traditional industries as the bulk fresh food wholesaling business.

E-commerce doesn't only enhance a smoother physical flow of goods in the supply chain. E-commerce technologies also provide clear records of transactions such as product categories, prices and quantities, allowing them to be itemised in detail in order to attain reliability, and accuracy, which in turn facilitates audit and control for the company.

SMEs that lack in-depth technical knowledge and implementation experience may require a total solution package from the service providers. The HKANA is actively helping SMEs by organising seminars, training and workshops on e-commerce, as well as providing e-commerce solutions and related technical or advisory services for businesses.

For instance, "ecec" (efficient collaborative e-commerce) is a complete e-business start-up kit offered by the HKANA to members who wish to build a firm electronic supply chain management (e-SCM) foundation. It includes a web-based database for product and company information (e-ID Repository), a B2B communication platform (EZ*TRADE), and promotional websites (EZ*SHOPS).

Ecec thus offers the essential tools for e-commerce and a foundation for successful supply chain management, streamlining data management, enabling collaborative data communication with trading partners and helping SMEs reach potential local and overseas customers.

"Trading partners can conduct EDI transactions over the Internet without additional software or technical training, accelerating all business processes from ordering to invoicing"

by Conser Lee
business support & membership manager,
Hong Kong Article Numbering Association

Nine steps to smart e-commerce

Step 1 Analyse business processes
Step 2

Consider company or customer requirements

Step 3

View the bigger picture - look at integrating all aspects of your business electronically

Step 4

Itemise exactly what e-commerce activities you want to conduct electronically

Step 5

Consider what e-commerce solutions are available to suit your needs

Step 6 Seek independent advice on best practices and standards from both solution providers and industry support organisations
Step 7

Consider legal and financial implications

Step 8

Review business objectives and performance of your e-business activities regularly

Step 9

Make sure you fulfil the expectations

Finer, faster food

Vegetable wholesaler Tinenin Co Ltd is a classic example of a firm using EDI to smooth and enhance its business operations on a day-to-day basis.

Based in Cheung Sha Wan Vegetable Market, Tinenin used to receive clients' orders via fax and phone but experienced frustrating lost orders and input errors.

However, in December 2001 Tinenin began using the EZ*TRADE web EDI system that enables trading partners to use the Internet to receive purchase orders and issue payment requisitions.

A mutually accessible web-based database also records any transaction updates and delivery destinations, which in turn becomes the base for making final payment requisition - also made in an electronic format.

Each day, Tinenin staff access the web browser, extract the purchase orders issued electronically overnight by the client and prepare the orders.

Once deliveries are made, the actual price, product type and quantity are once again matched against the purchase order while discrepancies are adjusted directly on the system.

Before a designated date each month, the company makes payment requisitions (PR) according to the updated records on the system.

The only obstacle blocking Tinenin's road to EDI implementation is the underlying nature of the goods and the traditional nature of the industry.

Unlike canned foods and other consumable goods, fresh food produce is easily degradeable, so some vegetables may be rejected due to damage.

Prices of fresh produce like vegetables may also fluctuate, so amendments for the actual quantity and unit price are only made manually on the delivery note on-site.

However, Tinenin perfectly demonstrates the essence of effective e-commerce implementation: enabling technology is just an effective tool to smooth the expedition.

The route to excellence must embrace process and a close collaboration between trading partners; buyers and suppliers must come together in a mutually agreed and integrated workflow, and staff on both sides must understand and stick to the revised workflow.


Protecting Your Business

Be prepared: firewalls, intrusion detection and protection facilities stop unauthorised access and help find and expel unwanted intruders

No business can afford to be without protection when it comes to the communications that are the very lifeblood of today's increasingly global business environment.

Internet attacks on information technology (IT) such as email, data storage and file transfer are, unfortunately, becoming so common that it is essential to install antivirus software programs.

Many firms offer antivirus software programs, including leading names like Symantec, McAfee, Norton and Trend Micro, scaled to meet the specific needs of individual small and medium-sized enterprises (SMEs).

However, basic automatic antivirus software suites that are simple to install may still not provide anything other than rudimentary protection, according to a leading industry figure.

"There have been several malicious virus attacks in the last year or two which hit a lot of machines, disrupted the whole Internet world and proved that antivirus protection is simply not enough," Symantec marketing manager Christine So explains.

"We see the recent threats as blended threats, where the originator used multiple propagation methods that do not attack a machine in a single way as in the past."

So therefore advises SMEs to add a firewall, which helps stop unauthorised access to a computer, as well as intrusion detection and protection facilities that help find and expel unwanted intruders.

These are readily available, with Symantec, for example, offering a Client Security product package that brings together antivirus, firewall and intrusion detection components in a single solution on a single machine.

"A customer only has to click once and these three different components will be automatically updated for a single computer with network management capability," So explains.

She claims that Symantec Client Security provides better protection for remote users and networked desktop clients against unauthorised network access and blended threats, such as the recent highly destructive Nimda, Code Red and Slammer worms.

"It also protects laptops outside the firewall from being used by hackers to gain unauthorised network access during an ISP connection, while the integrated security also provides better protection against blended threats for desktop clients inside the firewall," So adds.

Symantec Client Security automatically scans files for known and unknown viruses and blocks suspect inbound and outbound traffic, as well as unauthorised intrusions and port scans.

"It can also audit the network to identify unprotected nodes that are vulnerable to virus attack, and determine which nodes are protected by Symantec antivirus technology or other select third party products," So explains.

Symantec client firewall technology automatically instructs the antivirus scanning and intrusion detection engines to scan all outgoing files. "If a threat is detected, the antivirus and/or intrusion detection engine instructs the firewall to increase security measures and block the file," So says.

The Symantec solution is backed by the company's Symantec Security response, which delivers updates in a single, integrated package to ensure rapid deployment and security policy enforcement.

"Symantec Client Security means enterprises no longer need to purchase, update and manage multiple security products from multiple vendors or address interoperability issues between various vendors' products," So maintains, claiming multiple integrated technologies from a single vendor improve protection and help reduce total cost.

Available in a minimum 5-user version, Symantec Client Security is scaled so that larger SMEs with up to 100 users can invest in an enhanced package that comes with user packs called small business solutions.

The latter includes a licensing model that can scale up to thousands of computers, with cost depending on the number of machines connected to the system.

"Single employee companies might consider the Norton Internet Security package that integrates antivirus, firewall and intrusion detection software for a single machine," So adds.

Norton Internet Security 2004 for Windows 2000, Me, 98 and XP for a single user includes antivirus, firewall, intrusion detection, privacy protection, spam and content filtering in a single integrated suite and is available in five and 10-user Small Office Packs. "This would suffice for the one-man business, giving basic security for inbound Internet traffic," So claims.

Finally, So advises SMEs to deputise a staff member to oversee the company's IT systems and keep a log. "This will help provide the continuity needed to ensure that the efforts made to enhance security are coherent and solid," she concludes.


Security begins at home

There are five simple steps SMEs can take to implement a basic IT security policy and minimise the chances of potentially disastrous business disruption:

1. Be aware
Ensure all staff are aware of security threats including:

a) Peer-to-peer use in the office such as MP3 downloads that can contain Trojan horses - malicious codes that are unwittingly downloaded and infect computers once installed

b) Personal use of corporate email doesn't just waste corporate time; it also exposes the business to unnecessary risk

c) Using the Internet for activities not suitable for an office environment - some adult sites, for instance, use malicious code to alter the PC of the viewer to force premium rate diallers, hijack default homepages and install Trojan horses which can compromise a corporate network and expose it and its contents to the world

2. Enforce where necessary
Ensure that security compliance is contractually binding - especially where staff take laptops home, or use them for personal

3. Keep patching
Make sure all your systems are patched to the latest level as recommended by operating system vendors

4. Guard the door
Ensure that all desktop and laptop computers are equipped with virus protection and firewall software and keep it up to date

5. Never let up
New threats are constantly surfacing so stay alert, be proactive and make sure you know what's happening in the wide world of IT

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