1 April 2002
New Systems Fuel Efficiency For Digital And WTO Era(HKTDC Hong Kong Trade Services, Vol 01,2002)
Vol 1, 2002
IT & E-COMMERCE
Once problems are detected, all the relevant individuals can convene on-screen to decide on a solution, saving substantially on time and travel expenses.
SMALL and medium-sized companies recognize a need to become more efficient, cost-conscious and customer-service oriented to deal with heightened competition arising from the Chinese mainland's entry to the World Trade Organization.
Manufacturers, traders and services providers turn to new information technologies to improve efficiency and competitiveness. Integrated Monitoring and Surveillance Systems (IMSS) and Virtual Private Networking (VPN) are two technologies to help businesses compete more successfully.
Distance surveillance through IMSS systems can lower costs, increase monitoring capabilities and improve productivity. IMSS is often used for video conferencing, but more significant benefits can arise from remote monitoring of factories and reducing maintenance service costs.
Producers of IMSS systems say the global trend is towards remote monitoring systems that allow managers to make decisions and track potential bottlenecks or breakdowns without actually visiting a factory. Installing sensors and cameras strategically along a production line means problems can be detected early and solved quickly. If a breakdown occurs, maintenance can be supervised by remote from anywhere. Equipment suppliers can address issues in real time and advise on repairs, thereby lowering service costs and improving efficiency for all concerned.
Previously, most monitoring systems used Closed Circuit Television (CCTV) equipment. High installation and maintenance costs put CCTV beyond reach for many SMEs. Furthermore, the infrastructure on much of the Chinese mainland cannot transmit images from remote locations using CCTV technology.
Advent of an Internet Protocol (IP) IMSS system means video images and sensory data can travel through the Internet from anywhere. Engineers can easily access the data needed for changing processes, thereby creating enormous savings and flexibility. This alternative can even improve on CCTV systems: accessing information through a Web browser means no new skills are needed so learning the technology is faster.
IMSS can ease installation costs, help overcome bandwidth issues and allow SMEs to centralize or decentralize monitoring capabilities. Using the Internet through a secure connection with systems like VPN, an SME can connect an IMSS system to a central location. Then company executives can monitor production lines, provide advice and fix problems at any time or place, all without sending valuable resources long distances.
Virtual Private Networking
VPN works like an International Private Leased Circuit (IPLC), but is usually less expensive. An IPLC transmits video, voice or data across a dedicated line. The line, usually from a traditional telecoms carrier, is always active, high quality and private because it serves a single user. VPN has similar benefits, but multiple users can share a VPN line when traffic allows. Telecom companies can offer such services at lower rates.
VPN, IPLC and IMSS services are available through various telecom service providers. Hardware, such as sensory equipment or video cameras, comes from vendors like Synapse, Axis Communications, Alpha Systems Lab, Cisco, Nortel and ViewCast.
One example of a high-speed VPN connection available to Hong Kong businesses is PCCW's MegaLink service, which allows monitoring through IMSS technology. The company says using a high-speed, always-on, dedicated VPN service gives SMEs the needed infrastructure at service costs lower than those for an IPLC network.
WorldCom offers an IP VPN remote-access service that can help to connect an IMSS system to remote locations and allow companies to use the network for other applications. Executives can dial in securely from almost anywhere.
"WorldCom is dedicated to SMEs - one of our key business segments," says WorldCom North Asia managing director Howard Chow. "We provide cost-effective solutions to make SMEs successful and more competitive in today's digital world."
VPN has several advantages for SMEs. Maintaining private networks is costly. Many companies wish to replace private wide-area networks with secure connections via the Internet or VPN. Employees can use VPN to easily access information no matter where they are based. VPN can connect branch offices, remote users, business partners and clients on one network.
Suppliers of VPN services may offer options like global availability, scalability, local-language support, increased bandwidth efficiency, improved service quality, various access methods and network topology, reliability and security. It can be simple to add or delete sites as network requirements change.
Such technologies mean SMEs can accrue real benefits like raised productivity and higher customer retention. In the competitive environment of the mainland's WTO era, few companies of any size can afford to ignore such promising sources of competitive advantage.
WRITTEN BY DARREN GEORGE
VPN Basic Decisions
HAVING decided that Internet Protocol-based Virtual Private Network (IP VPN) technologies are of interest, SMEs face some basic decisions before proceeding with potential suppliers.
- Hosted or in-house equipment? SMEs can establish VPNs using equipment in their own offices, ideal for security and control. The industry calls this customer premise equipment, or CPE. However, letting someone else host the gear may lower costs and give easier access to technology upgrades.
- What service level? Many service providers structure VPN services so SMEs can choose appropriate service levels and prices. Consider the needed guarantees of availability and performance. The most expensive packages may be unnecessary.
- Choice of business partner? Some cutting-edge Internet companies provide the latest VPN technologies. Yet most traditional phone companies, with whom SMEs already have relationships, also offer such services. The latter may have a broader service range. In making this decision, pick an appropriate place on the technology curve.
- Ready to connect? At the simplest level, once equipment is installed in an SME's offices or those of its service provider, all that is required is to connect branch offices to the Internet. The IP VPN software then links the SME's offices through private voice and data "tunnels" on the public Internet. Network support costs and basic telephone charges plunge. Some US companies report phone bills of US$20 per month, down from US$2,000.
|Keen interest in developing more technology to slash business costs through reliable electronic trade will not disappear, says Elke Chan from TradeCard Inc, a provider of financial supply-chain services.|
FOR several years, collective wisdom in the business world has touted business-to-business (B2B) e-commerce as ready to transform the business landscape. The major obstacle is that some companies still harbour doubts on payment arrangements and whether online payment systems are secure.
Trust and creditability issues gnaw at the Internet's effectiveness as a business tool. Electronic traders can encounter difficulties trying to verify the identities of potential business partners and become decidedly uneasy when large amounts of money are involved.
In the Hong Kong offices of financial supply-chain services provider Tradecard Inc, director of alliance management Elke Chan says small and medium enterprises (SMEs) trading in Hong Kong and on the Chinese mainland are rightly cautious.
"In discussing electronic trade, you must show companies the money. They need to see savings, or losses if they fail to act. E-business solutions can cut both ways."
Chan says more new solutions are needed: "It is important to distinguish between dotcom and real e-business solutions. Interest in the right technology to cut business costs will not disappear."
Several options are available through traditional banks. At the Bank of East Asia, for example, if a company has a client on the southern Chinese mainland needing an online payment system, Web-based fund transfers can be used if both parties have accounts with the bank. Alternative methods include online telegraphic transfers or electronic clearing. Using these, businesses can work online in real time through the Internet.
With regard to user identification and verification, some banks apply special system controls to provide customers with a more secure environment. Increasingly mature and sophisticated online payment systems can tackle the authentication problems.
In Hong Kong, two organizations serve as certification authorities: Hongkong Post and Tradelink. Both issue digital certificates that are the equivalent of physical signatures.
"SMEs with limited IT resources are especially concerned about security and creditability issues in conducting business online," says Hong Kong's postmaster general PC Luk.
"Hongkong Post provides full certification services to facilitate secure electronic transactions and to authenticate the identities of e-commerce participants. This creates a secure environment addressing the four essential concerns of doing business in Cyberspace, namely authenticity, integrity, confidentiality and non-repudiation."
For SMEs in Hong Kong and on the Chinese mainland, there are two key motivators for change: a push for greater business efficiency and a pull from customers. In some cases, buyers tell suppliers to transfer to electronic sourcing systems as soon as possible to retain business.
Some companies gain a competitive advantage by starting immediately. "Remember how ISO 9000 got started," says Chan. Once considered a "luxury" for a few top-end manufacturers, this quality-certification standard has become almost a basic requirement. That soon may be the case for electronic sourcing and trading systems.
Market Site Serves SMEs Better Than Ever
BUSINESS people keen to realize benefits from electronic trade may wish to visit the Hong Kong Trade Development Council's new cyber marketplace packed with Web-based services.
"We learned many lessons in the past few years about what the Internet can really do for us," says TDC senior publications manager Henry Ng. "hkenterprise.com represents what we have learned and how our SME customers want to use the Internet."
The upgraded services site has "several ways to help improve users' businesses. We provide buyers with easier access to new products and our clients with easier access to new customers," Ng says.
"Our focus is on SMEs' practical needs. For years, we worked with SMEs through print publications and trade fairs. SMEs helped us develop these products to really meet their needs. Now we do the same with Internet services."
Users can customize four sets of practical services to designate products and companies of the most interest. At the heart of the site is an electronic sourcing guide (www.tdcenterprise.com). This brings together online presentations of new products and services from numerous industry categories.
The business-matching service (www.tdctradepartners.com) is a vastly more sophisticated version of a previous electronic bulletin board. Users are alerted automatically when people expressing similar interests post information.
TDC Link (www.tdclink.net) allows Hong Kong-based customers easier and expanded access to TDC's "crown jewels", its database of global buyers.
Meanwhile, a Trade Fair Centre (www.tdctradefairs.com) offers a wealth of information and services related to TDC trade fairs in Hong Kong. Included are basics like time and place, plus buyer registration, details on exhibitors and even appointment bookings.
"Our online business services are here for the long haul," Ng says. "More new features will appear indefinitely."
Digital Growth Spells 'Opportunity'
|Anthony SK Wong, Director-General of the Office of the Telecommunications Authority of the Hong Kong SAR, believes SMEs should take full advantage of digital technology's remarkable growth.|
Director-General of the Office of the Telecommunications Authority (OFTA) of the Hong Kong SAR Anthony SK Wong believes SMEs can benefit by studying the impact of digital technology on businesses.
"New technologies continue to change the way we live, think and do business," Wong says.
From computers to telecoms and biotech to satellites, the economic world is changing very rapidly. Advances in computers, broadband access to the Internet and 3G mobile technology create opportunities for change, speed and efficiency.
"At the heart of all this is the human mind. This truly is the age of information technology," Wong says.
When embracing information technology, SMEs must constantly broaden their horizons. They must ensure they can interface with global organizations and enter the supply-chain models of multinational firms.
As SMEs benefit from flexibility and being able to react rapidly to market-dictated changes, multinationals respond with outsourcing and opportunities for strategic alliances.
"The good news is that here in Hong Kong we are positioned perfectly as a telecoms hub to take advantage of the remarkable and rapid growth of digital technology on the Chinese mainland," Wong says.
"Today, there are more than 100 million users of mobile telephones on the mainland. Within a few years, that figure will rise to 200 million. In terms of prospective business, that means there will be more than 200 million chassis, the same number of plastic or leather outer-cases, batteries, chargers, circuit boards, keypads and countless accessories. All this is in the personal sector alone, a massive market that can only expand with the advent of 3G," Wong says.
An ideal way for SMEs to gain a full update is by participating at the upcoming ITU TELECOM ASIA 2002 industry event at the Hong Kong Convention and Exhibition Centre on December 2-7.
There, SME executives can meet prime infotech movers, listen to industry views, meet potential buyers or partners and devise ways to win new business, Wong says.
Once again at ITU TELECOM ASIA 2002, Hong Kong will serve as a window to Asian market opportunities while industry players demonstrate their tremendous buying power, Wong predicts.
WRITTEN BY ANTHONY MOORE
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