History and Introduction

Singapore is the city state of 2.6 million people occupying 624 sq km island at the southern tip of the
Malaysian peninsula this equals the population and size of Philadelphia. Singapore’s GNP in 1989 was
US$23.84 billion and per capita income was S$9000, literacy rate of 87% and life expectancy of 74 years.
In 1989 it became one of the top 20 trading nations of the world. The main source of Singapore’s trade
came from its geographically perfect location of its container terminal which was on the sea route
between Indian ocean and South China Sea. In addition to that, Singapore also had its airport built which
was expected to bring in more passengers and cargo to the country by 1991. In 1990 alone the external
trade equaled 3.5 times the country’s gross domestic products.

This was the time (1989) when the port of Singapore became the largest in terms of gross tonnage and in
bunkering activity and the second largest in terms of container handling in 1989 second only to HongKong
Container Terminal. The number of trade declarations received each day by the TDB (Trade Development
Board) had crossed the 10,000 mark and was continuously on the rise. A declaration typically consists of
manifests, bills of lading, letters of credit, customs declaration, receipts and reports. To enhance Singapore's
efficiency as a trading centre, TDB began to look for ways to reduce the cost and time of handling these
paperwork. They decided to bring along all stake holders online and share information on real time basis to
speed up the trade/cargo handling. This system would be the future TradeNet.

Challenges/Risks

1. Task/Time Factors/Lots of Data

2. Organizational Factors/Too many stakeholders
3. Technological Factors/Workforce/Experience
4. Market Factors/Acceptability and Competition

Task/Time Factors/Lots of data

TDB was handling more than 10,000 declarations each day. And a declaration consists of crucial
information. Any new system should be capable of handle and link up all the above documents and
information contained within them electronically. All agencies were given very tight schedule. They had
to conceive, plan, design, implement, test and run the system in two years which introduced a high risk
of time slippage.

Organizational Factors/Many stake holders

No single organization or group could make a workable system for trade given its multi-lateral nature.
There were many stakeholders/partners involved in the trading and that means there would be a lot of
stakeholder’s expectations and requirements to manage. Any new system would have to be able to
bring all of stake holders on the same platform and all stakeholders should buy-in to the idea of a
centralized trading system.

Technological Factor/Experience

As this was the first time implementation of any such system in Singapore and in the whole world in
trading, no government agency or stake holders had any previous experience to use for the
implementation of TradeNet. This posed a great risk of this system’s failure because EDI was a relatively
new system and finding a vendor of proper experience and for vendor to find local resources of that
experience would have been a great challenge.

Market Factors/Acceptability and Competition

TradeNet was to be used by thousands of subscribers and it was a big challenge to increase its
acceptability among all the subscriber’s base.

Planning

To develop specific recommendations on how Singapore could pursue its course in IT a committee on
National Computerization was formed in 1970s. CNC issued a report in 1980 with recommendations
which were incorporated educational and other governmental processes/systems to achieve the
required set of expertise by 1990.

After 1985 recession Singapore focused on external trade improvement as a major goal. Also, Hong Kong
was moving to implement an EDI system for trade. These two factors led to what we now call TradeNet.
As this had to be a combined effort Singapore Economic Development Board and Trade Development
Board brought together all the interest groups and took an agreement on “Streamlining Trade” that
bound them all to support and work for improving and streamlining technological and other business
procedures by making them simpler and easily automated. TradeNet Steering Committee was formed to
oversee the planning. Following were the main steps of planning.

1. Understanding the existing Trade Procedures.

2. Documenting the existing Trade Procedures.
3. Reviewing the existing Trade Procedures.
4. Simplifying the existing Trade Procedures.
5. Automating the process for the proof of Concept.
6. Review of POC and approval
7. Full Implementation of Trade Net

The TradeNet Steering Committee was divided into three subcommittees 1) maritime committee 2) air
committee 3) and government agencies and statuary boards. Over several months these committees
discussed existing Trade Procedures and worked to simplifying them before they can be automated.
Ultimately they reached to a point where a single computer screen could be used enter all the trade
information needed by any agency in Singapore instead of manual 20+ forms. The proof of concept was
made and after high level reviews TradeNet was officially announced and the team was given 2 years to
make the system operational.

Phase 1

1. Basic data Transactions processing and EDI interchange

Phase 2
 1. Database capabilities
2. Billing
3. Other enhancements

Procurement

TradeNet team developed a formal Request for Information (RFI) to determine which companies would
be able to take up this project. Their evaluation was based on following criteria

Evaluation Criteria

1. Size of the vendor

2. Past experience in similar projects
3. Ability to Stay till project completion

After initial evaluation three vendors were finalized that included 1) IBM Corporation 2) McDonell
Douglas Information Systems and 3) General electric Information Services and a formal Request for
Proposal (RFP) was made to them in June 1987. After receipt of RFP, companies were again evaluated
against the point number 3 of above mentioned criteria and at last IBM was awarded the project.

Forming of the Tradenet Project Team

As the TradeNet project was formally initiated, Trade Development Board (TDB), Port of Singapore
Authority (PSA), Civil Aviation Authority of Singapore (CAAS), and Singapore Telecoms decided to create
a for-profit company to implement, own and operate the system. On March 18 1988, Singapore
Network Services Pte. Ltd (SNS) was officially formed. All the original TradeNet project team members
were moved to this company (total 5) except Ko Kheng Hwa.

Contract

IBM’s sent Joe Huber as their Project Manager who started a detailed design study of current system
before the contract can be made. The detail review took three months and IBM agreed to build the
system as proposed with some minor modifications in original design. The contract was signed between
SNS and IBM on March 25, 1988. IBM was the system integrator contractor with responsibility for all
aspects of the system except what runs on the user’s site. IBM’s partner in the project was Singapore
based company, Computer Systems Advisors, Pte Ltd.)

TradeNet Development

TradeNet needed a system which would be able to process all EDIs and acts as a gateway to all
applications/clients/customers connected to the TradeNet. IBM had a similar system already in place in
their headquarters which was moved and modified a little to be used as the TradeNet main Information
Processing Engine. IBM’s Singapores office sent its two system Engineers to Tampa and then to London
to study IBM’s Tampa Engine to support the enhancements in Tampa Engine.
CSA as a subcontractor had the responsibility to write the technical modules for information exchange,
monitoring and user billing.

Change Management System

Joe Huber foresaw a large number of change requests to be made due to the complex nature of the
project and large number of stakeholders. He developed an Engineering Change Procedure ECP to deal
with all the changes. According to this procedure every change has to be discussed thoroughly for its
impacts on cost and schedule, its usability, urgency and importance. Every change request was also
documented using this procedure. This procedure helped keeping the changes to the system minimum
and the team was able to work on its original scope.

Costs

TradeNet development Costs

TradeNet was developed with the direct capital cost of US$10 million. This didn’t include the
investments made by other ministries, agencies and stakeholders to conceive, design, contract and
support the system.

TradeNet usage fees/charges

One time Charges for a company to hook up to the system : US$ 375

Montly cost of dial up: US$ 15

Average Declaration cost: US$0.2

In addition to the above costs, company had to have hardware and the software application that could
hook up with TradeNet information engine. That totals to average US$4000. Large companies had no
problem in these investments but to facilitate smaller companies Singapore offered tax cuts for
computer hardware purchased for small enterprises. TDB also opened convenience offices at TDB
locations to provide TradeNet facilities on public computers on a modest fees. These measure helped
increase the impact and usability of Tradenet.

Rollout

The first transaction on TradeNet was made on January 1, 1989. Officially the TradeNet was operational.
Although at this phase only the basic information interchange and EDI processing was implemented. In
next 6 months the remaining modiles were created, tested and rolled out and By June, 1989 all of the
TradeNet modules were in place.

Results

TradeNet proved to be a great success. SNS expected 25% of trade and 500 out of 2200 subscribers
(users) of TradeNet in its first year of operation but by the end of 1 st year TradeNet was already serving
850 subscribers and 45% of overall trade. That was due to the fact that the turnover/handling time with
TradeNet reduced from 3-4 days to 15-20 minutes. Subscribers of TradeNet system were benefited
financially on large scale. Seeing this level of adoptability, TDB announced trade with TradeNet to be
mandatory by 1991 instead of 1993 as planned.

Summary

The TradeNet system allowed trade documents to be submitted electronically to principal governmental
bodies. As a result, turnaround time was cut down from 1-4 days to 10-15 minutes. The use of TradeNet
proved so efficient that it was made mandatory in 1991. TradeNet succeeded for a number of reasons.
First, the project brought together a diverse and relevant group of participants. They included
government agencies, companies, hierarchical organizations, and voluntary associations, all of which
had direct participation/ stake in Singapore's trade development. Second, the project was reviewed and
approved by the highest levels of government. Third, the development team was given full authority and
resources by the government.