Singapore IT Veteran Sees E-Commerce Boom

An IT veteran of over 19 years, Stephen Yeo, has been at the helm of IT services provider, Singapore Computer Systems (SCS), for the last 10 months as its president and CEO. Key competencies of SCS include e-commerce, R&D/product development, systems integration and consulting services.

Yeo, formerly chief executive of Singapore's National Computer Board (NCB) met up with Computerworld's Solomon Emanuel, during which Yeo gave his views on e-commerce and other IT issues in the new millennium.

Computerworld (CW): How do you see the level of adoption of electronic commerce in Singapore?

Stephen Yeo (SY): Many have heard of e-commerce, (but) I don't think many people have embarked on a systematic strategy to exploit it. But they are all looking frantically for somebody who can handhold them into this arena. Some businesses, however, have made the breakthrough. Notably the big banks, which have started some forms of e-commerce initiatives. But overall, I think we are in the very infant stage of exploitation.

At the NCB, I saw Phase 1 - store fronts of the electronic malls - the Business-to-Consumer (B-to-C) type e-commerce. In Phase 2 we are seeing more the Business-to-Business (B-to-B) type which is beginning to show significance.

CW: Over the next 12 months, how do you see e-commerce evolving?

SY: I think the regulatory environment for e-commerce will probably get more stable as the regulators get clearer about what e-commerce is about. Secondly the standards for e-commerce will get better. Debates on various e-commerce standards would get settled, so people can focus on what can be achieved through exploiting the technology, rather than waiting to see whether the technology is matured.

And then the exploitation, I would see the take-off in the area of B-to-B, because that is an area which most people understand. Whether they know it or not, unwittingly, they will be involved in B-to-B commerce. In the Singapore context, for more than 10 years we have been using EDI (electronic data interchange). In B-to-C, there may be some kind of convergence. Instead of many people trying to jostle for airtime, we may be seeing the convergence of large B-to-C operators.

These could be in the form of communities, or in the form of government and so forth. And really in this large area of exploitation, what I hope to see is more innovative models. In the last 12 months, if you observe the e-commerce area, there has been a lot of innovation. Some people started out as a site to sell something, they end up being a portal to allow other people to compare prices to sell something.

Innovation is quite interesting and hopefully some of these initiatives will begin to see results in terms of top and bottom line.

CW: How optimistic are you that e-commerce sites will start making money this year?

SY: I think eventually we all have to learn to make money from e-commerce. I mean there's only so much hype that can go around. There's only so much optimism about potential. Potential somehow has to be realized. So I am very sure that the market will wake up and say, "Hey look, this frenzy now that we are leaning on today has to, at some point of time, come back to reality."

Whether that's a 12-month or an 18-month timeframe, I don't know. But we watch the markets and the markets will tell us.

CW: What is SCS' role in promoting e-commerce in Singapore?

SY: Our vision ultimately is all aspects of our business will be "e"-ed. So we will be an e-commerce systems integrator, provide e-commerce services (ASP is a good example), and be an e-commerce consultancy.

We are moving from being an IT company to one which is an IT-based company, which is slightly different. In the past, we would just develop an IT system for someone and sell it to them. We now are building our own e-commerce systems and then selling them in the form of services rather than selling them as systems. This area will increasingly be an important part of our business. So for example, you see SCS teaming up with partners to launch a used car trading portal that is based on an IT service owned by us that we sell to those people who want to trade in used cars.

We have signed an agreement with a few key members of the Used Car Association to start a portal. It's a consumer to business (C-to-B) portal where as a consumer with a used car that you want to sell, what happens is you drive your car to the inspection station which grades it and gives you a reserve price, and then publishes your car onto the portal. And then the dealers will start to bid for your car. We are planning to launch the company and service in February.

This C-to-B model was worked out in concert with the people who deal with used cars. The potential for this is that if it's successful in Singapore we can quickly replicate this in other countries. So it's a very repeatable business.

CW: I suppose you strongly believe that online auctions will take off. It appears that most such auctions are B-to-C and C-to-C, what's your take on B-to-B auctions?

SY: A lot of B-to-B transactions in the world today are already of the auction type, whether we realize it or not. Even in dealing with electronic components, it's actually an exchange of sorts. And how are the exchanges made? Based on auctions. The parties bid.

There are many reports that say that one day all transactions will be auction-based. I admit I don't believe that, but I think auctions will be a very hot way to process transactions for B-to-B.

SCS is moving into a number of other B-to-B services. Other forms could be financial services. So would you be surprised if you read that SCS has gone into banking eventually? I say, "No". Actually there is a market for B-to-B loans auctioning. You're a company, ABC. Today you have some excess cash. What do we do? We all park it in the bank. The bank will go to the money market and trade with other banks. But if we can start an exchange like a stock exchange for loans, and loans are commodities basically, the exchange acts a middleman.

And what is the price of a loan? Interest rate. Financial services can be done very easily, but we need the blessing of the regulator.

CW: Apart from online loan auctioning B-to-B, do you it developing for B-to-C?

SY: We do indeed. B-to-C financial supermarkets was what we talked about among ourselves, but I think the time is too early.

And it may also be a C-to-B model. You need a loan. What do you do? You go to the 'Net, you publish yourself, the financial institutions will bid for you as a customer. Today, what do financial institutions do? They publish the scheme general to everybody as if everybody's the same. Granted they can do some differentiation but they cannot differentiate down to one. In a C-to-B model they can differentiate down to one. It's a lot more competitive but I think for the consumer, a lot better. And that puts CRM onto a new plateau. Yes, Yes, and the customer of one is a reality now. It's talked about so much but I think finally it's become a reality.

CW: What are the opportunities and challenges for IT vendors and users?

SY: Vendors. I think the competition will get much hotter. In the past the stable of competitors are very predictable. We know who they are, we can name them, we can see them. Now it's a bit harder to see who are your competitors.

Suddenly, a telco is also an IT player with a range of services that competes with us. Suddenly a bank is also in e-commerce, also offering services for e-procurement. By the same token, we are also going into other people's areas.

It's a much hotter arena where there are many more players. I think that's the real challenge. It's quite scary.

For this industry, people talent is the greatest problem. It's hard to find the right people, and when you find them it's hard to retain them. It's a problem not just in Singapore but also in Silicon Valley. In the Valley too, people keep hoping around even with stock options. I think talent is the biggest challenge.

For users, the going has never been as good as now. He's got so much more choices. Things are getting so much easier from his point of view. He doesn't see the complexity behind but it's so much easier for him to use technology.

CW: What other new services can we expect from SCS this year?

SY: We plan to take our outsource services to new territories. And these are Web hosting, data recovery, data centre, and facility management services to Malaysia and Thailand, where the markets are mature enough for these to work.

Another business that we are planning to include is a general consulting. When I say general consulting, I mean today we already have consulting in very niche areas like ERP, but we will build a consulting service which we will launch early this year with a focus on three areas of importance. One is knowledge management, two is e-commerce and three is what you call business process engineering.

You might say it's got nothing to do with technology or IT specifically but these are important concepts that our client companies will be talking about.

We have a group of people, each of them has their own credibility and track record that will be offering this consultancy service to our clients. And I think that's more in line with Singapore's move to a knowledge-based economy.

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