Ms Yong Ying-I, Chief Executive Officer Infocomm Development Authority of Singapore Speech - Opening Ceremony of Ariba Singapore Ptd Ltd

Ms Yong Ying-I, Chief Executive Officer
Infocomm Development Authority of Singapore
Speech - Opening Ceremony of Ariba Singapore Ptd Ltd
Singapore, 14 November 2000

Dr Mukesh Aghi, Managing Director, ARIBA Asia Pacific
Ladies and gentlemen
Good evening

1. Thank you for inviting me to the official opening of ARIBA Singapore.

2. I would like to first congratulate Dr Mukesh and his team on successfully establishing ARIBA as a brand-name in Asia-Pacific. Within your short eight months in Singapore, the ARIBA technology has been selected to drive fifteen exchanges in the region, five of which are in Singapore. I was heartened to learn that out of the five Singapore-based exchanges, two of the exchanges are actually owned by non-Singapore companies. Your hard work here bodes well for Singapore's drive to attract even more e-businesses to set up exchanges to serve the region.

3. Dot.coms have ridden a roller-coaster in the last year. Now, the hype has gone and there has been a return to normalcy. Profits are recognised to be important -- and I note that ARIBA recently announced a break-even quarter. This recognition of the importance of business basics should not be surprising: indeed, analysts who study major business waves agree that hype is a typical stage of development and we have now passed through that and moved on to the next stage of development. It may be useful to take a step back and emphasise a point about the underlying business revolution that we are living through: which is that the mania has come and gone, but the internet is here to stay. The online revolution will bring about a total transformation of business - and we are only at the beginning of the change. As one commentator put it, "the hype is over; the heavy lifting has just begun". The difficult work, the serious value creation lies ahead.

4. So how do I see the developments going forward? From a recent study we conducted with Cap Gemini Ernst and Young, we understand that a company typically undergoes 4 phases in the eTransformation cycle. The first phase is the awareness and promotion phase. The company may just register on B2B exchanges hoping to benefit from greater information exchange. But the company only makes minimal changes to its business process.

5. In the second "facilitation" phase, the company may start putting some of its products online on the exchange catalogue, by using the B2B exchange as a marketing and transacting channel. But this is still peripheral to the company, and hence it also requires just minimal changes to existing systems. Phase 3 is the Re-engineering phase, which involves business integration and substantial systems-change. Online businesses become a core part of the company's strategy and a core way of doing business. In the fourth phase - the Re-invention phase, the company re-invents itself, leveraging online platforms to create a whole new core business with new business processes and models.

6. Singapore companies have gone through the first phase of awareness in the eTransformation cycle. Almost all our companies have access to the Internet, primarily for information purposes. Many of our companies, even the SMEs, are also starting to register on B2B exchanges or subscribe to ASP services. However, only an estimated of 9% of top companies actively conduct e-commerce. As such, Singapore now has to move on to Phase 2 of encouraging companies to transact more using e-commerce instead of merely registering with B2B exchanges. Only then, we believe, will the companies be able to realise the fuller value of e-transformation.

7. It was to support this next phase that IDA and the Productivity & Standards Board recently launched a new $30 Million incentive scheme known as the E-Business Industry Development Scheme (eBIDS) to directly encourage local companies to increase the number of B2B transactions on exchanges. EBIDs has 2 components: the first aims to support an SMEs' e-business infrastructure needs. The scope encourages the provision of applications through Application Services Providers (ASPs) and supports customer relationship management, electronic resource planning and supply chain management. Our companies must realise that having Internet access to a B2B portal is a good start, but they also need to start thinking of back-end integration to their own systems.

8. The second component of EBIDs aims to grow the number of companies doing online business and to grow the number of transactions. The funding support for this component will be tied to the actual online transaction value. Companies which already have e-commerce capabilities and wish to expand on them will be encouraged to transact on e-commerce exchanges and hubs, with an emphasis on e-business value creation. The EBIDs programme will take effect on Dec 1 2000 and we hope it will make it even more viable for your customers to site their exchanges here in Singapore.

9. There is synergy in ARIBA's corporate objectives and what IDA wants to do to make Singapore an e-business hub. IDA believes that you have made the right choice in siting your Asia-Pacific headquarters in Singapore, and we hope this will encourage others to follow suit. IDA and our sister agencies will support companies like ARIBA who are showing the way forward for other companies in the dynamic e-economy.

10. On this note, I would like to congratulate ARIBA Singapore on the launch of your Asia Pacific headquarters here. I wish Dr Mukesh and his team and partners all the best.

11. Thank you.