2004 APEC Informatization Workshop for SMEs. Group Discussion 1

Transcription

1 2004 APEC Informatization Workshop for SMEs Group Discussion 1 October 21, 2004 Facilitator: Dr. Woobong Kim (Konkuk University, Seoul, Korea)

2 Contents Topics to be discussed in this session The Conceptual Model of e-business E-Business environment in Korea at a glance The Korean Government Support for SMEs e-business Case 1 : ERP in a SME (Younil Electronics) Case 2: e-marketplace (e-sang Networks) The Conceptual model Connection of e-sang Networks and ERPs Remarks on E-Business in SMEs Summary of the Discussion

3 Refresh the concept of e-business Topics to be discussed The Government policy and programs for e-business in SMEs Informatization of SMEs internal business processes Are ERPs good only for big companies? The Prerequisites for SMEs to adopt ERPs The KSFs and major obstacles for SMEs to implement ERPs. The Benefits of ERPs for SMEs Informatization of SMEs external business activities How to extend the ERPs to SCM, CRM and other advanced systems Can SMEs develop successful e-marketplaces? A Case of e-marketplace Remarks and conclusions

4 The Conceptual Model of e-business DBM(Data Base Marketing), CRM(Customer Relationship Management), SFA(Sales Force Automation) VBM(Value-Based Management), ABM(Activity-Based Management), BSC(Balanced Scorecard) SEM DW(Data Warehouse), KM(Knowledge Management) CRM MIS TPIS EC SCM E-Marketplace ERP (modules): Finance, Accounting, Marketing, Personnel, Production, R&D Internet, Intranet, Extranet INFRA Hardware, Software, Network, Organization-ware

5 E-Business environment in Korea at a glance Annual E-Business Expenditure in Korea Annual Informatization expenditure in Korea: 11.7% of GDP in 2003 Communications: 54% Hardware: 21% Software: 25% In early 90 s Communications: 70% Hardware: 23% Software: 4% Internet penetration Number of internet users: 29,220,000 Internet users / the population: 64.5% E-Commerce Transactions amount 235,025 (in billion) 16.5% (ecommerce / total non financial transaction amount) (4.5% in 2000) ERP system adoption rate among Korean companies Total: 23.5% Large industries: 42.3% SMEs: 19.7% Accounting / Finance modules are most popular : 87.4% of the ERP adopted companies. More ERP adopted SMEs preferred ASP ERP services than custom built ERPs

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9 The Korean Government Support for SMEs e-business The Korean government has promoted and supported building of the ICT foundation for SMEs e-business By the end of 2002, 41,310 SMEs received the government aid for e-business. Basic S/W: 37,878 companies ERP: 2,809 companies Provide standardized ERP templates Provide matching fund Promoted B2B and e-mp among SMEs and large companies. Enhance the social trust in the cyber market using e-trust mark and e-business Prize Programs Initiated ICT development projects Global cooperation in e-business (via APEC, OECD, WTO, and etc.) Cyber crime prevention and consumer protection programs.

10 The Korean Government Support for SMEs e-business SME informatization programs initiated by SMBA (Small and Medium size Business Administration) E-Manufacturing Program Support manufacturing SMEs to implement ICT on the factory floor. CIM, MES, POP Project period: Target: support 1,500 SMEs until 2008 The performance in Budget 12.3 billion won 256 SMEs were supported Total Information Management Providers:TIMPs) project SMBA will reimburse up to 75% of the expenses (maximum 15 million won), if a TIMP initiate an informatization project for a SME and the project was evaluated as successful. The project includes consulting, system installation and after services. SME informatization consulting program Support SMEs information resource planning and consulting Provide matching fund up to 75% of the company level project budget (maximum 15 million won) ICT innovative business cluster project (by industry and by region) Support industry associations and/or regions to improve their competitiveness by using ICT. Provide matching fund of 430 million won per association (or a region) E-Business Solution development for Small Business Support development and promotion of ASP-type e-business solutions for small business. Informatization Education program Education and training for CIOs and employees in SMEs

11 The Korean Government Support for SMEs e-business Electronic commerce Resource Center(ECRC) by KIEC ECRC is a regional center for disseminating and promoting e- Commerce. 43 ECRC s around Korea were established by MOCIE. ECRC services include : Education and training of CEOs, employees in SMEs, potential manpower of industry, and venture entrepreneurs Consulting and technical support for SMEs to implement EC technology Technology transfer and regional specific activities International cooperation and others

12 Case 1 : ERP in a SME Company: Younil Electronics Established in July, Number of employees : 31 Business: OEM manufacturing electronics appliances. PCs for Samsung, LG, HP, Hyundai, Sambo and others. Air Cleaners Digital Video Recorders Financial data Revenue in 2003: 27,454 million won (approx. U$ 23.9 mil.) Profit (2003): 2,015 million won (approx. U$ 1.75 mil.) Background of e-business Changes in market environment, Management environment Information environment Major systems introduced for e-business ERP POP KM (planned to be introduced) E-Performances Enhanced customer satisfaction Enhanced productivity ( ) 2.7% of increase in output per employee Meeting the due date ( 81% 96%) Reduced defective rate (parts omission) (1.0% 0.02%) Reduced reworks Saved time for data collection and recording (240 min. 20 min) Better data for Quality Control Reduced labor cost Better partnership with vendors and clients

13 Case 2 : e-marketplace Company: e-sang Networks ( Established on March 1 st, Number of employees : 31 Business: B2B e-marketplace Steel products, stainless steel and nonferrous metals Innovative aspects Non-formatted DB technology Electronic credit guarantee system Connection to ERP Supporting PRM Supporting e-trade system E-Performance Transaction volume: 60,000 million won ( U$ 52 mil.) per month Future plan Apply the same e-mp technologies to other industries Global linkage

14 The Conceptual model Producers (A) Coil Center (B) Clients esang Networks esang Networks Upstream Downstream A : Steel makers - distributors (1:N) e-e MP B : Steel Brokerage (N:N) e-mpe

15 Connection of e-sang Networks and ERPs Value-Net Model s Legacy(ERP) esang Networks e-mp clients Procurement Sales.. Manufacturing Finance Etc. Legacy (ERP) System e-commerce (Buy & Sell, Auction) Community esang Networks Content e-payment System e-guarantee System adaptor adaptor Legacy (ERP) System adaptor adaptor.. adaptor Buyer A ERP + (Anysteel Enterprise) Buyer B Anysteel Enterprise Buyer C Anysteel Enterprise Buyer D.. Etc. BANK KCGF

16 Remarks on E-Business in SMEs Prerequisites PCs (HW) and appropriate SW The Internet / Communications networks Humanware CEO: vision and commitment Employees Service companies Consulting services System Integrators HW and SW houses ASP IDC Communications services Telcos / network operators The Government Support Tax breaks Removal of institutional obstacles Matching funds ICT infrastructure Progressive stages Stand alone PCs and SW Internally networked system ERP can be introduce Externally networked system ERP can be extended E-Business E-Commerce SCM, CRM SEM, KM KSFs Visionary CEO Good Planning and consulting Obstacles for e-business in SMEs Budget Little confidence in the benefits Tax Lack of proper manpower Good tips BPR

17 Summary of the Discussion