national computerization agency koreas experience in promoting e-business adoption among micro and...

National Computerization National Computerization

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Korea’s Experience in Korea’s Experience in promoting e-business promoting e-business

adoption among micro and adoption among micro and small businesssmall business

Korea’s Experience in Korea’s Experience in promoting e-business promoting e-business

adoption among micro and adoption among micro and small businesssmall business

Yoon, JeongwonYoon, Jeongwon

DirectorDirector

National Computerization AgencyNational Computerization Agency


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1.1. IntroductionIntroduction2.2. E-business in KoreaE-business in Korea3.3. ASP based e-business project for small business ASP based e-business project for small business 4.4. 30,000 SMB Informatization Project30,000 SMB Informatization Project5.5. ConclusionConclusion

Table of Contents


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Part IPart I

IntroductionIntroduction


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Why e-business ? Remove the barriers of time and distance with the Internet Tool to boost the nation’s competitiveness as witnessed in the

Korean success case.

Background

Cyber Korea 21 e-Korea Vision 2006

• Renewed focus on Internet growth and Internet Business :

“Use ICT as a strategic means to overcome economic crisis”

• New national IT master plan for five years(2002 ~ 2006) :

“Emphasize on advancing B2B e-commerce and providing a safe and reliable online business environment”


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Background

Total Commercial Transaction vs. e-Commerce(B2B,

B2C)Unit : billion USD

Source: National Statistical Office of

Korea

Continual growth in size of e-commerce market in Korea 47.9 billion dollars in 2000 -> 195.6 billion dollars in 2003

1,058

48

1,090

99

1,155

148

1,188

196

0

200

400

600

800

1,000

1,200

1,400

2000 2001 2002 2003

Total e-commerce

transaction

e-commerce

transaction4.5 %9.1 %

12.8 %

16.5 %


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Background

Relation btw GDP Growth and IT Industry Growth in Korea

Source: Bank of

Korea

-10

-5

0

5

10

15

20

25

30

35

40

1996 1997 1998 1999 2000 2001 2002

GDP Growth Rate

IT Industry Growth Rate

Unit : %, contrast to previous

year


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Closing the gap in IT use between small businesses and medium & large enterprises

Utilizing its highly advanced information infrastructure

Objectives

Highly Advanced Information InfrastructureHighly Advanced Information Infrastructure

Promoting new

business model

Right business environment for small businesses


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Part 2Part 2

E-Business in KoreaE-Business in Korea


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More than 88% of the total e-commerce market(198.3 billion USD as of 2003)

B2B in Korea

1998 1999 2001 2002 2003

1) Electronics

2) Automobiles

3) Construction

4) Defense

Start with 9 fields;

steel, shipbuilding, machinery,etc.

11 fields added; watches, agricultural products, livestock, and machinery, etc.

10 fields added; Semiconductor animation, etc.(Total 30 fields)

CALS B2B Network Project

9 fields added, ; stationary, jewelry, fruit, and flowery. (Total 1,017 companies)


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B2B in Korea

B2B Network Project

Government investment : 70% of the total costs (Total $51mil)

ISP, Standardization, raising awareness on e-business, pilot implementation

CALS Project

Large Enterprise

SME SME

Large Enterprise

B2B Network Project

“Optimizing Value Chain”

Large Enterprise

Large Enterprise Large Enterprise

Large Enterprise


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B2C market : 5.8% billion USD as of 2003, taking up 4.7% of the total retail market(105.8 billion USD)

Growth of B2C Market in Korea (in Billion USD)

B2C in Korea

0.6

2.2

4.2

5.8

0

1

2

3

4

5

6

7

2000 2001 2002 2003

<Source: National Statistical Office>


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G2B in Korea

• Standardized e-Catalog system for procurement supplies

• Public announcement of all government-wide projects for bidding

Realizing fair and transparent procurement

process and services

• Enabling online process for registering as a contractor, bidding on public project, signing contract agreement, and receive payment for services

Establishment of a single window government procurement system for entire process via the Internet


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G2B in Korea

‘Special Act on Taxes’ enacted in 2001

Online single window for public services

Trade permit, logistics, customs declaration

Credit inquiry, business matchmaking

Other G2B Tool

Tax Reduction

Online Business

Registration & permit

Online Export & Import

Processing

Promotional sites for

international trade

information


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Establishment of ‘Informatization Strategy Meeting’ under the presidency

e-Korea Vision 2006, e-business Facilitation Measure

Informatization Promotion Committee and several sub-committees

Collaboration for detailed implementation strategy=

Government Initiatives

E-leadership

Political Commitment from

the Top

Visions & strategies forInformatization

Implementation Framework

Cooperative Partnership

btw Public & Private Sectors


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Building trust for user and consumer

High-speed broadband network, R&D, HRD

Procurement of government and public corporate

Create favorable market environment

e-commerce law and regulations


Government’s role

Enhance e-trust for

E-business market

Establish infrastructure

Facilitate G2B

Promote e-commerce

in the private sector

Lay a groundwork for

cyber trade standardization


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Public Policy

1998 1999 2000 2001 2002 2003

e-commerce/informatization of traditional industries(①) 2.1 2.3 3.5 44.5 89.3 106.9

Informatization budget(②) 596 714 1,013 1,224 1,343 1,392

portion(①/②) 0.35

%0.33%

0.35% 3.63% 6.65% 7.67%

e-Commerce and Informatization Budget Portion for Traditional Industries

(Unit : million USD)


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Government InitiativesKey-Policies for e-Business

Category Project Budget(’03) Ministry

SMB Informatization

ASP based e-business project for small business

26.2 MIC

30,000 SMB informatiozation project 27.5 MCIE

Reform consortium for SMB 9.6 SMBA

HRD Training HR in e-commerce 2.1 MCIE

Technology Development

Next generation e-business technology development

4.6 MIC

E-commerce technology development

5.5 MCIE

StandardizationE-business infrastructure

technology 0.9 MIC


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Skills


Technical problems in MSB No IT expert, insufficient number of application software lack in capacity to operate or maintain IT resources adopted. low standardization level

Solutions; Adoption of ASP in the form of consortium. Provide free IT training courses Development & introduction of Business models through consulting


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Part 3Part 3

The ASP Based e-Business ProjectThe ASP Based e-Business Project for Small Businessfor Small Business


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The implementation structure of ASP based e-business project for SMB

Implementation Framework

MIC SMBA

NCAPromotion Committee

TFT Related Agencies CouncilAdvisory Committee

Service Business KIMI BM Business CNK


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Implementation Progress Master Plan for the project & 1st year project began Formulation of ASP consortia ASP-based integrated IT pilot services

45 integrated ASP services 3 community-BMs focusing on unions or associations related to

small businesses.

Designation of 5 ASP consortia with 175 companies A hub-BM developing company was designated for provider-

oriented e-business adoption 4 community-BM developing companies chosen.

The 4th year project on progress.

2001

2002

2003

2004


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Implementation Strategy

ASP Diffusion“Cost-effective”

Training for SME“Promote informatization”

Synergy through Consortia“Maximized synergy through integration”

Win-Win Framework“Link suppliers&demanders”


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• The ASP based implementation framework for MSB informatization

Implementation Status

Consortia

Consortia

Consortia

Consortia

Public bidding

NCA

Select & designate ConsortiaConsortium

MSBMSB

MSB

Broadband ISPs

Portal Service Providers

Contents Providers

Solution Providers

Etc…

“Acts independently, attracting MSBs wanting to benefit from ASP services”


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Development of Business Models:Pilot projects involving industry unions, industry associations, and

IT companies were launched to promote development of network-based business models.

Two types of e-business models :

Implementation Status

HUB-Model“Supplier oriented”

-Individual service provider- 32 models developed by 2003

HUB-Model“Supplier oriented”

-Individual service provider- 32 models developed by 2003

Community-Model“Demander oriented”

-Industry Association or Union- 7 models developed by 2003

Community-Model“Demander oriented”

-Industry Association or Union- 7 models developed by 2003


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Firm Level Support

Educational Support & PR

Creation of Demands on Initial IT services for MSB

• Customized training services & promotional activities through Unions or associations - > 160,000 companies benefited as of Nov 2003

• Government led the creation of the market (80% of investment covered by matching-fund system)

• A provider-oriented business model proposed

Cyber IT Support center

• Provide online service and technical support for e-Business project


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Part 4Part 4

30,000 SMB Informatization Project30,000 SMB Informatization Project


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30,000 SMB Informatization Project

5 Areas of Assistance

Pre-Consulting for Informatization

Basic Business Software

ERP

Manufacturing Process Informatization

Collaborative Informatization

Out of 37,392 companies applied 35,324 companies were selected for assistance


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• Raise awareness on Informatization• Present IT guidelines appropriate to their level

• Business process software for SMBs in early stage of Informatization

• For businesses looking to integrate their system

• Informatizing work process in the factory

• External expansion of Informatization



Basic Business

Software

Basic Business

Software

ERPERP

Manufacturing Process

Informatization

Manufacturing Process

Informatization




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Part 5Part 5

ConclusionConclusion


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Success Factors

TechnicalFactors

OrganizationalFactors

EnvironmentalFactors

Government reducedcost burden for

IT adoption

Systematic IT manpower support

Information systems & business models

Customized for Industry types

Various IT training

Advanced Information

Infrastructure


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Recommendation Establishment of Standards

Ministerial cooperation

Long-term and effective support policies

Differentiated policies for small and medium businesses Improving environments from the public sector

Meeting technological progress


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Thank You!

national computerization agency koreas experience in promoting e-business adoption among micro and...

Documents

korea slide

ebusiness project

ebusiness market

ebusiness adoption

internet business

internet slide

introduction slide

business matchmaking