Paperless Trading Infrastructure

Technology Development in Hong Kong

2005 APEC Symposium on
the Assessment and Benchmark of Paperless Trading
September 1-3, 2005, Beijing, China

Mr. Thomas Lee

Chief Technology Officer

Center for E-Commerce

Infrastructure Development
The University of Hong Kong
Hong Kong, China

Trading with FAX

PO
PO
1/9/2005
1/9/2005
ABC
ABCCo.
Co.
order
food
order food

Repetitive data entry and

checking
Low productivity
Prone to human errors
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

Paperless Trading
Fax machine for electronic documents?

System-to-system data
exchange
01010101
01010101
10101010
10101010
01010101
01010101

Manual data entry and

checking saved
Accurate data exchange
Human fraud avoided
Round-the-clock operation
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

Paperless Trading
Infrastructure Technology
Software
Message gateway for data exchange on Internet
Factors for adoption: cost and complexity

Standards
Standards on communication protocols, electronic
documents, business processes
Factors for adoption: sanction, traction, openness,
localization

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

eCommerce Software
Infrastructure
In 2002, HKSARG Innovation and Technology
Commission funded CECID HK$9.5M (US$1.2M)
Build ebXML software infrastructure in HK
Very successful R&D project:
Open-sourced software deliverables
Hermes Message Gateway as flagship technology
Lowered barriers for SMEs to do B2B e-commerce
Widely adopted in HK and internationally
Gained international recognitions
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

B2B EDI on the Internet

EDI

Private
Network

EDI gateway

Buyer

Order
Doc
(EDI)

EDI gateway

Expensive !!

Seller

With Hermes
Internet

Buyer

Hermes

Order
Doc
(XML)

Hermes

Seller

Making e-commerce
everyday
commerce
Cost effective,
affordable
by
SMEs
!!
Center for E-commerce Infrastructure Development

Cost of Ownership
Initial cost

Programming cost

Operational
expenses

EDI *

Hermes

US$40,000 $80,000 (Unix

or Windows based)
US$120,000 (mainframe)

FREE
If running on Linux

US$40,000 - $120,000

US$3,000
(app development)

US$0.25 - $1 per document

Internet subscription
(flat fee for unlimited usage)

* Source: The Total Economic Impact of EDI by Forrester Research

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

Worldwide Adoption of Hermes

Potentially largest user base among ebXML products

Recorded downloads from 80+ economies (Australia, Canada, China, Chinese

Taipei, Denmark, France, Germany, India, Korea, Japan, Macau, Myanmar, New
Zealand, Singapore, Thailand, UK, USA, Vietnam, )

Integrate Hermes into products and services

TIE (The Netherlands), Webswell (US), Crimsonlogic (Singapore), HK Govt EGIS

Many production cases in local and overseas projects, e.g.

Dairy Farm Group (HK large consumer goods retailer chain)
HKSAR Government (G2B document submission)
HMV HK
MTRC (HK major subway operator)
OOCL (international shipping company)
Sony Music HK
Daganet (Malaysia)
Spherion Technology (IT consulting in Australia)
Tedis (IT consulting Australia)

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

Electronic Invoicing Between

Buyer and Supplier
1

MTRC user orders via

bigboXX web application

3 MTRC user mark

goods received

2 Physical goods
delivery

4 E-invoice delivery
via Hermes

Procurement
web application
3

User Browser

Auto
Auto
Reconciliation
Reconciliation

Vendor
Backend
System

Internet
Electronic goods
receiving
intranet system

Hermes
2

Hermes
2
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

eCommerce Standards
Infrastructure
In 2004, HKSARG ITC funded CECID HK$14M
(US$1.8M) to build e-business interoperability
platform
Methodology and tools for e-business
information and process standardization
Localized international standardization practices
for adoption for many corporate and
government data standardization projects
Actively contributing to local and international ecommerce standardization
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

10

Local Standardization
eGovernment data standardization

Developed XML Schema Design and Management Guide under

eGovernment Interoperability Framework
HKSARG established Registry of Data Standards
(www.xml.gov.hk) to manage common XML schemas
e.g. person name, HKID, address, etc.

Software vendors need to follow the Guide and standards to

implement G2G and G2B projects

Digital Trade and Transportation Network electronic

document standardization
DTTN Co. standardized 60+ trade documents in XML with
industry and academia
Contributed the standards to develop Universal Business
Language 2.0

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

11

Regional and International

Standardization
Hong Kong actively participates in ebXML Asia
Committee (eAC) and OASIS Universal Business
Language (UBL)
To define cross-border trade standards in XML

UBL Library defines common trade documents

E.g. purchase order, invoice, despatch advice

Localized in different languages, e.g. Chinese, Japanese, Korean,
Spanish
UBL v2 aims to develop all trade documents mentioned in APEC
Paperless Trading Initiative paper
HKSAR and Singapore contributed local standards to develop
transport documents in UBL v2
Danish government mandates UBL for G2B invoicing
Potential saving estimated to be 160M euros per year

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

12

FAX Machine for Electronic Documents

Dept B

OGCIO

Dept C

Web Services
HKSARG OGCIO
Recruitment
Agents

Hermes / ebXML

Issuance
Companies

B2B
Connector
(Hermes Linux
Box)

e-Government
Infrastructure
Service (EGIS)

Shipping
Agents

Clinics

Hermes

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

Other
products

13

Conclusion
Software and standards are core paperless
trading infrastructure technology
Technology must be affordable, simple, and
open for wide adoption
Open source and open standards

Technology must be developed in a global

perspective
Government leadership in e-commerce adoption
is a critical success factor

Making e-commerce everyday commerce

Center for E-commerce Infrastructure Development

14

About CECID
R&D Center under Faculty of Engineering in the
University of Hong Kong
Our mission:
To create an infrastructure and environment that
allows e-commerce to pervade large and small
businesses through technology innovation, industry
collaboration, and knowledge cultivation.

20+ full-time staffs to develop innovative ecommerce technology and provide R&D
outsourcing services to the industry
Making e-commerce everyday commerce
Center for E-commerce Infrastructure Development

15

Thank You
Thomas Lee
ytlee@cecid.hku.hk
http://www.cecid.hku.hk