The Case of the Port of Singapore Authorityq
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Journal of Strategic Information Systems 9 (2000) 85±99 www.elsevier.com/locate/jsis Information technology management: the case of the Port of Singapore Authorityq J.E. Lee-Partridgea,*, T.S.H. Teoa, V.K.G. Limb aDepartment of Decision Sciences, Faculty of Business Administration, National University of Singapore, 10 Kent Ridge Crescent, Singapore, Singapore 119260 bDepartment of Organisational Behaviour, Faculty of Business Administration, National University of Singapore, Singapore, Singapore Received 30 April 1997; revised 10 September 2000; accepted 13 September 2000 Abstract The Port of Singapore Authority (PSA) used information technology (IT) extensively to create a high-tech port that has become the busiest port in the world. Now corporatised as a commercial port operator, PSA Corporation Ltd employs four key management success factors in managing IT to meet the demands and challenges facing port operators. They are: (1) having a business-driven IT investment; (2) aligning business and IT plans; (3) maintaining a ¯exible and extensible IT infra- structure; and (4) encouraging IT innovation and creativity. These management success factors are discussed and examples are given to illustrate how they help PSA more effectively leverage IT to streamline operations and sustain its competitive advantage. q 2000 Elsevier Science B.V. All rights reserved. Keywords: Information technology; Port operations; IT strategies; IT infrastructure; IT investment 1. Introduction The Port of Singapore is a mega transhipment hub with unparalleled cargo base load and shipping connections. Every day, the port services some 60 container vessels and moves 45,000 containers across its quay. Despite the economic crisis experienced in the region, the port was able to maintain its growth in container traf®c. Over these critical years, the q The Port of Singapore Authority was corporatised to be the PSA Corporation on 1 Oct 1997. * Corresponding author. Fax: 165-7792621. E-mail address: [email protected] (J.E. Lee-Partridge). 0963-8687/00/$ - see front matter q 2000 Elsevier Science B.V. All rights reserved. PII: S0963-8687(00)00035-4 86 J.E. Lee-Partridge et al. / Journal of Strategic Information Systems 9 (2000) 85±99 Table 1 Ranking of ports on port facilities as presented in the global competitiveness report 1999 published by the world economic forum Rank Country Rating for port facilities are extensive and ef®cient (1 strongly disagree, 7 strongly agree) 1 Singapore 6.76 2 Netherlands 6.64 3 Canada 6.42 4 Germany 6.38 5 Hong Kong SAR 6.38 6 United States 6.27 7 Finland 6.26 8 Belgium 6.17 9 Denmark 6.16 10 New Zealand 5.82 container traf®c grew from 12.94 million TEUs (twenty foot equivalent units) in 1996 to 14.12 million TEUs in 1997 to 15.1 million TEUs in 1998 and 15.9 million TEUs in 1999. With the regional economic recovery, the port has already seen an increase in cargo volume. The ®rst quarter of 2000 saw the handling of 4.2 million TEUs, a 15.4% increase compared to the same period in 1999. The port also set a world record in handling 1.5 million TEUs in a single month in March 2000; no other container terminal operator has handled such a high volume in a single location within a single month anywhere in the world. PSA has six terminals to accommodate all types of vessels Ð container ships, break bulk carriers, cargo freighters, coasters, lighters, and ocean liners Ð calling in its waters. The six terminals are Tanjong Pagar Terminal, Keppel Terminal, Brani Terminal, Pasir Panjang Terminal, Pasir Panjang Wharves and Sembawang Wharves. The terminals are purpose-built facilities for container vessels while the wharves are multi-purpose facilities for all kinds of vessels. The management of the terminals and wharves lies in the hands of PSA Corp's Container Terminals Division and the Logistics Division, respectively. The Maritime and Port Authority (MPA), formed out of the old Port of Singapore Authority (PSA) and several departments of the then Ministry of Communications, is the landlord and port regulator. Maritime trade is becoming an increasingly important part of Southeast Asia's economic development. Countries in the region like Malaysia, Indonesia and Hong Kong are making efforts to improve their port services and to challenge Singapore's position as a dominant shipping hub. Despite the competition, the Port of Singapore continues to outshine its neighbouring ports. In the Global Competitiveness Report 1999 published by the World Economic Forum, the Singapore port achieved a high score of 6.76 out of a possible 7 in terms of how well the port facilities met business requirements as compared to a 6.38 given to the Hong Kong SAR port (see Table 1 for a ranking of ports as provided by the report). In 1999, PSA Corp was awarded the ªBest Container Terminalº by the Lloyd's List Maritime Asia. In March 2000, at the 14th Asian J.E. Lee-Partridge et al. / Journal of Strategic Information Systems 9 (2000) 85±99 87 Freight Industry Awards organised by Cargonews Asia1, the Port of Singapore won the Best Seaport (Asia) award for the twelfth time, and PSA Corp. won the Best Container Terminal Operator (Asia) award for the eleventh time. These awards give due recognition for the excellent services provided by the Singapore Port and PSA Corp. Increasing competition from its neighbouring ports and the pressure to maintain a high standard of service for the shipping community are two important factors that motivated PSA to work hard at making the Singapore port the best port in Asia. Having an excellent infrastructure is key to the success of Singapore as a global shipping hub; information technology forms an important element of this infrastructure. In showcasing its information technology capabilities on its web page (http://www. psa.com.sg), PSA points to the fact that ªthe battleground of the future will be the fast and accurate exchange of information between (itself) and its customers, suppliers, and other container terminal around the world.º Consequently, PSA has invested hundreds of million of dollars in IT over the last 5 years so as to keep pace with the intensity of port operations. The investments include a computer network that is purported to be the largest network in Singapore. Computer applications have been developed to support every facet of PSA's administration, planning, and operation. Mr Eric Lui2, the former Director of Information Technology (IT), noted that PSA ªruns one of the most technologically advanced ports in the world.º 2. Background Singapore is a small island state with a land area of approximately 620 km2. Before 1964, the Singapore Harbour Board was responsible for overseeing the port facilities which were con®ned to some 5 km of wharves and 160,000 m2 of transit sheds and ware- houses at Telok Ayer and Keppel Harbour. Then, the main type of cargo handled was break-bulk general cargo, with small volumes of bulk vegetable oil and latex. In 1964, the Port of Singapore Authority was established to replace the Singapore Harbour Board. In 1971, the Stores Basin of the British Naval Base at Sembawang was handed over to PSA. This resulted in the establishment of the Sembawang Wharves. In 1972, the Tanjong Pagar Terminal was opened with three container berths. Later in 1974, the Pasir Panjang Wharves were set up. The decision to construct the ®rst container terminal in the late 1960s was a big gamble for PSA. This gamble paid off as evident from the increase in container volumes of over 100,000 TEUs in the 1970s to hitting the million mark in 1982. From this point, the growth in container throughput handled by Tanjong Pagar Terminal has been increasing substan- tially at a great momentum. Within a span of four years from 1982 to 1986, the throughput has increased a hundred-fold to 2 million TEUs. The next increase of a million TEUs was met in 1988 and then in 1989, it reached 4 million TEUs. The containers handled by the port continued to exhibit a steady increase over the last ten years (see Table 2). In fact, to 1 Cargonews Asia is a trade journal based in Hong Kong. 2 Mr Eric Lui has recently left the PSA. 88 J.E. Lee-Partridge et al. / Journal of Strategic Information Systems 9 (2000) 85±99 Table 2 Containers handled at the PSA terminals (source: PSA annual report 2000) Year Million TEUs handled 1989 4.36 1990 5.22 1991 6.35 1992 7.55 1993 9.04 1994 10.39 1995 11.84 1996 12.93 1997 14.12 1998 15.1 1999 15.9 maintain the rapid pace of expansion in container throughput handled, new container berths have been built almost every other year since 1980. The sheer volume of container traf®c and the overall increase in cargo handled began to stretch the capacity of PSA's staff. Added to this is the growing complexity of running a global port. It was then that PSA decided to go high-tech with a commitment to harness information technology (IT) to run the Port more ef®ciently and more effectively. As stated by Miss Chung Suat Lay, Customer Systems Manager, ªIT applications in PSA have come a long way to the present state. Our ®rst planning back in the late 1970s was all carried out manually. Human errors during inputting and outdated information had caused much chaos and inconvenience ¼ that is history now!º 3. Organisation structure PSA was originally a statutory board under the purview of the Ministry of Commu- nications. On 30th September 1997, PSA was corporatised and renamed PSA Corporation Ltd, a wholly owned subsidiary of Temasek Holdings.