RIYADH, 27 May — At E-Commerce Saudi Arabia 2001, major international IT firms were invited to bring their top experts to make presentations to the assembled decision-makers with the idea that these individuals would be able to give constructive advice and share experiences in the areas of e-government and e-commerce.
Areas such as infrastructure, transfer of technology, comprehensive planning and appropriate technology were highlighted. Examples were given of implementations that have been used elsewhere with success. The key theme was that stagnation is a killer. The Kingdom has been holding meetings, forums and panel discussions for two years now about e-commerce and e-government. There was a general consensus that the time for talk is over. Action is a must.
Two of the most prominent speakers at the conference came from completely different sectors of the IT industry. Rob Eckelmann is the vice president and general manager, Europe, Middle East & Africa for Intel. Peter Boit is the vice president, E-commerce, US-Corporate E-commerce, Microsoft.
“I really feel that it is important for key technology sources to be local,” said Eckelmann. “What I mean by that is the generators of the technology, the companies who deploy the technology, those who support the technology and who enhance the technology need to be present here in Saudi Arabia.”
Eckelmann went on to discuss the opening of Intel’s new office in Riyadh and how the company has been represented in the local market up until the present time. According to Eckelmann, Intel wouldn’t be making a move to open its own office unless the Saudi market had reached the point of maturity that such a resource was needed. In Saudi Arabia, Intel already has 80 authorized computer firms.
“We already have a substantial presence in the local market through these companies,” explained Eckelmann. “We train their personnel twice a year and we ensure that they are not just knowledgeable about the technology but also have access to the technology through an authorized distribution channel. This access is immediate upon the technology’s release into the market anywhere in the world. So our philosophy is instant global access with local capabilities to put the technology to use.”
While the Kingdom is employing advanced technology in more sectors, that doesn’t mean we’ve crossed over the digital divide and moved to the side with the developed nations. Our ability to integrate technology effectively throughout the society as a whole is an important measure of our position on the digital divide issue.
“Saudi Arabia seems to have one foot on each side of the digital divide which can be a very dangerous position,” said Eckelmann. “On the policy front, efforts to maximize competition are what is required now so that this nation can move completely over to the other side. There are just no two ways about it and that has to apply at every level.”
Eckelmann has found that in most developing markets the communications sector is where the bottleneck lies in effective implementation of information technology.
“It’s an awful truth,” he pointed out, “but users in developing markets pay more for poor Internet access than their wealthier counterparts do for excellent access in developed countries. Generally, the reason for this is because in developing markets the governments have a cozy relationship with the communications service monopoly. Sometimes it’s privatized. Sometimes it’s not. But even privatization may just mean that there are shareholders. It doesn’t necessarily mean there’s competition.”
He continued, “There’s often a plan to deregulate, that’s stretched out from two years to five years to never. And there’s sort of a philosophical falsehood that underlies this. That is the rational that if somehow you protect this monopoly for a while they will eventually have the resources to invest and put in the infrastructure that is needed. You’ll then be able to open up to competition once you’ve reached a certain threshold. But will you ever reach that threshold? The reality is that such logic is a total illusion because investment in supply of bandwidth comes from demand. The way to maximize the supply of bandwidth is to maximize demand. The way to maximize demand is to have competition in the market. It’s simple. Frequently governments don’t realize that with telecommunications what they are trying to build are the highways of the 21st century and they’re not going to get them built by protecting the builders.”
Intel is hoping that they can offer their experience, gained in world markets, to both public and private entities in Saudi Arabia. They believe that having such a knowledge resource available will assist large organizations in gaining confidence to make the dynamic, courageous decisions required to use information technology to move forward in such areas as education, e-government and e-commerce. “We plan to offer our input as advisers to a variety of players,” said Eckelmann. “We don’t sell products so we hope we will be accepted as trusted educators on the importance of many different technologies. Ignorance is the biggest impediment to progress in the effective use of information technology.”
While Eckelmann has looked at the Kingdom close up for some time, Microsoft’s Peter Boit took a more global view, describing activities that had been successfully carried out in other nations, which could easily be implemented here.
“There are some excellent examples of what people are doing and they help put e-government and e-commerce in context,” said Boit. “There are countries which are doing some of the obvious activities such as processing applications online but I would prefer to look at a nation which is moving aggressively, such as the UK. In the UK, the government has a project called the Gateway. Through this project, in the next four years they will move all of their processes online.”
Boit stated that several phases had to be carried out for the UK to open the Gateway. In addition to developing applications or services, the British government had to first put in a foundation. This foundation was an infrastructure based on Microsoft products onto which value added services were layered to bring them online for the citizens. It took four weeks to put the foundation in place.
“That common infrastructure doesn’t exist in the Kingdom but it could — rapidly,” commented Boit. “That is a very important step to make e-government happen. Because it is not a reality that you’ll have a government that will redo or migrate all the applications that have been there for a long time. They are in main frame applications. Such applications probably work fine but you need to expose them so that citizens can interact with them.”
After taking the first step, governments must look further to the way they think about future functionality. According to Boit, besides bringing in the basic services that a government needs to do, when going online a government should also use this occasion as an opportunity to create the means for businesses to interact with one another, or for businesses to interact with citizens. For example, the State of Pennsylvania in the United States wanted to have a state portal that provided a rich level of state services online. They also chose to make it a place where businesses could interact with one another buying and sharing goods and services, and also advertising and making services available at the retail level to ordinary citizens.
“This government thought of their project as an aggregation of value,” explained Boit. “They wanted to make more available to their citizens than citizens would normally expect from an e-government proposition.”
Not all online projects need to be complex and grandiose. Boit indicated that especially when a government is involved, early projects often need to be easily achievable. People should be able to see results in a short period of time. When there is a clear ROI in the government sector then everyone can understand that the concept is working well, and providing value. Once a high level of confidence is established, then more and more projects usually follow. In Saudi Arabia, Microsoft is working with 11 ministries to help get focus projects going so that the effects of IT can be seen and value can be shown. It is hoped that this will have a domino effect with more initiatives quickly coming online.
How can the Saudi government encourage e-commerce? In general, Boit has seen that in countries with a highly competitive and established telecommunications sector, governments don’t have to do much to encourage businesses to get online because businesses easily see the value of e-commerce and make the needed investments themselves. Businesses also learn rapidly how to function in the online environment. What works and what doesn’t, quickly becomes clear. Boit stated that in the US certain tax advantages were about the only encouragement that the government gave to businesses to operate online.
“However,” added Boit, “in countries like this one where the telecom is owned by the government then you do need considerable investment at a national level to put in the infrastructure to provide fast Internet service and quick availability of lines. In countries where the basic infrastructure is state sponsored or state owned then the government does need to take an aggressive lead.” Despite the difficulties in the Kingdom with issues such as infrastructure and legislation, Boit feels that people must do everything possible to re-engineer their businesses and get online.
“My view is to move, just move,” emphasized Boit. “There’s nothing that forces decisions faster than when a government sees people moving. If you don’t have the infrastructure then you can’t provide a very good experience nor is the business opportunity very broad, but do what you can. I think it will take very strong business lobbying to the government for them to make the needed investments. Average citizens should get involved as well. Consumers usually have to demand a certain level of service to get governments to do anything. They have to lobby very hard and very strong and maybe there will have to be a mutual investment made between business and government on it. But I still think history has shown that governments usually react when there are initiatives taken by the citizens or taken by businesses toward the betterment of society.”
