The Economic Downturn Effects on I.T Projects in Singapore - Case Study Example

 «The Economic Downturn Effects on I.T Projects in Singapore» TABLE OF CONTENTS Page Acknowledgements 5 Abstract 6 CHAPTER 1: Introduction 8 CHAPTER 2: Literature review 11 Overview of Economic Downturn in Singapore 11 2.2 Investments on I.T Projects 12 2.3 Effects on other Economic Sectors 14 2.4 Enhancing Productivity 14 CHAPTER 3: Research Methodology 16 3.1 Qualitative Research 17 3.1.1 Interviews 17 3.1.2 Success achieved from interviews 18 3.1.3 Use of Focus groups 18 3.1.4 Composition of Focus groups 19 3.2 Quantitative Research 20 3.2.1 Empirical and theoretical research techniques 20 3.2.2 Data matrix 22 3.2.3 Quantitative research Flow 23 3.2.4 Conceptual framework 24 Factors 25 Effects 25 Outcomes 26 CHAPTER 4: Reflections 27 4.1 Limitations Encountered 27 4.2 Ethical Considerations 28 CHAPTER 5: Research Findings and Data Analysis 29 5.1 Effects and Governments’ Reactions 29 5.2 I.T Initiatives Taken 30 5.3 Summary of I.T projects Implemented 32 5.4 Performance Trend 32 5.5 Projects Distribution 33 5.6 Graphical Analysis 34 Figure 2: Graphical Analysis for Local and Foreign I.T projects contracting in Singapore between 2004 and 2008 34 5.7 High valued ICT projects Investments in Singapore 34 5.7.1 Improvements in service Delivery 36 5.7.2 I.T projects awarded in 2009 39 5.7.3 Graphical Analysis of Projects Worth 40 5.7.4 I.T Projects at the end of economic crisis 41 5.8 Business Process Reengineering 42 5.8.1 Total Quality Management (TQM) 43 5.8.2 Competition boosts I.T Investments 45 5.8.3 Process Mapping 46 5.9 IT Projects and BPR in the Ministry of Manpower in FY2008/2009 47 5.9.1 Business Intelligence System 47 5.9.2 Disaster Recovery System 48 5.9.3 Electronic Document Submission System 49 5.9.4 Workplace safety and health portal system 50 5.9.5 Importance of the BI System Implemented 51 5.9.6 Design of a New Website 51 5.10 IT Projects and BPR in the Ministry of Home Affairs in FY 2008/2009 53 5.10.1 I.T Procurements’ Summary 53 5.10.2 I.T Challenges Encountered 55 5.11 IT Projects and BPR in the Ministry of Education in FY 2008/2009 59 5.11.1 FutureSchools@SG 60 5.11.2 Standard ICT Operating Environment (SOE) for Schools 61 5.11.3 I.T Challenges Encountered 62 5.12 Other I.T Projects Implemented 63 CHAPTER 6: Conclusion 66 CHAPTER 7: Recommendations 73 References 76 Appendix 79 Research Questions 79 Information Charts 83 Estimates of Projects implemented in the Ministry of Home Affairs in 2009 83 Centre for Instructional Technology (CIT) in 2009 83 Acknowledgements I would like to gratefully acknowledge the continuous assistance of my colleague, classmates and friends. I would like to thank my department managers particularly Daniel and Kenneth for their kind guidance, supervision and relevant discussions during the whole dissertation process. I am also grateful to my friends and colleagues at NCS Pte Ltd (Singapore), my friends and their colleagues at IBM Singapore, Ministry Of Home Affairs, Ministry Of Manpower, Panasonic Electronic Devices Singapore, NEC Singapore and National Library Board for their valuable time in participating in the questionnaire. Finally, I am forever indebted to my parents, brother and sister-in-law for their understanding, endless patience and encouragement when I needed them most. Abstract This study investigates how economic downturn affected Information Technology (I.T) projects in Singapore before and after the 2008/2009 economic crisis. The research was driven by a major question which was the effects of the 2008/2009 economic downturn in Singapore on the Information Technology projects. Sub questions were used to support the main question for effective research. The selected sub questions include the experiences of Singapore during the recent 2008/2009 economic downturn, and the position of I.T projects before the economic downturn in Singapore and how this was later influenced with the onset of economic downturn. Qualitative research was the research methodology adopted in this work due to its ability to test for relationships in the research variables. The relationship to be tested was a bivariate relationship in which the economic downturn was the independent variable and the I.T projects in Singapore was the dependent variable. Semi structured interviews were used as the data collection methods in which two government I.T projects and one private I.T project were examined with involvement of twenty officials as the key participants. Complimentary data collection methods included document reviews from government entities, company, research work and media records. All the findings obtained from the research methodology was documented and analyzed to help answer the research questions. Analysis of the research findings was done using statistical software’s such as Scientific Analysis Software (SAS) and Statistical package for Social Sciences. Tables were used for representation of numerical data for easier analysis and graphical notations were generated to supplement the tabulated data. All statistical measures were interpreted with clear explanations and concepts drawn from the findings. The research focuses in details the effects of the economic crisis on IT projects in Singapore during the 2008/2009 financial year, when there was a big economic recession. The recession not only caused a great impact to the economy of Singapore but the whole world as well in general. Critical projects which were implemented across several sectors of the Singapore government were analyzed and their impacts to the Singapore economy during the 2008/2009 financial year clearly analyzed. The major implementation challenges as well as development constraints encountered during the implementation of various projects were being explored and analyzed. In addition, the Business Process Reengineering (BPR) outcomes which resulted during implementation of various IT projects were also examined together with the distinction drawn between implementation and management standards used. Critical sectors of Singapore government such as the ministry of home affairs, Ministry of Manpower and Ministry of Education were being studied and the various I.T projects implemented during the 2008/2009 economic downturn analyzed to help in answering our questions for this research. The research was marked by a conclusion and recommendations for future research. For further research, a list of bibliographic materials, from which rich information and research data was obtained, was provided. CHAPTER 1: Introduction Between 2008 and 2009, several countries in the world experienced the worst financial crises ever since the Depression of the late 1930s (Jordan 2009). The financial crisis affected both developed and developing economies and forced several governments to take urgent steps to prevent a total collapse of their financial systems. A similar impact was felt in Asian economies especially in Japan and Singapore. In fact, Singapore was the first Asian country to witness the negative effects of the economic downturn. The crisis stalled most business activities and sectors and paralyzed the economy leading to job losses and bankruptcies. The current study examines the effects of the 2008 financial crisis on the Singaporean IT (Information Technology) sector and focuses primarily on the trends experienced thereupon among the various IT projects in progress within this industry. The importance of this crisis is highlighted from the fact that it forced Singapore into a drastic and critical recession and threatened to stall the entire South East Asian economy. According to GDP (Gross Domestic Product) estimates, which were released by the Ministry of Trade and Industry of the government of Singapore, the country was expected to grow from -2% to 1% in the year 2009, an estimate lower by 1% to 2% as measured in November 2009 (Daniel 2010). Beginning November 2008, global demand and investments in trade had been paralyzed and in turn had an adverse impact on several economic sectors in Singapore such as wholesale, retail, transport and storage sectors. For instance, the manufacturing sector is estimated to have contracted by 3.7% in 2008 and is a bit better than the 5.8% contraction for the year 2007 (Bradley 2009). The services and construction sectors also registered a slower rate of growth by as much as 5.3% (the figures were an incredible 17.3% in 2007) (Bradley 2009). Laying a primary emphasis on mitigating job losses, the government of Singapore responded to the crisis by adopting several measures. Amongst them, one of the most significant initiatives implemented included a job-retraining program aimed at improving the professional skills of workers and to reduce the burden on businesses by paying for related expenses incurred over job training. In several other cases, the government also closed down several projects or instructed business to do so if it felt that they were to resource intensive or hampering the reversal of the crisis (include author). A broad review of related literature and news reports (include authors) suggests that the IT industry was generally favored and supported by the government during this period of economic recession and restructuring. For example, a tender to provide passive fiber grid for the next generation of national broadband network in Singapore was awarded in September 2008. Decisions like these clearly indicate a high level of trust and commitment on the part of the Singapore government to support the IT sector and use of IT services despite and signifies the relevance of IT as an instrument for emerging out of the crisis. Further, a passive ICT infrastructure was to be implemented in Singapore by Netcom OpenNet to deliver speeds of 1Gbps and beyond. The government committed itself towards extending a grant of S$750 million to the contracted company so as to support the network implementation (James 2009) in the hope of opening up several opportunities along the way for many other I.T projects. Also, expenditure on ICT hardware as well as software systems was boosted up, a move which is believed to have opened up a bigger market for suppliers from international firms. The problems of Singapore have been compounded with growing insecurity and the threat of terrorism is affecting international trade between Singapore and its trading partners. In a bid to improve security, Singaporean officials visited many Israeli companies for consultation on adopting viable measures to thwart these vulnerabilities. Security measures like video analytics, light weight X-Ray machines, biological detectors, chemical detectors, explosive detectors, blast containment and protective computer equipments were some of the equipment recommended from their analysis. Purchasing, installing and maintaining these cutting-edge security technologies has given a big boost and served as an incentive to the IT sector and providers in Singapore. While Singapore continues to bank heavily on its proven IT expertise, the 2008 financial crisis appears to have had a significant impact on the progress of IT projects like the ones mentioned above. The study has worked towards developing a clear understanding of these issues by developing an elaborate guideline of research objectives and associated questions which have been thoroughly investigated. These include the evaluation of the performance of IT projects in Singapore between 2008 and2009, the economic scenario in Singapore during the financial crisis and the performance and course of IT projects in Singapore before, during and after the crisis. CHAPTER 2: Literature review Overview of Economic Downturn in Singapore Singapore is a leading economic powerhouse in Asia and the third largest in the world in terms of network readiness (Singapore Economic Development Board (EDB) 2009). Though Singapore is one of the wealthiest countries in South East Asia, it was also among the first few to recede into an economic recession during the 2008 financial downturn (Benjaathonsirikul 2009). The country has an established and efficient Information Technology (IT) industry with a robust intellectual market comprising over eighty prominent companies that provide a range of IT services including both software and hardware. Even in the midst of economic downturn, the IT industry in Singapore continued to experience significant growth. The domestic IT market has been values at US$4.8 billion for the year 2008 and the government has increased its spending in establishing a broader Information and Communication Technology (ICT) infrastructure across the island nation (Business Monitor International 2009). Exports are the mainstay of most South East Asian economies and Singapore is no exception. Singapore was particularly vulnerable to the economic downturn due to its high dependency on exports and has critically devastated its overall economic growth. In response to resolving the impact of the downturn, the government of Singapore put in place several strategies, with one of them being to invest more in its IT sector. 2.2 Investments on I.T Projects During the crisis period, several medium to large sized IT projects that were encouraged and funded based on their relevance to important and critical sectors that could assist the government’s efforts in staving off the crisis. This led to further investments in IT projects that were being developed to assist sectors such as health care, e-government, homeland security, manpower, transport and education. An example of such investments can be cited in the case of the implementation of the nationwide broadband network for homes which cost nearly US$750 million (Business Monitor International 2009). The government introduced a stimulus package of US$20 billion into the IT Industry to prevent the country’s economy from slumping further. This stimulus package is expected to bring about a significant positive impact to the IT projects being developed and has benefited from the enhanced collaboration between the government and other commercial players who understand the importance of the crisis. These strategies highlight the faith placed by the Singapore government and local business on the viability of IT projects as important tools for rejuvenating economic growth (Adams 247). Singapore, which lays a great emphasis on technological advancement, has continuously nurtured investments in technological initiatives as sees it as a prospective contributor in the growth and expansion of its economy. In fact, the government has at times stalled projects in some sectors in order to fund its ongoing IT projects. For example, a construction project worth S$4.7 billion was scrapped in 2008 in order to in order to facilitate investments for other needy sectors of the economy (Business Monitor 2009). The government of Singapore believes that by boosting its investment in operational and security technologies, efficiency would be created to safeguard the economy and its associated elements such as border security compliance (Business Monitor International 2009). In the financial year 2008-2009, the government of Singapore recognized the need to extend further support to the healthcare and medical sectors. Through detailed studies it was discovered that there was reduced efficiency in the provision of health care services to the public due to inefficient handling of patient records and documents. For instance, multiple medical records are stored at different clinics and hospitals in different formats and are not connected, synchronized or consolidated. When patients consult different doctors, they need to undergo repeated tests and medical procedures leading to more expenses and financial difficulties. This inefficiency not only escalates unnecessary cost but also inhibits a doctor’s capabilities to develop an overall understanding of the patient’s medical history leading to a poor and inefficient diagnosis. This has prompted the government to undertake necessary steps in enhancing its existing Electronic Medical Records (EMR) system. The expansion and revamp of this electronic system was performed by Israeli Healthcare IT companies and brought about an increased efficiency in the country’s healthcare services. Although other sectors of the economy were experiencing hurdles in continuing their projects, investments in leading IT technologies have recently helped Singaporean firms capture more markets and expand business operations. This has in turn boosted the performance of other economic sectors as in the case of the water authority of Singapore which was funded substantially in 2009 from funds made available through improved tax reserves. The generation of these additional funds has been cited to the vast improvements delivered by new IT projects that have helped cut down costs in government spending. The water authority has further benefited in efficient water resource management through support from related management software which has established the positive impact of encouraging IT projects even during periods of turmoil and economic difficulties (Chia 297). 2.3 Effects on other Economic Sectors The negative impacts on the economic growth were inevitable and affected various sectors of Singapore economy in many ways. The private sector was especially weighed down by the credit crunch as well as reduced external demand for the country’s exports. Initial signs of recovery were evident by late 2009 after the country had invested heavily in the consolidation and expansion of its IT projects and undertook massive improvements in its technology infrastructure. Local demand for goods and services began to improve and financial schemes were put in force to assist local enterprises in improving their workflows, minimize costs and offer better products and services at competitive prices. 2.4 Enhancing Productivity In the post-crisis period since the later part of 2010, Singapore has recognized productivity as the primary driver for ensuring a sustainable growth that is capable of weathering similar economic downturns in the future. In this context, the administration wants to look beyond certain drivers of development that have largely achieved growth on a temporary basis1. For example, the over leveraging of business activities in developing markets has led to undesirable effects in the forms of bubbles and has led to economic crashes in the past. In the context of productivity, the government looks to enhance the skills of workers in various sector including the IT and services industry and is keen to enable them work smarter through the better leverage of Information Technology and soft skills, which are perceived as the basic catalysts for enabling sustainable growth of the overall Singaporean economy2. In the IT sector, the government is taking steps to develop a pool of professionals who are receptive to innovation and evolving leadership in embarking on challenging initiatives. During early 2010, the Singaporean government opened a ‘National Productivity and Continuing Education Council’ which works towards improving the technical and IT skills of local workers and boosts their productivity3. Moreover, the government has forged alliances among various internal departments to facilitate the utilization of IT expertise in these domains and create a more effective workforce in every related sector. However, these initiatives demand a long-term perspective, commitment and oversight from the government, private industries and investors. The IT sector, through related projects, has a two-fold capacity to become a primary element of driving growth in the Singaporean economy – the first is to enable the growth of the enterprise through the best and proper utilization of all available resources, while the other is to occupy the role as an engine of innovation and growth to have an impact beyond national borders4. There is no room for doubt that innovation in the Singaporean IT sector will not just create new jobs, but also help in securing new customers. The government believes that the power of the Internet revolution is still underutilized and a lot of inroads can be made into utilizing its capabilities and features in a number of domains necessary for public security, economic growth and sustainability. Along with this trend, there is also some effort towards educating local people to use this technology so that it becomes a success in reality within the coming few years. CHAPTER 3: Research Methodology Qualitative and quantitative research methods were used in the study on the effects of economic downturn in Singapore I.T projects. The use of qualitative and quantitative research methods was used to eliminate the weaknesses associated with single qualitative research or quantitative research methods (Benjaathonsirikul, 2009, p.14). Based on software maintenance strategies, non probability based samples was used in a non generalizable way to answer the whys and the how’s about economic downturn and its effects on I.T projects in Singapore. Quantitative methods were based on probabilistic samples to test the set hypothesis. Qualitative methods used in this research include structured interviews as well as closed and open end questionnaires. Quantitative methods used were observations, use of open and closed questionnaires, random sampling and literature reviews from past papers, books, Journals and other electronic materials on the effects of economic downturn on the I.T projects in Singapore (Hertel, 2008 p. 112). 3.1 Qualitative Research 3.1.1 Interviews In qualitative research, qualitative interviews were conducted with twenty officials from three IT projects. These included two government sector projects and one private sector project. Comprehensive document reviews were also carried out to capture as many facts and information as possible for the best case analysis of the research questions. Qualitative research was preferred due to its ability to isolate causes and effects as well as its ability to provide effective theoretical relations between different variables that were being used for in the research. Examples of relations tested in the qualitative research included the bivariate relationship between independent economic downturn and the dependent effects on I.T projects. Qualitative research was used for a comprehensive understanding of the research questions as well as identification of social realities surrounding the effects of economic downturn on I.T projects in Singapore. An example of such social realities tested includes the gross domestic product and the effects of technology on the livelihoods Singapore citizens. In addition, Qualitative research was critical in this work due to its ability to use non generalizable and non probabilistic samples with a formative approach in answering our research questions. 3.1.2 Success achieved from interviews Although the data involved in our qualitative research was time consuming to collect and analyze, it was rich in content and highly reliable in the research objectives (Flick 2009, p.22). Structured interviews and open as well as closed questionnaires were used for qualitative research. Qualitative research was done based on the understanding that quantitative research methods are probabilistic and generalizable which makes it difficult to understand the accurately achieve the research objectives. The use of qualitative research in this work helped in gathering first hand information which is non probabilistic and non generalizable from leading industry experts within Singapore, both in the private and public sectors. Although this approach was resource and time consuming; all standards and tools were applied to obtain rich data for a formative and critical analysis on the effects of economic downturn on I.T projects in Singapore. Research questionnaires were distributed and structured interviews conducted with industry experts from the selected companies, who have a long term and sound experience on software and economic management. 3.1.3 Use of Focus groups Focus groups were additionally selected to discuss critical research questions such as enquiries on the nature of I.T projects before and after the economic downturn. Every focus group was used as a single unit of research analysis. To be able to effectively tackle critical research questions, complimentary surveys were conducted on the selected organization. A connection with someone from the selected organizations was well maintained to gather as much data and information as possible (AHA, 2009). This data from the industry experts include twenty officials from both public and private sectors were used to derive conclusions on financial and I.T segments in Singapore during the 2008/2009 economic downturn. 3.1.4 Composition of Focus groups Focus groups were comprised of five to ten people and a moderator was selected to drive the discussions on the effects of economic downturn on the I.T projects. There was a maximum of five focus groups that brainstormed and conclusions represented to the larger focus group for comparison and subsequent analysis. Face to face and telephone interviews were also conducted and administered questionnaires distributed to various target groups which includes the financial and software industries. All the selected groups received similar questionnaires which were filled and collected for critical analysis. Open ended as well as closed questionnaires were used to create an in depth analysis related to the research topic. Once all the questionnaires have been filled completely, all the data gathered were posted into a data analysis package such as SPSS to conduct a thorough analysis. Any relationships such as bivariate relationships between economic factors and its effects on the I.T projects and multi-variate relationships such as comparison of different economic factors to different I.T project advancements were identified and the required statistical measures conducted. The results were then carefully compiled and accurately interpreted to come up with a comprehensive analysis on the research questions. Different statistical measures such as mode mean, and standard deviation, chi square and T-distributions were used for effective interpretation of the research results. All the research analyses were done numerically which means that all the research variables were represented with numerical values. The various effects of economic downturn and their contributions were for example represented with numerical values such as 1 for increased procurement of ICT hardware, 2 for increased procurement of software and 3 for increased development of Internet infrastructures. This accelerated the analysis work with the leading analysis tools such as Statistical Package for Social Sciences (SPSS) and Scientific Analysis Software (SAS). 3.2 Quantitative Research 3.2.1 Empirical and theoretical research techniques Empirical as well as theoretical research techniques were used to quantitatively collect and analyze data on the effects of economic downturn of I.T projects from various sources (Rosenthal 2009). Using empirical approach, research data was obtained through well planned and systematic empirical observation methods, while theoretical approach was used to analyze data from previous researches such as scientific journals, recent financial books and research papers by other researches. The idea of using this quantitative approach is to eliminate the weaknesses associates with qualitative approaches such as time and resource constraints which will complicate the scope of research. Most of the materials used for quantitative research were obtained from the Internet. In addition, theoretical approach was used to analyze past data from PROMISE repository i.e. predictor models for software engineering. The use of PROMISE repository was a vital research method in the impacts on I.T projects since all the data in the PROMISE database such as PROMISE 2010 has been fully updated, it is clearly understood by industry experts and it has a huge database of supportive models, something which cannot be found in any other research sources. PROMISE repository was used to analyze the software development life cycle (SDLC) in Singapore between 2008 and 2010. The trends given here were critical in drawing observations on how the industry has been growing and the total number of failures in the I.T projects during this period was also identified. The development standards as well as geographical distributions were clearly obtained. PROMISE data analysis approach for our research work is based on the sound understanding that a good research technique is not based on generalization of data from the real world but on specificity of data. The process of collecting such data is usually problematic since most private and public organizations will not wish to expose their software development styles and trends to public scrutiny. Our quantitative research approach therefore made use of whatever data that was available from the PROMISE repository on I.T projects in Singapore to quantitatively analyze its effects from the economic downturn that hit Singapore between 2008 and 2010. The employment of these quantitative techniques provided explanations to questions, for example, the total number of I.T projects before and after the economic downturn and how different was the project management processes before and after the economic downturn hit Singapore. All the research data and information obtained was then represented numerically and the results were transformed into a data matrix with each unit occupying a row and each variable a column (Lee, 2008, p.74). 3.2.2 Data matrix Generation of a properly planned data matrix was a critical starting point for the research on the effects of economic downturn in Singapore. Below is a sample of a data matrix which was generated to aid the process of data collection, especially from the PROMISE repository. The data matrix reduced the complexity of the massive data available from PROMISE repository and other electronic sources for easier analysis. The data matrix was later exposed to statistical analysis techniques for analysis and interpretations to be obtained for the research questions set at the research inception. Case Question1 Question 2 Question 3 Question 4 Quesstion5 Question 6 Question 7 Question 9 1 4 5 6 7 4 5 900 600 2 5 4 7 6 5 5 699 800 3 3 5 5 5 4 4 700 900 2 5 4 7 6 5 5 800 900 5 5 4 4 4 4 4 750 950 The data matrix to be used for the analysis work was represented numerically to ease the analysis work using analysis tools such as SAS (Scientific Analysis Software) and Statistical Package for Social Sciences (SPSS). A number such as 1,2,3,4 etc was used to represent the nature of I.T projects before the economic downturn while others such as 6, 7, 8 and so on represented the nature of I.T projects after the economic downturn. In the research design, a variable such as a dependent effect on I.T projects was a measurable and observable variable with different being used for measurement. 3.2.3 Quantitative research Flow Our quantitative research approach started from the research ideas as well as questions which were documented prior to application of research techniques and tools. From the research ideas, a literature review was conducted from internet library Journals, Business Journals, White papers, past research papers and other people’s thesis proposals, online and off line books as well as periodicals. The research problem was then clearly formulated theoretically and operationalization of empirical research questions conducted for a sound research design (Adam 2008, p.250). Upon a sound comprehension of the research design data was collected from authoritative sources such as the PROMISE repository using key words such as ‘Singapore’, ‘IT projects’, ’SDLC’, ‘Economic crisis’, ‘Singapore trends before 2008’, ‘Singapore software trends after 2008’ and ‘IT Projects in Singapore’. 3.2.4 Conceptual framework The impact of the economic downturn and resulting government reforms can be conceptualized at a fairly high level as depicted in the flow diagram below through a two-stage relationship wherein the prevailing conditions from the downturn have a series of effects on business and IT projects, which in turn evoke some crucial steps both from the industry and the administration to counter the negative outcomes of the financial crisis. The effectiveness of these actions and strategies ultimately can be assessed by analyzing the performance of IT projects and the services they have delivered over the past few months when the crisis has finally began to ease5. In order to conceptualize the implications of the recent reforms on IT projects, an framework is proposed that can describe this entire period, wherein the impact and extent of the downturn on IT projects in Singapore can be evaluated by a set of parameters. Thus, these parameters will account for estimating all the effects believed to have resulted from the economic crisis on the IT sector in general. Fig: Simple Analytical Framework for correlating the economic crisis with effects on IT projects and resulting outcomes Factors The first box in the above diagram describes some of the factors that resulted out of the financial crisis of 2008. Amongst these, Singapore, being an export driven economy, has had to experience the effects of external shocks primarily from its external trading partners like USA, UK and Germany6. It has also had to experience an internal credit crunch resulting in declining business activity and a local economic crisis leading to severe job losses. All these parameters will be duly studied as the factors that led to a serious impact on IT projects in Singapore. Effects While factors highlights the aspects that contributed to the perceived influence on the IT sector, the parameters listed under Effects will help estimate the real extent of the impact along several dimensions. The economic crisis and the credit crunch has forced massive cuts on spending, leading to reductions in budget, spiraling prices and declining trade volumes7. All these effects were observed in the case of ongoing IT projects in Singapore. Outcomes The effects emanating from the crisis have further led to a series of steps undertaken by both the administration and the companies in Singapore to overcome the downturn or at least minimize the extent of damage to the economy and business. Amongst the various steps taken, Kyokai (2009) believes that reforms occupy the primary position as it encompasses all legislation and infusion of fresh funds into the economy through any stimulus packages. Further, the government has been recommending the extended use of IT across all sectors of the industry in a bid to streamline operations and improve productivity. Such developments also command greater coordination between companies and the government in general. As such, all these possible outcomes have been duly considered in this contextual framework and will be thoroughly evaluated as part of the analysis. CHAPTER 4: Reflections 4.1 Limitations Encountered Some possible limitations were experienced during the research work. One of the challenges expected to show up included lack of reliable documentations due to government restrictions. The use of sources such as Business and Straight times was used to try and service the availability of such information. It is the government constraints associated with the release of critical information that would lead to the use of quantitative techniques to obtain the data from other secondary sources such as the promise repository. The promise repository for example provided different papers on IT projects in Singapore and the information obtained from these papers was incredible in answering the research questions. The use of structural approach was critical in our research as it acknowledges the importance of obtaining data and information from day to day interactions. Deeper structures can be created to improve the quality of data and information obtained from daily interactions. Issues associated with this approach are whether the involved parties were using the surface of deeper interactions in providing the required data and information. 4.2 Ethical Considerations Ethical considerations were also issues of concern in this research. All the data obtained from different sources required to be privately and confidentially stored (Benjaathonsirikul, 2009, p 14). This is due to the data protection act which requires that all the client data must be maintained with the highest level of integrity and confidentiality. If such data is revealed to unauthorized person, it would be equivalent to breaching of the data protection act. The interviewees had to be convinced that the data collected from their business enterprises was only used for research work and sharing would only be done with the research supervised where need arises. A need to sign a formal document might be required to enforce the ethical and legal requirements. All the digital materials were securely stored in password protected personal computers and access limited only to the authorized user. All the hard copies of the material collected such as filled questionnaires and company journals was locked in secure locations to prevent access by unauthorized personnel. The authenticity of the research work was another major issue in this research work .All the work produced must be original and any references used must be properly cited to avoid plagiarism. All ideas borrowed from interviews were recorded as interview findings. There must be informed consent during the research interviews. The research was therefore properly prepared and the interviewees informed in advance, which areas would require to be discussed on. The researcher refrained from any political influence or any other interview ideas that may crop up to degree the quality of research. Standards were followed to maximize the research quality. CHAPTER 5: Research Findings and Data Analysis 5.1 Effects and Governments’ Reactions Singapore was the first ASEAN country to fall into economic recession during the 2008/2009 global economic crisis. This occurred due to its heavy reliance on trade imports which caused the gross domestic product to fall up to -2% from 2% in the 2008 and 2009 financial years respectively. Due to the financial crisis that hit the whole world, Singapore had to look for measures and mechanisms to respond to the crisis. Contracting in the manufacturing sector went down from 5.8% in the year 2007 to 3.7% in the year 2008. The services producing industries as well as the construction sectors were worst hit as the GDP fell from 17.3% to 5.3% in the 2007 and 2008 financial years respectively. Many projects were stalled and the government of Singapore had to look for urgent measures to revive the economy despite the crisis. The crisis was also most evident in Singapore as the stock market plays a huge role in the regional economy and is made up primarily of Foreign Direct Investment (FDI). The crisis prompted many foreign investors to reduce their exposure to developed markets including Singapore that were more entwined with the global economy8. 5.2 I.T Initiatives Taken In the midst of the economic crisis in the 2008/2009 financial year, the Government of Singapore felt that one of the ways in which it could revive the economy was through viable investments in technological advancements. Many projects were dropped in sectors such as construction sector where a project that was estimated to be worth S$4.7 billion was dropped and attention had to be diverted into technological investments. The government was determined to maintain the jobs for most people who were retrenched or encountered problems finding a job during the economic downturn period. To help ease the problem of the sudden unemployment rates, the government recognizes the need to invest in technologies and other initiatives to help businesses thrive despite the economic crisis. Several significant initiatives were implemented to aid in keeping the high unemployment rates down to prevent the economy of Singapore from slumping. These measures are similar to the steps taken by the government in Germany, which relied mostly on cost cutting in a bid to ensure minimal job losses unlike the case of the US or UK which focused primarily on infusing stimulus packages to help troubled companies. The result has been that the governments adopting the former approach have been able to evoke stronger cooperation among citizens and have overcome the crisis in much lesser time due to collective efforts of the workforce9. The fist initiative to be implemented was the skills programme for upgrading and resilience which was technology oriented to help different businesses pay for the training of their staff. A tender to provide passive fiber grid called the national broadband network was awarded in September 2008. There was a need to security especially for the trade imports and exports so that international business could thrive. This was done as security deterioration was one of the factors that had caused the economy to decline. An I.T project on video analytics had to be implemented. Portable and light weight X-ray machines were also implemented and investment in I.T projects began to rise. Other projects that had to be implemented to improve security included explosive detector systems and biological detector systems. Medical technologies were also identified to improve the health for the working and non working group. The procurement trends for the government ICT were found to go up despite major declines in other sectors on Singapore government. The I.T contracts awarded to locals rose from $0.82 billion to 0.85 billion in the year 2007 and 2008 respectively. This showed a significant improvement on the investment in I.T projects. According to the analysis conducted the 2008 investment in I.T projects was the highest since 2004. Below is a summary of the investment in I.T projects for Singapore since 2004. Year 2004 2005 2006 2007 2008 I.T investment in Billion Dollar 0.69 0.8 0.81 0.82 0.85 The number of I.T contracts awarded since the year 2004 to the year 2008, when economic recession hit Singapore was as summarized in the table below. 5.3 Summary of I.T projects Implemented Year Number of Contracts Awarded 2004 570 2005 575 2006 523 2007 654 2008 721 5.4 Performance Trend Below is the performance trend generated from I.T projects contracting data Figure 1: Number of IT Contracts awarde in singapore from 2004 to 2008 From the graphical analysis above, there was an increase in the number of I.T projects awarded in the year 2007 and 2008 from 654 to 721 respectively. This means that despite the tough economic downturn which was experienced in the year 2008, the government of Singapore was still dedicated in funding I.T projects. It was believed that proper I.T infrastructure and related technologies, both hardware and software was the key to economic prosperity. It is evident that since the 2006 financial year, the government of Singapore has been continuously investing in I.T projects and has increased its investments in implementing such projects across several departments10. The data below gives a distribution and a breakdown in the number of ICT projects awarded to both the locals and other foreign companies between 2004 and 2008 financial years (James 2009). 5.5 Projects Distribution Year Number of Local Contracts Number of Foreign Contracts 2004 570 420 2005 575 380 2006 523 370 2007 654 360 2008 721 320 Analysis of the above data was able to give a clear analysis of the trend in which Singapore has been awarding its I.T projects since the year 2004. There is a clear indication that since 2004 up to the time when there was tough economic downturn in Singapore, the award of I.T projects has been decreasing on foreign companies awards and increasing on local investments. During the 2008 financial year, only 320 I.T projects were awarded to foreign companies while 721 projects were awarded to local I.T companies. One of the major effects of the economic downturn is therefore clear, that investment was declined from foreign outsourcing to local investments. The government has ensured that a majority of the I.T projects were awarded to the local I.T companies in large numbers to boost the economy and retain jobs within the economy11. Below is a graphical analysis of the IT projects contracts distribution up to 2008, the year of economic downturn. 5.6 Graphical Analysis Figure 2: Graphical Analysis for Local and Foreign I.T projects contracting in Singapore between 2004 and 2008 5.7 High valued ICT projects Investments in Singapore It was evident that Singapore had mastered the tactics of technology oriented growth as it felt that without proper technology in place, the economic growth of the country will be at stake. Similar trends have been observed in the case of other developed economies which have suffered most from the crisis. Most notably, the United States has encouraged the use of new technologies like hybrid vehicles and renewable energy. Most countries in Europe are contemplating a wider implementation of solar and wind energy a farms to help realize long-term cost benefits and reduce expenditures on various initiatives12. During this tough economic year, Singapore took big investments in the following projects13: Development of Next Generation National Broadband Network Development of Integrated I.T support services for DSTA14 Integrated Electronic Litigation system development Supply, delivery and deployment of Microsoft licenses to institutes of higher learning Wide Area Network Services for all schools and sites STARS21 project Notebook tender for Singapore students Supply and delivery of Server and Storage systems for government offices IT application development, annual maintenance services and integrated system management support Supply, delivery, Installation, testing, commissioning and support of personal computers, notebooks, tablets PCs, printers and computer accessories Supply of broadband Infrastructure system for government offices Supply of contract infocomm consultancy system The above list only indicates the projects which were termed as high valued in terms of financial investment and development requirements. Most of the above listed projects were to be developed in the year 2008 when other sectors of Singapore economy were declining (Lee 2008, p. 72). The government was dedicated to ensure that its IT infrastructure is in good condition as well as to oversee implementation of business critical systems to boost the economic growth. Information and communication was among the I.T projects that were heavily invested on during the economic downturn of the 2008/2009 financial year. It was believed that there were a lot of business opportunities in the information and communication sector and that investment in leading information technologies would see Singapore recover from its economic recession (Lee 2008, p. 72). At an industry briefing, the Chief executive Officer of IDA Singapore, investment in leading information and communication technology would not only boost business in the 2009 financial year but would also help different organizations to improve their operational efficiency. He believed that investment in leading technologies was the only way that Singapore would become relevant both locally and internationally. 5.7.1 Improvements in service Delivery There was a growing need for Singapore government to improve its service delivery to the public through the use of Infocomm technology (Macfarlane, 2008 p. 17). The use of infocomm technology was encouraged so as to improve efficiency and responsiveness in the public sector. Up to the year 2008, Singapore had been consistently ranked in the world as one of the top few countries who had successfully managed to leverage on the use of infocomm technology to assist in the daily operations for its citizens and their businesses. Singapore hopes to withhold this recognition and at the same time maintain continued investment in leading technologies to involve all the citizens and businesses in the positive progression of its economy. In a research conducted by Wasenga University International for E-Government rankings in 2009, Singapore emerged as the top. In 2008, a survey conducted by International Institute for Management development, Singapore was the second in the use of infocomm technology. The country also emerged among the top 5 in the economic forum in the world due to its effective global IT support and Singapore has been in the running for five consecutive years. During the 2008 economic downturn, even the infocomm industry was affected but the government continued to fund heavily by providing major IT projects. The investments not only provide seeding of opportunities which could help in the improvement but also enhance the utilization of infocomm services by the government, Singapore businesses as well as the general public (James Kang, 2009). One of the critical projects implemented by the Infocomm Development Authority of Singapore (IDA) was the Critical Infocomm Technology Resource Programme (CITREP). This project was introduced in the year 2008 to help I.T professionals to acquire critical skills for business and technology advancement. Apart from this, it also helps accelerate the development of emerging, critical and specialized infocomm skills that is urgently sought after by the infocomm industry and user organizations. The fees support for infocomm technology was increased from 50% to 80% and all organizations will automatically be eligible for an “Absentee Payroll” system when the organizations support their staff for the training by sponsoring them. This was an enhancement of the CITREP systems and all organizations were required to implement it within the next two years. A total of 10,000 infocomm professionals are expected to benefit significantly from this enhancement. Support was continuous for critical I.T projects. In the same year, i.e. 2008, a total of 258 courses were submitted for endorsement through the enhanced CITREP programme. The total number of courses endorsed in 2007 was 248 implying that there was an addition of 10 courses. The active investment in IT projects such as the CITREP program was intended to alleviate most of the difficulties that businesses and companies were experiencing during the economic downturn. I.T projects investment was also intended to help both the businesses, companies and also the individuals to upgrade their operational manpower by leveraging on infocomm efficiency and effectiveness. Advanced business capabilities and services were also expected to be developed from the increasing usage of infocomm technology. It was believed that economic and social developments could be accelerated through infocomm technologies and the results gave the government of Singapore the assurance of increasing its financial support to the I.T industry. During the year 2008, more that 621 infocomm tenders worth over $1.6 billion were awarded to a total of 296 companies (James Kang, 2009). The largest IT contract which was awarded in 2008 financial year was the Next Generation National Broadband Network (Next Gen NBN) which was supported by a grant of 750 million dollars from the government of Singapore. This (Next Gen NBN) project strives to allow Singapore’s broadband infrastructure to be recognized among the best in Asia. In addition, with the high speed broadband, it allows for a more competitive and vibrant I.T industry. At the beginning of the year 2009, IDA selected Nucleus Connect as the operating company for (Next Gen NBN) with a total grant of 250 million dollars. Nucleus Connect shall be responsible for the designing, building and operating the active infrastructure for (Next Gen NBN). This I.T project was a big dedication to the support of the local I.T industry in the midst of economic crisis. In the year 2009, more than 392 tenders worth over 1.7 billion dollars were issued to further advance the growth in the technology industries. The list below illustrates some of the top ICT tenders that were awarded by different government agencies at the beginning of the year 2009. 5.7.2 I.T projects awarded in 2009 Government Agency Estimated tender value in dollars MOE 687,697,600 MOF/IDA 224,000,000 MHA 126,796,920 MOM 74,500,000 IDA 47,785,197 ITE 47,475,000 Mindef/DSTA 40,099,561 PMO 38,340,000 MICA 13,020,000 MCYS 12,330,000 Below is the graphical analysis of the above data. Its statistical analysis shows that each ICT sector had an average of $131,204,428 worth of projects. 5.7.3 Graphical Analysis of Projects Worth Figure 3: Graphical Analysis of Projects Worth The high valued ICT projects which were implemented in the year 2009 included the following: Standard Infocomm Technology (ICT) Operating Environment for Schools (SOE Schools) Information Technology Application Development and Maintenance (this was a bulk tender) Server and SAN Project Information Technology Infrastructure and Application Systems Outsourcing project Turnkey System- this project was implemented to Support all Checkpoint Clearance Functions in Singapore Integrated Human Resource Management System- these systems were implemented to connect all government offices in Singapore and to automate all human resource tasks IHLs Joint PC -Notebook and Printers project WAN Internet link and managed security services for schools 5.7.4 I.T Projects at the end of economic crisis Below is a critical analysis of the projected number of I.T projects and their estimated values for the year 2009, just when the economic crisis was about to end. Tender Value Number of tenders Estimated tender Value Read More