Leveraging IT at the Port of Singapore

Robert Yap, executive vice president of IT for PSA Corp., the company that developed and operates the port of Singapore, holds the top IT job at the busiest and largest container port in the world?a great job, but not without its worries.

Yap’s port handles 250 shipping lines with connections to 600 ports in 123 countries, and daily sailings to every major port on the globe. Its calling card is efficiency; its backbone is IT. Because of the Computer Integrated Terminal Operations System (CITOS, a proprietary ERP application) and Portnet, an e-business system that provides paperless one-stop shipping for the port and its customers, PSA believes that technology is the basis of the port’s competitive advantage. And it has been since 1984, when the first version of Portnet was introduced. Today, Singapore’s port enjoys first-mover status as the world’s IT leader in seaport logistics and operations.

But What About Tomorrow?

“I’m a firm believer in the second-mover advantage,” says Yap, an Australian-educated business historian born in Malaysia who headed IT at Philips Electronics Asia-Pacific before joining PSA in 2000. “The first-mover is the one who creates the breakthrough,” Yap says, quoting theory from his favorite professor, F. Warren McFarlan of the Harvard Business School. “But it’s the second-mover who builds the business,” he says. “We’d like to be both.”

Has that ever been done? It can be argued that the Walt Disney Co. was a first-mover in animated films and theme parks, slipped and then rebounded to regain substantial margins in both markets. And Yap believes that Charles Schwab, which branded the online brokerage business and then awoke a sleeping giant in Merrill Lynch, ultimately will come back to own the marketspace. “But they’ve got to stay ahead of the curve,” he says.

As does his port, which finds the edge of its technological advantage narrowing because of the ubiquity of IT applications in its industry. Accordingly, since 1996 PSA has focused not just on improving its own internal systems but in expanding its operations throughout the world?buying shares of rival ports and turning them into franchises that grow the PSA brand. Today, PSA participates in joint ventures with 13 ports in eight countries throughout Europe and Asia, and it has established a subsidiary company, Portnet.com (of which Yap is CEO), to market and sell Portnet to other ports worldwide. The latest customer is the port of Seattle, PSA’s first U.S. customer.

By constant expansion, PSA intends to ensure that its systems remain the industry standard. With a proprietary system in every port (figuratively speaking), what rival could hope to compete?

“I don’t see any,” Yap says. “But the challenge isn’t building the application; it’s who really has the innovative idea.”

By spreading its technology globally, PSA has, for the time being, maintained its edge.

And that’s Yap’s plan.