IT Policy & After

An overview of the major developments in IT sector during the last one year since the announcement of the IT Policy.

It has been realized that information technology influences the life of people profoundly. Nepal has been exposed to the technology but it has not really influenced the lives of people as the benefits of IT have confined to the well-off and English educated class. The history on the usage of computer in Nepal goes back to 1968 A.D. but the development afterwards has been pretty slow. Except some private sector initiatives on the awareness, training and limited services export, no real industrial impact was evidenced until the middle of 90’s. Later part of the 90’s saw more initiatives from Computer Association of Nepal (CAN), some interest by policy makers, higher growth in terms of PC users and internet connection and some more investment in the IT industry and business. With combined effort of the private sector and the professionals, IT policy was announced by the government in 2000. Here is an analysis of the developments so far after the policy was announced:

There have been some initiatives by Ministry of Science & Technology (MOST) specially in the field of drafting a Digital Signatures Act. There was a public hearing or interaction program held on the draft and suggestions are requested through website http:// most.gov.np, where the draft law is available. The other important initiative has been on Human Resources Development.

The ministry claims it is determined to have at least 10,000 people trained in IT in semi-skilled, skilled and advanced level categories. And the bidding process to select training institutes has already been started. The ministry, as it claims, is also keen for institutionalization as proposed in IT policy. But neither the IT Council nor the National IT Centre, as provisioned in the IT Policy, have been formed as yet. However, the Ministry is said to be preparing to make some announcements within January 2002 itself.

In the private sector, there are several IT education institutions newly established during the last one year. Prominent among them are Web_Park Nepal, Putalisadak, Singh Incorporated’s Education Wing, Kantipath and Kaashyap Radiant Systems, Kantipath which primarily are engaged in non formal training. Apart from them more than a dozen colleges are engaged in formal IT education. College of Software Engineering (CSE), which has been in IT education for some years, has now acquired affiliation with Purwanchal University for an academic course in IT. Similar affiliations with universities are being developed also by other institutes. There are many other institutions that have been catering to the demands of IT education in non-formal sector for the last several years.

The other significant development in the field of HRD during the year is the study loan being provided for IT students by Employees' Provident Fund and Everest Bank Ltd.

In an another development, MOST and Employment Promotion Commission have approved a training-cum-employment program for 1500 people in Medical Transcription in association with Unlimited Numedia (P) Ltd..

Websites of the institutions have increased immensely, so is the case on the number of PC users and internet users. Various government agencies now have websites and email address (see page 46). Currently it is estimated that about 150,000 people in Nepal have their own email addresses and more than 100,000 PCs are in use (some even put the figure at 200,000 PCs.)

There have been some initiations taken by the ministry (and CAN is more active in lobbying) for implementation of the IT policy. CAN is continuing with its regular programs for IT enhancement, such as hosting the annual CAN Info Tech. It is also continuing the practice of holding international conferences.

However, traditional business houses still feel sleepy when IT topics are heard though Satyam Online and Kaashyap Radiant are examples to show that the business houses are also taking up business in IT sector.

Though the year experienced a mega collapse of a Nepali IT company in the form of Himalayan Info Tech, a company that had recruited a large number of youths for its IT enabled service business, Sigma House, a group of professionals engaged in IT business, started a telecommerce business (call center) through its company Himalayan tcommerce, and another business group, Mercantile started the first call center of the country. Though both of them are not reported to be doing a satisfactory business, these initiatives show the enthusiasm generated by the IT Policy. The free PC scheme being run successfully by Singha Incorporated is another example of this enthusiasm.

Now, more and more of the banks are using VSAT services and linking their branches into a single network. Kumari Bank Ltd., one recent entrant into commercial banking business, is said to be about ready to start Internet banking as well. Though the largest user of software in business is perhaps the banking sector itself, the government also became a very significant purchaser of software for use in the tax administration (i.e. in PAN Card distribution).

One of the most basic things that the policy has initiated is to establish and operate a venture capital within this fiscal year to help in financing IT ventures. It also has initiated training and HRD programs, international marketing and goodwill visits to develop IT enabled services business.

IT Park

IT Park project is moving slowly but the blue print of the park has not been made public as yet. The private sector is demanding public interaction on the blue print, but it has not been done so far. International marketing to attract foreign IT company in the Park has not been initiated.

It is believed that without attracting foreign investment in the Park, it would not be as successful in the objective as is expected.

National Budget 2001-02 & IT

For the first time the national budget showed a high priority to IT. The budget allocation for the Ministry of Science & Technology was a more than 10 fold increment, and it was specially for IT HRD Schemes and IT Park itself. On IT tax structure, it did not propose new facilitative measures but neither did it take any negative step. As the private sector reaction, CAN hailed the budgetary provisions. However, though an amount of Rs. 100 million is earmarked for venture capital fund, no agency has been set up as yet to operate the fund.

Main Features of Draft Law on Electronic Transactions

There are 12 chapters as follows:

· Introductory

· Electronic Documents and Digital Signature (made legally acceptable)

· Sending, Receiving and Acceptance of Electronic Documents

· Provision for Controller and Certification Institution

· Provision for Certification

· Rights, Responsibilities and Duty of the customer

· Electronic Document and Digital Signature in Government Offices

· Provision for Internet Service Providers

· Provision of Electronic Transaction Court

· Provision for Electronic Transaction Appeal Court

· Provision about Computer Crimes

· Miscellaneous

The draft law is quite extensive but its implementation is very difficult due to the nature of the technology. This is not a comprehensive cyber law or IT bill but only one part of it, targeted specifically to promote e-commerce and e-governance. But the lack of provision for foreign currency handling is pointed out as a serious flaw in the draft which needs to be corrected before it is sent to the parliament for approval.

Some IT Events in the Year 2001

· Round-table on Information Technology & E-commerce for Development, January 26, 2001, organised by Centre for Development & Governance.

· International Conference on Information Technology, Communications & Development November 29-30, 2001, organised by Frederick Ebert Stiftung in Association with CAN

· SAARC Conference on E-commerce, December 2001, organised by Ministry of Information and Communication in association with Nepal Telecommunication Corporation and SAARC Secretariat

· 15th Asian Forum for Standardization of Information Technology, November 7-8, 2001

and Seminar on Enhancement of the International Standardization Activities in Asia Pacific November 5-9, 2001, organised by Unlimited Numedia in association with MOST, CAN and CICC, Japan.

Internet Shopping

Companies can benefit from the reach and flexibility of eCommerce.

When someone says ‘eCommerce’, most people think of shopping on the Internet. But it’s more than that.

eCommerce affects three areas of activity: direct selling, integrating the supply chain and procurement, and the best solutions are likely to include all three. Small companies in particular can benefit from the reach and flexibility. e-Commerce brings to business, enabling them to compete effectively with larger players.

Why invest in eCommerce?

There are several good reasons to add eCommerce to your business strategy:

· Around the World, users (14 Years old +) now have access to the Internet.

· There are no geographic boundaries. A manufacturer or dealer in Pokhara can sell to buyers in Mississippi, Sardinia and Singapore without opening branch offices.

· Entry and overhead costs are relatively low. It’s cheaper to launch a functional eCommerce site than it is to open a new sales office or retail store. With an established business, extra overhead is minimal.

· Effective cash flow management is the key to business success. With eCommerce solutions you can speed up payments from customers by taking credit card orders over the Internet. Your invoicing could be improved by using Intranet-based electronic forms and e-mail.

What does this mean?

Simply that your competitors are preparing to cash in on eCommerce, and you’ll have to follow their example if you haven’t already started making plans for your business. Most business sectors will be drawn into using computer networks for information exchange and business transactions of one type of another within the next two to three years.

Increasing... IT Customer Loyalty & Satisfaction

Customer loyalty and satisfaction continue to rise in the information technology (IT) market, according to a surveys, which explored the professional services, software, computer and networking IT sectors.

According to the survey, "Customer Satisfaction in the IT Industry," customer loyalty scores are increasing in most segments of the IT market, a strong indication that IT vendors are paying more attention to their installed bases, doing a better job of retaining customers and having more success in defending their bases against their competition.

Customer loyalty issues are more critical than ever to sector domination. "In certain areas such as the software business, there are still leading companies that exhibit high customer loyalty, yet still show low customer satisfaction, although the examples have become fewer over each of the last four years."

The surveys around the world have measured four critical markers in determining customer satisfaction: ease of doing business, quality of products, support provided and price-value relationships. Vendors with low customer loyalty (installed-base repurchase intentions below 85 percent) displayed their greatest weaknesses in ease of doing business and technical support. In addition, professional services vendors have not been able to convert superior performance into sustainable repurchase intentions among current customers at the same rates found in hard goods segments of the IT industry.

While satisfaction scores and referenceability ratings are generally strong, respondents indicated that many professional services buyers are clearly "shopping" each new project on the basis of its unique technical requirements. Professional services vendors who are able to team effectively are going to have a competitive advantage. Professional services buyers show the lowest preference for "one-stop shopping" when it comes to supplier selection. Interestingly, customers who are upgrading on a regular basis are typically more loyal and more referenceable, and have more aggressive spending plans for their IT vendors.

Computer and networking product manufacturers are now experiencing the one-to-one correspondence between satisfaction and loyalty that is typical in nature, commoditized markets. More than 20,000 surveys were conducted in more than 40 countries across the professional services, software, computer and networking IT sectors.

Customer loyalty and satisfaction will also play a key role as companies tighten their spending budgets. The Spring 2001 IT Survey that covered more than 300 technology buyers and found total IT budget (hardware, software and services) growth is decelerating, expected to have increased by only 7 percent in 2001 compared to 11 percent in 2000. Spending on external services will decline by 2 percent among large businesses this year, while midsize and smaller businesses should increase services spending by 8 percent and 13 percent, respectively.

(Compiled by Manish Kansal, Vice President of ITNTI, from various sources.)

Bridging Digital Divide

By Jiwan Giri

In this paper, I have developed a model that reflects the issues in digital divide of the developing countries in South Asia, such as Nepal, Pakistan, India, Sri Lanka, and Bangladesh by considering the local context at the micro level. This model recommends that developing countries should coordinate, collaborate, and partner with four principal players—government, university, industry, and non-government organization (GUIN) – to develop bottom-up initiatives, and reform in IT policies. Developing countries planning to bridge the digital divide must take two immediate actions:-

a. Development of ICT Policies: Define and develop new ICT policies that comprise the common interests of these players. While developing ICT policies, the decision makers must reform existing policies to consider the views of all the players. They must make sure new ICT policies adequately address other aspects of development policies such as in education, health, transportation, foreign investment, government attitudes and leadership; employment, and the economy of the country. Most ICT policies in developing countries are either outdated or copied from highly developed countries and they fail to meet the local requirements (perspectives of local stakeholders) where the policies are implemented.

b. Execution of ICT Policies: In addition, the policies should be implemented at ground level of playing fields. Most policies in developing countries are made at the macro level and have never been implemented with proper actions. Once the ICT policies are developed, they must be executed at the micro levels by rigorously embracing democratic management principles that enforce the players to adhere within the boundaries of ethical responsibility, accountability, and integrity.

The players’ primary task is to share knowledge and best practices to develop better and inexpensive multimedia systems that integrate the geography, the economy, and the language. The collaborative efforts of these players are the critical success factors to build a global digital network, develop ICT infrastructures, and create a faster access to all, which contribute to narrow the digital, divide. These players must be committed to innovate and update their countries’ educational systems and infrastructure. Individual initiatives to tackle the complex problems of the digital divide are currently beyond the scope of their abilities and efforts. Therefore, sharing resources and experiences among the GUIN is vital to address these issues. Several good examples with useful resources that address these issues through collaboration and partnering can be available at Digital Divide Network site of Benton foundation. (Twist, 2001)

Governments, along with other partners, should develop a curriculum that reaches deserving communities to teach, train, and conduct seminars in Internet technology. Technology driven teaching and learning opportunities in the country benefits many deserving people and minority communities. Minority communities will come to understand the impact of IT implication and make better decisions in their lives. A proven legal and regulatory framework is needed at the national and international level that helps to encourage e-commerce, build a model marketplace for information goods and services, produce more human capabilities, and encourage e-government leadership.

Brain drain among young generations is a huge problem in developing countries. In order to reverse the brain drain, governments must create favorable business environment where expatriates can easily set up business ventures; invest capital; and share working knowledge and experiences in their own native land. The expatriates could bring a wealth of tacit and implicit knowledge such as best communities of practices; working business models and framework; innovative and entrepreneurial ideas; years worth of experiences because of their understanding of the global cultural differences to do business in a borderless business economy.

In addition, affordable distance learning that focus on developing vocational and entrepreneurial skills will accelerate narrowing the divide that exists in developing countries. Developing countries should expand access to education and knowledge at the national and international level. The expansions in IT include distance learning, online training, virtual learning, and e-learning. There are several distance-learning models but all of them may not be applicable in the context of developing countries. Ruth and Giri have proposed a model that provides several examples of distance learning in developing countries. Ruth and Min have analyzed the cost and benefits of distance learning in the context of developing countries. They have included correspondence courses, CD –ROM, VCR, Radio, and Internet based courses as examples of distance learning approaches that are relatively high in yield and low in cost. China, South Africa, and many countries in South America have been greatly benefited from distance learning. Other countries could also adopt and customize some of existing affordable models according to their need, capacity of their telecommunication infrastructure, and political context.

Further, liberalization of state-owned telecommunication industries is seen as a positive factor to attract foreign investment, market competition, and private industry involvement. This is critical for ICT infrastructure improvement. This liberalization in ICT will create job opportunities, push countries into a new digital economy, and allow fair market competition by reducing Internet cost for consumers. Nepal is one of the positive example of a country that benefited several other industries from this process after Nepal Telecommunication (NTA) deregulated telecom market in 1997. The number of telephone lines in the country increased significantly when NTA took a liberal approach by establishing the licensing provision. Nepal has the lowest IP access prices in South Asia.

Finally, setting up community based Internet training centers, such as online libraries, Internet cafes, and government training centers that allow free public Internet use will help to bridge digital divide internally and externally in developing countries. The ultimate result from knowledge sharing, collaboration, and partnership within GUIN will assist in bridging these widening gaps in the areas of technology, knowledge, politics, and the economy. Their synergistic approach aiming to bridge digital divide will enhance and improve their relationship within the country and among the developing countries. The common efforts within the players eventually unite them together to reform the education systems; lead for sustainable development, productivity, competition; strengthen the process in technology innovation; enhance the country’s healthcare systems; attempt towards poverty alleviation; and renovate the democracy and e-leadership in the developing countries.

(Excerpted from a paper Giri submitted to Computer Association of Nepal (CAN) for the international IT conference being held during the 8th CAN Info-Tech 2002. Giri is a researcher, PhD student in International Centre for Applied Studies in Information Technology (ICASIT), George Mason University, Fairfax, USA.)

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