Daniel Lai is a familiar figure on Hong Kong's information technology (IT) scene; he has over 30 years of experience, has held a number of high-profile jobs, and is the sitting president of the Hong Kong Computer Society. Since February 1999 Lai has worked as Head of Information Technology for the MTR Corporation Limited (MTRC), responsible for developing the organisation's IT vision and direction, and for planning, implementing and operating the strategy required to execute that vision.

A year and a half after Lai's appointment, the MTRC sold shares on the stock exchange, a move that reinforced its commitment to prudent commercial governance, and brought all of the organisation's operational activities under closer scrutiny. Lai says the public listing underscored the importance of spending wisely on IT development, of implementing systems that are proven. All new systems implementations, he says, must be able to make a strong business case for themselves.

Lai's IT philosophy is to adopt best-in-class systems that deliver accurate information quickly to support the organisation's decision-making process. His focus is in three areas: a maintenance and logistics system; a human resources and payroll system; and a financial resource planning system, including an activity-based costing system. In addition, this year he is building a hazard registration system that will allow the MTRC to reduce and eliminate dangerous procedures and equipment.

Outsourcing, Knowledge-sharing and Visualisation
Outsourcing plays an important role for Lai's IT department. "In the past we have done a lot of systems development ourselves," says Lai. "But in 1998 we made a shift to outsourcing as a part of our preparation for Y2K. The cost-effectiveness of outsourcing for us has been evident in terms of reduced maintenance costs and much shorter development lead times."

The MTRC has recently outsourced its helpdesk and PC maintenance functions and outsources only to increase cost-effectiveness and gain expertise unavailable from within the organisation. "IT can help nearly every organisation raise productivity and improve competitiveness," says Lai.

In parallel to his outsourcing effort, Lai has worked to develop internal knowledge sharing systems. The resulting Enterprise Information Portal has consolidated 20 years of accumulated knowledge, and made it possible for the MTRC to make a commercial offering of that knowledge, via its Railway Consulting Services group, to rail systems developers in cities such as Shanghai, New Delhi, Kaohsiung and Singapore.

As Head of IT for a large and listed organisation, Lai necessarily focusses on the long term as well as daily operations. Three years ago, the MTRC developed a five-year plan for IT development. This plan is updated annually, and Lai says the process the MTRC goes through is an invaluable one for any organisation.

"Right now we are trying to develop an image of our business in 2006," he says. "We are trying to make our visions of our technology future and our business future overlap. On the face of it, the railway business is a very traditional one; we are working all the time to try to reinvent it through the forward-looking application of technology."

SMEs Need SME-specific Solutions
Many of Hong Kong's small- to medium-sized enterprises (SMEs) have not adopted IT solutions at the same rate as counterparts in other geographies, and Lai blames the relative dearth of solutions tailored to SME needs. "Hong Kong people are quite willing to accept new technology," he says. "Look at the fast and widespread acceptance of ATMs, Octopus cards, mobile telephony and other technologies and you can see there is little resistance to good ideas that improve people's lives. What we need are more applications developed for SMEs, and by SMEs.

"Hong Kong has always been an important trading hub; there's no reason it can't be an important e-trading hub as well," he continues. 'E-commerce will not replace commerce, as is now obvious, but it adds value throughout the supply chain. To continue to lead, Hong Kong must lead in e-commerce as well as in the more traditional areas of commerce."

If, as he asserts, there is a shortage of SME-specific IT solutions available to Hong Kong firms, how then can Hong Kong get competitive? The Government needs to take a stronger lead, says Lai.

"I feel the Government needs to take one more step," he says. "Yes, the Government has opened the door for a number of technologies, but I think they can go further. For example, I think the e-Cert process can be considerably streamlined. Businesspeople don't want to work with technology to get their jobs done; they want the technology to work for them. They want the underlying technologies to be transparent.

Lai continues. "When e-certification becomes as easy as sending an e-mail, the process will be available to every Hong Kong business and every Hong Kong person."

Hong Kong and China, Together
As President of the Hong Kong Computer Society, Lai seeks to foster the development and application of IT in Hong Kong, and he believes Hong Kong can become an important development centre. "I don't think Hong Kong will ever become a Silicon Valley," he says.

"But Hong Kong can succeed as a centre for applications development. Hong Kong has always been good at applying technology rather than developing it from scratch. But solutions development for SMEs is exactly about applying technology, creating solutions to specific problems. Hong Kong's business community is mostly comprised of SMEs. Hong Kong is the ideal crucible for SME applications development," he says.

Hong Kong is too small a market to allow applications developers the revenues and profits necessary to justify investment, Lai feels, but he notes that there are abundant external markets within Asia, and an enormous potential market across the border in China. "China is both a market and a resource for Hong Kong," he says.

"China has tremendous resources to offer to Hong Kong, and to be frank, at the moment Hong Kong's education system is not meeting the demand for IT professionals. China has quite a lot to offer to Hong Kong, and I believe Hong Kong can offer quite a bit to China," he says.

Lai Talks to Tung
Shortly before Tradelink Talk spoke with Lai, the IT veteran, who is also a member of the HKSAR Election Committee, had met with Chief Executive Tung Chee-hwa to present the views of the Hong Kong Computer Society on IT development in Hong Kong.

"We talked about SME funding," says Lai. "We suggested that some of the Government's SME funds could be used to help SMEs apply technology to their business processes.

"We also suggested that the Government speed up and streamline its outsourcing efforts," Lai continues. "It's very difficult for most SMEs to take advantage of the Government's outsourcing commitment and to apply for Government work. The procedures required by the Government are too cumbersome, and few SMEs possess the resources to try to win the business. The net effect is that the majority of Hong Kong businesses are unable to attempt to win Government business, and that's something that needs addressing."

"Hong Kong's SMEs have long been achieving success through dogged effort and clever adaptation to market conditions," says Lai. "Given the right support from the Government, I believe many Hong Kong SMEs can become e-commerce leaders, and I believe Hong Kong can make a name for itself in SME applications development."