With global stock markets shying away from the technology sector, the hype about the Internet, Information Technology (IT) and e-commerce is subsiding at a rate faster than people ever expected. Faced with such volatile trends, many local enterprises have been left wondering whether it is still wise to invest in IT. Indeed, is IT still a practical tool that can help companies make a profit?

To Matthew Yum, Managing Director of Hung Hing Printing Group Limited, the answer is a resounding "Yes." But there is a catch: "Local enterprises have to understand that IT is still a useful tool that can increase the efficiency of their business operations, but it is not a 'miracle cure' for people looking to make instant profits." As Matthew points out, it takes a "down-to-earth" attitude for local businesses to realise what IT can really do for them.

Founded in 1950 as a small printing shop, Hung Hing has evolved into one of the largest packaging printing companies in Hong Kong over the course of half a century. The company was listed on the Stock Exchange in 1992.

Managing Costs with IT
Currently, Hung Hing's main business is diversified into three sectors: paper and carton box printing and manufacturing; corrugated carton manufacturing; and paper trading. In order to cope with the ever-increasing pressure of rising production costs, Hung Hing has moved its production line into mainland China, as have many local firms.

In addition to its headquarters in Tai Po Industrial Estate, the group has manufacturing plants in Fuyong and Zhongshan in China, employing more than 5,800 workers. Such an arrangement requires the support of a management system that responds swiftly in a variety of areas, including gathering market news, communicating with overseas clients, production control and processing customs declarations. And it is IT that helps Hung Hing to manage these tasks and, therefore, get the jump on their competitors.

As Matthew explains, China's customs declaration process can be complicated, sometimes affecting shipment schedules, so Hung Hing first ships most of its products to Hong Kong, and then exports them to its overseas customers. This obviously increases the need for Hung Hing to process declarations locally, but Tradelink's electronic services effectively eases the pressure in this respect.

"When we first switched to using Tradelink's services to lodge trade declarations, our staff took a little time to get used to checking the 'error messages' which tell you when declarations have not been successfully submitted to the government. However, as they became more accustomed to the software, they became very efficient in lodging declarations."

A Wide Range of Tools
In addition to using Tradelink's services, Hung Hing also employs other IT tools to enhance efficiency. However, Matthew has his own unique view of the nature of IT: "Actually, any technology that harnesses telecommunications to facilitate the transfer of information belongs to the realm of IT. Therefore, such tools as faxes, long distance phone calls, e-mails and the Internet all belong to the IT field. It would be very short-sighted to define IT simply as the Web and the Internet."

Using this principle, Hung Hing strives to keep its staff up to date with all the relevant technologies that will enhance the efficiency of everyday tasks. Matthew notes: "Over the years, we have always kept an eye on the latest IT developments, and adopted whatever is suitable to our operations. For instance, several decades ago, we used the telex as a way to maintain communication with our clients. Then, with advances in telecommunications, new and more efficient tools started to emerge. Now, we all communicate with our overseas clients via fax and e-mail." With this evolution, all levels of Hung Hing staff have shortened their response time to every task, thereby increasing the efficiency of the organisation as a whole.

Softly, Softly
Obviously, part of the reason behind Hung Hing's success is the practical and timely manner in which it has deployed an IT strategy. However, the company has adopted a rather hesitant stance when it comes to embracing e-commerce. For a company of Hung Hing's scale, explains Matthew, e-commerce may not be such a profitable solution as it is for other companies. One of the reasons is that it abolishes all forms of human contact.

"Although we can conduct all sorts of business operations on the Internet, there are still tasks that simply cannot be done with a keyboard alone. Take procurement for example. You cannot order a shipment of raw materials simply after reviewing the price and a picture posted on the supplier's web site. Companies still need to send a member of staff to examine the goods before placing an order," says Matthew. "Negotiation is another operation that requires a lot of human interaction. In fact, whether a deal can be sealed or not sometimes depends very much on actual face-to-face discussions."

Nevertheless, Matthew emphasises that when e-commerce becomes standard practice in the packaging industry, Hung Hing will be among the first to head in that direction and maintain its lead over the competition. In addition, he also points out that Tradelink could become an important starting point for the development of local e-commerce as local businesses can build on Tradelink's foundation to diversify into this area.

Back down to earth - this philosophy is not only a reality in the technology sector, but also a way to help companies prosper in the fast-changing IT era.