Gokis Kiosk Self-Service

IBM-powered portal to take 300m Chinese residents ‘into the cloud’

A Chinese technology company has enlisted the help of IBM to build a cloud computing platform that will eventually connect 300 million people to a wide range of “citizen livelihood” services and information.

IBM-powered portal to take 300m Chinese residents ‘into the cloud’ | Energy

Yi Lian Zhong Information Technology (YLZ), plans to expand its existing services in Fujian Province to residents across seven more Chinese provinces. The cloud platform to be build with IBM’s System z will connect various networks of urban and rural residents, government departments, social service providers, medical institutions, corporate and public organizations and vocational schools.

The project is aimed to help meet the Chinese government’s 12th five-year-plan for improving citizen well being.

According to IBM, its System z mainframe can scale easily, which will help YLZ manage the unpredictable nature of transaction peaks and valleys without incurring additional costs.

The cloud services platform will be offered through new kiosks to be installed across selected communities at civic centers, hospitals, banks and shopping malls. Kiosk users will be able to swipe their social insurance identity cards, which are already connected to banks, to access the additional services offered by various government departments. They can also use their ID cards to settle service payments. The system will allow residents in rural areas to access the same services as residents in cities.

Among the services the portal will support:

• Payment of social insurance contributions and utilities, account transfers, medical fee reimbursements, and medical and unemployment benefits.
  
• Access to information about job and training opportunities.
  
• Services for scheduling clinical appointments, self-service medical fee settlement, case referral and group diagnosis.
  
• Access to farming subsidies, including farmer-based subsistence allowances, seed subsidies and fuel subsidies for rural vehicles.
  
• Support for distributing aid for disabled people, verifying of low-cost housing applications and providing education-related services.
  

IBM-powered portal to take 300m Chinese residents ‘into the cloud’ | Energy

Buying from US or China Comparison

New comparison notes on benefits and dangers of buying from China.

US vs. China

Why is buying kiosks from Far Eastern suppliers (Korea, Taiwan or China) or local manufacturers in your area a somewhat risky adventure?

As you know, the pricing for kiosks from the Far East and some local suppliers tend to be less costly than those built in Europe or the USA. There are several reasons for this.

1. Given that costs of a kiosk solution are 80% components and 20% enclosure, there is only one true way of reducing pricing for a kiosk solution ………. focus on the components since they make up the majority of the cost.

2. While lower labor rates on kiosk assembly may contribute to some cost savings, they are really a very small part of the overall kiosk price structure. In focusing on components, one has to make a choice between better quality components that cost more or poorer quality components that cost less. There is no way around this conundrum. By offering pricing significantly lower than Western kiosk manufacturers (USA & Europe), it is clear that the Far Eastern manufacturers are offering poorer quality components.

rest of article at Self-Service & Kiosk Association

Self-Service Kiosk system Hong Kong China

PCCW Solutions has received news that it won an $11.77 million contract to develop, build and install a self-service kiosk system for the Leisure and Cultural Services Department.

The system will be connected to the department's existing venue booking services infrastructure. It will also be integrated to the Octopus Payment system and the Smart ID Card Authentication system.

PCCW Solutions is also awaiting the results of bidding for an e-government contract to build an advanced Transport Information System.

That project was put up for re-tender by the government after the Transport Department terminated its contract with IBM in February last year because of delays. The original contract included a one-off cost of about US$4.7 million for devising and implementing the system in 18 months and an annual recurrent cost of US$300,000 for maintaining it over 10 years.

"PCCW Solutions is different from companies such as IBM and Hewlett-Packard because we do not have our own hardware or software products to sell. We work with suppliers that offer the best solutions for our projects," Mr Fok said.

full article

China's Exploding POS

Did you know that Sixty percent of the [construction] cranes in the world are in China right now. Forty percent of the world's concrete is in China right now, too..

China POS Sales Soaring
February 18, 2005

By Evan Schuman
As Chinese consumers suddenly start to embrace the retail store, orders for point of sale systems are soaring, according to a new study from IHL Consulting Group.
IHL is projecting that China's accelerating 20 percent annual growth rate last year will catapult it this year beyond the POS sales of Germany, which is Europe's largest POS market.

Like all statistics, these POS sales numbers look very different depending on context. Historically, China's POS sales have been very low despite a huge population. Just like a startup company, when a retail industry such as China's does start buying POS units, the initial purchases will likely be massive. After all, a developed retail infrastructure such as Germany's needs only replace aging POS units, not replace every single POS in every establishment. But China's need is much more extensive.

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To read about Microsoft's push into the POS space, click here.

Also, many of the POS purchases that China is making are very low-end units, raising the question of whether it's a fair statement to compare the units with Germany's without factoring in price, said report co-author and IHL President Greg Buzek.

"It should be noted that more than 75 percent of the installed base of POS devices in China are actually PC-on-Cash-Drawer [PCOCD] devices," the report said. "This is much higher than any other country in the world and shows that, although the POS growth opportunities are huge, the traditional POS vendors will need to adapt their strategies to take full advantage in the region."

Although Chinese retailers are more willing than ever to embrace Western retail technology approaches, the IT environment is radically different.

"Fully 92 percent of the POS population used 486 or higher processors at the end of 2004, mainly due to the relatively young age of the modern retail landscape in China," the IHL report said. "There are still 36,000 older POS devices installed. The older technology's hold on the POS market is exacerbated by the food and specialty retailers using DOS terminals and showing little initiative to change."

IBM's China PC deal is giving Big Blue a big help in that country. To read more, click here.

Even though the typical U.S. retailer is technologically behind some of the more sophisticated Japanese and European retailers, China's current retail technology "is probably about 70 to 80 years behind" the United States, Buzek said in an eWEEK.com interview.

In China, POS systems�and low-end POS systems at that�are only in the larger retail chains. Small chains and single-store retailers rarely use POS, Buzek said.

"One interesting aspect of POS systems in China is the relative lack of scanners, even in new installations," the report said. "Simply, there are not that many products in Chinese retail locations that have barcodes. The retailers therefore rely upon time-honored price tags."

Cash systems dominate, with credit-card units rare, Buzek said.

Next Page: Is China's economy growing too quickly?

Buzek paints China as an economy that is growing too quickly, potentially out of control. "Sixty percent of the [construction] cranes in the world are in China right now. Forty percent of the world's concrete is in China right now, too," he said.

rest of story

Prepaid and CHina

How Did VendTek Hit it Big in China?

story

Intele-CardNews | printable pages

ISSUE: 2/1/2005

Golden opportunity
By: Bridget Mintz Testa

How did VendTek Systems Inc., a small prepaid distribution software company from Port Coquitlam, near Vancouver in British Columbia, hit the big time in China's huge market? And how did they do it without running into problems that much larger companies, such as Cisco, did? Paul Brock, president of the company, shares his story with Intele-CardNews.

Prepaid without plastic

VendTek's parent company was founded in 1988 as an electronic vending machine firm. After going public in 1999, the company changed business models in 2002. It left the vending machine trade to become a provider of an all-new type of software for the prepaid market.

Named e-Fresh, the software operates in a variety of POS and self-serve terminals, enabling consumers to purchase telecommunications and financial services electronically. Purchasers who use VendTek to buy services receive a printed receipt with their PIN and usage instructions. What's missing? The plastic!

By removing the card from the equation, VendTek lets convenience stores eliminate their $10,000 inventories of plastic cards. This, in turn, removes the cost and "shrinkage" risk of maintaining that inventory. "In an industry based on high volume and low margins, saving 3 percent on inventory or theft is a lot," Brock says. Because any type of prepaid product or service can be downloaded, including ring tones or games, Brock adds, "Stores get more inventory for their customers to choose from."

Last October, VendTek announced that e-Fresh had reached a milestone. Now Prepay, the company's domestic subsidiary, had installed the software in 5,000 Canadian POS terminals. But an even bigger milestone was reached earlier in August, when VendTek signed a licensing agreement with Beijing-based ChinaPay e-Payment Services.

Doing business in China

Why China? According to the agreement, ChinaPay can use e-Fresh in its POS terminals in exchange for paying VendTek transaction fees based on POS system revenues. As a financial institution backed by some 80 shareholding Chinese banks, ChinaPay and its cross-country POS network provide VendTek access to China's 1.2 billion consumers � the largest market on Earth.

As if those 1.2 billion consumers weren't enough, China is especially promising for prepaid. "The Chinese population is so large that it is impractical for companies to provide credit, especially considering the developing financial infrastructure," Brock says. "Virtually everything is prepaid." Besides the usual telecom services, that also includes apartment rent, cable service, hot water and even cold water.

If it sounds like an enormous opportunity, it is. But Brock cautions that doing business in China isn't easy. "Business in China is entirely relationship-managed," he says. "It's not about the best product or the lowest price. The No. 1 challenge for me has been building relationships and trust with people." Without such relationships and trust, you can't even get started. With them, you can find opportunities and flourish.

VendTek first started doing business in China in 2001 with a small Beijing company. Through that company, Brock was later introduced to ChinaPay. Though the ChinaPay agreement happened within a couple of months of the first meeting last May, the meeting would never have happened if Brock hadn't first spent three years in China getting to know the people, establishing business relationships, learning the language and eating some very unusual foods � such as a snake and its freshly drained blood � to show he accepted the culture. "The Chinese view their foods as important, and I believe we need to embrace that as much as we embrace all aspects of their culture," he says.

VendTek started earning licensing fee revenue in China within six months of entering the market through system deployment in Beijing. Conditions changed, however, and Brock said that revenue has since declined. Now that the company has an agreement with ChinaPay, which will involve a much larger-scale rollout of VendTek's software, Brock expects to see revenue within the first half of 2005 and profits by the end of the year � assuming things go well.

Is it necessary for foreigners to have a Chinese partner to do business in the country? Not absolutely, according to Kevin G. Rivette, executive advisor for the Boston Consulting Group. "It's probable, though, mostly due to government requirements. [Foreigners] can own a majority of a joint venture, but most companies still have some sort of Chinese involvement," he says.

Intellectual property

Though Chinese regulations can be as frustrating as anywhere else, the greatest challenge for a technology firm that wants to do business in China is the country's approach to intellectual property (IP). With no heritage of competitive research and development in the technology arena, "[the Chinese] have much more of a �technology is free' approach," Rivette says. "The more high-tech the company, the greater the chances that they'll end up competing against their own technology."

China has no trade-secret law. So if a Chinese employee learns how a foreign company's technology works, there's no law preventing him or her from opening up shop down the street, selling or using the same technology at a cut-rate price. For this reason, Cisco sued Chinese manufacturer Huawei, claiming the Chinese company copied its products and manuals. Some of Rivette's customers consulted him after similar setbacks.

To manage the theft risk, Rivette says, "You must develop a strategic IP plan. Don't just let the lawyers do it. This is something that must be dealt with at the highest strategic level." One suggestion Rivette offers to technology companies is to be prepared to patent processes or products at a much more "granular" level. For example, in the United States, a company might patent a product once it's completed. However, in China, it might be necessary to patent bits and pieces of the product along the way.

Regarding IP in China, Brock says that software is one of the worst industries to be in. But VendTek had a strategy. "We initially protected ourselves by making our customer one of our largest shareholders," he says. "[Thus, he] would only damage his own investment if he stole our property." Brock says VendTek also works hard to deliver real value to customers for the licensing fees, including software customization and some special proprietary incentives.
Six tips on doing business in China
1. Do lots of research and preparation.
2. Spend time there. It's almost impossible to do business in China remotely.
3. Paticipate in the culture, including the food, drink and language. If you can't do that you'll be seen as a foreigner intent on exploitation.
4. Before you go, contact the business community, such as expatriate groups or businesses similar to yours, to help you network. Start with your embassy.
5. Try to find a potential Chinese partner before you go. They can show you around and provide introductions.
6. If you have valuable intellectual property, develop a comprehensive protection strategy before you go.

Rapid change

With staggering speed, China is emerging as a global economic force. Brock says, "By far the most interesting thing [about China] from my perspective is the rate of change. In a country with thousands of years of traditions and history, it is amazing to see how fast things are changing and how well the people are accepting the change."

As an example, Brock explains how he and his companions had to walk on timbers across a "gaping void" when entering a Beijing restaurant one night for dinner. The restaurant was an island in a sea of dirt extending as far as Brock could see. "A few hours later," he says, "when we exited the restaurant, the wooden beams ... were gone. A new road was in place for as far as the eye could see. The road was finished, and people and cars were on it. There was no sign of the work crew who were probably gone to build another road somewhere nearby."

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