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Winners And Losers Of The Next Generation ERP System

Hint: It’s not you, unless you are a SingTel shareholder.

 

If the current ERP system isn’t already as unpopular amongst Singaporeans as it is, it will soon become worse. The Land Transport Authority recently announced its plan to roll out the next-generation ERP from 2020. The new system will cost SG$556 million, close to 3 times the cost of the current ERP system that was developed for SG$197 million.

We decided to take a look at the winners and losers of this project.

Winners

SingTel and MHI Engine System

NCS and MHI Engine System clinched the lucrative deal to build Singapore’s next-generation electronic road-pricing (ERP) system. SG$556 million will be a boost to the revenue and profit of both the companies. More importantly, it gives them a track record to showcase should any other countries intend to copy the same system in the future.

In case you are wondering why this has anything to do with SingTel, NCS is a fully owned subsidiary of SingTel.

Why are we not surprised?

Singapore Government

This advance ERP system is going to be at the edge of technology, which coincides with Singapore’s plan to be one of the smartest nations globally. The success of this technology will help put Singapore on the globe as one of the technologically advance countries.

On top of that, this new technology has the ability to equip drivers with the right information on which route they should take or if they should leave their car at home and take the public transport instead. It has the ability to track one’s vehicle and charge drivers for the distance they travelled.

Similar to how the adoption of the electronic carpark gantry ensures that drivers could no longer short-change the carpark fee they should be paying, this new technology will be more efficient in ensuring that drivers pay for the distance they cover, assuming that LTA goes down that route (no pun intended).

Relevant Tech Companies

The demand to embark on such a massive project will mean the increase in demand for related technological hardware, software, gadgets and spare parts. Firms that provide relevant parts required for this project will stand to gain from the increase in business over the long run.

Losers

Singaporeans

We remember reading about the news about the implementation of the next-generation system ERP, while being stuck on the MRT due to a train fault. The irony is not lost on us.

SG$556 million can definitely make a difference to the current public transport system. More trains running at a higher frequency is something that is on every Singaporean wishlist. Instead, Singaporeans are now paying

In other words, Singaporeans are paying to introduce a system which main purpose is to charge themselves more effectively.

ST Electronics

We can only imagine how embarrassing it must have been to be presenting your project against your competitor only to find out that your quotation was about twice of what your competitor is quoting.

ST electronics quoted a SG$1.2 billion when bidding for this project. Not surprisingly, they did not win the tender.

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