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The e-certificate
The Department of Business Development
Thailand

The Problem

The Department of Business Development (“DBD”) is a government agency responsible for business registration and maintaining the database of more than 1 million business entities nationwide. Key services of the DBD include issuing company certificate and certifying various types of business document.

A company certificate is a business equivalent of a person identification card. The up-to-date version of a company certificate is an essential piece of document that proves the existence of a company and is necessary for any credible transactions. This contributes to the DBD issuing over 1 million company certificates annually. With approximately 60,000 new companies every year, the need for the certificates also rises on average 10% each year.

Thailand, under a globalization era, is moving towards freer trade and investment, especially in ASEAN. It is therefore important that public services be responsive, efficient and convenient to support fast-moving business operation both at the domestic and international levels. But the process of issuing certificates was somewhat time consuming and frequently a subject of criticism and complaints from business operators. Such slowness was mainly due to complex procedures, each step of which needed to be carried out in person at different counters. These include filling out and submission of the form, fee payment, presenting the receipt and wait for the certificate. On average, it took 30 minutes to get the certificate, without taking into account the time needed to get to one of the DBD branches to do this. To exacerbate the matter, there is only 6 branches of DBD in Bangkok and only 1 branch for each of the rest of the provinces. With traffic, especially in Bangkok, the traveling part could take up to half a day, or could cost around 400 Thai Baht (approximately $13) if utilizing a messenger service for the task with a risk of further delays because the messenger may not always be able to respond to queries from the officer.

In 2006, the DBD, aiming to provide a more efficient alternative, introduced and continued to improve the online system that allows a request for the certificate to be made online and the certificate delivered by hand to a designated address within 3 hours. Despite this, as much as 97% of the service was still utilized via a traditional channel as a physical pick up was still necessary.

The slowness from the traditional face-to-face service and the above mentioning problems affected thousands of business in terms of opportunity costs as well as operational costs. Based on the average number of certificates issued, annual resource costs could total to 400 million Thai Baht and a total 3 million accumulative hours wasted yearly. That is a huge loss of efficiency under today’s highly competitive business environment and hinders the nation from being a country with ease of doing business.

Solution and Key Benefits

 What is the initiative about? (the solution)
The e-Certificate Project (“the Project”) is a public-private partnership between the DBD and commercial banks that provides an additional mean of providing the certificate service. This ultimately results in thousands of new collection points allowing easier and more efficient access nationwide.

The e-Certificate Project is, for the first time in Thailand and among ASEAN, a state innovation that allows private sector agents to provide this type of business information service. By utilizing the electronic signature of the registrar in combination with advance cyber security technology to prevent unauthorized manipulation and enhance credibility, the company certificate issued electronically under this project is as good as the original document.

With over 8,000 branches strategically located nationwide, commercial banks are a promising aspect and a key to efficiency enhancement to the process if they become partners with the DBD and act as issuers of the certificate. Business will be able to collect the certificate at any of the bank branches that are located in the same vicinity and have a more compatible office hours as their business, which translates into savings on time and costs of traveling.

In realization of this, the DBD partners with 6 leading commercial banks of Thailand; Bangkok Bank, KrungThai Bank, Government Savings Bank, Kasikorn Bank, Siam Commercial Bank, and Thanachart Bank, with a total of more than 5,700 branches nationwide ideally located for efficient business access. In addition to this, the DBD has improved the procedure and replaced the many over-the-counter processes with a one-stop service via the internet. The electronic filling of information reduces errors and allows registrars to proceed with a minimum need to rectify the information, reducing the service time from 30 to 15 minutes. These improvements result in a 200% increase in the number of a certificate requests an officer can satisfy on a daily basis. And with the banks acting as additional channels of certificate issuance, the DBD resources are freed up and available to support business in other meaningful areas.

The DBD and the banks have also put in place a system that regulates and monitors the service nationwide providing feedback and information to stakeholders allowing them better and more responsive planning, reporting and decision making that continually enhances transparency and quality of the service so that it can respond to the growing needs of business.

At a country level, the e-Certificate Project is inline with the Green Government policy. The online form filling reduces paper and by virtually eliminating the traveling need, the Project helps improve traffic and more importantly reduces significantly the use of fuel, lowering pollution. Moreover, the successful collaboration with the private sectors is an image enhancement both at a domestic and regional level and is a significant step towards an even greater improvement of the quality of services provided by government agents.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The executives of the DBD came up with a vision to increase the certificate issuing channels, the ones that collaborate and utilize the many available outlets of the bank that are ideally located nationwide. Also with the e-Government initiative in mind, the executives of the DBD assigned the officers at the office of the business information to work on an establishment of principle, planning and managing the project with 3 dedicated teams responsible for 3 specific aspects as follow;

(1) The Coalition Team
Work with the 6 banks in communicating the banks’ needs, the differences in work culture and environment as well as the problem to jointly develop the certificate issuing system and to identify roles and responsibilities of each party;

(2) The IT Team
Consisting of representatives from the DBD, the banks and the Electronic Transaction Development Agency (“ETD”) under the Ministry of Information and Communication Technology, the IT Team designs and develops the IT system that is fully capable of generating the electronic document that can replace the original paper counterpart;

(3)The Legal Team
The legal officers from the DBD amend the ministerial regulation regarding the online application form and e-certificate. At the same time, the legal officers from the committee on electronic transaction under the ETD looks at an establishment of a legal endorsement mechanism, and the Comptroller’s General Department sets up regulations that allow the private sector agents to collect fees and issue receipt on behalf of the government.

Being both a requestor of the certificate and a party to a transaction needing to see the other's, nationwide business operators are the key beneficiary of this project. Other key stakeholders include the Thai Banking Association, participating banks as they expand the scope of their services. The office of the ETD and the Comptroller’s General Department also play a crucial role in customizing the regulations to support the e-Government initiative.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The ultimate objective of this project is to get the certificate to business operators as quickly and efficiently as possible so that the unproductive waiting time and cost are minimized. The project comprises 4 main strategies as follow;

(1) Increase the number of service outlets:
The DBD works with the participating banks to have them issue the certificates on the DBD's behalf, provided they satisfy the prerequisites established by the DBD (in collaboration with the Thai Banking Association). This is to ensure that the participating banks have the right technology, resources as well as the credibility to securely and efficiently provide the service.

(2) The right technology utilization
By employing the electronic signature, banks can issue the certificates, certified by the registrar on behalf of the registrar. This crucial transaction is carried out over a high speed fiber optic network with the highest level of security.

(3) Credibility and reliability
An establishment of a system that legally endorses electronic documents is necessary to attach credibility to the electronically issued certificates. The relevant system also needs to be able to provide peace of mind to the user in terms of system security and reliability.

(4) Human resources development
The success of the project relies largely on the awareness and the capability of all people involved. Personnels of the DBD and the partnering banks understand and recognize the objectives of the project and the importance of its benefits to their organizations as well as the nation. They are equipped for the new process and ready for future adjustments as necessary.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
The e-Certificate project was initiated in 2010 when the DBD started working with the Thai Banking Association to look for the right candidates who satisfied the requirement and were ready to be partners in the project. The project took shape in January 2011 when a ceremony was held to witness the official launch of the project. The executives of the DBD and the partnering banks executed the memorandum of understanding at this occasion in front of the Minister of Commerce. After the ceremony, the working team established the project plan outlining the project framework, identifying roles and responsibility and gave a twelve-month timeframe to the project. Tasks were categorized into 3 main groups, namely IT, legal and human resource. A four-stage approach as detailed below drove the implementation steps;

(1) Research and preparation
Took place during February to April 2011, this was the first integrating step between the DBD and the partners. This stage was necessary to identify the exact goals and the necessary tasks in all the key areas.

(2) Operation
From May to October 2011, each group worked on the following;
IT - Installation of the necessary hardware and software to establish the linkage between the DBD and the banks;
Legal - Minister of the Information and Communication Technology as a Chairman of the Committee on Electronic Transaction, signed the Committee’s Notification, which was later gazetted. The Notification stipulates the ETD to be a certifying agency for the electronic documents and that the electronically issued business certificate shall be eligible for use as the original.
Human resource - The DBD conducted training programs to build awareness and understanding on the new process to the officers and to give hands-on experience on the program and system management.

(3) Public relations and follow up:
From September 2011, the project had been advertised via various media channels to highlight the benefits of the initiative to business operators. Since the official go-live date of January 20, 2012, the DBD, together with the partners, have been looking at the utilization statistics as well as issues through the system reports and have been working together to solve them. The DBD also set up a Help Desk to assist the implementing banks overcoming any issue. A satisfaction survey is conducted every six months to continually improve the service, with the Electronic Transaction Development Agency closely monitors the standard of reproduction.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The key obstacle to the success of the project was the credibility of the process and the resulting certificate which is electronically certified and reproduced. The main reason was the fact that this is an innovation - the first official document to be issued electronically, the first juristic information service provided by a private sector. It is therefore inevitable that the initiative created doubts and skepticism, especially on the security of the information, credibility, integrity and ultimately the usability of the resulting documents. These would jeopardize the project if not resolved. To overcome this, the DBD addressed each of the concerns specifically.

First by utilizing the highest level of cyber security technology that ensures data security and prevents data and document manipulation at every stage of the transaction that allows users to verify the correctness of the information.

Secondly, a legislation was enacted to endorse and guarantee the credibility of the certificate issued electronically by a private sector.

Finally, stakeholders were made aware of these key features together with initiatives, the objectives and the benefits via public hearing seminars as well as several other media.

Another obstacle of significance was the perception of the banks towards the business certificate and the relevant process. Bank staffs did not have the necessary knowledge regarding the certificate issuing process, the security of the information nor the understanding of its significance for efficient and successful business transactions. It was necessary to overcome this so that the directions and goals of the DBD and the partners are consistent. Training sessions were held for all different levels of personnels of the banks to build the desired awareness.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The management of the three types of resources that drove the e-Certificate project can be summarized as follow;

(1) Financial Resources
The DBD received an allocation from the Ministry of Finance based on a deduction of fees collected by the DBD from the 2010 budget to fund the necessary expenses under the project. The funds were planned to support 3 key areas; a) a procurement and development of the IT hardware, software as well as the establishment of a data center; b) human resource development to enhance the relevant personnels’ awareness as well as essential knowledge and capability; and c) public relation via seminars and other media.

(2) Technical Resources:
The efficient utilization of technical resources contributed to an achievement of a high-security service provision. The electronic signature implementation links the service provision between the DBD and the partnering banks. Electronic data is transmitted through dedicated leased line. The web service is equipped with 4 mechanisms that verify the correctness of the information, i.e. QR Code, Micro Text, Watermarking and Reference Number.

(3) Human Resources: Key staffing for the realization of the service is vital at two ends. The registrars at the DBD handle the preparation of the electronics certificate and transmit the same to the bank staffs at the bank so that a printed copy can be furnished to the users.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The e-certificate project is proved to be a sustainable project in terms of institutional, environmental and finance. At the institutional level, the executives of the DBD and the partnering banks executed the memorandum of understanding in front of the Minister of Commerce to show their strong commitment to this project. This can also be translated as a government statement to support the e-government initiative with the public-private partnership concept.

The project is highly financially sustainable. The initial investment is a one-time fixed investment with small maintenance costs. Future expansions to the service could also be done at a relatively low cost. The project is, in fact, an important contribution to a long-term reduction in government spending. This in turn, enhances the continuation potential of the project.

The result of the project also adds even greater guarantee to its continuation. There is a ten-fold increase in the number of the e-certificates issued after its ten months of service (33,000 certificates) and more than 80 per cent of the service users were satisfied with the service and felt that they can obtain the certificates easier, faster and cheaper.
In January 2013, the e-certificate will extend its services with more types of electronic certificates issued in order to cover more needs of the customers. These include foreign company certificate, the certification of company registration documents, company’s annual account and shareholder list of partnership, company limited and public companies. More importantly, the service will also be provided through three additional banks: Kasikorn Bank, Siam Commercial Bank and Thanachart Bank, making a total of 6 banks with more than 5,600 service outlets nationwide.

Apart from working with the partnering banks, the DBD is planning to expand the e-certificate project by working with the local municipal agencies allowing greater access to the service in a more decentralized level.

The e-certificate can be a good prototype for any public organizations in ASEAN seeking to reform the process of certificate issuance and the DBD has hosted many visitors from various organizations and currently there is another public organization that replicates the e-certificate model to its core function.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The achievement of the e-certificate is an important evidence of the success of the corporation among the stakeholders, both the public and private sectors. Though there are some difficulties arise during the course of the project, it is evitable that this state innovation project-the first official document to be issued electronically, is achievable in Thailand. There are 4 important factors contributing to this success and can be used as the lessons learned for the future.

Firstly, the strong corporation with partners that share the same goals and have solid commitment to the project from the very start. A close communication between all parties throughout the process, both at the executive and officer levels, helps each party to remain its strong determinant and assisting each other when they face problems.

Secondly, the right technology utilization increases the credibility of the process and reservations on the security of the information, and ultimately the usability of the resulting documents. The right technology helps eliminate doubts and skepticism, in turn, it increases the public awareness on the credibility of the project.

Thirdly, the flexibility of the law and public regulation system plays crucial role in allowing the private agent to proceed government transactions on behalf of the government i.e. providing juristic information service, collection of service fee, and issue of receipt.

Lastly, the true understanding of the problems resulting from the constant communication with the public and all stakeholders. Public opinions are valued and collected before and after the project was launched through various channels i.e. public seminars, DBD website and questionnaires. These informations help to correct the problems in the right direction and lead to a continuous improvement.

Contact Information

Institution Name:   The Department of Business Development
Institution Type:   Government Agency  
Contact Person:   Dr. Kullapat Jangkamolkulchai
Title:   Trade analyst  
Telephone/ Fax:   + 66 (0) 81 701 4954
Institution's / Project's Website:   www.dbd.go.th
E-mail:   kullapatj@dbd.go.th  
Address:   44/100 Nonthaburi 1 Rd, Bangkrasor
Postal Code:   11000
City:  
State/Province:   Nonthaburi
Country:   Thailand

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