WORLD TRADE
ORGANIZATIONTN/S/W/10
S/CSC/W/37
8 January 2003
(03-0051)
Council for Trade in Services
Special Session
Committee on Specific CommitmentsOriginal:  English
COMMUNICATION FROM THE SEPARATE CUSTOMS TERRITORY OF TAIWAN,
PENGHU, KINMEN AND MATSU
Computer and Related Services
The attached communication has been received from the delegation of the Separate Customs
Territory of Taiwan, Penghu, Kinmen and Matsu with the request that it be circulated to the Council
for Trade in Services in Special Session and the Committee on Specific Commitments.
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1. Computer and Related Services have evolved into the “application oriented” (total solution)
era, with the result that existing descriptions in CPC 84 are no longer capable of differentiating
between one service and another.  The Separate Customs Territory of Taiwan, Penghu, Kinmen and
Matsu would like to identify two problems with respect to the current coverage of CPC 84, and to
propose possible solutions.
I. BACKGROUND
2. The Computer and Related Service Sector is one of the major driving forces in the
development of the knowledge-based economy.  It facilitates the more efficient operation of business
activities and dramatically enhances the competitiveness of countries that have actively pursued the
establishment of this new technology.  In 1997, the WTO estimated the global market for this sector
to be worth some US$375 billion, a growth of 10% since 1995.  This figure exceeded $426 billion in
2001 and is expected to grow on average by 11.1% annually over the next four years to reach $650billion in 2005, largely because of the existence of an open, competitive and basically unrestricted
business environment in these sectors.
3. However, the “digital divide” is also becoming a serious concern for developing countries.
The presence of foreign services providers would help these countries to improve their information
and communication infrastructures, to increase access to information and knowledge, and to trainskilled technicians. In this regard, we are of the view that enhanced international trade in Computer
and Related Services will benefit both the exporters and importers of all countries.
4. As the market for Computer and Related Services, becomes more liberalized, the following
two concerns for Members remain.  The first relates to the broad coverage of CPC 84.  The second
concern relates to the overlapping of Computer and Related Services with other services sectors.
5. In the first concern, some Members would prefer to use three-digit CPC numbers instead of
two-digit numbers for negotiation.  We consider that the traditional classifications of 3-digit sub-TN/S/W/10
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sectors under CPC 84 are not capable of adequately  defining classifications of computer-related
services in the modern world.  We would like in this submission to introduce the concept of the
“value-chain” to identify the scope of Computer and Related Services; an approach that has been well
accepted by the IT industries.
6. The second concern about the possible overlapping with other service sectors is indeed a
legitimate one, but should not be so difficult to deal with.  For instance, in banking services, some
banks will operate with their own IT department, while others will outsource their “IT-intensive”
operations to services providers.  In this case, the outside services providers could be classified as
Computer and Related Services if the services provided fall within the definition of CPC 84.  The
commitment on market access for CPC 84, in this case, will facilitate the provision of banking
services only, and will not change the scope of commitments made in the banking services sector  per
se.  We would like to register our concern, however,  over the so-called “convergence services,” e.g.,
combining computer and telecom technologies to  deliver internet-based telecom services, or
integrating computer and audiovisual technologies  to deliver multimedia content.  As these
convergence services would have a great impact on the regulatory environment, we are of the opinion
that they should primarily be dealt with in other identified service sectors, e.g., telecommunication oraudio-visual services sectors, but not within Computer and Related Services.
7. It should be noted that we are not seeking a re-classification of Computer and Related
Services as currently defined in CPC 84.
II. SCOPE OF COMPUTER AND RELATED SERVICES
8. The proposed “value-chain” approach would define the scope of Computer and Related
Services in four stages, namely, the pre-implementation stage, the implementation stage, the
operations stage, and the maintenance and support stage (see Annex for details).
(i) Pre-Implementation Stage – the services provided in this stage mainly
include consultancy services which can be classified within the scope of
W/120 1.B.a and 1.B.b. (CPC 841+842).  Even though it is necessary toperform some management consulting services at the same time, the core
services undoubtedly belong to IT consulting services.
(ii) Implementation Stage – the current W/120 /1.B.b. (CPC 842) classification
already accommodates activities in this stage.
(iii) Operations Stage – in-house services provided by businesses’ own functional
departments require no additional classification.  In the case of outsourcing
services, as more and more companies are outsourcing some IT-intensivebusiness processes (which do not affect their “core competencies”) to third-
party services providers, it is widely accepted by the industry that these
service s are classified within the scope of Computer and Related Services.
In addition, these services are usually “bundled” together and could cover the
whole range of services under CPC 84 (W/120 1.B), sometimes overlappingwith other services sectors.  We must emphasize that in spite of this overlap,
their core services still have the main characteristics of Computer and Related
Services.
(iv) Maintenance and Support Stage/ Others – this includes training services for
staff of clients, and services that are not classified elsewhere. They can beaccommodated by W/120 1.B.e.(CPC 845+849)TN/S/W/10
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39. We are mindful of the fact that in a real world where businesses require “total solutions” from
their service providers, application of computer services would usually combine services included in
all four stages.  In other words, computer-related services usually employ: (1) some consultancy
services before implementation (CPC 841); (2) deve lopment and integration services to implement the
application (CPC 842); (3) data processing, data base, and connectivity services (CPC 843 and 845);
(4) maintenance, support, and training services; and/or (5) others.  In order to clarify the scope of
classifications with the above-mentioned four-stage approach, it is essential to move from 3-digits to
2-digits.  This is therefore our proposal.
III. PROPOSAL
10. The Special Session of the Council for Trade in Services should initiate a dialogue, aimed at
starting the negotiation on market access and the elimination of barriers to trade in the Computer andRelated Services.  At the same time, a subsidiary body, such as the Committee of Specific
Commitments, should be instructed to examine th e issue of convergence services, and identify the
appropriate sectors that would either remain in the Computer and Related-Services sector or will be
covered by other service sectors, in order to deal with those issues.
11. Regarding the complementary services such as management consultancy services classified
elsewhere, they should be negotiated and scheduled in the relevant services sectors other than
computer and related services.TN/S/W/10
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 Pre-Implementation 
Stage Implementation
StageOperations Stage
1.Consultancy Services
1.a. Business Application
Consulting  [1.B.a.,
1.B.b./1.F.c.]
1.b. IT Consulting [1.B.a.,
1.B.b.]2. IT Development and Integration Services
2.1. Application Development [1.B.b.]2.2. Integration [1.B.b.]
2.3. De
ployment [1.B.b. ]Customers’ In-house IT Operation (not
included in IT related services)
3. IT Management Services [1.B./ 2.C./
2.D./ Others ]
3.1 Operational Services (including host/data
center, client/desktop, and connectivity/network)
3.2 Applications IT Management Services
3.3 Hel
p Desk IT Mana gement Services
4. Business Process and Transaction
Management Services (BPTM) [1.B. /
2.C./ 7.B./ Others]
4.1 Business Process IT Services
4.2 Business Transaction IT ServicesCustomers’ Outsourcing IT Services via
Contracts, Subscribe, or other means.Maintenance and
Support / Others
5. Maintenance and Support
5.1 Hardware maintenance and
support [1.B.e.]
5.2 Software maintenance and
support [1.B.e.]
5.3 Training services for staff o f
clients [1.B.e.]
5.9 Other IT Services [1.B.e.]
Controversial Convergence Services  (No
classification provided here)
/g115 Internet-based Telecom. Services
[1.B. vs. 2.C.]
/g115 Multimedia Contents Services [1.B.
vs. 2.D]Annex - Scope of Computer and Related ServicesTN/S/W/10
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SCOPE OF COMPUTER AND RELATED SERVICES DESCRIPTIONS
1. Consultancy Services
Consultancy services are advisory services to help companies analyze and improve the efficacy of
business operations and technology strategies. Consulting services include two sub-segments:
business application and IT consulting.
1.1        Business Application Consulting Services
Business application consulting services are advisory services that influence the adoption of
information technology. These business application consulting services are intended to improvebusiness operational efficiencies transform existing businesses or create new businesses via IT.
Business application consulting activities include corporate strategy planning, review of business
plans, business process analysis or re-engineering, and business requirements analysis, as well as
change management and organizational consulting pertaining to the adoption of IT solutions. Some
services examples include product/market portfolio consulting, corporate development, R&D, salesand marketing consulting, operations strategy, organization management and reorganization,
operational effectiveness management, strategic sourcing, and supply chain management (SCM).
Business application consulting services typically preface the design of IT solutions.
1.2        IT Consulting Services
IT consulting services are advisory services that help clients assess different technology strategies and
in doing so, align their technology strategy with their business or process strategy. These services
support customers' IT initiatives by providing strategic, architectural, operational and implementation
planning. Strategic planning includes advisory services that help clients assess their information
technology needs and formulate system implemen tation plans. Architecture planning includes
advisory services that combine strategic plans and knowledge of emerging technologies to create the
logical design of the system and the supporting infrastructure to meet customer requirements.
Operational assessment/benchmarking includes services that assess the operating efficiency and
capacity of a client's IT environment. Implementation planning includes services aimed at advising
customers on the rollout and testing of new solutions deployment.
2. IT Development and Integration Services
Development and integration services customize or develop IT solutions, assets, and processes and
then integrate these solutions, assets, and processes with existing infrastructure and processes.
Development and integration services implement solution designs. Development and integration
services include three subsegments, application development services, integration services and
deployment services.
2.1        Application Development Services
Services that create new functionality for customers' developed or packaged applications. Application
development frequently serves to integrate or link internal or external business processes. These
services may include conversion applications to run on different platforms or architectures.
2.2        Integration Services
Detailed design, implementation, and IT management services to link applications (custom or
prepackaged) to each other or with the existing or planned information technology infrastructure.
Specific activities might include project planning, project management, detailed design, andimplementation of application programming interfaces.TN/S/W/10
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2.3        Deployment Services
Deployment services support the implementation and rollout of new applications and/or
infrastructure. Activities may include: hardware and software procurement; configuration; tuning;
staging; installation; and interoperability testing.
3. IT Management Services
IT management services provide day to day management and operation of IT assets and processes. As
such, they represent the core value components of IT outsourcing. IT management services include
three subsegments: operational services, applications IT management services, and help desk IT
management services.
3.1        Operational Services
Transfer of all or part of the day-to-day system management responsibility for a customer's IT
infrastructure (host/data center, client/desktop, or connectivity/network), and in some cases the
transfer of ownership of the technology or personnel assets to an outside vendor. Services may
include systems operation or support, administration, security, performance monitoring, technicaldiagnostics/ troubleshooting, configuration manage ment, system repair management, and generation
of management reports. Also included are services to manage and implement business continuation
processes. Also included is the management of technology assets.
3.2        Applications IT Management Services
This includes a wide variety of services, processes and methodologies for maintaining, enhancing and
managing both custom and packaged software applications.
3.3        Help Desk IT Management Services
Services to provide centralized information and support management services to handle a company's
internal queries and operational problems about IT related processes, policies, systems and usage.
Services include hardware and software support, loggi ng of problems, dispatch of service technicians
and parts, training coordination and other IT-related issues.
4. Business Process and Transaction IT Management Services
Business process and transaction IT management services (BPTM) are a component of business
process outsourcing (BPO).
4.1        Business Process IT Services
Services provide business transformation knowledge and expertise applied as a part of a BPO
contract. Examples of business processes that are outsourced to an external service provider (ESP)
include logistics, procurement, human resources, finance/accounting, customer relationshipmanagement or other administrative or customer-facing business functions.
4.2        Business Transaction IT Services
BPTM includes transaction processing services that provide IT operational support for specific types
of transactions, such as for credit/debit cards, payroll, check/bank, and healthcare.
5. Maintenance and Support Services
5.1        Hardware Maintenance and Support Services
These are preventive and remedial services that physically repair or optimize hardware, including
basic installation, contract maintenance, and per incident repair, both on site or at a centralized repairdepot. Hardware support also includes telephone technical troubleshooting and assistance for setupTN/S/W/10
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and all fee-based hardware warranty upgrades. Exclusive of parts bundled into maintenance contracts,
sales of all parts used to repair high-tech equipment in carryin, mail-in, or per-incident on-site
delivery modes, or purchased by internal staff to perform the repair, are included. This segment
includes only external customer spending on these services.
5.2        Software Maintenance and Support Services
These services include revenue derived from long-term and pay-as-you-go support contracts.
Technical support contracts include telephone and on-line troubleshooting, installation assistance and
basic usability assistance. Software maintenance includes support contracts and custom software
updates. Software products and technologies covered under this category include operating systems,
application software and systems, application software, and systems and network managementsoftware, tools and utilities. The different types of software covered in the software maintenance and
support services include the following:
5.3        Training Services for Staff of Clients
These services include training services for staff of clients, related to computer programs, computers
or computer systems, and IT applications.
5.9        Other IT Services
Computer related services which are not elsewhere classified.
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