THe IIum journal of case studies in management

IIUM Journal of Case Studies in Management Vo l . 2 No. 1 J une 2 0 1 1 Contents Lifeline: Where Technology Manages Crisis Support

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Sajid Hassan National Systems and Application Administrator, Lifeline Australia

HRM and KM Practices in ISTIQ: Lessons to Learn

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Anuar Omar, Azian Mohd Azlan, Samila Kadir & Siti Nur Hafizah Hazaipah Graduate School of Management, International Islamic University Malaysia Suhaimi Mhd Sarif Kulliyyah of Economics and Management Sciences International Islamic University Malaysia

Information Technology – Harbinger of Change in an Indian Private University

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Anupama R & Sanjeev Bansal Amity Business School, India Sodhi JS AKC Data Systems Pvt. Ltd.

Choupal Sagar: Pioneering Organised Retailing in Rural India Prarthana Banerjee

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IBS, Salt Lake City, Kolkatta 700091, India Subhadip Roy IBS, IFHE Campus, Dontanapally, Hyderabad, India

Bank Rakyat Malaysia: Vision Remains while Mission is Revisited Khaliq Ahmad

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International Islamic University Malaysia Azhar Kazmi King Fahad University of Petroleum and Minerals (KFUPM), Saudi Arabia

Telekom Sales & Services Sdn. Bhd.

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Mohd Roslan Haron Telekom Malaysia Sdn. Bhd. Mohd Ismail Ahmad International Islamic University Malaysia

Teaching Notes of the Case Studies, published in this issue, are available ONLY to lectures and trainers. Please send your request to the Chief Editor ([email protected]/[email protected]) giving details of your job position and institutional affiliation using your institutional email address.

IIUM Journal of Case Studies in Management ISSN 2180-2327 Published by International Islamic University Malaysia 53100 Kuala Lumpur. Editorial Team • Chief Editor: Prof. Dr. Arif Hassan Deputy Director Management Centre International Islamic University Malaysia • Co-Editors: Assoc Prof Dr Noor Hazilah Abd Manaf Management Centre International Islamic University Malaysia Assoc Prof Dr Arif Zakaullah Management Centre International Islamic University Malaysia • Editorial Advisory Board: Prof Dr A Seetharaman Faculty of Business Strategy S.P. Jain Centre of Management, Singapore. Prof Dr Faridah Hj Hassan Director Centre of Business Excellence, Faculty of Business Management University Technology MARA (UiTM) Professor Dr Khaliq Ahmad Dean Kulliyyah of Economics and Management Sciences International Islamic University Malaysia Prof Dr Mohd Ismail Sayyed Ahmad Director Management Centre International Islamic University Malaysia Prof Dr Mukund Dixit Indian Institute of Management Vastrapur, Ahmedabad, India Dr Muslim Harsani Department of Accounting Kulliyyah of Economics and Management Sciences International Islamic University Malaysia

Dr Amir Mahmood Deputy Head of Faculty and Assistant Dean International Faculty of Business and Law University of Newcastle NSW Australia Assoc Prof Dr Nik Nazli Nik Ahmad Deputy Dean (Postgraduate Studies) Kulliyyah of Economics and Management Sciences International Islamic University Malaysia Prof Dr P M Shingi Dean, School of Business Flame University, Pune India Dr Sharifah Raihan Syed Mohd. Zain Head, DBA program Management Centre Kuliyyah of Economics and Management Sciences International Islamic University Malaysia Aim and Scope of the Journal The IIUM Journal of Case Studies in Management is an internationally refereed journal published twice yearly by the Management Centre, International Islamic University Malaysia. The journal is dedicated to the development and promotion of case studies in the field of management and related disciplines for the purpose of enhancing our knowledge and understanding in the areas. Cases selected for publication are expected to deal with important issues related to the discipline, which may be used, among others, by instructors of Master of Business Administration and Master of Management programmes. Special consideration will be given to cases that deal with management issues in the Asia-Pacific region. Both, cases based on field research and secondary sources, will be considered. Also, papers on case writing, case teaching and case analysis will be accepted for publication. Occasionally the journal will publish empirical papers on current issues in management.

Editor’s Note We are delighted to present the third issue of this journal. There are six cases in this issue. They represent a good mix of Malaysian, Asian, and international companies. The issues highlighted provide a number of relevant management concepts and practices. We are sure these cases will be useful to teachers and trainers who would like to use them in their teaching. Case 1 authored by Sajid Hassan provides a case study of Lifeline Australia—an NGO involved with counseling services. It explains how Information Technology is being used as a responsive support to people in need of help and distress. The case identifies the stakeholders, project management challenges in meeting the needs and expectations of the stakeholders, issues and problems experienced during project management, and how the major operations are performed by a typical Service Desk according to ITILv3. Case 2 co-authored by Anuar Omar, Azian Mohd Azlan, Samila Kadir, Siti Nur Hafizah Hazaipah and Suhaimi Mhd Sarif presents a case study of a Malaysian company known as ISTIQ involved in the noise control business. The case addresses issues of human resource management and knowledge management practices and the kind of employee management challenges that this small enterprise had to face during different phases of its operation. Case 3 written by Anupma R, Sanjeev Bansal and Sodhi JS describes the case of an Indian private university. This study traces the evolution of IT together with the rapid expansion of the University across continents. It also outlines the difficulties faced and solutions worked out till a optimum level of performance was achieved. The case brings out the issues related to teaching-learning pedagogies and the impact IT-enabled processes had on the students. Both advantages and fallouts are discussed and the case study poses to the readers the question of an optimum mix of IT enabled and traditional teaching methods. Case 4 written by Prarthana Banerjee and Subhadip Roy relates a story of a retail chain specialising in rural marketing. This paper traces the origin and development of Choupal Sagar, the rural marketing initiative. Based on secondary research, the case deals with issues, problems, and challenges in rural distribution, product management and rural marketing as a whole. Case 5 authored by Khaliq Ahmad and Azhar Kazmi presents the case of a Malaysian bank known as Bank Rakyat. The Bank evolved from a cooperative system of management to a highly creative market entity ready to face the very aggressive competitive market forces of the Islamic banking and finance industry. While maintaining the vision of its founding fathers as a cooperative entity, it had to negotiate new challenges emerging from a new mission. The readers have to analyse as to what extent the bank has succeeded in its change management efforts.

Case 6 authored by Mohamed Roslan and Mohamed Ismail Ahmed is about a Malaysian Telephone service provider known as Telekom Malaysia. It makes an extensive analysis of the telecom industry in Malaysia and discusses the emerging issues and challenges faced by this company in the context of deregulation and market competition. The case poses a number of marketing related questions before the readers in order to examine how the company should come up with some creative solutions. We would like to record our thanks to all the contributors of this issue and our colleagues who are taking a keen interest in making this journal a good source of knowledge. We hope that the readers will find the cases interesting and useful.

Arif Hassan, PhD Chief Editor

IIUM Journal of Case Studies in Management: Vol. 2 No.1: 1-11, 2011

ISSN 2180-2327

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Case Study

Lifeline: Where Technology Manages Crisis Support

Sajid Hassan National Systems and Application Administrator, Lifeline Australia Abstract: Lifeline is a not-for-profit organisation based in Australia providing crisissupport, mental health support and suicide prevention services to Australians. It has a large volunteer workforce across 65 Australian locations. Most of these services are delivered from the National Office of Lifeline Australia. The aim of this paper is to present the challenges faced by Lifeline in effectively managing successful service delivery and how these challenges are being overcome by adapting well-known and proven frameworks. This paper also attempts to elaborate the concept of ICT Service Management and its adaptation within Lifeline.

INTRODUCTION “Good Evening, This is Lifeline Servicedesk and my name is Beau. How can I help you?” “I have pressed the Call Trace button and tried to follow the emergency intervention procedure to trace a caller but it seems technology has got the better of me. Please help as I think the person whom I was talking to might just be on the brink of attempting a suicide.” This is usually a typical start of a conversation for a member of Lifeline Servicedesk team, often in the middle of the night. Lifeline is a not-for-profit organisation that provides access to crisis-support, mental health support and suicide prevention to Australians. It is a completely volunteer-based organisation working 24 hours a day, seven days a week and 365 days a year. There are more than 4500 telephone counsellors providing the services at 65 locations in Australia. This paper is an attempt to elaborate the techniques, standards and frameworks that are being used by Lifeline and its ICT department to successfully manage the service delivery in an organisation of this magnitude. This paper begins by clarifying the services provided by Lifeline. Then, it presents the challenges faced by Lifeline and the organisation’s ICT department. Finally, the paper attempts to elaborate the techniques, standards, policies and procedures that have been implemented by the organisation to assist in delivering these services.

Correspondence author: Sajid Hassan; Email: [email protected]

Sajid Hassan

Figure 1: Lifeline National Call Summary

ABOUT LIFELINE Lifeline is an organisation which has been operating since 1963. It was founded by the late Reverend Dr Sir Alan Walker when he took a call from a distressed caller in Sydney who later took his own life. This incident made Sir Alan determined that he would not let isolation and lack of support cause more deaths. He then launched a 24hour crisis support line in Australia. This service, known as 13 11 14 service now answers more than 450,000 calls annually of which nearly 20,000 are related to suicide attempts(Figure 1). This service has been an integral part of the lives of Australians and over the years Lifeline has become a national brand, winning a number of accolades from various sectors of society. It has also been mentioned numerous times during political campaigns as a leading advocate of providing mental health and crisis support across the region. In the last three years, Lifeline has taken more than 2.1 million calls from Australians. The breakdown of issues for each of these calls is shown in Table 1.

Technical Architecture Lifeline currently serves 65 sites across Australia. Most of these sites are in remote Australian locations. Besides the obvious challenges of connecting these sites with the national network, there are issues usually related to providing remote ‘hand and eyes’ support to the users. 2

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Table 1: Breakdown of calls by issue received by 13 11 14 telephone counsellors Issues

Percentage

Abuse and Trauma

4.8%

Adjustment and Loss

5.6%

Family and Relationship

28.3%

Health and Disability (Including Mental Health)

25.3%

Practical Help

3.5%

Problem Behaviour

5.9%

Self and Community

22.6%

Suicide-related

4.0%

The sites are connected by the primary hub via WAN links which have been provisioned by the network service provider. The small ICT team at the National Office manages the technical backend of the system. Each of the sites currently has a desktop computer, CISCO IP phones, UPS and a NTU. In terms of software, the telephone counsellors utilise a CRM application built to capture call interaction data and it is a legal record of the conversation, actions and findings of a particular call. In addition, the telephone counsellors also use another web-based application called Service Finder which contains a record of a number of agencies who specialise in providing care and other type of services. During a counselling session, the counsellors often utilise the Service Finder to search for a particular agency and then provide the help seeker with the necessary referral details. The referrals could range from as simple as providing details of the nearest accommodation service or in some cases, agencies providing financial counselling. Other than providing technical infrastructure support to the entire nation, Lifeline’s ICT team also provides technical, project and programme management support to the National Office staff. The support includes management, implementation and maintenance of a number of applications including Emails, Financial Management and Information System, Asset Management, Training, Application and Desktop Support, Security, Network Administration, IP Telephony services, hardware/software procurement and vendor management. There are more than 67 different types of servers running various operating systems. In addition, there are more than 7 types of database systems keeping a diverse genre of records which are often required to be presented in court of law. In addition to the counselling services that are provided by the volunteer workforce, Lifeline also has a significant web presence. The Lifeline website gets a very high number of hits every day, where members of the general public often seek valuable information using the online resources available on the website. To add to the services IIUM

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that are being managed by Lifeline’s ICT team, the website is also managed in-house by the ICT team. The aim of this paper is to demonstrate how such a complex network of users, business, applications, data and technical infrastructure can be effectively and efficiently managed. In the following sections, this paper will attempt to demonstrate the use of different standards, frameworks, agreements and management to achieve the necessary outcomes.

CHALLENGES When technology advances, it usually provides users with more features and ease of use. However, in most cases it also introduces another level of complexity which any organisation’s ICT team struggles to manage. The challenges become even greater when the organisation is volunteer based. The task of introducing a new technology to a user base which is constantly changing is a challenging task. As mentioned in the earlier section of this paper, Lifeline is a not-for-profit organisation. Hence, it does not have the luxury of a large enterprise with a huge ICT skills base with multiple level of redundancies. The team that manages the technology at Lifeline comprises not more than ten individuals. This creates a number of problems especially when the organisation does not have a redundant skills set available. If an individual is not available, then this usually leads to a system issue not being resolved at Lifeline. The skills shortage within the ICT team in the past had led to poor practice in terms of knowledge transfer, system architecture and technical documentation. A well-known fact in the industry is that ICT is a dynamic workforce. Hence, when a new group of ICT workforce comes to the organisation, there is a poor handover of most technical systems. However, such practices often result in very high operational expenditure and one of the objectives of this paper is to present the framework that has been implemented at Lifeline to overcome this problem. The total number of telephone counsellors across Australia is more than 4500 and most of them work on a fortnightly shift. The unique nature of Lifeline introduces another level of complexity. Usually, in an organisation of such a size, one can introduce a new technology, infrastructure or a process with little or no change management issue. However, the issue of change management is one of the most significant challenges at Lifeline. Whenever the organisation introduces a new technology or makes a decision on changing a process, the National Office has to prepare a complete new set of training material and make sure they are delivered, implemented and supported for a very long period.

OVERCOMING THE CHALLENGES The sheer size of the organisation together with its unique nature requires a unique management effort working at multiple levels within the network. The effort is not only very exclusive at Lifeline, it is also extremely efficient. As a result the organisation 4

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as a whole and the ICT department to be specific is able to meet the specified target, SLAs and objectives. Though, most of the mentioned frameworks and techniques are still being implemented at Lifeline, the results of following a proven framework is already showing. As shown in Figure 1, Lifeline for the past three financial years has steadily been answering more calls than in the previous years. The organisation has worked hard to remove system level congestion and as a result more and more help seekers are able to get through the system. Further, the operational expenditure on technologies has also dropped significantly and Lifeline can manage to fund additional resources and services for help seekers. For an example, Lifeline recently embarked on providing Online Crisis support to Australians who may not necessarily feel comfortable making a call and would prefer an online presence. The service is currently being run on a trial basis. There is a long list of achievements the organisation has made over the past few years. However, the aim of this paper is to highlight the framework that has been adapted by the organisation which has resulted in these accomplishments.

Programme Management Programme management is the process of managing several related projects. The programme manager typically has oversight of the purpose and status of all projects in a Programme. The programme manager can use this oversight information and knowledge to support project level activity to ensure the overall programme goals are likely to be met (APM, 2007). One such programme that is currently being managed at Lifeline is titled ‘131114 Improvements Programme’ which is an umbrella cover to manage a list of projects to upgrade Lifeline’s contact centre capability. It includes management of the following set of projects • Upgrade Lifeline’s telephony infrastructure • Implement a new telecommunication service provider • Develop CRM application to assist Telephone counsellors for capturing help seekers demographic information • Introduce and implement a National Workforce Management System The framework that is being adapted to manage this programme is called ‘Managing Successful Programmes (MSP)’. MSP defines programme management as “the action of carrying out the coordinated organisation, direction and implementation of a dossier or projects and transformational activities to achieve outcomes and realise benefits of strategic importance to the business.”

Project Management Project management is the discipline of planning, organising, securing and managing resources to bring about the successful completion of specific project goals and IIUM

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Figure 2: PRINCE2 Project Management Methodology

objectives. A project is deemed to be successful if all its deliverables are met within the specified timeframe and do not exceed the cost (Nokes, 2007). There are a number of frameworks that are available for use such as PMBOK, PRINCE2, Agile Project Management, Event Chain methodology, etc. The framework that has been adapted within Lifeline is PRINCE2. It stands for PRojects INControlled Environments (PRINCE) (Office of Government Commerce, 2009). PRINCE2 is a process-driven project management method which defines 40 separate activities and organises these into seven processes as shown in Figure 2. Some of the advantages of adapting this framework are • • • • • •

Provides a structured approach to project management. Provides a method for managing projects within a clearly defined framework. Describes procedures to coordinate people and activities in a project. Describes procedures to design and supervise the project. Actions to take if it doesn’t develop as planned and project has to be adjusted Divided into manageable stages, the method enables an efficient control of resources.

Information Technology Services Management There is hardly any doubt that managing ICT department resources and providing appropriate services to its customers is a remarkably difficult task. Hence, a number

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of management approaches are applied in various situations. One of the most successful ones comes from the government of UK’s IT infrastructure library model, popularly known as the ITIL framework (Ashley et al., 2009). This framework has been adapted by Lifeline ICT Servicedesk team over the past two years. ITIL offers a systematic approach to delivering quality IT services. ITIL was developed in the 1980s and 1990s under a contract with the UK government (Ashley et al., 2009) Under this framework, the operative procedure for providing quality and transparent IT services for Lifeline is perhaps best suited to this paper. ITIL framework recognises this as the ‘Service Operation’ lifecycle phase. IT Service Operation involves coordinating and carrying out activities and processes required to provide and manage services for business users and customers within a specified Service Level Agreement (SLA). In Lifeline’s situation, customers are usually referred to as volunteers at the 65 centres (locations). Service Operation is also responsible for management of the technology required to provide and support the services. Service Operation is an essential phase of an ITIL based service lifecycle model. If the day-to-day operation of processes is not properly conducted, controlled, and managed, then well-designed and well-implemented processes will be of little value. In addition there will be no service improvements if day-to-day activities to monitor performance, assess metrics and gather data are not systematically conducted during Service Operation (Ashley et al., 2009) The basic concept of Service Operation revolves around ensuring that the customers achieve their goals. Additionally, it is responsible for the effective functioning of components supporting the service. Achieving a balance in Service Operation implies the following: • Handling a possible internal and external conflict between maintaining the current situations and reacting to changes in the business and technical environment. Service Operation must try to achieve a balance between conflicting priorities. • Achieving an ICT organisation in which stability and response are in balance. On the one hand, Service Operation must ensure that the ICT infrastructure is stable and available. At the same time, Service Operation must recognise the business needs changes and must embrace change as a normal activity. • Achieving an optimal balance between costs and quality. This addresses ICT’s challenge to continually improve the quality of service while at the same time reducing or at the very least maintaining costs. • Achieving a proper balance in reactive and proactive behaviour. A reactive organisation does nothing until an external stimulus forces it to act. A proactive organisation always looks for new opportunities to improve the current situation. Usually, proactive behaviour is viewed positively, because it enables the organisation to keep a competitive advantage in a changing environment. An over-proactive attitude can be very costly and can result in distracted staff. IIUM

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Figure 3: ITIL Service Operations (Ashley et al., 2009)

In order to achieve balance in Service Operations, communication is essential. ICT teams and other departments, as well as users, internal customers and Service Operation teams, have to communicate effectively with each other. Good communication can prevent problems. This has become evident since the establishment of an Internal Communications Department at Lifeline. The results of a yearly climate survey have led to satisfactory customer satisfaction. There are some key Service Operation processes that must link together to provide an effective overall IT support structure as shown in Figure 3. Service Operation processes provided by Lifeline’s ICT servicedesk team include • Event Management – Surveys all events that occur in the ICT infrastructure in order to monitor the regular performance, and which can be automated in order to trace and escalate unforeseen circumstances. • Incident Management – Focuses on restoring failures of services as quickly as possible for customers, so that it has a minimal impact on the business. Incidents can, for example, be failures, questions or queries. • Problem Management – Includes all activities needed for a diagnosis of the underlying cause of incidents, and to determine a resolution for those problems. • Request fulfilment – The process of dealing with service requests from the users, providing a request channel, information and delivery of fulfilment of the request. 8

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• Access management – The process of allowing authorised users access to use a service, while access by unauthorised users is prevented. Service Operation activities undertaken at Lifeline include • Monitoring and Control – This is based on a continual cycle of monitoring, reporting and undertaking action. This cycle is crucial to providing, supporting and improving services. • ICT Operations – Fulfill the day-to-day operational activities that are needed to manage the IT infrastructure. • There are a number of IT operational activities which ensure that the technology matches the service and process goals. For example, mainframe management, server management and support, network management, database management, directory service management, and middleware management. • Facilities management – It refers to the management of the physical environment of ICT operations, which is located in the server room and data centres. Main components of facilities management are, for example, building management, equipment hosting, power management and procurement. There are several ways to organise Service Operation functions, and each organisation will arrive at its own decisions based on size, geography, culture and business environment. However, an organisation possessing an integrated IT Service management technology can categorically provide value-added service to its customers.

CONCLUSION AND WAY FORWARD The objective of this paper to present the advantages that can be achieved by adapting well proven frameworks. As evident in the case of Lifeline, numerous aspects of the organisation’s service delivery including reducing operations expenditure, delivering successful projects and maintaining customer expectation and satisfaction are some of the key benefits that can be realised. The success of these frameworks can also be realised and optimised with the adaptation of an Enterprise Architecture framework. The purpose of enterprise architecture is to optimise across the enterprise the often fragmented legacy of processes (both manual and automated) into an integrated environment that is responsive to change and supportive of the delivery of the business strategy. Fortunately, there is already a well know Enterprise Architecture framework, called TOGAF ‘The Open Group Architecture Framework’, available for organisations to adapt. The beauty of this framework is its adaptability to other service delivery systems, project and programme management frameworks already in place. Figure 4 depicts the TOGAF architecture stages and its link to other frameworks. The adaptation of the TOGAF framework together with other frameworks can enhance all the other benefits that have been realised by the organisation. A properly architected enterprise can bring important business benefits that include the following: IIUM

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Figure 4: The TOGAF Architecture Stages and its Link to Other Frameworks

• • •

A more efficient ICT operation Better returns on existing investment, reduced risks for future investment Faster, cheaper and simpler procurement (TOGAF 9, 2009).

DISCUSSION QUESTIONS Q1. Identify some of the key stakeholders and their roles in the service delivery model as described in the case study. Q2. Besides managing a wide range of stakeholders, what are the project management related challenges experienced by the organisation? Q3. Describe some of the major drawbacks of implementing the Project/Programme management framework. Q4. Describe the major operations performed by a typical Service Desk according to ITILv3.

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REFERENCES Nokes, S. (2007). The Definitive Guide to Project Management. 2nd edn. London: Prentice Hall. Office of Government Commerce. (2009). Managing Successful Projects with PRINCE2 (5th ed.). The Stationery Office. Norwich, UK. APM (2007). Introduction to Programme Management. APM Publishing, London, UK. Ashley, H., Windebank, J., Adams, S., Sowerby, J., Rance, S. & Cartlidge, A. (2009). ITILv3 Foundation Handbook. The Stationery Office, Norwich, UK. TOGAF 9 ( 2009). The Open Group Architecture Framework. The Open Group, London, UK.

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HRM and KM Practices in ISTIQ: Lessons to Learn

IIUM Journal of Case Studies in Management: Vol. 2 No.1: 13-21, 2011

Case Study

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ISSN 2180-2327

HRM and KM Practices in ISTIQ: Lessons to Learn

Anuar Omar, Azian Mohd Azlan, Samila Kadir & Siti Nur Hafizah Hazaipah Graduate School of Management, International Islamic University Malaysia

Suhaimi Mhd Sarif Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia

Abstract: This case study addresses issues of human resource management (HRM) and knowledge management (KM) practices at ISTIQ Sdn. Bhd. ISTIQ is a local company that has ventured into an interesting field - noise control engineering. ISTIQ began as an humble engineering company that discovered opportunities in noise control engineering and expanded to serve both regional and international markets. However, the employees of ISTIQ are neither vibrant and dynamic nor sufficiently proficient in responding to the requirements of their customers. Efforts to address these deficiency problems include on-the-job and off-the-job training programmes, technical workshops and English courses. A topping up measure was a recent review of its hiring practices to be in line with human resource and knowledge management requirements.

INTRODUCTION ISTIQ originates from the Arabic word ISTIQamah which means ‘persistence in practising virtue.’ This concept prevails in the vision and mission of ISTIQ Sdn Bhd. In fact, ISTIQ has put this into practice in the business by persistently and consistently improving its products and services. Since its establishment in 1995, the company has grown tremendously and has emerged as one of the leading companies in industrial and building acoustics. Its business activities range from product supply and design, fabrication and installation of assigned acoustics to noise control projects. In fact, ISTIQ is highly specialised and is well recognised in applications involving generator sets, blowers, compressors, press machine and HVAC systems. All of its work and products on controlling noise on these applications either meet or exceed the requirements set by the Malaysian Department of Environment (DOE) and Department of Safety and Health (DOSH). Apart from this, they also provide services in noise measurement and in obtaining approvals from the DOE. Correspondence author: Dr Suhaimi Mhd Sarif; Email: [email protected] IIUM

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Two years later, realising bright opportunities in this industry, ISTIQ established a subsidiary to make headway in fabricating their own acoustic products. This approach is practical to sustain profitability and a competitive advantage. The Managing Director cum Principal Engineer of this company believes that self-sustaining production would allow the company to acquire and implement the latest manufacturing technology, while maintaining cost effectiveness. But above all, this move was to ensure that ISTIQ products would be of the highest standard and quality that would meet the requirements demanded by local as well as foreign customers. The quality of ISTIQ products has been proven to be competitive because customers are repeat buyers not only from Malaysia and Singapore but also from Hong Kong, Taiwan, Maldives and Angola. ISTIQ is naturally proud that it has gained recognition from key customers such as Matsushita, Shell, Hewlett Packard, PETRONAS, Volvo, Tractors and Siemens. In fact, according to Razali, the Quality Control manager, ISTIQ’s commitment to providing their customers with premier service and support is their top priority.

Vision and Mission The vision of the company is to grow, innovate and venture into new inventions within the scope of their core expertise, which is noise control engineering. At the same time, it is the company’s mission to elevate their staff’s economic status by training and improving their skills in technical (hard) and people (soft) skills. According to Anuar, Managing Director of ISTIQ, the company has successfully stayed one step ahead of their competitors by applying the latest Information Technology. Not only do they use the latest software in their operations but would also access the most current information to update their knowledge on noise and sound engineering. In fact, they developed their own in-house software programmes to speed up their daily routine tasks. The company recognises that industrial noise can cause ailments which are detrimental to the health and safety of people. In fact, excessive noise can cause annoyance or loss of concentration, and productivity may fall. Non-compliance to noise standards may also lead to defective products or corrupt data being obtained. There are several approaches towards creating noise-free environments. However, noise theory is a delicate subject matter which requires a thorough understanding of the subject. A lack of knowledge of noise theory may result in expensive pursuits of noise-free environments which could create even more problems in the process. A recent review of various national and international standards states that many specialist areas require the environment and equipment to meet certain noise standards. These must be examined and engineered skillfully before these environments can be declared safe for everyone. The preference, therefore, is for a quieter environment. On the product line, this is often reflected by the selling advantage of the quiet product over the noisy competitor.

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Even before ISTIQ came into the picture, the technical aspects of sound particularly the noisy environment of businesses have been discussed and solutions sought. Admittedly, the task of diagnosing and correcting noise problems in the most effective way had received little formal attention in the past. But it is generally recognised that integration of modern measurement techniques such as active noise control with fundamentals of applied acoustics has been the most effective treatment to combat noise problems.

THE MANAGEMENT TEAM Mr Anuar Omar has headed ISTIQ since its establishment in 1995. He and his partner, Felicia Lai, established the firm. Both of them had previously worked together in a company, KSM Engineering Sdn. Bhd. They started off with another two staff members giving a count of four when they began operations Currently, ISTIQ Sdn Bhd employs 30 staff which includes the employees of their manufacturing company, ISTIQ Fabrication. Both companies, ISTIQ and ISTIQ Fabrication, are accredited by the quality management system of ISO 9001:2000. As the major shareholder in the company, Anuar assumes the role of decision maker on critical matters related to finance and cash management, and human resource management (HRM). In short, he is the captain of the ship, while Felicia assists him with the sales and administration aspects of the company. Besides Anuar and Felicia, the management team also comprises Rosli Bassri, the General Manager of ISTIQ Fabrication, Jaladi Muda, the Group Human Resource and Administration Manager, Razali Z. Abidin the Group QA/QC Manager, and Ida Yulianis, the Finance and Account Manager.

STAFFING – SELECTION AND RECRUITMENT Most of the personnel in this company who were hired at the time of establishment were mostly local graduates with a diploma or certificate in engineering-based subjects such as drafting. The majority of them are not proficient in writing and speaking English, except for Anuar the only engineer in the company. In the early stages, the need for manpower requirements for the company was for people with drafting skills or other technical skills. However, when the business expanded and began producing high-end products, the manpower requirements expanded to include not only those with technical know-how but also those with a reasonable standard of English proficiency. In the mean time, the company felt that it could attempt to retrain existing staff to acquire new skills and the English proficiency expected. Using this as a base, Anuar identified personnel who had the potential to be re-trained in other areas of the business such as sales, project management, interior design and engineering support. From time to time, these selected personnel of ISTIQ were sent to attend training workshops so as to enhance their individual competencies on job-related courses and some among them were even supported in acquiring a diploma in the required fields.

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The company, no doubt, was very supportive of the workers throughout the process of acquiring knowledge in all aspects, including finance. However, what had been planned did not take place as envisaged. According to Anuar, the most memorable incident was when the staff, on whom he had pinned the most hopes, left the company to start a business of his own, and, turned out to be his immediate competitor. In another case, the staff whom he had groomed and trained in interior design also left for another design company for better pay and career prospects. Nevertheless, the incidents turned out to be a blessing in disguise. If the employees had stayed on with ISTIQ, they would not have been able to progress in their careers because of their lack of interest in furthering their study. In addition, some who are still with the company do not bother to improve their English proficiency but are persistently demanding a better salary every year. Anuar is of the opinion that the company cannot retain workers who are deficient in upgrading their work skills/ knowledge or in improving their English proficiency. He has consistently urged them to work on improving themselves, if they want to keep their job. The nature of the work at ISTIQ requires staff to prepare reports on completion of jobs and projects. If Anuar has to do the reports for his staff, it is likely that he would eventually deviate from his role as the top management of the company. During the period of 2007 until end of 2008, there was a massive turnover of staff, some of whom had been with the company for over ten years. The wave of change affected the morale of other employees who had chosen to remain with the company. It affected their emotional status and concentration at work for a certain period of time. Furthermore, the task of training new staff had to be done all over again and it definitely impeded the company’s progress. Taking what had happened as a lesson learned, the management of the company is changing their strategy in hiring. Currently, the focus of staff recruitment is on their qualification merits, sales skills, a good command of English and a positive attitude. For example, in the most recent year, the company hired two engineers who had graduated from University of Tenaga Nasional (UNITEN) with a CGPA of well above 3.0. From their mid-term appraisal, their performance was good and they appear to be progressing very well. They seem to acquire skills much faster and are self-motivated in their job performance. Their work has been segmented to promote efficiency. Anuar, in a regretful mood, states that the most probable reason for this staff turnover could have been the inaccurate criteria used to hire people. As an engineering company, progress in research and development is extremely important but this had been impeded by not having a sufficient number of competent staff. However, the company is hopeful of finding answers to the problem by hiring the right people through proper planning and definition of core competencies required of the workforce. The process of selection and recruitment of new people needs to be improved. This will be a challenge to Anuar, as the Managing Director, and his Human Resource Manager, Jaladi. They need to hire people who can contribute to the company, while staying loyal and eventually progressing with the company. 16

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As for Anuar, throughout this crisis period, he acquired knowledge to better manage the company and the people through reading management books and attending relevant seminars. Feeling this approach to be rather ad-hoc and insufficient to make him competent and proficient, he enrolled in a structured training programme in management - a Master’s in Management - which he hopes could provide answers to his quest for knowledge. He strongly believes that the course will enhance his knowledge in management and prepare him for the challenges of the next level of achievement to become an internationally competent company in noise control technology.

THE LEARNING ORGANISATION The management of ISTIQ truly believes that improving one’s knowledge is the most important criteria needed to sustain and progress further in the market. They have an inherent belief that it is the people who actually make an impact on any organisation. Due to this notion, back in 2005, the management began to encourage staff members to engage in learning and sharing of knowledge in their tasks so as to develop ISTIQ into a Learning Organisation. Retracing the history of their staff development, ISTIQ had in actual fact adapted a knowledge learning culture since its inception as a business. Most staff had earned their certificates, or diplomas while working at ISTIQ. The management also had sent their employees for various types of training seminars and workshops now and then. Evidently, the training and development of the staff has become more structured since receiving their ISO 1900:2000 certification; this is one of the requirements for an ISO Certification Company.

Knowledge Management in Action A typical week at ISTIQ starts with a Sales and Project meeting, every Monday at 9.00 a.m. This could last until 10.00 to 10.30 a.m. During the meetings, previous quotations which have sent out will be discussed and reviewed, a move designed to monitor the sales activities. All discussions will be recorded, compiled and distributed to the various parties concerned. The compilation of project activities is also done in a similar manner. However, there is a slight difference in that the activities are recorded in a journal format. The rationale for this format is to allow for the history of project activities to be recorded and captured as much as possible. The project team is required to highlight problems and describe how it has been solved. This format is envisaged to ensure that important corporate knowledge is retained for future reference and reuse. Once a month, there will be a management meeting. Normally, this will be conducted on a Saturday in the first week of the month. The overall company performance of the previous month will be reviewed and discussed. During this meeting, all the Department heads are required to present their department’s performance, against the goals set.

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The management of ISTIQ knows that every organisation needs to be clear about its knowledge requirements. They also need to be clear about the importance of knowledge sharing. Therefore, besides the sales and project meeting, every Wednesday, a core leader will be assigned as a facilitator to conduct training to the staff members on their core competency subject. For instance, Anuar will conduct training in Acoustics and Noise Control Engineering in the first week of the month; Jaladi will conduct training on information technology (IT) in the second week; while Razali will provide training on quality management in the third week. The last week of the month will be assigned to either Sales by Felicia or 3D drawing by Hajar. This method relies on knowledge chains and realising that this may not be the best way to impart knowledge, they are moving towards a central knowledge hub which is believed to be more effective in coordinating and diffusing various knowledge sources to individual recipients. As mentioned earlier, most support staff in the organisation lack communication skills in English. Realising that this is an important skill for most of the employees to acquire and progress in their career, the ISTIQ management team has implemented several measures to enhance the skill. Wednesday has been declared an ‘English day’ with everybody having to speak English on that day. However, this method did not show any significant improvement after one year of implementation. According to Jaladi who is responsible for the staff English Enhancement Programme (EEP), the main problems identified were the ‘feeling of being shy’ and a lack of confidence. The strategy for the EEP has been changed. Since the beginning of 2009, a facilitator has been identified – Ariff who is the Assistant Sales Engineer and who has a good command of English will facilitate the English forum. In this forum, Ariff will suggest a topic of interest and the group will discuss the topic among themselves in English. A self-managed knowledge team is being applied here. From Anuar’s observation, this strategy seems to work better and has shown a very positive results. Most of the staff have gained confidence to communicate in English and furthermore, they seem to be enjoying themselves during the forum. In addition to these meetings, every Thursday morning, the company would meet and read the translation of Al Quran. The reading would either go from chapter to chapter, or from one topic to another. The method, as mentioned by Razali, is one of the most unique ways that ISTIQ is fulfilling the spiritual knowledge gap of the staff. Very often, this meeting will be facilitated by either Jaladi or Anuar with the objective being to read, understand and practice the command of Al Quran. According to Jaladi,the management hopes it will lead to sustained practice as well as lead to the company doing business according to Islamic teachings. The management encourages their employees to explore knowledge through reading. They encourage their staff to acquire an interest in exploring knowledge. According to them, the world is an awesome place for those who like to explore God’s creation. In the Quran, it is stated: “In the of the heaven and the earth, and the alteration of night and day, there are Signs for people of intelligence: those who remember Allah standing, sitting and lying

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on their sides and reflect on the creation of the heavens and the earth”(Surah Ali Imran 3:190-191).

PERFORMANCE MANAGEMENT The ISTIQ management believes that goal setting is the foundation for personal and business success. Goal setting enables an individual to achieve one’s dreams and success while serving as the framework for management success. Therefore, every staff is given five goals to achieve each year. The more effectively the employee performance evaluation processes goals accomplishment, the more the additional benefits. Documented employee performance evaluations are communication tools which ensure the supervisor and the reporting staff members are clear about the requirements of each employee’s job specifications. The employee performance evaluation also communicates the desired outcomes, or outputs needed from each employee and defines how they will be measured. These are the goals of an effective employee evaluation process. The employee and the Head of Department (HOD) are clear about the employee’s goals, required outcomes or outputs, and how the success of the contributions will be assessed. The goals of the best employee performance evaluations are employee development and organisational improvement. The employee performance evaluation helps employees accomplish both personal development and organisational goals. The act of writing down the goals takes the employee one step closer to accomplishing them. Since goals, deliverables and measurements are negotiated in an effective employee performance evaluation, the employee and the supervisor are committed to achieving them. The written personal development goals are a commitment from the organisation to assist the employee to grow in his or her career path. Employee performance evaluation provides legal, ethical, and visible evidence that employees are actively involved in understanding the requirements of their jobs and their performance. The accompanying goal setting, performance feedback, and documentation ensure that employees understand their required outputs. In the event that an employee is not succeeding, or improving in his job performance, the performance evaluation documentation can be used to develop a Performance Improvement Plan (PIP). This plan provides more detailed goals, with more frequent feedback to an employee who is struggling to perform. The goal leads to improvement but repeated non-performance can lead to disciplinary action, up to and including employment termination. The employee performance evaluation provides evidence of non-discriminatory promotion, pay, and recognition processes. This is an important consideration in training supervisors to perform consistent, regular, non-discriminatory employee performance evaluations. The documentation of success and failure to achieve goals is a critical component of the employee performance evaluation process. While employee performance evaluation systems take many forms, depending on the organisation, the components described earlier are likely to be included. Some are IIUM

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more effective than others. However, it is to be noted that the goals for the employee performance evaluation system, or the appraisal process, or the performance management process are similar. The differences appear in the approach and the details. This can make all the difference in how the system is perceived by, and carried out by, employees.

The Role of Information Technology Generally, top management at ISTIQ is very supportive of IT usage and development. They clearly believe that Information Technology is a critical component in learning and knowledge management. IT has been established as an enabler. Local area network (LAN), e-mail, access to the Internet, computer aided design (CAD) system and the Internet banking system are being used extensively. It is evident that one important advantage of the use of IT is that it is giving the organisation an expanded ability to develop and maintain a much improved, structured corporate memory. Currently, they are moving to cloud computing, rather than relying on their internal server. However, sadly, most of the core leaders at ISTIQ are not extensive IT users, which is eflected in their lack of knowledge on the subject. Largely as a result of this, the repository system is not systematic. Information retrieval can take hours and sometimes it could even take more than a day. In order to overcome the problem, they are planning to hire an IT executive who will be in charge of IT-related matters, with his responsibilities outlined s follows: • • • •

Ensure the ICT system is intact at all times To train core leaders and knowledge workers on more efficient use of ICT To set up a systematic repository system To explore the usage of cloud computing

The greatest challenge to implementing effective KM is the transformation of employees from knowledge hoarders to knowledge sharers. It is acknowledged that the lack of IT knowledge will further impede the sharing progress. Power and influence in an organisation arise from being a knowledge source. Historically, with limited knowledge available, that power was carefully retained and cultivated by selective distribution of knowledge. However, today the problem is reversed. The excessive information flow now points to the real value of those who can provide timely access to accurate information knowledge.

KNOWLEDGE MANAGEMENT PRACTICES AT ISTIQ It can be seen that ISTIQ wanted to put into practice knowledge management practices as prescribed in knowledge management and human resource management textbooks, but faced a problem in terms of acquiring competent staff. The reality is that some ISTIQ employees are still IT illiterate, very disorganised in keeping records, are unable to write a good report in English, and are not able to share knowledge with customers and other stakeholders due to their low competency in English proficiency. ISTIQ is 20

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also facing other challenges of absenteeism and a massive staff turnover. A consequence of the latter is a brain drain problem.

DISCUSSION QUESTIONS Q1. You are invited by the ISTIQ Sdn Bhd to evaluate their KM programme. Based on the case above, explain TWO ways in which ISTIQ can gather data for the evaluation and also discuss TWO ways in which you can evaluate their KM programme outcomes. Q2. With regard to KM programmes, there are certain features of successful, sustainable knowledge communities. Based on the case above, describe three features that ISTIQ possesses that will allow them to sustain their KM programme. Q3. Explain three characteristics of an effective knowledge repository and two maintenance issues that need to be considered in managing a repository at ISTIQ. Q4. How does the knowledge service work at ISTIQ Sdn Bhd? Does ISTIQ really need a knowledge service to support its KM initiatives? Q5. Explain two reasons why learning is very important in a knowledge environment and three organisational factors that are affecting learning with reference to ISTIQ Sdn Bhd

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IIUM Journal of Case Studies in Management: Vol. 2 No.1: 23-30, 2011

Case Study

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Information Technology – Harbinger of Change in an Indian Private University

Anupama R* & Sanjeev Bansal** Amity Business School, India

Sodhi, JS *** AKC Data Systems Pvt. Ltd.

Abstract: Indian University has grown from single location and a few hundred students to a multi-continent presence with more than 60,000 students and 2500 faculty members. In the present scenario of globalisation and resultant intense competition, no organisation can be considered successful unless each of its processes can boast of efficiency and efficacy. Information Technology is a great driver of change and re-engineering. With IT, unchartered territories can be covered and new heights scaled. Increased communication, speed in transactions, accuracy in administrative tasks and collaboration amongst team members are the obvious advantages. Some of the initiatives resulting from the implementation of IT are Elearning, virtual classrooms, IP-camera enabling archives of surveillance and global connectivity of classrooms for guest lectures. This study traces the evolution of IT with the rapid expansion of the Indian University across continents. It also studies the difficulties faced and solutions worked out till optimum scenarios were reached. The study also emphasises the changing teaching-learning pedagogies and the impact of IT-enabled processes on students. Both advantages and fallouts are discussed and the case study poses to the readers the question of an optimum mix of IT enabled and traditional academics. Security aspects were another area of concern, be it intellectual or copyright issues of professors when they upload their lectures on the intranet or integrity of databases. Change management is also explored – migration to computerised systems, compatibility issues of legacy systems with the new ones and user acceptability issues.

THE PROBLEM The founders of the Indian University had realised the gaps in availability and quality of institutions of higher learning. Though they had schools running in Delhi, they *

Corresponding author: Anupama R., Assistant Professor & Head of IT Department Amity Business School, India: Email: [email protected], ** Professor Sanjeev Bansal, Director, Amity Business School, India *** Dr JS Sodhi, Assistant Vice President, AKC Data Systems Pvt. Ltd.

Ms. Anupama R, Prof (Dr) Sanjeev Bansal and Dr J. S. Sodhi

decided to venture into management education. Beginning with a Post Graduate Diploma in Management course (PGDBM), they evolved into a university and later into a ‘universe’ with branches around the world. Several challenges were inherent to this exponential growth. There is and was a need to have uniformity of systems and procedures – hence the network needed to connect all local and global campuses to the central headquarters. Again as thousands of students, faculty and management would access and be online especially during working hours, the network needed to be robust to handle the volume. The university generated huge volumes of data which had both archival and operational importance. Again, this network as well as data had to be accessible both locally as well as viewed and monitored at headquarters. The importance of technology as a tool for the teaching learning process as well as a catalyst for transparency and effectiveness of processes was felt from the very beginning and hence all functions of the university was technology enabled. Coping with exponential growth, ever increasing demands of stakeholders, changing technology scenarios and global competition is not an easy task. Yet the story of a belief turning into a story of success ensues.

EVOLUTION Today, Indian University boasts of over 5000 desktop computers and about 5000 laptops connected through the intranet at any point in time. The beginnings of the Indian University more than a decade ago were humble but the vision immense. It all began with a few class rooms and even fewer members of faculty. The need for any powerful computing was minimal and hence computers were a rarity. The few that they had were with the management and heads of department, mainly serving as silos. Around 2001 when the student number rose to a few thousand, the need to ‘link’ the computers was felt – both as workgroups and to the outside world via the Internet. The computers used were Celerons. They were available in three computer labs and totalled about 100 in all. There was the establishment of a very local kind of network – with a dial up connection available. Soon the number of directors and management increased and a strong need was felt to network the computers. LAN wires were used to create workgroup-like topology. Ten mpbs hubs were used to connect LINUX based systems. Freeware was largely used and firewalls were used to protect the systems. Gateways Co a subsidiary of Reliance provided the bandwidth needed. The Internet speed achieved was about 1 mbps. Radio connectivity was largely used. There were no application servers but various domains such as ‘directors’ ‘management’ etc were created to facilitate intranet management. It was in the middle of 2003 that the domain structure was created on the Indian University server -- indian.local. This enabled uniform policies of computer usage to be installed in the Indian University. Security and privacy procedures were also clearly laid out. This revised structure facilitated intra-office communication. Also, licensed 24

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centralised software packages such as Prowess were installed at central servers for global access. Internet servers looked after the needs of net usage. Oracle was centrally installed to handle the database available. The hubs were organised into racks. Intelligent switches looked after the routing processes. CAT 5 cables were largely used while optic fibers were used to connect various blocks of the building to the server room. The year 2004 saw the domains being configured into parent-child structure and domains such as abs.Indian.edu (for Business School users) came into being. This was done to remove the load off the parent server as the number of users had increased phenomenally. 10/100 Mbps switches began to be used and Internet speeds reached 4 Mbps. Another Internet service provider was added to the list of vendors and for the first time uninterrupted Internet usage was guaranteed. The use of intelligent routers enabled Internet to flow through the shortest routes possible enabling faster access. Initially individual offline UPS were used across all labs which provided about 15 minutes of back up time. The inherent disadvantage of this provision was that they required all systems to be shut down in case of power failure. With the advent of new online UPS, all offline UPS were replaced at server levels, enabling more than 30 minutes of back up time. The RJ 47 cords were also replaced by new factory made ones. Though they were high on initial costs, yet because of low maintenance, they justified their use.

THE PRESENT The Indian University has institutes across the world and feels that the education of the students must be uniform regardless of location. INDIAN UNIVERSITY

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The Indian University has several ISPs on board. They are linked with the University through their own fibre optic networks and are connected to their respective racks. From there, they are linked to RADWARE which puts multiple bandwidths on one bandwidth to combat the ISP server or transmission lines failure. Having multiple ISPs on board implies that the Internet is never ‘down’ for the Indian University users. From there, a very unique firewall comes into play – not only does it control any malicious traffic coming from the Internet cloud, it also puts into effect the Indian policies of usage and privacy. Two firewalls are being used in redundant mode for high level content and URL filtering. Presently, 16 spoke locations are connected with the hub at University headquarters and thus are able to access centralised Firewall, policy implementation, applications software and the Indizone Interactive Portal. Even the databases of the content generated from high resolution surveillance cameras found at all locations to monitor classrooms, hostels, corridors, access areas and gates are maintained centrally.

CONNECTING THE INDIAN UNIVERSITY UNIVERSE Various parts of the building blocks in a campus are connected via fibre optics and switches. Then the campuses and other locations of the Indian University universe are interconnected through a highly secured virtual private network. WLAN links are used to connect other locations. Meanwhile WLAN links and VPN tunneling were used to connect to Indian Global Varsity campuses spread across 33 locations including London and Singapore. Radio towers and connectivity connect adjoining campuses. For this purpose several switches are used for routing functions.

CENTRALISED ACCESS The Indian University has centralised blade servers on which multiple applications can be loaded which are subsequently connected to EMC’s storage which are in terabytes. About 10 or so applications can be loaded in a single blade. These blade servers enable a virtual platform so that multiple interfaces can be provided to the users. Platforms such as Oracle, Windows etc. are then centrally available for use by several users and locations all over the world leading to optimum use of resources. Again manpower to man these applications is centralised at headquarters’ server rooms. Over 37 highend servers power the Indian University Domain Tree Network.

SECURITY Security and privacy are matters of primary concern. Any data and network accessed widely faces dangers of hacking, virus and other malicious content. Again unproductive sites need to be filtered to de-congest network traffic. Academic content must be downloaded, viewed etc at extremely fast speeds. In the case of the Indian University networks, there are several levels of security to look into. These are as follows:

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• Physical : Employee computers are physically locked and secured in rooms / cabins while server rooms are manned and monitored 24 hours, seven days a week against any kind of unauthorised access. • Personnel: For all personnel employed for system administration and data security, thorough background checks are done before making hiring decisions. • Technical : Storage, access, manipulation, and transmission of data are safeguarded by technology that enforces Indian information control and Domain policies. Gateway Security at the Indian University: • Antivirus protection is also maintained at gateway level using UTM Firewall, IPS and IDS besides normal desktop controls • Web Content Filtering - Non productive and non academic sites are blocked to create an appropriate environment for students • All users have their authorisation and privileges as per their access rights.

UBIQUITOUS INDIAN UNIVERSITY Two different solutions (e-learning & surveillance cameras) bring experts from different fields and locations to students across the campuses. Minimum investment was required as existing IP cameras and e-learning suites were used. The video of the presenter was captured via webcam and the surveillance cameras conveyed student images to the presenter. Dedicated high bandwidth is required to transmit audio, video and presentations simultaneously. The IP cameras transmitted the video and audio was transmitted through the e-learning suites and then integrated. There are several cost benefits, as lots of time and travel is saved for guest lecturers. These lectures can also be used to benefit future students. A mobile phone version of the same is on the anvil.

INDIZONE Indizone has been the wonder wand for the Indian University. All stakeholders have their share of this Indian intranet. It goes a long way in bringing transparency and accountability to processes. As all candidates now have their own microsites, starting from the admission process which now can be tracked online, the candidate can now select suitable dates for the admission test, view displayed results and be guided through all procedures to the teaching process which requires the teachers to upload their session plans and course material ahead of the class, to administrative procedures, where the student can view timetables, attendance and other schedules. Even midterm and assignment marks are available to the students so that they can keep track of their progress. Thus intranets automate most processes on campus. The University

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also has one of the most advanced online counselling systems to facilitate quick responses to queries.

CHANGE MANAGEMENT Neither taking senior management members from their pens to keypads nor the task of taking faculty members used to ‘chalk and talk’ to multimedia content was easy. A serious initiative flowing from the top and percolating to all levels was required. It had to be done in stages – all faculty members were first trained to use Indizone. They were allotted ‘buddy’ faculty members to help them in the initial stages, Then they were encouraged to transfer content to power point presentations which were uploaded for students to view before scheduled classes. A dedicated training division ensures that everyone at the Indian University is updated with the latest technologies and trends.

THE CHALLENGES • The Indian University student strength is increasing manifold resulting in increased demands on IT and network infrastructure. • The Indian University vision is to provide the latest technology i.e. multimedia rich content but streaming video and video-on-demand continuously strains the present set ups. • Installation of IP cameras across the campus has loaded the network further. • An increase in demand for new applications translated into new server hardware. This has led to the challenge of physical space.

THE FUTURE IT infrastructure expectations of the Indian University are ever increasing. There is a need to archive the lectures of great teachers which are being recorded on a daily basis. They can constitute an invaluable resource, both for present as well as future students. Security demands that all camera recordings be saved for future references have led to terabytes of data. A unified storage system which could provide dynamic addition of storage space on various servers is envisaged as there is also a need for personal storage space of files by faculty and students, for example, the content uploaded by teachers. As the Indian University claims to be exceedingly environment conscious, students are encouraged to submit e-assignments, project reports and dissertations. Finally, it is an imperative that all systems are scalable to meet the growth plans of the University in the near future. The initiatives being worked for the future are the live transmission of university functions and the creation of a digital repository for research and project work. Towards this, the intranet portal, Indizone, is being strengthened and enabled to automate canteens with cashless automated counters. Videoconferencing is being 28

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extensively enabled with the help of communication servers and live meeting for the Unified Indian Communication System.

REFERENCES Amity University (2010). Amity University, 15 June 2010. From www.amity.edu. Dhume, S. (2006). Perceptions of Business Education Students towards e-Learning: An Empirical Study of North Karnataka region of India. The Fourth PanCommonwealth Forum on Open Learning (PCF4) Commonwealth of Learning and the Caribbean Consortium, Jamaica. Pittman, J. (2007). Converging instructional technology and critical intercultural pedagogy in teacher education. Multicultural Education & Technology Journal, 1(1): 200-221. Doctor, G. (2008). Capturing intellectual capital with an institutional repository at a business school in India, Library Hi Tech, 26 (1): 110–125. Saeed, N. & Yang, Y. (2008). Incorporating Blogs, Social Bookmarks and Podcasts into Unit Teaching. Paper presented at Tenth Australasian Computing Education Conference (ACE2008), Wollogong, Australia, January 2008. McGee, P.A. & Diaz, V.M. (2008). Finding the Good Fit: Faculty Members, Instruction, Evidence, and Technology, Paper presented at EDUCAUSE, Orlando, 28-31 October. Sodhi, J. S. (2009). Indian University Interactive Class Rooms. PCQUEST, July, pp. 60-61. Jha, N. (2010). Classes in your bedroom. The Times of India, 15 July, p. 23. Pushkarna, N. (2010). End of ‘talk and chalk’ regime. Times of India, 13 June, p. 3. Taylor, L. & Clark, S. (2010). Educational design of short, audio-only podcasts: the teacher and student experience. Australasian Journal of Educational Technology, 26 (3): 386-399. Zhao, J. & Xu, F. (2010). The state of ICT education in China: a literature review. Front. Educ China, 5 (1): 50 - 73.

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DISCUSSION QUESTIONS Q1. What do you mean by computerisation of an organisation? Q2. Differentiate between intranet and extranet and how can they contribute to an organisation’s growth? Q3. What are switches, routers and ISP providers? Q4. What are the basic requirements in analysing the scope of a network?

Q5. What are open source systems? Read about some examples. Q6. Read about some examples of single and multi user operating systems.

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Choupal Sagar: Pioneering Organized Retailing in Rural India

IIUM Journal of Case Studies in Management: Vol. 2 No 1: 31-39, 2011

Case Study

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ISSN 2180-2327

Choupal Sagar: Pioneering Organised Retailing in Rural India

Prarthana Banerjee1 IBS, Salt Lake City, Kolkatta 700091, India

Subhadip Roy IBS, IFHE Campus, Dontanapally, Hyderabad, India

Abstract: With a major segment of the Indian population residing in villages, and a significant number having purchasing power for their daily necessities, the Fast Moving Consumer Goods (FMCG) companies have shifted their focus from urban to rural India. Big industrial houses such as DCM, Mahindra, Godrej and corporate giants such as Hindustan Unilever and Imperial Tobacco Company of India Ltd (ITC) have ventured into organised rural retailing. This case study traces the origin and development of Choupal Sagar, the rural marketing initiative of ITC. The case deals with issues relating to rural distribution, product management and rural marketing based on secondary research. The case also discusses the problems and challenges faced in rural retailing.

“The myths about the rural consumer class being an impoverished mass are slowly being dispelled. S. Sivakumar, Head of International Business Division, ITC “These malls make a lot of sense as it’s clear that rural consumers are becoming increasingly brand-conscious and they are the ‘value-seekers’ who don’t mind paying more if the quality is assured.”2 Guy Goves, General Manager (Agri-business), Tata Chemicals

INTRODUCTION The two quotes above signify the potential of the rural markets in India. Indian business groups have realised the potential of an erstwhile untapped and ignored market, that 1

Corresponding author: Prarthana Bannerjee, IBS, Kolkata, RDB Boulevard, 8th Floor, Plot #K1, Block #EP and GP, Sector V, Salt Lake City, Kolkata 700091, India. Email: [email protected]

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Pasture Plazas: Corporate giants are making canny rural forays—out to tap a huge, latent market. Shuchi Srivastava(2006), Outlook, September, 2006. IIUM

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is, the rural markets of India. Surprisingly, the major retailing giants in urban retailing have been left behind by the companies who are pioneering rural retailing. The reason is relatively simple. Firms such as Imperial Tobacco Company of India Limited (ITC) (refer to Exhibit 1 for a brief profile of ITC) have been involved in agri-business since the 1990s. This gave them knowledge about the rural markets and the demand structure in rural areas. This saw the rise of ventures like ‘Choupal Sagar’, a rural retail mall by ITC. The prospects in Indian rural markets have driven big corporations like Fast Moving Consumer Goods (FMCG) giant Hindustan Unilever Limited (HUL), industrial conglomerates the Mahindras, the Godrejs, Delhi Cotton Mills (DCM) Shriram group, oil majors like Indian Oil and Bharat Petroleum, and even bankers like Industrial Credit and Investment Corporation of India (ICICI) towards the hinterlands of India. Choupal Sagar is one of the pioneers of organised rural retailing. However, with increasing competition, the rural markets are going to witness new players and new strategies to gain a market share. In such a scenario, it would be interesting to observe the marketing strategies of Choupal Sagar to retain its market position.

Exhibit 1. Brief Profile of ITC The ‘Imperial Tobacco Company of India Limited’(ITC) was incorporated on 24 August 1910. It started operations in a leased office on Radha Bazar Lane, Kolkata, shifting to 37, Chowringhee, (now renamed J.L. Nehru Road) in Kolkata on 24 August 1926. The Company’s ownership became more and more Indianised, and the name was changed to I.T.C. Ltd in the year 1974. The Company has a diversified portfolio of businesses encompassing a wide range such as cigarettes & tobacco, hotels, information technology, packaging, paperboards & specialty papers and agri-exports. In September 2001, the full stops in the Company’s name were removed and the company name was renamed ‘ITC Limited’. ITC is one of India’s leading private sector companies with a market capitalisation of about USD14 billion and a turnover of over USD 5 billion as on 31st March 2009. ITC has been ranked among the World’s Best Big Companies, Asia’s ‘Fab 50’ and the World’s Most Reputable Companies by the Forbes magazine. It has also been rated among India’s Most Respected Companies by BusinessWorld magazine and among India’s Most Valuable Companies by Business Today. ITC is one of India’s largest exporters of agricultural products. ITC is also one of the biggest foreign exchange earners for India. ITC employs more than 25,000 people in more than 60 locations across India. The all inclusive vision of the company is captured in its corporate positioning statement which says: ‘Enduring Value. For the Nation. For the Shareholder.’ Source: Adapted from http://www.itcportal.com/sets/itc_frameset.htm

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BACKGROUND The idea behind the Choupal Sagar originated in a venture by ITC known as the ‘eChoupal’. The e-Choupal was introduced by ITC in June 2000 so as to set up a direct link with rural farmers for procurement of products like soybeans, wheat, coffee, oilseeds etc. which it requires for its agro-based division. The agricultural sector of India had been characterised by weak infrastructure and several intermediaries. Previously, most of the products were procured in the agricultural marketing centres known as a ‘mandi’ resulting in high profits for the intermediaries. Generally in this sector, a farmer would sell his produce to a small trader called a kaccha adat, who would then sell the produce to a larger trader called the pakka adat, who in turn would take the produce to a local mandi, where a larger trader would buy the produce. The mandi traders then operated through brokers to negotiate sales to companies such as ITC. This long supply chain (Refer to Exhibit 2 for the Traditional Supply Chain in Agricultural Products) resulted in a high cost of procurement for ITC on one hand and also a very low profit opportunity for the farmers, on the other hand. Moreover, the entire process was too lengthy and complicated. Such a time consuming process also resulted in the deterioration of the quality of the products.

Exhibit 2. Traditional Supply Chain in Agricultural Products

Source: http://www.itcportal.com/agri_exports/images/value.gif

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Given the backdrop of these problems, ITC took the initiative to introduce eChoupal through which the farmers could directly negotiate the sale of their produce with the company without further involvement of intermediaries. This provided many benefits to the farmers. On one hand, they could sell their produce at reasonable prices and on the other, they could have access to PCs and the Internet which enabled them to obtain useful information about the weather, fertilisers, seed quality, information about various types of seeds etc. They could also place orders for good quality seeds and fertilisers thereby improving the quality of produce. The farmers were also assured about correct tonnage since e-Choupal used automated weigh bridges to weigh their produce. As the farmers agreed to sell their produce, it was dispatched to the nearest e-Choupal warehouse and they immediately received their sale income. For operation of these e-Choupals, sanchalak (coordinators) were employed by ITC. They were the literate people elected from among the farmers of the village and were trained to run the Internet and access useful information from meteorological sites along with other agricultural information. The roles of the intermediaries were redefined to samayojak (meaning agent) assisting the company in setting up new eChoupals, collecting price data and maintaining records etc. They also received commissions on produce processed. Though there was an initial reluctance by the agents to join, they soon began to see the benefits of a substantial earning opportunity in the form of increased commission as sales volumes began to increase. The e-Choupal initiative was also beneficial to the company as it had easy and direct access to agricultural produce without going through the process of negotiation with the intermediaries. The cost of transportation of the goods from the local mandi to ITC storehouses was reduced due to the setting up of their own warehouses as part of this initiative. The initiative was successful in making the entire process transparent and smooth. In early 2000, e-Choupal was serving over 4 million farmers covering the states of Madhya Pradesh, Haryana, Uttar Pradesh, Rajasthan, Karnataka, Maharashtra, Kerala, Tamil Nadu and Andhra Pradesh.

INTRODUCTION OF CHOUPAL SAGAR Following the success of the e-Choupal, the company launched Choupal Sagar comprising collection and storage facilities and a unique rural hyper market offering multiple services under one roof. This was another unique initiative by the ITC to lure the rural agricultural community by constructing a rural mall in the same warehouse used for storage of produce that it purchased through its e-Choupal. The first rural mall on an eight-acre plot with a shopping area of 7,000 square feet was set up in August 2004 at Rafiqganj, about four kilometers from Sehore town in Madhya Pradesh. What had started as an experiment to use information technology tools to enable farmers find the best price for their produce, now metamorphosed into this shopping idea by providing multiple services under one roof, such as selling produce and buying quality products for farm and household consumption. The additional services provided were soil testing, banking, insurance from ICICI Prudential and LIC and 34

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medical facilities and a restaurant. Thus Choupal Sagar had been successful in evolving into a universal platform for rural India with a basket of goods, services and most important, information access. The key factor for the success of Choupal Sagar is the fact the rural India has much more potential than the urban marketplace, not only for agro-extension services but also for organised retailing in the form of rural malls and supermarkets. Rural India accounts for over 50% of India’s GDP. There is tremendous potential in rural India as the rate of disposable income is increasing. The rural markets have been growing at a much higher rate than the urban markets. Thus the rural retailing market is becoming significantly more attractive.

PRODUCTS AND LOCATION With a dazzling array of clothes and consumer goods (from FMCG and others), the Choupal Sagar emerged as a one-stop shop for farmers (refer to Exhibit 3 for snapshots of Choupal Sagar). Its 7,000 square feet area was stacked with brand names such as Sonata (watches) and home appliances from brands such as Usha, Prestige and Hawkins. Among the apparel brands there was Italio, Cosmo, Springwood and John Players. Philips (mainly light bulbs) and LG products were available in the consumer electronics shelf. With an area of 7,000 square feet, the Choupal Sagar was too small to be called a mall but its breadth of products could easily challenge a supermarket. Operating in self-service mode, the shelves stocked almost everything from toothpaste to televisions, hair oils, motorcycles, mixer-grinders, water pumps and fertilisers. The mall also had a Bharat Petroleum Corporation Limited (BPCL) outlet selling diesel and petrol, and an average farmer could purchase fuel for up to Indian Rupees (INR) 3,000 (USD = 67.11).3 However, the majority of the brands for sale were local, e.g. Marico, Colgate, Eveready, TVS etc. The rationale for setting up the mall next to a warehouse was also interesting. With its network of e-Choupals, ITC communicated its latest commodity prices to the farmers. If the farmers found the offer attractive, they sold their produce to ITC. When the farmers came to deliver their products to the warehouse, they also visited the mall next to it. This ensured steady footfalls in the store since the Choupal Sagars were mostly in those villages where the majority of the farmers dealt with ITC only. According to Mr. R. Nandkishore, director for marketing in Philips Lighting, “ITC realised that the farmers had just got money, that they would spend it anyway, and that they had an empty vehicle with which they could lug the stuff back.”4 It was the use of this strategy that saw ITC achieving a two-way flow of products and services into the rural economy. Companies such as Philips which could not penetrate deep into the rural areas of India greatly benefited because of Choupal Sagar. According to Nandkishore, the 3 4

USD 1 = INR 45 approximately as on 7 June 2011. Chaupal Sagar – “Unlocking rural markets”, Businessworld, 20 September 2004. IIUM

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Exhibit 3. Snapshots of Choupal Sagar

Source: http://www.itcportal.com/sustainablity_report/page_57.htm 36

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logic was simple. If we assume that a village needs 200 bulbs, given the MRP of INR 10 (USD = 0.22) per bulb, the revenue was INR 2,000 (USD = 44.74) and the company would make a gross margin of 5-7 % on it. However, to go deeper into the rural markets and beyond to villages with a population of below 20,000, the company would have to hire a van. Given the van cost of INR 50 (USD = 1.12), the entire model would fail to work. However, when Philips realised that ITC was sending a van to all its Sanchalaks once every 15 days to villages with population of 20,000 and below which supplied produce to them, Philips collaborated with ITC to have their orders dropped off as well. This resulted in increasing coverage of up to 50-60 % in these areas from 20% in 2002. Another advantage was that high cost energy saving products now began to be displayed in the Choupal Sagar (rather than in the village kirana5 store where not only was there problems of space, the bulbs also had less sales) thereby adding to further penetration of their products.

COMPETITION WARMING UP Looking for new areas of growth, the corporate sector had realised the huge potential of the untapped rural market. Along with ITC’s Choupal Sagar, several other companies took initiatives in the same direction. These were Delhi Shriram’s Kissan Haryali Bazaar, Godrej’s Aadhaar etc. The rural market is accounting for over one-third of the market for most durable and non-durable products. Even manufacturers are developing new products with the rural consumer in mind besides using village-oriented marketing strategies for brand promotions. DCM Shriram group launched a chain of rural business centres under the brand name Hariyali Kisaan Bazaar which has been in operation since 2002. These stores are so planned that they cater to around 100 small villages within a radius of about 40 kilometers with a diverse product range from farming products to household goods. At present DCM Shriram has a total of 302 stores in eight states of Uttar Pradesh(UP), Rajasthan, Punjab, Harayana, Chattisgarh, Maharashtra, Madhya Pradesh (MP) and Andhra Pradesh (AP), and are planning to take the total count of Hariyali Kisaan Bazaar outlets to 500 in the next three years, and mainly in the above-mentioned states. The Godrej group is another industrial powerhouse that has opened its rural mall under the brand name of Godrej Aadhaar Stores. The first centre was set up at Manchar near Pune in December 2003. It plans to set up 1,000 Aadhaar stores across rural India by 2010. The Mahindra group (Mahindra), the largest farm equipment maker in the country is another competitor in this area. Its branded rural retailing foray is a chain of superstores called Mahindra ShubhLabh Stores. The farm extension arm is called the Mahindra Krishi Vihar. ShubhLabh Stores began in 2002, and soon extended into 11 states of AP, MP, Tamil Nadu (TN), Maharashtra, Karnataka, Gujarat, Rajasthan, Orissa, Chattisgarh, Bengal and Delhi. Indian Oil Corporation (IOC), the Fortune 500 oil company in the public sector started 5

A kirana store is the name for a local provision store selling daily necessities. This is the Indian equivalent of ‘Mom and Pop’ stores in the Western World. IIUM

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its rural retail venture in 2005 by setting up Kisan Seva Kendras (KSKs), which is a rural petrol pump cum retail store. There have been more than 2000 of these rural retail outlets across the country. Consumer products giant HUL started its new rural venture, Project Shakti, in 50 villages of the Nalgonda district in Andhra in 2001. This project is unique in that it empowers women through self-help groups to increase awareness of HUL’s products to facilitate product reach into areas of low access and low market potential. The project has now been extended to MP, Gujarat, Karnataka, TN, Chattisgarh, Uttar Pradesh and Orissa.

OUTLOOK The prospects of rural retailing are very lucrative going by the report published by McKinsey India on Rural Retail in 2007. According to the report, rural consumption growth rate is likely to increase from around 4% in 2005 to more than 5% in the next ten years resulting in a rural market worth 16 trillion6 Indian rupees (USD = 357 billion approximately). By 2017, the average rural household consumption would coincide with the value of urban households of year 2005. This may have been the most important reason leading to the increasing focus of large corporations into Indian villages. However, though ITC has its expansion plans in rural retailing, it is not sitting idle on the prospects of urban retailing of consumer goods. ‘Choupal Fresh’ is the name given to the vegetable and fruits supermarket with the first store being set up in Hyderabad in August 2006. The 2,500 square feet store has combined retail with wholesale. The store has its own cold storage chain and operates from 5 a.m. every day to supply to wholesale and retail clients. The success achieved by Choupal Fresh has subsequently let to outlets in Chandigarh, Pune and Hyderabad and has provided the impetus to ITC to plan for opening up about 140 stores in 54 Indian cities over the next three years. Meanwhile the focus on Choupal Sagar is expected to continue with plans for further expansion. Only time, competition and the strategies adopted by ITC would decide the fate of Choupal Sagar!

DISCUSSION QUESTIONS Q1. What are the fundamental issues which deterred major retailing firms from entering the Indian rural markets for retailing? Q2. The e-Choupal initiative of ITC helped it to establish its rural retailing unit, Choupal Sagar. But the company still has a long way to go to overcome the barriers in rural retailing. How far do you support this argument? Critically argue your viewpoint. Q3. The competition in the rural retailing scenario is warming up with giants like Hindustan Unilever and Godrej entering the foray. What sort of challenges does Choupal Sagar face in such a scenario?

6

1 Trillion = 100,000 Crore

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Q4. ITC, the parent brand of Choupal Sagar, is one of the most renowned firms in India. But will the experience be successful for Choupal Sagar in the long run or will it need to develop a new model for success in the rural market?

REFERENCES Anon. (2004, 20 September). ‘Choupal Sagar - Unlocking rural markets’, Businessworld. http://www.itcportal.com/newsroom/bwpress_oct07_04_.htm [Retrieved 6 July 2009]. Anon. (2006, 30 August). ‘ITC’s Choupal Fresh combines retail with wholesale.’ http://www.moneycontrol.com/news/business/itcs-choupal-fresh-combinesretailwholesale_237261.html [Retrieved 6 July 2009]. Anon. (2006, 20 December). ITC to open 54 Choupal Fresh outlets in 3 years. Business Line. http://www.thehindubusinessline.com/2006/12/20/stories/20061220027 50500.htm [Retrieved 6 July 2009] Anon. (2007, 23 January). ITC plans big on retail; to open 140 Chaupal ‘Fresh’ & over 50 ‘Sagar’ stores. http://indiaretailbiz.wordpress.com/2007/01/23/itc-plansbig-on-retail-front/ [Retrieved 6 July 2009]. Bennychan, K. J. The new rural rising: malls, hypermarts. Pitch. http:// www.pitchonnet.com/feature.asp?id=14 on 06/07/09. Kakatey, R. (2007, June 14). IOC rural malls script success story. Business Standard. http://www.ibef.org/artdisplay.aspx?cat_id=60&art_id=15871&refer= n35 on 08/07/09 McKinsey Global Institute. (2007). The ‘Bird of Gold’: The Rise of India’s Consumer Market, Ch 4. Srivastava, S. (2006, 11 September). Pasture Plazas: Corporate giants are making canny rural forays—out to tap a huge, latent market. Outlook. http:// www.outlookindia.com/article.aspx?232470 on 06/07/09.

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Bank Rakyat Malaysia: Vision Remains while Mission is Revisited

IIUM Journal of Case Studies in Management: Vol. 2 No 1: 41-48, 2011

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Case Study

ISSN 2180-2327

Bank Rakyat Malaysia: Vision Remains while Mission is Revisited

Khaliq Ahmad* International Islamic University Malaysia

Azhar Kazmi ** King Fahad University of Petroleum and Minerals (KFUPM), Saudi Arabia

Abstract: The slogan, “of the people, for the people, by the people” comes home. Bank Rakyat Malaysia (BRM) offers a different kind of retail banking. Bank Rakyat underwent a drastic evolution from a cooperative system of management to a highly creative market entity ready to face the very aggressive competitive market forces of the Islamic banking and finance industry. The BRM was a cooperative bank before it entered the Islamic banking and finance industry. It needed to create a culture of change and flexibility to adapt to the changing external environments. The challenge was to remain consistent in its vision but revisit its mission. The consistency had to be maintained as it was in line with the founding fathers’ idea of serving its members. Thus the vision of serving its members was maintained while a new structure was created to aid efficient decision making and communication with stakeholders. This change subsequently facilitated the implementation of its growth strategies and planning activities, an imperative for its survival. All of this change was being effected while sustaining its image as a responsive, transparent and honest corporate citizen despite a host of issues and challenges that lie ahead.

HISTORICAL BACKGROUND The cooperative movement in Malaysia is quite well established and has a long history. The first credit cooperative registered was the Postal and Telecommunications Cooperative Thrift And Loan Society Limited in 1922. Syarikat Kampung Teluk Haji Musa Bekerjasama-sama Dengan Tanggungan Berhad, Parit Buntar Krian, Perak was registered in 1923.Starting with only a single activity such as credit or rice milling, the cooperative movement diversified into a range of business activities such as consumer, housing, transport, land development, and production that benefited the members.

*

Professor and Dean, Kulliyyah of Economics & Management Sciences, International Islamic University Malaysia (IIUM). Email: [email protected]

** Professor, King Fahad University of Petroleum and Minerals (KFUPM), Saudi Arabia IIUM

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As a socio-economic movement, the cooperatives have grown steadily in terms of participation in the economic activities of the country.1 Malaysia’s cooperative movement has 4,553 cooperatives with 5.4 million members.2 The total number of cooperatives in 2004 stood at 4651 with a total membership of 5.391 million members and total assets of RM 25.977 billion. The total shares (subscription) were worth RM6.664 billion and during the same period, loans extended to 586,620 borrowers reached RM 5.10 billion.3 Bank Rakyat was established in September 1954 under the Cooperative Ordinance 1948, following an expansion of the cooperative movement in Peninsular Malaysia. To facilitate the expansion of the cooperative movement, the cooperatives set up their respective union banks to provide for financial needs of their members. On 28 September 1954, 11 of these union banks decided to merge and form Bank Agong (Apex Bank). In 1967, Bank Kerjasama Malaysia Berhad replaced Bank Agong with the membership being opened not only to the cooperatives, but also to individuals. Subsequent changes in the by-laws also resulted in the creation of subsidiary companies and opening of branches to serve customers as well as members. On 6 January 1973, the bank saw a name change to Bank Kerjsama Rakyat Malaysia Berhad or better known as Bank Rakyat (BRM). BRM is governed by its by-laws and Bank Kerjasama Rakyat (M) Berhad Act 1978 (Special Provision 202), which allows the Bank to provide financing to non-members. In 1989 Bank Rakyat was placed under the Ministry of Land and Cooperative Development and the Ministry of Finance. In 1993, the Cooperative Act was reviewed allowing the Bank to operate in Sabah and Sarawak. On 8 May 1993, BRM took a giant step towards becoming a Syariah-compliant cooperative bank by introducing Islamic banking products at four of its branches. BRM became a full-fledged Islamic cooperative bank in 2002. Hence, with this major decision, BRM marked another milestone in its history where it became the third bank to offer a total range of Islamic banking products in Malaysia. On 15 February 2002, the Bank, together with six other financial and development institutions, was placed directly under the supervision of Bank Negara Malaysia (Central Bank of Malaysia) under the Development of Financial Institutions Act (DFIA). On 27 March 2004, BRM was placed under the supervision of the Ministry of Entrepreneurship and Cooperative Development. At present, the BRM has a total of 111 branches offering Islamic banking facilities to its customers. BRM is among a family of organisations under the Ministry of Entrepreneurship and Cooperative Development as shown in Exhibit-1. As a full-fledged Islamic

1

Website of Cooperative Development Department of Malaysia at http://www.jpk.gov.my/ default%20page%202.htm [Retrieved 22 April 2005.

2

‘Cooperative Bank Interests Iranians,’ says Khaled. Bernama, 7 March 2005.

3

‘Focus on the cooperatives: New commission to tighten operations.’ New Straits Times, Kuala Lumpur, 6 March 2005.

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Exhibit 1. Organisations under the Ministry of Entrepreneur and Cooperative Development MINISTRY OF ENTREPRENEUR AND COOPERATIVE DEVELOPMENT

Cooperative Development Agencies

Entrepreneur Development Agencies

Bank Kerjasama Rakyat Malaysia Berhad

Malaysian Cooperative Development Department

Cooperative College of Malaysia

cooperative bank, the BRM has an eminent Board of Directors and a Shariah Advisory Council comprising learned Islamic scholars. Besides, it has the mandatory Audit Committee reporting to the Board.

THE VISION AND THE MISSION The BRM’s vision statement of ‘Your Choice Bank’ explains its Mission as follows: “To raise the economic well-being of our members by providing financing facilities at reasonable rates for agriculture, production, marketing, industrial, fishery, transportation, housing, business, and other beneficial activities.” The objective of the bank is: To ensure a satisfactory profit towards meeting dividend payments to its members while charging reasonable profit rates which are not a burden to its members. IIUM

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The functions that the Bank assigned its branches are: “to provide financing and accept deposits as well as producing satisfactory dividend returns for the betterment of its members.” The strategies that the Bank has outlined so as to operate efficiently are as follows: • Market: Widen and penetrate the market through effective marketing efforts. • Product: Determine a unique product and ensure a simple and timely delivery. • Customer: Provide valuable offerings through a service that is sensitive to customer needs. • Social responsibilities: Increase contribution towards social development and members’ needs. • Product range: Explore business opportunities beyond retail banking.

MARKETING MANAGEMENT The typical profile of Bank Rakyat’s customer is the retired person who has saved money for a comfortable post-retirement life and therefore needs a safe and sound avenue for his or her hard-earned money. In early 2006, the Bank had almost 45,000 such customers and therefore the focus of marketing efforts had been towards consumer financing products as nearly 95% of its loans portfolio constituted retailing including housing, personal, and car loans. In 2006, the Bank targeted a loan growth of 25% to reach RM18 billion. It signed a memorandum of understanding with Takaful Ikhlas (a Malaysian company offering Islamic insurance services) to offer a new product - Personal Financing-i - that offers insurance to customers at nominal premium rates.4 The bank aimed to disburse RM50 million worth of Personal Financing-i loans in the first year, beginning with the bank’s existing 10,000 customers who are civil servants. Bank Rakyat’s customers include over 700,000 individuals and 1,200 cooperatives.5 The BRM financial statements and range of products and services being extensively marketed are presented in Exhibits 2 and 3 respectively.

PUTTING INFORMATION TECHNOLOGY TO WORK The BRM operated directly under the supervision of the Central Bank of Malaysia (Bank Negara Malaysia) under the Development of Financial Institutions Act (DFIA). In order to comply with this Act, financial institutions must have the highest levels of network security. Though an old and established institution, Bank Rakyat started facing increasing pressure to deliver high volumes of transactional and operational data, securely and in real-time. By 2002, BRM’s existing network had reached maximum 4

“Bank Rakyat expects to give out RM18bil loans this year.” The Star , 9 February 2006.

5

“Bank Rakyat expects loans to rise 25%.” The Edge Daily. 8 February 2006.

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Exhibit 2. Financial Highlights Year Ended 31 December Items 1. Profit & Loss Account i. Total Income ii. Profit before Tax & Zakat 2. Balance Sheet • Total Assets Including Commitments and Contingencies • Dealing and Investment Securities • Financing and Advance • Deposits and Savings • Deposits and Placements with Financial Institutions • Shareholders’ Funds 3. Financial Ratio i. Returns Before Tax and Zakat on Average of Shareholders’ Funds ii. Returns Before Tax and Zakat on Average of Total Assets iii. Financing and Advances on Total Deposit iv. Risk Weighted Capital Ratio v. General Provision vi. Coverage on Non- Performing Financing vii. Non-Performing Financial Ratio

Change %

2007 Million

2006 Million

2,387.21 828.83

1,961.21 626.63

21.72 32.27

34,900.15

27,491.93

26.95

6,825.55 22,936.31 27,253.58 2,296.02

3,910.96 19,022.26 22,710.81 2,511.39

74.52 20.58 20.00 (8.58)

3,964.09

3,634.01

9.08

Percentage 21.82

Percentage 17.19

26.90

2.66

2.43

9.12

84.16

83.76

0.48

19.19 2.90 107.58

21.53 2.85 101.43

(10.88) 1.75 6.07

2.37

2.75

(13.82)

Source: Bank Rakyat’s website at: http://www.bankrakyat.com.my/web/guest/profil?p_p_id=56_INSTANCE_RETP&p_p_l ifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column5&p_p_col_count=1&page=2/[Retrieved 7 April, 2009]

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Exhibit-3. Products and Services of Bank Rakyat Investment/ Savings

Financing

Qiradh Investment Account – 1 Bank Rakyat’s Financing Certificate – 1 Warge Emas Investment Account – 1 Tilmiz Savings Account – 1 Shabab Savings Account – 1 Taufir Savings Account - 1

Aslah Personal Financing – 1 Mudarris Personal Financing – 1 Shifa’ Personal Financing – 1 Manzili Home Financing –1 Manzili 2 Home Financing Manzili 3 Home Financing Aitab Car Hire Purchase Financing Al Falah Education Financing Ar Rahnu Pawn Broking Az Zahb Pawn Broking Tijari Contact Financing Personal Financing

Insurance

Services

Takaful Rakyat-I-Hayati Scheme

Kad Rakyat One-stop Bill Payment Centre Electronic Banking Centre Bankcard ATM Services

Source: Bank Rakyat’s website at: http://www.bankrakyat.com.my/index.php?idx=main& lang=en [Retrieved 16 April 2005]

capacity and would not have been able to support new services to be implemented in the near future. As a result, its branches decided to upgrade the existing network as part of their five-year strategy to be a leading Islamic Cooperative Bank, respected both domestically and internationally. In line with this, the Bank installed a CISCO network system particularly to augment the organisation’s capacity to install and manage the vast amounts of data that its day-do-day operations generated.6 BRM signed MOUs with Microlink Systems Sdn. Bhd. and Sun Microsystems Inc. to upgrade its Microlink Banking Solutions system in 2004 for RM2.8 million. With Internet banking facility, the goal of the bank was to be able to pre-approve loan applications online. “This feature reduces the time required for a loan to be approved and helps increase the bank’s share of the retail loans market”.7 BRM was the first non-commercial bank in the Malaysian Electronic Payment System Sdn Bhd (MEPS) network that operated as a shared automated teller machine

6

http://www.cisco.com/asiapac/channels/files/a_sound_investment_aug04.pdf [Retrieved 15March 2006].

7

‘Bank Rakyat targets RM6b loans.’ The Edge Daily, 6 July 2004.

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Bank Rakyat Malaysia: Vision Remains while Mission is Revisited

(ATM) network in South-east Asia. Its purpose was to enable member banks’ cardholders to use ATM services for withdrawal, fund transfer and other transactions in the participating countries. The MEPS system is a part of the e-Asean initiative, a framework agreement first proposed in 2000 to establish information infrastructure and to promote electronic commerce. In Malaysia, there are 14 financial institutions including Public Bank Bhd and Malayan Banking Bhd. that jointly set up MEPS. It covers 10 anchor banks and two Islamic banks with 12 million ATM cardholders.8

FUTURE PLANS AND PROSPECTS In a press conference on the occasion of the official launch of the bank’s call centre, Tele-Rakyat, in Kuala Lumpur on January 12, 2006, the acting managing director of BRM, Kamaruzaman Che Mat said: “We aim to achieve this (i.e. increase loan disbursals from 15 to 25%) through our current and new market share in our niche products as well introducing new ones.” He also said the bank would continue to focus on the retail segment with greater emphasis on personal loans, car and housing financing and maintain a pre-tax and pre-zakat profit annual growth target of 15% (The Edge Daily, 6 July 2004). The Bank’s personal loans accounted for 60%, car financing 10%, housing 25% and corporate financing 5%. In line with the bank’s existing financing and portfolios’ management, BRM is aiming to increase car financing from an existing level of 10% to 25% in the future. The Bank plans to work in collaboration with the SME Bank to identify areas in which it could facilitate loans to small and medium enterprises, as the SME Bank might not be able to cater to all loan applications. Future plans include the setting up of several new branches in addition to the 107 already in the pipeline with four of the proposed branches being expected to be operational soon. The bank submitted its application to Bank Negara to launch Internet banking while repackaging some of its existing products.9 Bank Rakyat has a total of 126 branches after the launch of its branch in Kuala Nerang, Kedah on 23rd November, 2010. The branch is offering Islamic banking facilities to customers. To date the BRM has 127 branches with the addition of a Sarawak branch in 2011 offering Islamic banking facilities to customers (members). This branch offers one of the highest returns compared to any other commercial bank. This has enabled Bank Rakyat to march toward achieving its vision (Vision: Bank Rakyat is its members’ Choice Bank as all its products and service offerings are the best compared with those provided by other competing financial institutions. Since membership in Bank Rakyat is very significant, there is no reason for them to look at others. This vision generates the tagline: “Bank Rakyat Your Choice Bank” by revisiting its business Mission which is

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“MEPS to go regional” The Edge Daily, 8 July 2004 “Bank Rakyat targets 25% loan growth in 2006. The Edge Daily, 12 January 2006 IIUM

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to help improve the economic well-being of members by providing financing facilities at an affordable rate for agriculture, production, marketing, fishing, transportation, housing and business activities that are deemed beneficial to members and to also promote thrift and savings. All these will be achieved through Article 5(i) which has allowed Bank Rakyat to successfully embrace the character of an Islamic Bank while maintaining the cooperative nature of the bank.

DISCUSSION QUESTIONS Q1. Why did Bank Rakyat Malaysia make a shift from the conventional cooperative system (as envisioned by its founders) to an Islamic banking system? Q2. By evaluating and assessing the future direction of the banking industry, suggest the course of action for Bank Rakyat. Q3. Discuss the appropriateness of BRM’s decision to adopt a technological component towards achieving its goals as a financial organisation vis-a vis other commercial banks operating in the Malaysian environment.

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Telekom Sales & Services Sdn Bhd

IIUM Journal of Case Studies in Management: Vol. 2 No.1: 49-55, 2011

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ISSN 2180-2327

Telekom Sales & Services Sdn Bhd

Mohd Roslan Haron1 Telekom Malaysia Sdn. Bhd.

Mohd Ismail Ahmad2 International Islamic University Malaysia

Abstract: Telekom Malaysia (TM) is the largest integrated communications solutions provider in Malaysia, and one of Asia’s leading communications companies, with a market capitalisation of RM11 billion. Serving 1.43 million customers as at end 2009, TM today is also Malaysia’s leading broadband service provider. Telekom Sales & Services Sdn. Bhd. (TSSSB ), 100% wholly-owned subsidiary of Telekom Malaysia, is a customer service organisation which provides a one-stop solution for TM Group’s products and services. Currently, TSSSB has more than 100 ISO Certified outlets nationwide known as TMpoint. It has undertaken several streams of activities in recent years, in order to ensure that the company objectives are achieved within a specified timeline. Among the strategies adopted are to be ‘best in customer services’ and also to be the ‘best in retail sales.’ In order to meet top management concerns, there is an urgent need for TSSSB to develop strategies and plans towards solving the immediate problems facing the company. In recent years challenges have included severe competition from rival companies, such as MAXIS, especially in the broadband field. These challenges must be addressed with appropriate TSSSB strategies.

INTRODUCTION Ms Haniza Baharom, General Manager of Telekom Sales & Services Sdn, Bhd. (TSSSB), looked out of the window in her office situated on the high-rise Telekom building and took in the beautiful view of the Kuala Lumpur skyline. But her mind was not quite on the scenery. In a few minutes she would be meeting with senior offices

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General Manager, Planning & Development Division, TSSSB Telekom Malaysia, Sdn. Bhd.

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Professor & Director, Graduate School of Management, International Islamic University Malaysia. E-mail: [email protected] IIUM

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and executives of TSSSB. Top management of Telekom had been getting all divisions, particularly hers to achieve higher levels of performance in the coming year. Ms Haniza was going over the meeting’s main points in her mind. There must be motivation of the staff but emphasis on productivity increases in measurable values must be discussed too. And then there was customer services. This was even more challenging. Both strategies and practices with respect to improved services were needed. With these thoughts in mind she headed towards the meeting room.

CURRENT SITUATION OF THE TELECOMMUNICATION INDUSTRY The telecommunication industry has evolved from fixed line to mobile phone, from First Generation to Fourth Generation (4G). The High Speed Broadband (HSBB) project is really changing the landscape of the telecommunication industry in Malaysia and playing a significant role in achieving a national broadband penetration rate of 50% by 2010. Although the trend now is moving towards mobility, as far as telephone usage is concerned, the importance of the fixed line cannot be neglected. There are many organisations and individuals who are still using the fixed line because of its speed, stability and reliability. The need for this capability is crucial for those serious users who often have both mobile access and the fixed line at home. More and more operators are now moving towards Internet Protocol (IP) in their voice offering to customers, instead of the Public Switched Telephone Network (PSTN). The compression technology is so advanced that the user is unable to tell the difference between using the IP network and the PSTN. With the introduction of Unifi, the brand name of TM’s Broadband, the home user is now enjoying triple play technology. With a single installation, they can view television programmes, access the Internet and make calls from their fixed line simultaneously. They are no longer required to have separate lines for these services.

TELEKOM MALAYSIA BERHAD Telekom Malaysia (TM) is the largest integrated communications solutions provider in Malaysia, and one of Asia’s leading communications companies. It has a market capitalisation of RM11 billion and an employee force of 24,744. Established as the Telecommunications Department of Malaya in 1946, it was privatised in 1987, and listed on Bursa Securities in 1990. In April 2008, strategies were adopted to allow TM to focus more intently on its core business of providing communication services and solutions in Internet and multimedia, data as well as the fixed line. TM was one of the pioneering companies that facilitated Malaysia’s entry into the Internet age with Streamyx, its broadband service introduced in 2001. Serving 1.43 million customers as at end 2009, TM today is Malaysia’s leading broadband service provider. TM’s latest nation-building endeavour involves rolling out the most exciting telecommunications service to date: High Speed Broadband (HSBB). In September 2008, it signed a Public-Private Partnership (PPP) to develop an HSBB network and services that will deliver speeds of 10Mbps (Megabits per second) and beyond via 50

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fibre optic infrastructure, to high economic impact areas. Under this initiative, 1.3 million premises are to have high speed broadband access by 2012. The infrastructure needed will be developed over 10 years, with the Government co-investing RM2.4 billion and TM, RM8.9 billion. HSBB is an end-to-end project encompassing access, core and international infrastructure network. The initial roll-out was in March 2010. HSBB will offer triple play service of video, high speed Internet and voice. With HSBB as an enabler, there are many potential high bandwidth next-generation applications such as video-ondemand, online gaming, interactive shopping, Internet Protocol Television (IPTV), etc., that can be made available which would make the overall experience engaging for consumers. It heralds a digital revolution enabling people to work together and collaborate more effectively than ever before. Committed to universal service excellence, TM has adopted a business model that is tuned to the marketplace. Operationally, it is aligned to six principal customer segments: Consumer, Small Medium Enterprise (SME), Enterprise, Government, Wholesale and Global. Wholesale focuses on bandwidth and other infrastructure to telcos, ISPs, managed network service providers, application service providers, global operators and data centre providers; while Global provides satellite, terrestrial and submarine fibre optic connectivity across Asia, Europe, the Americas, Oceania, the Middle East and Africa. The new business model creates greater synergies between the various divisions, and allows TM to target its product and service offerings more specifically to the needs of the different niches. To further enhance the customer experience, TM focuses on accessibility, simplicity and convenience of transactions via its extensive network of TM points and the secure, customised self-service portal, TM Online.

TELEKOM SALES & SERVICES SDN BHD Telekom Sales & Services Sdn. Bhd. (TSSSB ), 100% wholly-owned subsidiary of Telekom Malaysia, is a customer service organisation which provides a one-stop solution for TM Group products and services. With the Vision, “To be a one-stop centre for TM Group products and services”, TSSSB is determined to provide excellent services for TM Group’s customers and to offer competitive ICT products and services. Currently, TSSSB has more than 100 ISO Certified TMpoint outlets nationwide. TSSSB is determined to provide excellent services for TM Group’s customers as it looks forward to future growth in the coming years. The most commonly used touch points between the customer and TM are its 105 TMpoint outlets nationwide. To improve customer experience and enhance customer service, TM has improved on the services and facilities available. It has installed 30 e-Kiosks at 27 TMpoint outlets nationwide for easier access by customers and greater convenience for bill payments, either by cash or cheque. In April 2009, TM launched TMpoint-on-Wheels (TMOW) to better serve customers in remote locations where there are no TMpoint outlets. TM has deployed IIUM

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15 TMOW units nationwide, with one unit for each state. More units will be introduced to cover widely dispersed geographical areas in rural regions like Sabah and Sarawak. Access to TMpoint can also be achieved online. Using the technology available, TSSSB launched TMpoint Virtual in 2010. Being one of the touch points of TM’s customers, the main business of Telekom Sales & Services Sdn. Bhd. is focused on providing excellent customer service. To run the business well, TSSSB is designed with two important Centres i.e. the profit centre and the support centre.

TSSSB’s PROFIT CENTRES The Outlet Sales & Services Division (OSS) is the core division in TSSSB. All 105 TMpoints are under the management of OSS, headed by Haniza Baharum. She is assisted by a team of support centre staff carrying out various functions. All TMpoints at each state are managed by the State Business Manager. The main function of OSS is to monitor the operation of TMpoints, which is the touch point between TM and its customers. The division has support service units at headquarters to assist all outlets with various services. About 60 to 70% of TSSSB’s revenue comes from transactions carried out at TMpoint. Therefore, it is important that the services rendered at TMpoint are of the highest quality. This is where the customer comes to subscribe services, pay bills and lodge complaints. The Marketing Division’s main role is to plan the activities at TMpoint. This is done by planning the service activities and product development aspects in order to ensure full support is given to TMpoint’s success. There are several units in Marketing that carry out specific functions, including the Business Support Unit which compiles and prepares monthly sales report. This report is for analysis and future marketing. Marketing Communication Unit conducts marketing and brand promotion. They also disseminate the latest information on products and promotions to all staff and customers. Business Development & Cards Mobile Unit is responsible for developing new business opportunities for the company besides focusing on calling card business. Business Services Unit focuses on telecommunication services and products like Key Telephone System (KTS), Private Automated Branch Exchange (PABX) and IT – Local Access Network (LAN). The Retail Services Unit is responsible for telephony products like CPEO, CDMA, cellular and fixed lines. These products under the consumer segment contribute to the largest source of revenue for TM. The IT Broadband Services Unit plans the marketing activities of IT retail business and broadband services.

SUPPORT CENTRES OF TSSSB The Planning and Development Division is involved in strategies development to manage existing businesses in terms of performance as well as plans for potential new revenue streams. There are two key units: the Business Planning Unit manages the existing businesses by monitoring performance via the Balanced Scorecard and Key Performance Indicators (KPI). The Business Development Unit looks for new

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businesses opportunities for the company. The Financial Controller’s Division is a critical support unit in TSSSB. It manages the financial aspects of the company and is organised into several units that undertake specific financial functions. The Human Resource/Corporate Administration Division is the core support unit in TSSSB. It is involved in the strategic management of human resources as well as the efficient administration of HRM. It has several units to assist the operation of the division. Among them are the Planning and Operation Unit which is responsible for preparing the HR policies and procedures, including salaries and incentives. The Development and Industrial Relations Unit prepares the industrial relations (IR) policies and procedures, collective agreements with the union and also manages disciplinary action. The Corporate Administration Unit manages rental agreement, registration with various agencies including the Ministry of Finance (MOF), National ICT Association of Malaysia (PIKOM), Malaysian Employers Federation (MEF) and Malaysian Institute of Human Resource Malaysia (MIHRM)). The IT Services Division manages the Information Technology (IT) requirements of the company by offering systems development and IT support services. It has several units that execute specific functions. TThe Quality Management Division is responsible for planning quality activities which include Risk Management, Quality Management Systems and ISO compliance. Last but not least, the The Corporate Communications Division manages all interfaces between the public and the TM company. It is also responsible for all corporate events that involve the public and media.

SOME RECENT COMPANY STRATEGIES In order to achieve its aspirations, TSSSB has undertaken several streams of activities in recent years, in order to ensure that company objectives are achieved within a specified timeline. The aspiration of TSSSB is to be the best in Customer Service and the best in Retail Sales. To be the best in Customer Service, several key points needed to be addressed. Among them are to: (a) have in place an excellent customer service through full visibility of end-to-end customer service fulfilment; (b) have a zero complaint status on TMpoint; (c) improve on the recruitment policy and to have a Trained-TestedCertified (TTC) workforce; (d) be a zero-fraud TMpoint by improving the existing processes and systems; (e) ensure compliance to the process and accountability; and (f) enforce internal control via a check and balance system. The next TSSSB objective is to be the best in Retail Sales. To achieve this, a number of key points need to be addressed. They are to: (a) focus on retail sales and to relocate business sales to SMEs; (b) cultivate a sales-oriented culture; (c) have more effective sales by improving performance driven compensation plans; (d) convert selected TMpoints into a Lifestyle store; (e) collaborate with major ICT partners so as to offer customers with HSBB experience at selected TMpoints; and (f) provide Streamyx facilities at all TMpoints. IIUM

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Being a customer service organisation, TM and TSSSB have put in place Customer Satisfaction measures that are to be carried out at each TMpoint. These measures are to be undertaken on a monthly/yearly basis to identify customer’s satisfaction level to the services. This is done by the following: (1) Measuring the level of services provided by CSR at the TMpoint. Assessors will pose as a genuine customer and real time assessment will be carried out. (2) Measuring customer’s retention/commitment which is calculated as a singlenumber format/index. Agencies/assessors call or interview customers and ask for ratings on the services. Customer selection is based on those having experience dealing with TMpoint in the past 6 months. (3) Customer selection is based on those having experience dealing with TMpoint in the past 6 months. These initiatives have put TSSSB on its toes in providing high quality customer service. The Mystery Shopper Index (MSI) and TRI*M Index are included in the Key Performance Indicators (KPI) for all heads of TMpoint. At the end of the year, all staff will be evaluated in their Annual Appraisal exercise and these measurements are some of the major criteria for the offer of incentives.

PERFORMANCE OF THE COMPANY In its 10-year history, TSSSB has moved from a full customer service organisation to a more diversified business including retail and credit sales. TSSSB has become a more business-like organisation with the emphasis on the bottom line becoming more apparent. This is so especially when compared to earlier years when TM was a ‘government department’. This is further manifested in its financial statements of recent years. Except for 2002, where there were few allowances for bad debt, stock and clearing accounts that contributed to a loss, the other years were profitable (Figure 1).

Figure 1. Profit after Tax (1999 – 2009) 54

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FUTURE STRATEGIES The General Manager of TSSB, Ms Haniza Baharom, emerged from the 2-hour meeting with the staff feeling happy with the discussions but yet feeling disappointed that no firm strategies had been forthcoming from the discussions. In order to meet top management concerns, there was an urgent need for TSSSB to develop strategies and plans in order to the solve the problems facing the company. TSSSB’s next major task would be to develop those strategies in the immediate future.

DISCUSSION QUESTIONS Q1. In recent years, challenges from competing companies such as MAXIS have intensified. This is making it difficult for TM to gain additional market share, especially in the broadband field. What further creative marketing strategies are required by Telekom to meet the competition effectively? Q2. It is suspected that competing companies may be attracting away some of TM’s existing customers. What types of marketing research and what other innovative strategies are needed to meet this challenge? Q3. The Planning and Development Division has used various measures and methods for some time now, including the use of the Balanced Scorecard and Key Performance Indicators (KPI) for company improvement, Would it be fruitful for TM & TSSSB to extend this further to include comparisons in terms of performance with other competitor companies. Discuss the pros & cons. Q4. TM & TSSSB take pride in their HR policies and staff incentive schemes. Whilst it is good to have proper HR policies and initiatives, such policies and programmes can be costly. More intensive cost & benefit studies may need to be undertaken by the HR Division. Such studies will reveal if the development of more costeffective HR policies and strategies are required. Carry out a suitable analysis in order to give your views on this issue. Q5. It is generally recognised that TM Customer Services have improved in the past few years and the company takes pride in the current excellent customer services accorded to the clients. Whilst this is laudable, the same argument in (Q4) above applies. Do you feel it is necessary for Telekom to carry out cost-benefit studies on ‘customer services’ as well or should it continue its current practices. What do you recommend and give reasons for your preference.

REFERENCES TM Annual Reports – various issues, including 2008

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