ABF Presentation - Corporate MIS Restructuring for Sustainable Growth

8/7/2019 ABF Presentation - Corporate MIS Restructuring for Sustainable Growth

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Corporate MIS Restructuringfor Sustainable Growth

"Your suc cess in life isn't b ased on your ab ility to simp ly

change . It is ba sed on your ability to c hang e fa ster thanyour com pet ition , custome rs and business."

Ma rk Sanb orn(International Bestselling Author)


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CorporateStructuresCorporateStructures

Sole

Proprietorship

Corporation

Organisational

Structures

Partnership

General Public Private

Limited

Structure SoleProprieter Partnership Corporation

Shareholders Oneshareholder General Eachpartnerassumesequalstature,

risk,andrewards

Private Ownedbyan

individualorgroupof

individuals; donotoffer

CorporateStructuresCorporateStructures

assumesadifferent

elementofcontrol,

investment,riskand

rewards

purchasebythepublic

Public Ownedbylargenumberofinvestors.

Stocksareofferedforsale

tothegeneralpublic

Advantages Totalmanagementcontrol Fullownershipofprofits Noreportsofaccounts

required

Nobusinesstax,just

Moreexpertiseandresources

Businessrisksshared

amongpartners

Nobusinesstax,just

Limitedliability Easeofownershiptransfer Unlimitedaccesstocapital

incometax income

tax

Limitations Responsible foralldebtsandrisks

Unlimitedliabilityof

personalassets

Unlimitedliability Disagreementsordisputes

mayoccuramongpartners

Lifespanislimited

Doubletaxationofdividends

Decisionmakingshared

amongshareholders


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Sole

ProprietorShareholder

OrganisationalOrganisational StructuresStructures

Thesoleshareholderalsoperformsallthejobroleswithinthecompany

Partnership

Shareholder Shareholder

Thepartnerssharetheresponsibilitytoperformalljobfunctionsinthecompany

CorporationStructure

Shareholders

BoardofDirectors

MD/CEO

CMO CFO COO

HR

IT

m n

The shareholders may consist of an individual or a group of investors. The company structure isexpansive and consists of individuals who hold specific job roles


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TraditionalFormofBusinesses

Founder

Patriarch

jia= family

Bookkeeping Sales Supplymanagement Transportation&Logistics

FamilyMember1 FamilyMember2 FamilyMember3 FamilyMember4

Suchstructuresaremeanttopromotetrust,efficiencyandamanagementpracticethatbuildsonthespiritoffamilykinship

However,thistypeofbusinessposesmanydisadvantages: Centralised managementandminimaldelegationofduties

Patriarchoftenhasvetopower

Financesare

often

kept

haphazardly

Adoptionoftechnologyisconsideredtaboo Shorttermfocusonimmediateearnings

ExampleofTraditionalBusinesses

Embracing

Change

Gentin Grou Sunwa Grou and Rimbunan Hi au Grou are exam les of com anies that, ,beganasfamilybusinessesandlaterunderwentcorporaterestructuringactivitiesinorderto

expandtheirbusinesses.

YTLCorporationisanidealexampleofacompanythatexpandeditsbusinessviatechnologyandcorporaterestructuring.Thecompanystartedoffasafamilybusiness

engagedinconstruction.Itwashelmedbyitspatriarch,Yeoh Tiong Lay

Itwasabletoexpandthroughseveralcorporaterestructuringactivities,including:

Bringingin

experienced

professionals

Diversificationintodifferentmarkets Innovatingwithtechnologythroughtheirtechnology

arm(YTLeSolutions)


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CorporationStructure

Shareholders

BoardofDirectors

MD/CEO

CMO CFO COO CTO/CIO

Inrecentyears,therehasbeenincreasing

dependencyonIT,thusaugmentingthe

importanceofCTOsandCIOs

IT

Admin

CorporateStrategies

Themajorfocusofcorporatestrategyistopresentamethodbywhichanybusinesscanadapttoachangingenvironment,enablingittoimproveits

competitiveadvantage.

HOWDOWE

GETTHERE?

WHEREDOWE

WANTTOBE?

Corporatestrategypresentsuswiththefollowingquestions:

WHEREAREWE

NOW?


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WhatisCorporateRestructuring?

CorporateRestructuring

A un amenta c angein irectionan strategy oranorganisation t ataffectsthewayinwhichtheorganizationisstructured

ImportanceofCorporateRestructuring

Theneedtoimproveefficiencyandprofitability

Creatingcostefficiency

Puttinginplaceexpertandcapablemanagement

Esta is esc earjo ro es

Survivalandgrowthoftheorganisation

Openup

communication

channels

Valueaddedproductsand/orservices

WhydoCompanies

Undergo

Restructuring?Growth

Time

Haphazard

growth

Exponential

growth

Plateaugrowth.

Growthislessrapid

Whenacompanyreachesacertainstageofprogress,corporaterestructuringisrequired

tofacilitateittomovetothenextlevel.Thefactorsinclude:

Haphazardgrowth

Rapidgrowth Inefficientmanagement Poorpositioningofadministrativefunctions(e.g.HR,accounts,etc)

Highgearing

Increasingprofits


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Factorsfor

CorporateRestructuring

Operational

efficiencyStreamline

ComplianceFactors

IPO

M&A

Corporate

Restructuring

business

Costreduction

Productivity

Corporategovernance

Changein

environment

KeyFactors

Keyfactorstoconsiderbeforeproposingcorporaterestructuring:

ShareholdersMission

StatementLongtermObjectives

Currentbusinessstrategies

Marketplace&competitors

Internalandexternal

resources

Internalgrowthandadaptability

Informationflow


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CorporateRestructuringOptions

Whenevaluatingthedifferentstrategicdirectionsabusinesscantakethere

areseveral

routes

abusiness

can

explore:

Doeslittleintermsofreactingtochangesinthemarketplace

DoNothing

Spendmoneyonresearch,developingnewproductranges

Development

Backward:Buyupbusinesssuppliers lowerpricedrawmaterials

Forward: Buyupproductdistributors increasedprofits

Horizontal:Buyupcompetitors increasemarketshare

Integration

Joinforceswithacompetitor strongerpositioninthemarketplace

StrategicAlliances

EmbarkonpositioningthecompanyintonewmarketsNewMarkets

IdentifyingRestructuringStrategies

Whenidentifyingwhichcorporaterestructuringstrategiestoemploy,several

factorsneedtobeconsidered.Theyinclude:

Costofrestructuringactivitiesinvolved

Machiningcapabilitiestoachievethestrategy

Additionofmanpower fortheimplementationphase

Fundingmodels

Effectofstrategyoncurrentbusinessmarketingplans

Informationgapsbetweenthecompanyandcapitalmarket


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AspectsofCorporateRestructuring

The

EnvironmentResources

Values,

Expectations

andObjectives

Resource

Planning

Strategic

Analysis

Strategic

Implementation

Strategic

ChoiceEvaluationof

Generationof

Options

Organisation

StructurePeople&

SystemsSelection

of

Strategy

JohnsonandScholes

AreasofCorporateRestructuring

AreasofCorporate

Restructuring

Organisational FinanceMISHumanResource

ITSMandITIL

bestpractices


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WhatisMIS?

Whyis

MIS

the

most

important

division

in

acompany?

ManagementInformationSystem

(MIS):Integrated,

user

machine

systemprovidinginformationto

supportoperations,management,

anddecisionmakingfunctions

Integrationofdataprocessing

Reportgenerationandanalysis

dependencyonhumanresources

Accesstopurposespecificinformation

Keeptrackofclientele

MISStructured

informationflow

Uniformed

SOPs

ExamplesofMISFunctions

in

Businesses

ManufacturingandHighTech

FreightandLogistics

Trading Administrative

SupplyChainManagement

MaterialResourcePlanning(MRP)

ProductLifecycleManagement

Supplier

SupervisoryControlandDataAcquisition(SCADA)

FleetManagement

LogisticsSoftware

CustomerRelationshipManagement(CRM)

ServiceandAssetManagement

OperationalRiskManagement

ProjectManagementSoftware

BusinessPerformanceManagement

Digital

RelationshipManagement

Dashboards


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ITSpendinginCorporations

Accordingto

research

by

aworld's

leading

information

technology

research

and

advisory

company,operationalefficiency(savingmoney)isstillcitedasadriverofITspendingmore

oftenthananyotherfactorinAsiaPacific(Gartner,2007) TheincreasingdependenceonITbycompaniesisindicatedbythesignificantincreasesin

globalITspending,yearafteryear.

Figure 1: Global IT Spending from 2001 to 2007

BenefitsofITinCorporations

Eveninnontechcompanies,anITdivisionisessentialtoensurethesmooth,uninterruptedflowofinformationwithinanylevelofanorganizationwithoutcompromisingonsecurity.

Com aniescanlevera eonITtodrivebusiness erformancein:

Greatlyreducedistributioncostsofinformationanditshandlingtime.

Integratedwithbusinessstrategyandprocesses,canenablegrowthandeffectivecompetition

Creatingaborderlesseconomythroughvast/realtimenetwork

Internalnetworkingandofficeautomationsupportsintegrationofapplicationsforadministration,disposition,planningorcontrolling

Allowbusinesschangestobetracked,recorded,andrespondedtoquickly,therebyhelpingsteertheorganizationtowardsitsgoals.

OperationalEfficiency WorkerProductivity


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Shareholders

BoardofDirectors

ImportanceofITinCorporations

MD/CEO

CMO CFO

HRAdministration

KPImeasurements

ProductionCOO

IT

Admin

IT

spending

CRM

HR

Finance

PotentialProblemswithITInspiteofthefactthatITservessignificantcorefunctionsinorganisations,companiesmay

encounterseveraldrawbacksinimplementingITarchitectures:

IncreasedcosttomaintainITsystem

LackofexpertisetosupportITsystem

Technicalinefficiencyduetouncentralised

system

Heavydependenceon3rd partysoftware


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Doyouknowthatyourinputisrequiredto

createauniqueIntellectualProperty(IP)?

Componentsof

Intellectual

Property

TechnicalKnowledge

targetsystem

DomainKnowledge

Knowledgeabouttheenvironmentinwhichthetargetsystemoperates


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DomainKnowledge

LossofIntellectualProperty

3rd party

Company VendorCostcenter

software

LowHRtosupport

dependencyon3rd

par yso ware g ma n enancecos sInflexiblesystemsITdeliverynotinaccordancewithbestpractices

Shareholders

RetainingIntellectualProperty

HowdoesMISRestructuringenablecompaniestoretainIntellectualProperty?

BoardofDirectors

MD/CEO

CMO COO CFO CTO

Outsource development& own domain knowledge

Implementing ITSM bestpractices

IT

HR

Admin

eve oppropr e ary

software

Is IT your domain?

Do you want to manageyour IT personnel?


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ConvertingMIStoProfitCentre

With the development of proprietary software and creation of own domain

knowledge, the new unit can be transformed into a profit centre

HoldingCompany

CompanyA CompanyB CompanyCIndependentIT

Company

Legend

OwnershipOutsource


Development of a generic platformSubsidiary

A

Subsidiary

B

Outsourcing

RetainIP Profit

Centre

Subsidiary

C

Outsource

DomainKnowledge

CompanyX CompanyY


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ITOutsourcing

Domain

Knowledge


Company

CompanyOutsource

IPbelongstothefirm

Createnewrevenuestream

3rd PartyCompany

e eve ope so ware, ecompanynow asano ersourceo revenue y

sellingthedevelopedsoftware

Summary:BenefitsofRestructuring

WiththeownershipofIP,companiesmaycreatenewsourcesofrevenue

Organisation ownsdomainandtechnicalknowledge

Bystreamlining operations,costsfor3rd partysupportandadministration canbegreatly

Streamlineoperationsusingbusinessbestpractices

Transformsacostcentreintoaprofitcentre

Re uces epen encyon3rd partysoftware Ownership

ofIntellectual

Property

NewRevenueModels

CostReduction&MSCStatus

OperationalEfficiency

Restructuringenables

qualificationforMSCMalaysiastatuswhichgivesthemtaxexemptionsforupto10years

,

resourcescan

also

be

channeledtotheorganisationscorebusiness


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FurtherGrowthforMISEntity

TheMalaysian

government

provides

the

following

incentives

under

the

MSC

Malaysianstatustosupportvariouslocalandforeigncompanies:

TaxExemptionforupto10years EligibilityforR&DGrants

FinancialIncentives

Freedomtosourcecapitalandborrowfundsglobally

Dutyfreeimportationofmultimediaequipments

ThankYou

Q&ASession

Documents

ABF Presentation - Corporate MIS Restructuring for Sustainable Growth