Anyway for this week I am going to write about my own experience on change management. I’m a Company Secretary attached to UEM Group Management Sdn Bhd (“UEMGM”), a wholly-owned subsidiary of UEM Group Berhad (“UEMG”) whose principle activity is provision of corporate and administrative support services. Briefly, within UEMGM, there are 5 core distinct units providing selected outsourcing corporate and administrative support services to subsidiaries within the UEMG Group as follows:-
· Financial Management, Accounts & Reporting
· Internal Audit
· Risk Facilitation
· Productivity & Quality Improvement
· Legal & Secretarial
In a nutshell, the outsourcing services of these functions are to facilitate the operations of the subsidiaries so as to develop and channel their resources to core business activities.
In my analysis paper for change management, I shall only focus and conduct analysis of the current situation affecting my business Unit (“BU”) i.e. the Legal & Secretarial Division. The functions of my BU are essentially to provide corporate legal and secretarial support roles to the subsidiaries of UEM Group.
The BU’s total staff strength in my BU is 25, with 19 Executives and 6 non-Executives including 3 sub-heads and a division head director. At present, my BU has altogether 15 principal customers in the form of 15 major subsidiaries under UEM Group’s stable, 3 of which are public listed companies on Bursa Malaysia. In total, we provide services to approximately 150 companies.
At the end of the financial year, an annual Customer Satisfaction Survey (“CSS”) is conducted to allow the subsidiaries to measure the level of satisfaction on quality, competency and effectiveness of services rendered to our stakeholders. We have built in the CSS rating as one of our BU’s Key Performance Indicator (“KPI”) scorecard under productivity of resources.
Our BU’s immediate challenge for 2009 is to achieve the highest rating (stretched KPI target) within the current resources and limitations. Notwithstanding the challenges, our BU’s is committed to continue providing its level best to its customers to achieve its KPI target.
IDENTIFYING & DEFINING STRATEGIC PRESSURE POINTS (“SPPs”) IN BU
With the nature of work that my BU is engaged in, the amount of paper usage and printing works involved in the preparation of legal documents, circulars and Board paper folders are enormously high, especially for the major operating customers.
Not only the amount of “paperworks” for current and ongoing works, but in line with UEM Group’s Business Continuity Management Programme (“BCMP”), our BU is also the custodian of agreements and other statutory records for our customers. Under the BCMP, our BU is entrusted in keeping copies of the agreements, JVs, MOUs, corporate exercise files, legal files, statutory records, Board papers etc in a traditional hardcopy form to be kept in various off-sites storage for retrieval during crisis or disaster.
Following are the brief descriptions of the SPPs affecting my BU:-
SPP 1 – Ever-increasing Administrative Expenses
Over the past 3 years - 2005 to 2007, UEMGM had not achieved its intended breakeven targets.What is more alarming is that there was a whooping increase of 365.6% in the administrative expenses over the 3 years. Indeed, this is a cause of a serious concern. The annual budget for office supplies and printing costs has also been in a similar upward trend.
SPP 2 – Understanding stakeholders’ interests
Not surprisingly, our customers are concerned with to what degree the economic downturn will impact their business. It is not far-fetched to imagine for our customers to increase cutbacks as concern grows and prolongs. Some of our customers have announced preemptive measures to cushion such impact by implementing prudent initiatives to better manage operations and costs.
SPP 3 – The need to remain as dynamic BU
Essentially, to remain a dynamic BU, we need to react quickly to minimise this cost escalating trend amidst the current economic recession.
To remain viable and productive, our BU needs to continuously introduce a more efficient and effective ways to serve our customers. To pursue cost-cutting measures but at the same time still adopting the “traditional” way in its business process will not have the meaningful impact it intended.
Leverage on the “cost cutting” drive as the story line, our BU felt that this is the opportune time for our BU to be establish the great sense of urgency to migrate into a more sophisticated way in doing its daily chores. The sub-heads were of the view that utilizing the state-of-the-art technology and facilities is the answer to remain as a dynamic BU.
These are the SPPs that are driving the need for change in my BU. In this case, the SPPs will impact the business strategy and organizational capabilities of my BU and the change drivers are as follows:-
- Internal factor – the need to introduce a more sophisticated and efficient ways to serve our customers; and
- External factor – the cost cutting measures to be undertaken group-wide.
CURRENT SITUATION VS DESIRED FUTURE STATE
Our BU deals with tons of paperwork daily and have a few more tons tucked away in filing cabinets that we continuously have to add to or get information from. Our BU must maintain client files and any paperwork pertaining to that client for a number of years. Many times these files must be accessed for various reasons. However, we found in our daily chores that some of the processes can be automated and integrate into electronic versions of paper documents and other types of digital medium storage.
In our analysis, we found that reducing office supplies and printing costs is the most widely employed and can be the effective cost cutting measures for my BU, way ahead of reducing staff, travel or telecommunication costs.
Our BU task-force has identified the impact of these SPPs and has embarked with initial steps to diagnose the issue. Some of the areas that we have identified for automation are as follows:-
- Board papers folders are distributed to Board of Directors for Board meetings in hard copy form
- Manual assessment of Board effectiveness i.e. via paper survey by each Board member
- Board meetings are done in a “traditional” manner where all Board members must be present at a designated location
- Very limited dependency on paperless database to retrieve corporate information
- The storage of agreements and other statutory documents under BCMP is on a “traditional” paper form
That is all for now and I will continue in the next postings the detail management plan to be undertaken using the principles laid out by Kotter and in the process using the relevant tools and applications that I learned throughout the 3-day UEM-MBL LOC program.
Cheers...
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