abf presentation - corporate mis restructuring for sustainable growth
TRANSCRIPT
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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
ConvertingMIStoProfitCentre
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
ConvertingMIStoProfitCentre
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