enterprise system

Table of Contents1. Introduction.............................................................................................................2

1.2 Vision.......................................................................................................................2

1.3 Mission....................................................................................................................2

2.1 Framework 1 - Porter 5 forces analysis...................................................................3

2.2 Framework 2 – Fishbone Chart...............................................................................8

2.3 Framework 3 – SWOT Analysis...........................................................................11

3. Propose of enterprise system................................................................................14

4. Challenges.............................................................................................................16

5. Conclusion............................................................................................................18

6. References.............................................................................................................19

7. Work Break Structure...........................................................................................23

1. Introduction

Hong Leong Bank Berhad is a public listed bank in Malaysia. It is a member of the

Hong Leong Group Malaysia. Today, Hong Leong Bank possesses 300 above

branches in South-east Asia, and the Headquarter in Malaysia is located in Kuala

Lumpur, Malaysia. The businesses of Hong Leong Bank includes personal financial

services, wholesale banking, Islamic financial services and regional franchises and it

also has electronic channels including Hong Leong Mobile Banking, Hong Leong

Online, Hong Leong Call Centre and self-service terminals (Hong Leong Bank

Berhad, 2014).

1.2 Vision

(Hong Leong annual report, 2009)’.

1.3 Mission

Hong Leong Bank’s mission is to help clients to generate superior returns through the

provision of top-quality service, in-depth investment insights and prudent risk

management advices (Hong Leong Bank Berhad, 2014).

2.1 Framework 1 - Porter 5 forces analysis

A) Threat of new entrants (Low)

Banking industry in Malaysia is regulated by the central bank of Malaysia, which is

the BNM- Bank Negara Malaysia. The principal of BNM under the Central Bank of

Malaysia Act 2009 is to promote monetary stability and financial stability conducive

to the sustainable growth of the Malaysian economy (Bank Negara Malaysia, 2012).

In the Law of Malaysia, Act 372- Banking and Financial Institution Act 1989 is an act

that for licensing and regulation of institutions for banking, or other finance relating

companies connected therewith Bank Negara Malaysia. All the banking institutions in

Malaysia are required to hold a valid license granted by the Minister (Lawyerment,

2014). There are 16 sections and 131 rules and regulations for applying license under

Banking and Financial Institution Acts 1989. Licensing requirement is a barrier for

the new entrance to startup a banking industry in Malaysia.

Therefore, threat of new entrants for Hong Leong Bank is low.

B) Threat of substitute products or services (high)

Threats of Hong Leong Bank is not only from the competitors, but it also comes from

the insurance agencies, investing and loan companies. Some insurance companies do

offer insurance plans that covered illness saving plans with high interest rates. Great

Eastern offers a plan that is called ‘Great Ideal Living’ which covers 36 different

kinds of critical illness, Total and Permanent Disability (TPD), death and added

advantages with Deferred Whole Life (DWL) as shown in Table 2.1.1.

Table 2.1.1 is the calculation of DWL from Great Eastern. (Great Eastern, 2013)

Figure 2.1.1 example of Great Ideal Living Plan from Great Eastern. (Great Eastern, 2013)

Therefore, the threat of substitute products or services for Hong Leong Bank is high.

C) Bargaining power of customers (high)

Customers of Hong Leong Bank are the account holders who using Hong Leong Bank

services. There are 27 commercial banks in Malaysia which included foreign and

local owns (Bank Negara Malaysia, 2014), whereas Hong Leong Bank is not the only

option for customers to save money. Hong Leong Bank customers has large number

of alternatives that offer the similar services. Spilt banking occurred when people

employed two or more bankers to handle their personal financial affairs (Denton &

Chan, 1991). From a customer perspective, multiple banking account enable a

customer to get a wider range of financial services, also accessing to wider range of

ATM. Therefore, the bargaining power of customers is high.

D) Bargaining power of suppliers (low)

Hong Leong Bank unlike those manufacturing industry need suppliers for supplying

the raw materials, whereas the supplier plays an important role in the product

processing. But for Hong Leong Bank as in service industry, the suppliers are the

supporting facilities, such as furniture, cheque books, statement papers, ATM

machine and etc. The impact of these in Hong Leong Bank is not much significant

since they are not raw materials (UKESSAYS.COM, 2009).

Depositors is another suppliers of Hong Leong Bank. Depositors refers to the people

who deposits the money into the bank. Depositor has no bargaining power whatever

in reality (Ackerman, 2008). A fixed interest rate will be paid for the depositors in

Hong Leong Bank. Although the more money depositor deposits into Hong Leong

Bank, he/she will get paid based on the fixed interest rate for the amount of money

deposited.

Therefore, the bargain power of suppliers for Hong Leong Bank is low.

E) Intensity of competitive rivalry (high)

Although is hard for new entrants to get the banking license in Malaysia, yet Hong

Leong Bank still facing the challenges from another 26 commercial banks in

Malaysia. Overnight Policy Rate (OPR) referring to the interest rate for housing loan

from Bank Negara Malaysia for banks as references for banks in BLR adjustments,

but there might differ from bank to others bank. (BLR.MY, 2011) OPR was fixed by

government is 3% and the range of BLR adjustment is based on the bank themselves

after the calculation based on the formula that involved the costs of the loan (Bank

Negara Malaysia, 2014). The strategies to promote the services are almost the same

among these banks. There is no identical service that provided by Hong Leong Bank,

whereas all of them are controlled by government, the only making differences among

the banks is the BLR adjustment (Refer to table 2.1.2 for the comparison table of BLR

among the commercial banks in Malaysia). Therefore, the degree of intensity of

competitive rivalry of Hong Leong Bank is high.

Table 2.1.2 is the table of comparison BLR that offers by Malaysia Commercial

Banks (RmValues, 2011)

There are many financial companies that offer private loans with lower interest rate

compared to Hong Leong Bank.

Comparing Hong Leong Bank to MBSB, that loans out the same amount of money

which is RM10 000 and with the same repayment period, the interest rate of Hong

Leong Bank is slightly higher compared to MBSB.

http://www.blr.my/blr.htm

http://www.blr.my/Financial%20Glossary/BNM.htm

http://www.blr.my/Financial%20Glossary/Overnight%20Policy%20Rate.htm

Table 2.1.3 Loan Repayment Tables. (Left table is the repayment table of MBSB and

right table is the repayment table of Hong Leong Bank.)

2 .2 Framework 2 – Fishbone Chart

2

3

Facilities Equipment

Figure 2.2.1 (daryl.k, 2008)

The Cash Deposit Machine (CDM) is a problem that facing by the customer. In

Figure 2.2.1, the customer complaints that there is no enough Cash Deposit Machines

(CDM) in the branch of Hong Leong Bank. Occasionally, the CDM will faults or too

many customers using in one CDM and this cause the customer inconvenience.

Irrational Deployment

Hong Leong

Poor Service

Affect employee

working

performance

Procedure

Certain Impolite staff Call

Centre (Back Stage)

Facilities

Staff

Messy

Bad Communication

between Departments

Less CDM in

the branchesInconvenience to

customers

Less Employee service

customers in a specific time

Procedure

Figure 2.2.2 (Wong, 2014)

The problem of Hong Leong Bank is their messy process due to they do not have a

better communication between the departments. Because of this problem, the

customer feel confuse about the information procedure that giving by the employee

and customer feel disappointed with their services. In the Figure 2.2.2 above, the

customer has been complaint due to this problem.

Staff

Front Stage Problem

One of the problems is occurring in the front stage. When during the lunch time, the

customer is waiting the front stage employee for service, but there are only few

employees are working due to they cannot arrange their working time well and cannot

find the people to replace their working position and this occurred in some of the

Hong Leong Bank branches.

Back Stage Problem

Figure 2.2.3 (Chong, 2013)

Another problem is about the back desk staff. The back stage staff is referring to the

employee of Hong Leong bank call center. The problem about call center is the Hong

Leong Bank cannot ensure all employees in call center are speaking friendly and

politely to the customer. This attitude of employee will affect their impression to the

customer and the customers will think they are not trained and not professional

enough. In Figure 2.2.3 above, the customer complaints the sound of employee is

unfriendly and impolite when the customer calling to the call center.

Irrational Deployment

The internal problem of Hong Leong bank has been affected the morale and working

performance of the employee. Because of this problem, the employee would not

provide a good service to the customer due to Hong Leong Bank irrational to deploy

their employee without any reason. Hong Leong Bank branches are distributed

throughout Malaysia. They may deploy their staff when necessary. They deploy their

employee from their original work place to a distant branch. For example, the

employee deploy from the branch of Kuala Lumpur to branch of Penang.

2.3 Framework 3 – SWOT Analysis

Strength:

Top 20 public company listed in ‘Forbes Global 2000’ year 2013

According to Forbes‘s report in ‘Forbes Global 2000’, Hong Leong Bank was

listed in the list and there is only 20 Malaysia companies in the list. This

ranking is based on criteria namely company’s Sales, Profit, Assets and

Market Value. (Forbes Global, 2013)

The low interest rate for repaying to credit card, high balance transfer

According to the comparison of ringgitplus, Hong Leong bank is the lowest

cost to be paid in annual compare with other commercial bank in Malaysia.

The Hong Leong Wise card is 15% interest rate, 10% cashback and free of

balance transfer and annual fee. Then Hong Leong bank provide high balance

transfer which is minimum balance transfer rm3000 in the maximum duration

of 6 months. (ringgitplus, 2014)

Low interest rate for housing loan

According to the comparison of ringgitplus, the interest rate for housing loan

that offered by Hong Leong bank is lower, which is only 4.20% per annual.

And the competitors such as OCBC bank, Maybank offer the interest rate for

housing loan is 4.30% and 4.50%. This comparison show that this is strength

of Hong Leong bank, it will generate more profit for them. (ringgitplus, 2014)

Weakness:

Bad credit card & banking service.

According to Lowyat.net, some of people complaint that some of the credit

card services are not professional enough and need consume a lot of times to

finish the service. (Lowyat.net, 2012)

High interest rate for personal loan

According to the comparison of ringgitplus (2014), the interest rate for

personal loan provided by Hong Leong bank is 12% in annual. Reversely the

competitors such as Citibank, Maybank just only charge 7.64% and 8% in a

year. So this information show that this is the weakness of Hong Leong bank,

it affects less people to have loan from Hong Leong bank. (ringgitplus, 2014)

Opportunity:

More IT Devices or Software Used.

Nowadays, mobile phone is acting as payment clearing houses or hubs, with

an important portion for us to perform the financial services. The mobile

phones working similar as Mastercard’s PayPass technology, the monthly bill

will be sent to customers from servicing operator. The scenario shows that the

banks and mobile operators are reconciled to provide the seamless joint

services for customers.

These innovations help banks to build customer trust, managing risk and churn

and encouraging retention and loyalty. (Peppers & Rogers Group, 2014)

New entrants in local are low, low competitive level

According to the Laws of Malaysia, Act 372 – Banking and Financial

Institution Act 1989 is an Act to issue the new laws for the licensing and

regulation of institutions carrying on banking, merchant banking, finance

company, money-broking businesses and discount house, for the regulation of

institutions carrying on certain other financial businesses, and for matters

incidental thereto or connected therewith. The licensing of banks are

controlled by Bank Negara Malaysia in Malaysia by BAFIA. After that, the

Minister is the one who can grant the valid license to all the commercial bank

in Malaysia.

So that, the challenge of new entrants for Hong Leong Bank is low, this cause

the market share is maintained.

Multiple- use of cards

The enhancement of E-Business in Malaysia has created an opportunity for

bank to issue more credit or debit cards. In most of the E-Business websites,

customers required making the payment with cards, and this has encouraged

the consumers to apply for a card. Customers can use cards to purchase

cinema tickets, concert ticket or airline ticket in online system. This creates

convenience to customer and banks can gain more profit which interest

charged from cards. (Peppers & Rogers Group, 2014)

Threat:

Facing growing threat from mobile phone technology

Nowadays, bank is depending on the technology very much, example ATM

machine, E-banking and M-banking. To be competitive in the market, Hong

Leong Bank also need to adopt all these technologies. It will increase the

hardware, mobile application and maintenance cost for the Hong Leong Bank.

(Okoth, 2013)

Intensity of competitors

According to the list of Bank Negara Malaysia show that, there are 27

commercial banks, 16 Islamic banks and 13 investment banks existing in

Malaysia.

This information shows that there are many competitors in the local include

Maybank, CitiBank, CIMB Bank, OCBC Bank, HSBC Bank and so on. All of

them are providing the same products and services to the customers. This

would cause high competition for Hong Leong Bank. (Bank Negara Malaysia,

2014)

3. Propose of enterprise system

Based on the analysis reports of Hong Leong Bank above, an Enterprise System

package that able to integrate all the existing information system with Decision

Support System (DSS) and Customer Relations Management features are

recommended to be implemented.

Decision support system (DSS) is an information system designed to help users reach

a decision when a decision-making situation arises. A variety of DSSs exist to help

with a range of decisions. (UNCCHARLOTTE, 2014)

Customer Relationship Management (CRM) in an enterprise wide effort to acquire

and retain profitable customers. It focuses on building long-term and sustainable

customer relationships that add value for both the customer and the company.

New enterprise system for Hong Leong Bank

DSS feature

Statistical report will be prepared by the enterprise system to the HLB executives for

making decision could be a possible solution to solve the issues occurring in the

analysis.

By referring to the porter’s 5 forces and SWOT analysis above, the problems facing

by Hong Leong Bank are the differences of interest rates among competitors and

service offered to customers. The new enterprise system will uses of internal sources

which including the sales, financial data, inventory data or cash flow data in Hong

Leong Bank and external sources, which including the trends, government policies or

inflation rates to help Hong Leong Bank’s executive makes decision. Enterprise

System can acts like a DSS for better decision making by using the knowledge to

solve the problem. With the capabilities of DSS in the Enterprise System, statistical

analysis capabilities, spreadsheets, and graphics will be including in DSS, to help in

extract the result for the most suitable interest rates based on the trends from the

analysis reports.

CRM feature

For the problems of serving customers mentioning in Fishbone chart, CRM is

recommended to be in the enterprise system to solve the issues occurred. CRM is

mainly concentrating in making a better relationship among customer and the

company. From the analysis, some customers were dissatisfied with Hong Leong

Bank services, due to the bad service provided and posted it on the internet. As a

public company with high reputation, a good relationship between employees and

customers is very important, a single mistake might bring down the company’s image.

As the implementation of the new enterprise system with the CRM feature, it will

enhance a better relationship between the customers with Hong Leong Bank. As CRM

has provided a platform for the customers to submit feedbacks on their opinions and

suggestions, Hong Leong Bank will be able to adjust their processes in order to serve

the customer in a better or satisfactory manner. CRM can help in better serving the

customer, thus, the complaint from customer can be reduced after the implementation

of enterprise system.

CRM also can help Hong Leong Bank to giving a clear and faster procedure to the

customers. Hong Leong Bank will be able to provide some basic information in CRM

for customers to refer to. After implementing the new enterprise system, there is a

CRM feature that allow the customer to track the bank loan process and many more.

In this platform, employee can update the latest information process and customer can

keep track of all the transactions done (information update etc.) which provides a

better, clearer understanding and latest information of the updates to the customer.

Hong Leong Bank need to provide a customer database system to the employee for

checking and update the information such as the employee can update the latest

process information of the customer. Through this platform, the employee would get

the latest information and messages of the customer. Thus, when the customers

asking, the employee would giving the latest and accurate message to the customer.

4. Challenges Implementation of enterprise system would bring some advantages for the Hong

Leong Bank, yet there also some limitations and challenges that would occurring after

the implementation.

1. GIGO

Garbage in garbage out (GIGO) referring to the concept that the quality of

the output is only as good as the quality of the input (Shelly & Rosenblatt,

2012) . All the data from internal and external sources must be accurate to

get the best decision. Result that from the fact finding might not be

accurate. For example, Hong Leong Bank is doing the online survey to get

feedback for a particular issue, participant might not giving out the accurate

information. With the irrelevant information, DSS will come out a result

based on the irrelevant information which is not suitable to use and might

be a threat for Hong Leong Bank.

2.

Business

process

(Reengineering)

Business procedures will be affected due to the implementation of

enterprise system. New business practices may introduced to fulfill the

standard of process in the new enterprise system. From the research report

by Mano Billi (2014) about the challenges in implementing ERP into

enterprise, several researchers prove that best application can only meet the

70% need of the company. The modification of business process may lead

to some other challenges that could affect Hong Leong Bank.

3. Storage

challenges and

maintenance

Implementation of enterprise system would lead to storage environment

issues. There is a research of Dell enterprise system from Ana Volpi and

Doug Chandler from IDC Research Company, for ‘How Dell addresses

enterprise storage challenge’, there are 7 issues that are commonly faced by

enterprise system were listed out in this research paper. The same

challenges will be faced by Hong Leong Bank.

Challenges of storage (Ana Volpi and Doug Chandler, 2002):

Business continuity and disaster recovery strategies

Designing for high availability

Opportunity to consolidate storage

Opportunity to consolidate server

TCO and ROI

The challenge of the heterogeneous storage area network (SAN)

Post implementation support

4.

Enterprise

System literacy

versus Resistant

to change

Training for the new system has to be provided to the employee with the

right job position. Employee has to be trained before using the enterprise

system but employees get very attached to their way of doing things, and

when technologies change, they invariable come up with resistant to that

change (Martin Emerson Low, 2013). As Hong Leong Bank employees

need to attend the training for the new enterprise system, and some may

resists it because of the changes of work processes.

5.

Duplication of

data of

Information

systems

Information duplication might happen after the integration in the existing

information systems. If the same information is inserted twice in the

different information system, and this issue will occur in the new enterprise

system when updating the particular information.

5. ConclusionBased on the analysis reports of three frameworks, Porter five forces, SWOT analysis

and Fishbone Chart, we encounter that the main issues of Hong Leong Bank are the

customer-relationship, the threats from competitors which offering better services and

lower interest rate for loan and also the isolation of information system. To solve

these issues, an Enterprise System with integrate all the information systems, CRM

and DSS built-in to supports the business in better customer serving and better

decision-making is recommended to underpin their business future strategy. Yet,

there are some challenges after the implementation of Enterprise System. If Hong

Leong Bank able to deal with the challenges, the implementation of Enterprise

System will helps in support the daily business, growth of business in future and

increase the competitive advantages.

6. ReferencesAckerman, J., 2008. The Banking Industry Problems and Competition. [Online]

Available at: http://searchwarp.com/swa292998.htm

[Accessed 28 May 2014].

Ana Volpi and Doug Chandler, 2002. How Dell Addresses Today's Enterprise

Storage Challenges, Framingham: IDC. [Accessed 28 May 2014]

Bank Negara Malaysia, 2012. BANK NEGARA MALAYSIA, Kuala Lumpur: Bank

Negara Malaysia. [Accessed 28 May 2014]

Bank Negara Malaysia, 2013. Commercial Banks. [Online]

Available at: http://www.bnm.gov.my/index.php?

ch=li&cat=banking&type=CB&fund=0&cu=0


Bank Negara Malaysia, 2014. List of Licensed Banking Institutions in Malaysia.

[Online]


ch=li&cat=banking&type=CB&fund=0&cu=0

[Accessed 29 may 2014].

Bank Negara Malaysia, 2014. Monetary Policy Statement. [Online]


ch=en_press&pg=en_press_all&ac=3004&lang=en


BLR.MY, 2011. New Reference Rate Framework, s.l.: BLR.

Chong, J., 2013. Hong Leong Bank. [Online]

Available at: https://www.facebook.com/HongLeongBank?fref=ts

[Accessed 15 April 2014].

daryl.k, 2008. Which Bank the lousiest Service. [Online]

Available at: https://forum.lowyat.net/index.php?

showtopic=856509&st=60&p=21858681&#entry21858681


Forbes Global, 2013. 2013 Forbes Global 2000 & Ranking for Malaysian Companies.

[Online]

Available at: http://1-million-dollar-blog.com/2013-forbes-global-2000-ranking-for-

malaysian-companies/


Great Eastern, 2013. LIFE + HEALTH PROTECTION. [Online]

Available at:

http://www.greateasternlife.com/my/en/insurance/products/products_lifehealth.htm#d


Hong Leong annual report, 2009. Hong Leong annual report. [Online]

Available at: https://www.hlb.com.my/data/ar20091.pdf


Hong Leong Bank Berhad, 2014. Hong Leong story. [Online]

Available at: https://www.hlb.com.my/ahlb/corpstry.jsp?flag=corpstry


Hong Leong Bank Berhad, 2014. Treasury Services. [Online]

Available at: https://www.hlb.com.my/sg/hlsghmps.jsp?flag=hlsghmps


http://www.personal-loan.my/, 2013. Personal Loan Malaysia | Pinjaman Peribadi.

[Online]

Available at: http://www.personal-loan.my/mbsb-personal-loan/193/


Joseph, L. (2013). Hong Leong Bank Sea Park - Service SUCKS. [video] Available

at: http://www.youtube.com/watch?v=gjsHRgqT22I [Accessed 28 May. 2014].

Lawyerment, 2014. Lawyermant.com.my. [Online]

Available at: http://www.lawyerment.com.my/financial/banking2.shtml

Low, M. E., 2013. The Importance of Effective Employee Training in Enterprise

Systems. [Online]

Available at: http://thewebandi.com/the-importance-of-effective-employee-training-

http://www.youtube.com/watch?v=gjsHRgqT22I

in-enterprise-systems/


Lowyat.net, 2012. Credit Card & Online Banking Service SUCKS. [Online]

Available at: https://forum.lowyat.net/topic/2469964/all


Okoth, J., 2013. Commercial Banks face growing threat from mobile phone

technology. [Online]

Available at: http://www.standardmedia.co.ke/mobile/?

articleID=2000093428&story_title=banks-face-threat-from-mobile-phone


Peppers & Rogers Group, 2014. How can commercial banks generate new income

opportunities, especially during this global financial crisis. [Online]

Available at: http://www.peppersandrogersgroup.com/view.aspx?docId=31446


ringgitplus, 2014. Best Credit Cards in Malaysia. [Online]

Available at: https://ringgitplus.com/en/credit-card/


ringgitplus, 2014. Best Personal Loans in Malaysia. [Online]

Available at: https://ringgitplus.com/en/personal-loan/


RmValues, 2011. Basic Lendinng Rate. [Online]

Available at: http://www.rmvalues.com/bank/b_blr.html


Shelly & Rosenblatt, 2012. Systems Analysis and Design. United State: Course

Technology, Cengage Learning.

UKESSAYS.COM, 2009. Why Porters 5 Model. Unregistered Trade Marks Of Hong

Leong Bank Bhd Marketing, Volume 1, p. 4. [Accessed 28 May 2014]

UNCCHARLOTTE, 2014. TYPES OF INFORMATION SYSTEMS. [Online]

Available at: http://bisom.uncc.edu/courses/info2130/Topics/istypes.htm [Accessed

28 May 2014]

WebVideo, N. (2013). Rintihan pekerja Hong Leong Bank Kuantan. [video]

Available at: http://www.youtube.com/watch?v=jx-uVUcSGBA [Accessed 28 May.

2014].

Wong, K., 2014. Hong Leong Bank. [Online]

Available at: https://www.facebook.com/HongLeongBank?fref=ts


http://www.youtube.com/watch?v=jx-uVUcSGBA

7. Work Break Structure

Group Members:

1) Chong Yong Dee (TP025657)

2) Joseph Loh Shin Yu (TP031119)

3) Chen Jian Yong (TP026096)

No. Task / Description / Responsibility Name & Signature

1 Porter 5 forces

Propose of enterprise System

Challenges

Conclusion

2 Introduction

SWOT analysis

3 Fishbone analysis

Propose of Enterprise System

enterprise system

Documents

hong leong bank services

businesses of hong leong

hong leong group malaysia

hong leong mobile banking

central bank of malaysia

bnm bank negara malaysia

law of malaysia

public listed bank