Ademco – SG

Transforming to adapt to an uncertain business environment

Source: The Straits Times    Date: Jan 3, 2022

ROUNDTABLE PARTICIPANTS
Marcus Neo, chief executive officer, Omni-Plus Systems
Toby Koh, group managing director, Ademco Security Group
Alan Lee, founder and executive chairman, Elmich
Moderator: Venga Subramaniam, journalist, The Business Times

 

Question: As a winner of the Enterprise 50 Enterprise Transformation Award, can you share with us what prompted your company to embark on its own transformation journey then?

Toby Koh: Transformation is simply constant improvement for any business. Like sharks, we need to continue to swim in order to survive. The world is constantly changing, clients’ problem statements evolve, risk profiles fluctuate, business models morph. Hence we need to transform ourselves to keep with the times. Transformation is not a side thought, it is survival. And that has been our modus operandi since day one.

Alan Lee: At Elmich, going global was not an afterthought. We foresaw the need to enter the international markets when we started designing and manufacturing engineered landscape and urban greenery products in 1998. In 2018, exports represented 60 per cent of our business.

Transformation has not been easy and will always be an on-going process. We need to stay relevant in today’s ever changing business landscape and continue to take bold steps to make sure we stay ahead of the curve.

Marcus Neo: Expansion of the operation to the region; (as well as) the decision to use Singapore as a knowledge hub to manage operations in the whole region (led us on our transformation journey).

Question: What were some of the first steps you took, and what were the initial challenges you faced and how did you overcome them?

Marcus Neo: (We started by) identifying gaps in the processes and standardising work practice. Change management is the biggest challenge. We value teamwork among employees and believe in the development of individuals for high performance and job satisfaction. Also, transparency breeds trust – so disclosure and informative sessions to get everyone interested and (to feel) secure.

Toby Koh: The most important challenge is changing mindsets. Most people do not like change. My biggest challenge was to lobby those who did not realise we needed to transform even faster. I gathered all the people who were looking forward to our transformation journey and they became the internal champions to help rally the troops.

The identification of the appropriate technology and decision to deploy is another challenge. The latest technology may not be the most optimal choice as it may not be stable and ready for use in our customers’ premises. In the security industry, reliability is top priority. Hence, the evaluation of the most appropriate security solutions for our clients must be done in a methodical fashion taking their risk assessment, budget, their operational requirements and needs into consideration, not simply the technology.

Alan Lee: First we had to convince our local customers that our products are as good as or even better than the imported alternatives and not be another manufacturer of “me-too” products. To do so, we needed to take innovation and quality seriously. This includes spending several hundred thousands of dollars annually on designing, prototyping, testing and paying intellectual property fees.

However, the transformation does not have tangible outcomes which are immediately measurable, particularly when faced with rising business costs and the emergence of many similar products disrupting the market equilibriums. Yet, Elmich has stood steadfast on delivering quality products and invested in systems and technology to strengthen its foundations as our operations gravitated towards a global market.

For business transformation to be effective, the workforce has to transform too. Existing staff needed to be retrained to be equipped with the necessary skill sets and new staff with strong technical and engineering background recruited to support the transformation process.

Question: Did you find any government assistance useful during your company’s transformation journey? In what areas is the government supportive of such transformation efforts?

Toby Koh: Absolutely. The government grants to help local businesses transform and digitalise has been invaluable. The work by Enterprise Singapore is truly amazing and spans across most aspects of business functions.

Ademco is also privileged to be in the Scale Up programme where we work with other local businesses and consultants to sharpen our business strategy. We are helping our customers change their old way of procuring security to a capital expenditures (capex) free managed service model.

Alan Lee: We received a considerable number of grants for our investments such as for establishing overseas offices and implementation of the enterprise resource planning (ERP) system.

Marcus Neo: Government support (was crucial) in helping lower the barrier and (overcome the) fear to digitalise. Our first step started as early as 2008 where Enterprise Singapore supported us during the Lehman brothers’ crisis.

Question: How did you train and upskill your workers to ensure that no one was left behind?

Alan Lee: We set the objectives of what we wanted to achieve for digitalisation and identified the knowledge gap and then sent the respective staff to attend the appropriate training courses for skills upgrading. Regular communication and reassurance were necessary and for the ERP system, we hired a project officer to develop a comprehensive implementation plan and coordinate the migration process with step-by-step guidance and tutorial.

The key personnel had to understand the process, so that they could communicate with their respective departments and help facilitate the buy-in. Human capital is an integral part of Elmich’s beliefs.

Marcus Neo: We worked with institutes for higher learning, for example with Singapore Polytechnic to conduct a training need analysis, identify strengths and gaps for individual employees and encourage them to take up courses to upskill. Several of our employees are taking on Specialist and Advanced diplomas at Singapore Polytechnic. During the Covid-19 pandemic, NTUC made available many online courses which our employees could access too.

Toby Koh: We put great emphasis on internal training and have a full time training manager to manage our Learning Management System. On-job-training is also a key ongoing initiative. Ademco also works with external trainers for core skills that we may not have in-house training capabilities.

Question: How has your company benefited from investing in its business transformation?

Toby Koh: One of the top benefits is that it excites my team to be on the transformation journey to shape Ademco’s future. Sure, it is tough to be the first to effect change, but making an early move to transform has historically given us market advantage on many instances. This advantage can range from being able to drive better value to our clients or establish a beachhead in a new space.

Every business needs to have clear leadership in some sectors of the target market for long term sustainability. More importantly, it rallies the team together and is something to be proud of. When we transform our business model to a managed service model, our customers see real benefits and cost savings. Instead of the traditional deployment of many security guards, we use remote monitoring from our central monitoring and command centre to safeguard property.

This helps optimise manpower, save cost immediately, and decrease carbon footprint – all through leveraging on technology. Exactly what the Singapore government is trying to advocate with the Industry Transformation Map for security.

Alan Lee: Important business information on customers, products, prices, orders, stock and finances are now centrally stored in an electronic resource planning system; this increases efficiency and cuts down the time spent on paperwork. A purchase requisition that needed 2 forms and took 30 minutes to prepare together with the required signatures, now takes less than 5 minutes with electronic approvals and without need for a single sheet of paper.

We can also respond quickly to requests from clients in different time zones. For example, it is now possible to remotely extract data at any time from the office server for sending to customers in any part of the world. We also have better visibility of our inventory and control over our production capacity.

Marcus Neo: We are ready when work from home was implemented for safe distancing. Business can run as per normal from anywhere in the region. We are able to grow faster even with the constraint of manpower shortage.

Question: In an uncertain operating environment caused by the ongoing pandemic, how important is enterprise transformation for a business in your view?

Toby Koh: Businesses which do not transform and adapt, may not be sustainable in the longer term. Business owners have little choice but to consider how to pivot their models for the future. Relooking at one’s unique value proposition and stress testing past business models for validity is now a half yearly exercise and not a 3 to 5 year plan.

Alan Lee: Elmich has been ISO 22301 Business Continuity Management (BCM) certified since 2012. This has never been more important during the on-going pandemic as we are able to operate under unexpected conditions. BCM has raised our resilience and allows us to better navigate the new challenges in these unprecedented times.

Marcus Neo: We set high sustainable results with our stakeholders who include customers, shareholders and employees. (So) we are in the process of continuous quality improvement in our businesses and operations through innovation and creativity; (and) we are committed to growing business while meeting business ethics, governance and regulatory compliances.

Question: How has the pandemic affected your business? What are some of the efforts put in by the company to stay relevant and competitive amid an ever changing environment?

Toby Koh: Covid has impacted our business both positively and negatively. On the positive side, Singapore, which is our headquarters, has performed very well. This pandemic has helped speed up adoption of our managed services by customers especially since they all wanted immediate cost savings.

However, our 6 overseas subsidiaries have had frequent disruptions during these times with movement restrictions and hence, it has been challenging to execute projects and visit clients. We have had to use more collaboration tools to help our clients achieve their end goals and still deliver our services sometimes from remote locations.

Some of my colleagues even volunteered to live on the client’s premises for months in order to fulfil the client’s operational requirements. Our willingness and ability to meet our customers’ needs even with extremely challenging conditions across the Apac region has further cemented their faith in us.

Alan Lee: The pandemic and the resultant disruptions to the supply chains including shipping significantly affected the availability and costs of imported products as well as the availability and costs of our own products that are used both locally and exported. It also had a major impact on demand due to shut downs at construction sites.

During this period, we took the opportunity to review our strategic business plans and re-chart our growth plans, improve our product innovations and production tool designs and improve our marketing collaterals.

Marcus Neo: We always plan for the worst and hope for the best.

Question: What advice would you give to companies that are planning for their own transformation?

Alan Lee: Before planning for business transformation, it is necessary to conduct a self-assessment of the existing weaknesses of the business processes and strategies. There are several schemes available from Enterprise Singapore for small and medium-sized enterprises (SMEs) that can seek assistance with the business transformation.

Marcus Neo: Do not be complacent and overambitious. Most importantly you will need to gather support from your stakeholders.

Toby Koh: Engage your team and get their buy-in. Success can only be a team effort. Take baby steps. One massive transformation move may sometimes be too demanding on the team’s resources. Small victories will encourage your team and increase the momentum. Validate, validate and validate again that your transformation strategy makes sense to customers, team and market.

The E50 Special Recognition Award – Enterprise Transformation is supported by the Future Economy Council

This story was first published in The Business Times.