proposal for setting up integrated service desk for ...repository.um.edu.my/805/1/integrated service...
TRANSCRIPT
PROPOSAL FOR SETTING UP
INTEGRATED SERVICE DESK FOR INFORMATION TECHNOLOGY (IT) DIVISION OF
A PROMINENT INSURANCE AND TAKAFUL COMPANY IN MALAYSIA
BY MOHAMAD AZMAN SOAED HISHAMUDIN HAJI WAHID
FACULTY OF BUSINESS & ACCOUNTANCY UNIVERSITI MALAYA
JULY 2008
PROPOSAL FOR SETTING UP INTEGRATED SERVICE DESK FOR
INFORMATION TECHNOLOGY (IT) DIVISION OF A PROMINENT INSURANCE AND TAKAFUL
COMPANY IN MALAYSIA
BY MOHAMAD AZMAN SOAED Bachelor of Business Administration
Western Michigan University Michigan
United States of America 1991
HISHAMUDIN HAJI WAHID
Bachelor of Science University of Pittsburgh
Pennsylvania United States of America
1993
SUBMITTED TO THE GRADUATE SCHOOL OF BUSINESS, FACULTY OF BUSINESS AND
ACCOUNTANCY, UNIVERSITY OF MALAYA, IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
JULY 2008
ACKNOWLEDGEMENT
First and foremost, we are greatly thankful to our supervisor, Dr Noor Akma Mohd
Salleh. Her guidance and advice have been very valuable towards the completion of
the project.
Abundance of thanks to En. Azizi, the Head of Information Technology of the
Insurance and Takaful organization, for the blessing to carry out and complete the
project at the company. Our most heartfelt thank you also goes out to Mr Ng, Encik
Syed, Encik Kiswadi, Encik Hazmin, and all the staffs whose involvement and ideas
are crucial in making the interview sessions successful.
Great To our spouses and children deserve our undying gratefulness for their patience,
support and encouragement during these tiring moments. Not to forget our friends
Awasi Mohamed and Mohd Yazid Jali for being great course mates throughout these
years.
Our warm and sincere thank you to Dr. M Fazilah Abdul Samad, Director of UM
Graduate School of Business, and her team of professors and other administrative
team for all the knowledge, support, and happy moments we experienced in this great
campus of academy. Finally, we feel blessed and overjoyed to be able to present our
final project paper after going through three years of hard work and challenging
moments.
i
Table of Content
Executive Summary....................................................................................1
PART 1 - INTRODUCTION .................................................................3
1.1 IT Service Management.........................................................................3
Information Technology Infrastructure Library...............................5
Certification and Qualification Scheme.........................................10
IT Service Management and Delivery of IT Services ...................12
Successful Implementation of IT Service Management ................13
1.2 Service Desk ........................................................................................17
Scope of Service Desk ...................................................................18
Service Desk and Help Desk..........................................................21
Benefits of Service Desk................................................................22
Literatures on Service Desk and Help Desk ..................................24
PART 2 - THE PROJECT....................................................................26
2.1 Objective ..............................................................................................26
2.2 Justification for Focus of Project .........................................................27
IT as Business Driver.....................................................................28
Strategic IT Planning .....................................................................29
IT Outsourcing – A Global Phenomena.........................................29
Service Level Management............................................................32
Managerial Problem with Existing Vendor ...................................34
2.3 Research Methodology ........................................................................35
Research Design.............................................................................35
Preliminary Study ..........................................................................36
Sample Framework ........................................................................37
Target Group..................................................................................38
ii
Data Collection ..............................................................................39
Interviews.......................................................................................39
Secondary Data ..............................................................................40
Observation Method.......................................................................43
Types of Observations ...................................................................44
PART 3 - THE COMPANY.................................................................49
3.1 Background of the Company ...............................................................49
Insurance Business Unit for a Leading Financial Institution.........49
The ‘Insurance Group’ Of Companies...........................................50
Vision and Mission ........................................................................51
Merger and Acquisition .................................................................52
The New Brand Vision ..................................................................54
BO-A New Brand Attributes .........................................................55
3.2 Business Activities...............................................................................56
Business Operation Model.............................................................57
Business Portfolio ..........................................................................58
Business Performance....................................................................59
3.3 IT Operation.........................................................................................61
IT Operation Model and Group IT Policy .....................................61
PART 4 - THE ANALYSES................................................................62
4.1 Current State of IT Services and Support ............................................62
IT Help Desk..................................................................................62
IT Application Support ..................................................................66
4.2 Weaknesses and Issues of Current IT Support Structure.....................68
Analytical Observation ..................................................................68
Management Report.......................................................................70
Interview with the Employees .......................................................72
Other Findings from Interviewees’ Responses ..............................77
Insource Versus Outsource ............................................................80
iii
4.3 Proposed Course of Action ..................................................................84
Summary of Issues.........................................................................84
Proposed Solution: Integrated Service Desk..................................85
Rationale of Recommendation.......................................................88
PART 5 - RECOMMENDATION AND CONCLUSION ..................90
5.1 Service Desk Infrastructure..................................................................90
Process Flow ..................................................................................91
Business Process and Procedure ....................................................92
System Design ...............................................................................98
Training........................................................................................101
New Service Level Agreement ....................................................102
Work Area....................................................................................103
Governance ..................................................................................106
5.2 Project Implementation and Key Milestone ......................................109
5.3 Conclusion .........................................................................................111
Reference ............................................................................................113
Appendix 1 – Interview Questionnaire...................................................117
Appendix 2 – Financial Reports .............................................................118
iv
Abbreviation
BO-A Business Organization A
BO(P)-A Business Organization (Parent) A
BO-G;T;L;C Business Organization – Subsidiaries of BO-A
BO-LL Business Organization – Subsidiaries of BO-L
BO-N Business Organization – Subsidiaries of BO-C
OV-B Outsourced Vendor B
IT Information Technology
ITD Information Technology Division
ITSM IT Service Management
ITIL IT Information Library
SLA Service Level Agreement
SLM Service Level Management
IT Application An area of IT function related to the design, programming,
maintenance, and support of the computer application system
IT Infrastructure An area of IT function related to the design, acquisition,
installation, maintenance, and support of the computer hardware,
software, network, database and data storage, and other computer
devices and peripherals
v
Executive Summary
The ‘Insurance Group’ is fast expanding in the ever competitive insurance and takaful
industries. Ineffective implementation of the IT Service Management leads IT to lack
focus on the business need, misalignment of IT with corporate strategy, problematic
delivery by outsource vendor, ineffective management of service level, and lack of
management control on the Help Desk function. Thus, the need for improved and
more effective implementation of IT Service Management is the basis to justify for
this project. IT Information Library is one best-practice that provide the most
recognized and comprehensive guidelines for the adoption and implementation of
effective IT Service Management. Objectives of the projects are: to investigate the
current setup of Help Desk; to examine weaknesses and issues on the current Help
Desk; and to recommend necessary course of actions.
The following gaps are identified from the current setup of the outsource Help Desk:
• Users do not get end-to-end support from the IT support service
• Status of request and incident are not updated to the users
• There is ineffective monitoring and escalation of outstanding issues
• Certain areas in the Help Desk are too technical and lack user friendliness
• There is no service level defined for User ID and password issues; and
• There is lack of effective governance by the management
• Overall performance of Help Desk is well below the expectation
• Implementation of Help Desk is not aligned with the corporate direction
Page 1
Considering for a consolidated Service Desk that integrate both internal IT
Application support and Infrastructure support by outsource vendor is the strategy to
create a single point-of-contact for logging, tracking, and delivering result to end
user’s problem and request for IT services. The following improvements are
recommended to support the effective Service Desk infrastructure:
• Improved process flow that facilitate efficient delivery of the support services
• Refined process and procedure that clarify the Service Desk activities
• Enhanced system functionality to support integration of technical team and
more friendlier self-help functions for the business users
• Leveraging on the strength of existing human and technical resources for
extended service hours
• Effective training of cross functionalities between the two support team
• Refined Service Level Management to cater for ultra efficient service
requirement for user ID and password issues
• Conducive work area to support delivery of agreed service level
• Good governance model and practice to monitor and maintain the acceptable
service performance
In summary, integrated Service Desk would turn the IT organization from the generic
technologically and technically inclined operation into a more service-oriented and
business-focused function. Thus, strategic implementation and effective infrastructure
of the integrated Service Desk would put back the IT Service Management on track. It
also ensures the alignment of IT organization with the business direction.
Page 2
PART 1 - INTRODUCTION
1.1 IT Service Management
In the business world today, bridging the operational divide of Information
Technology (IT) is necessary in order IT service provider to produce the most
efficient, effective, economical, and equitable IT organization possible. Providers of
IT services can no longer afford to focus on just the technology and their internal
organization, they now have to consider and focus on the quality of the services they
provide and on the relationship with customers.
Information Technology Service Management (IT Service Management) is a
discipline that helps IT managers to manage IT services and deliver to users from the
customer’s perspective, rather than the technological one. IT Service Management is a
discipline for managing IT systems, philosophically centered on the customer’s
perspective of IT contribution to the business. IT Service Management stands in
deliberate contrast to technology-centered approaches to IT management and business
interaction.
IT service providers provide IT service of value to the business organization. They do
this by executing IT Service Management, using an appropriate mix of assets. These
include various resources and capabilities: Management, Organization, Process,
Knowledge, People, Information, Applications, Infrastructure, and Financial Capital.
Internal and external suppliers of IT components provide the IT service provider with
Page 3
Applications, Data, Infrastructure and Environment, which the IT service provider
‘assembles’ into IT services.
The scope of IT Service Management according to Information Technology
Information Library extends partially into the domain of the suppliers of IT
components. The manufacturing of standard products such as laptops, servers,
operating systems, tooling and generic packaged applications is excluded from IT
Service Management but the production of products made to order is partly included.
This generally applies more often to applications than to infrastructural components.
In the case of packaged applications that have to be extensively customized in order to
be used effectively, the production of the standard application is excluded but any
customization is included.
The following diagram in Figure 1.1 illustrates the flow of IT products and services
and the scope of IT Service Management.
Figure 1.1 – IT Service Management within the IT service chain
Page 4
Information Technology Infrastructure Library
Information Technology Infrastructure Library (IT Information Library), commonly
referred to by its abbreviation ‘ITIL’, is the only consistent and comprehensive
documentation of best practice for IT Service Management. IT Information Library is
a cohesive best practice framework, drawn from the public and private sectors
internationally.
IT Information Library views the IT Service Management domain by primarily
describing the phases of the service lifecycle. It describes the organisation of IT
resources to deliver business value, and documents processes, functions and roles in
IT Service Management. Within this perspective it uses processes that detail parts of
one or more phases. Alongside processes, descriptions of organizational functions and
activities are also used to provide guidance.
The recommendations within IT Information Library were first developed in 1980s by
a UK Government's agency which later merged into the Office of Government
Commerce (OGC), an office of the UK Treasury. The concepts were initiated in
response to the growing dependence on IT and a recognition that without standard
practices, government agencies and private sector contracts were independently
creating their own IT management practices and duplicating effort within their
Information and Communications Technology (ICT) projects resulting in common
mistakes and increased costs. As published in its official website,
http://www.ogc.gov.uk/, the Office of Government Commerce is “responsible for
improving value for money by driving up standards and capability in procurement,
Page 5
from commodities buying to the delivery of major capital projects, maximising the
effective use of 60 percent of Government spending and a £30 billion property
estate”.
IT Information Library is built around a process-model based view of controlling and
managing operations often credited to the famous quality guru, W. Edwards Deming.
The ‘ITIL Version 3’ published in the website (http://www.itil.co.uk/) in September
2007 takes a lifecycle approach to guidance, as opposed to its earlier versions that
were organised according to IT delivery sectors . The current version comprises 5
volumes with overview being described in the Table 1.1 below:
Table 1.1 –Overview of topics of the five volumes in ITIL Version 3
Topics of ITIL Version 3 Overview of topics
1. Service Strategy The achievement of strategic goals or objectives requires
the use of strategic assets. The guidance shows how to
transform service management into a strategic asset.
2. Service Design Guidance on designing IT services, along with the
governing IT practices, processes and policies, to realize
the strategy and facilitate the introduction of services
into the live environment ensuring quality service
delivery, customer satisfaction and cost-effective service
provision.
Page 6
3. Service Transition Guidance for the development of capabilities for
transitioning new and changed services into operations,
ensuring the requirements of Service Strategy, encoded
in Service Design, are effectively realized in Service
Operations while controlling the risks of failure and
disruption.
4. Service Operation Guidance on achieving effectiveness and efficiency in
the delivery and support of services to ensure value for
the customer and the service provider. Strategic
objectives are ultimately realized through Service
Operations.
5. Continual Service
Improvement
Guidance in creating and maintaining value for
customers through better design, introduction and
operation of services, linking improvement efforts and
outcomes with Service Strategy, Design, Transition and
Operation.
It is quoted in the IT Information Library official website that research confirms the
approach above provides the following benefits:
• Establishes the integration of business strategy with IT service strategy.
• Enables agile service design and a ROI (Return on Investment) blueprint.
• Provides transition models that are fit for purpose in a variety of innovations.
• Demystifies the management of service providers and sourcing models.
Page 7
• Improves the ease of implementing and managing services for dynamic, high
risk volatile and rapidly changing business needs.
• Improves the measurement demonstration of value.
• Identifies the triggers for improvement and change anywhere in the service
lifecycle.
• Addresses the current gaps and deficiencies in IT Information Library today.
The diagram in Figure 1.2 illustrates the five subject areas within the IT services
lifecycle as described in the ‘ITIL Version 3’ as adopted from the publication of The
IT Service Management Forum, titled ‘An Introductory Overview of ITIL® V3’
(Cartlidge et al, 2007).
Figure 1.2 – IT information Library within the IT services lifecycle.
Page 8
IT Information Library philosophy provides guides on the provision of quality IT
services, and on the accommodation and environmental facilities needed to support IT
organization. The philosophy behind the development of IT Information Library is the
recognition that organisations are becoming increasingly dependent on IT in order to
satisfy their corporate aims and meet their business needs. This leads to an increased
requirement for high quality IT services.
IT Information Library provides the foundation for quality IT Service Management.
The widespread adoption of the IT Information Library guidance has encouraged
organisations worldwide, both commercial and non-proprietary, to develop supporting
functions such as Service Desk to realize the IT Information Library philosophy.
Most IT organisations around the world adopted the IT Information Library
philosophy, either via reference to the available guidance contained within the IT
Information Library books or even via subscription to its professional qualification
scheme. One of the primary benefits claimed by proponents of IT Information Library
within the IT community is its provision of common vocabulary, consisting of
enhanced glossary of tightly defined and widely agreed terms as a key deliverable of
the IT Information Library Version 3.
References to almost all of technical terminologies related to IT discussed in this
project are made to the ‘ITIL Glossary of Terms and Definitions’ released in 30 May
2007.
Page 9
Certification and Qualification Scheme
IT Information Library Qualification Scheme provides certification to support the
formalized learning requirement for individuals and organization related to IT Service
Management. Based on the ‘ITIL Service Management Practices’ published in
November 2007, the qualification scheme covers a broad scope of subject areas and
capability elements including Service Level Management, Incident Management,
Problem Management, Service Desk, Supplier Management, and Change
Management.
Table 1.2 in the next page provides a full list of the capabilities elements in the
subject areas are grouped in various combinations and organized into three levels of
certifications: Foundation Level, Intermediate Level, and Advanced Level to cater for
different role and level of practice of the IT Information Library philosophy.
While the qualification scheme certifies the subscribers to the formal learning process,
it does not guarantee for effective adoption and implementation of the IT Information
Library best practices to support the IT Service Management of one organisation.
Page 10
Table 1.2 – List of subject areas covered in the ‘ITIL Qualification Scheme’
Page 11
IT Service Management and Delivery of IT Services
A research conducted based on survey responses from Chief Information Officers
(CIOs) revealed that one of the biggest drivers for IT Service Management adoption is
the desire to create a common business language that ensures IT, the business and
external service providers all communicate effectively, so as to deliver the highest
levels of service to customers (PR Newswire, 2008). According to the survey, there is
“a link between adoption of frameworks such as IT Information Library and an
organization's ability to establish and maintain clear channels of communication”.
These improved communication channels enable IT organization to provide more
effective end-to-end service delivery to the internal and external customers.
The research was commissioned by Dimension Data on more than 370 CIOs from 14
countries across five continents reveals that globally, more than 90 percent of CIOs
believe IT Service Management can help align IT and business through the creation of
a common understanding of the scope and term of reference of the IT services. This is
particularly significant when an organization adopts a multi-sourcing strategy that
entails using many best-in-class service providers to manage different functions
within the business. Under these circumstances, a ‘common language’ enables every
department to have a clear project definition and insight into expectations and
responsibilities.
Page 12
Successful Implementation of IT Service Management
Although IT Information Library is recognised to provide most acceptable best
practices for IT Service Management, it only provides high-level concept that focuses
on ‘what’ should be done, but doesn’t describe at a detailed level ‘how’ to do it.
According to an article published in the web page ITSMWatch.com titled “How to
Ensure a Successful ITIL Implementation”, it is mentioned that ensuring success in
the implementation of IT Information Library requires a lot of understanding from IT
and the business. One main reason is that even though IT Information Library is a set
of integrated, best practices the program does not provide step-by-step explanation
that lays out the exact ways on how things should be done.
It is recommended from the study that it is important for IT and business executives to
work together to understand what specific business problems they are trying to
resolve, and how IT Information Library can be an enabler to solving them.
A smart IT team can start assessing the various business units to understand their
short-term and long-term goals, and determine how IT fits in. The basic intelligence
should provide IT management with a good feel for where the business is at today,
where it is going and to determine the best implementation of IT Information Library
around the aggregated goals.
Both IT and business executives should then work together to determine the relevant
IT services as described by the IT Information Library, and negotiate formal service
Page 13
level agreements that correctly match the expectations of business needs with what IT
is capable of delivering. The study concludes that IT information Library should be
viewed as a means to an end.
Implementation of IT Service Management should also be measurable to determine
the level of implementation success. Thus, effective metric management is important
in achieving accurate measurement of the implementation of technology services.
Evans (2005) wrote in an article titled ‘IT Metrics And Successful Measurement’ that
achieving value-based measurement and continuous improvement of IT services
requires the implementation of activities based on what the organizations want to
accomplish, not on what they want to measure. The attributes in measuring the
primary accomplishment should be based on the effective alignment of services with
the current and future needs of the business and its customers as described and
recommended by IT Information Library framework and IT Service Management.
Evans listed the following key attributes to be considered in the metric management
to achieve the above measurement:
Vision: The future state of any measurement program should be clearly outlined,
specifically identifying the people, processes and technologies that are required to
support the future state vision.
Page 14
Assess: Evaluate the current state of any existing measurement system and understand
how best-in-class organizations implement these systems. Activities that are not
value-based should be stopped immediately.
Staffing: IT measurement is primarily built around people with clear roles and
responsibilities to ensure accountability and efficiency. Obtaining formal commitment
from senior management on support staff is critical to the success of any measurement
program.
Documentation: Measurement goals, objectives, milestones and underlying activities
should be formalized to ensure sponsorship and continuity. Just like the core IT
service support and delivery processes, the IT measurement process should also be
captured and documented.
Communication: Communication is required for measurement sustainability and
ensures the entire organization understands and supports the program. More
specifically, it is important to identify and maintain communication with those
individuals that create value through use of the resultant performance measures.
Consistency: The core building blocks of measurement should be established with
consistency in order to minimize measurement costs. Specific metrics should be
developed, captured, measured, reported and reviewed in a consistent fashion,
supported by standard procedures, processes and policies.
Page 15
Control: With the advent of IT governance, Sarbanes-Oxley and other legislative
requirements, metrics and measurement should be monitored for completeness,
accuracy, validity and appropriate authorization prior to commencement of any
related activities.
Prototype: A prototype or "proof-of-concept" measurement project may be a key
activity in demonstrating value to the business. In turn, measurement activities can be
bootstrapped and evolve with the maturing knowledge and support provided by the
stakeholders.
Prioritize: Any measurement results should be used as an input for prioritizing the
service improvement program portfolio. Just as individual metrics themselves need to
be evaluated for value, improvement projects based on measurement findings need to
be cost-justified and prioritized based their inherent value to the business.
Reporting: The true audience of a measurement program is the business leadership.
Measurement results need to be rationalized, rolled-up and reported in a non-technical
format, on a consistent basis and to the appropriate business audience in order to add
real business value.
Page 16
1.2 Service Desk
Service Desk, as defined by IT Information Library, is a crucial and an integral
function within the IT Service Management that support for effective management of
IT organization and the interaction between IT and users. Service Desk is also a
primary IT capability called for in IT Service Management. It is intended to provide a
Single Point of Contact (“SPOC”) to meet the communications needs of both users
and IT and to satisfy both objectives of customer and IT service provider. Many
organisations have implemented a central point of contact for handling customer, user
and related issues (“user” refers to the actual user of the service, while “customer”
refers to the entity that is paying for service, e.g. business entity).
The IT Information Library approach considers the Service Desk to be the central
point of contact between service providers and users and customers on a day-to-day
basis. It is also a focal point for reporting Incidents (disruptions or potential
disruptions in service availability or quality) and for users making Service Requests
(routine requests for services). The Service Desk handles incidents and service
requests, as well as providing an interface to users for other IT Service Management
activities such as change request.
Within the IT Information Library Version 3, Service Desk is discussed under the
topic Service Operation as part of the Incident Management Process and Problem
Management Process.
Page 17
Scope of Service Desk
The specific responsibilities of Service Desk, as described in the ‘An Introductory
Overview of ITIL® V3’ publication, are:
• logging all incidents and requests, categorizing and prioritizing them;
• first-line investigation and diagnosis;
• managing the lifecycle of incidents and requests, escalating as appropriate and
closing them when the user is satisfied; and
• keeping users informed of the status of services, incidents and requests.
Incident Management
An incident, as defined by the IT Information Library, is an unplanned interruption to
an IT service, or a reduction in the quality of an IT service. The primary objective of
Incident Management is to restore normal service as quickly as possible, and to
minimize the adverse impact on business operations.
Incidents are often detected by event management, or by users contacting the Service
Desk. The incidents are then categorized to identify who should work on them and for
the purpose of trend analysis. Incidents are prioritized according to urgency and
business impact. If an incident cannot be resolved quickly, it is “escalated” to a
specialised technical support team. After the incident has been investigated and
diagnosed, and the resolution has been tested, the Service Desk should ensure that the
user is satisfied before the incident is closed.
Page 18
“Escalation” is defined in IT Information Library as an Activity that obtains
additional Resources when these are needed to meet the targeted level of service, or
customer expectations. Escalation may be needed within any IT Service Management
process, but is most commonly associated with Incident Management, Problem
Management and the management of customer complaints. There are two types of
Escalation: Functional Escalation and Hierarchic Escalation.
Meanwhile, a problem is a cause of one or more incidents. The cause is not usually
known at the time a problem record is created, and the problem management process
is responsible for further investigation. The key objectives of Problem Management
are to prevent problems and resulting incidents from happening, to eliminate recurring
incidents and to minimize the impact of incidents that cannot be prevented.
For the sake of simplicity in this project, the term Incident Management and Problem
management would are used interchangeably to refer to a same meaning: a
management process to investigate, resolve, prevent, and minimize the impact of
incident and problem on the users.
Service Request
Service Request is a request from user to obtain any of the following:
• general inquiry or request for information related to IT
• request for advice on IT issues
• request for new computing device
• request for access to an IT application, a network domain, or a file system
Page 19
• request for a standard change in the configuration of IT resource
Example of Service Requests are scenarios when a user is contacting IT to reset a
forgotten password, or a Human Resources personnel send a formal memo to IT to
provide a standard desktop computer for a new employee, or the Head of Finance
Department write an email to IT to upgrade the permission level of a clerk that was
recently promoted to be an Accounts Executive.
Service requests are usually handled by a Service Desk, and depending on areas of the
changes may need for formal documentation of the request description and
authorization to carry out the relevant task.
Change Request
Change Request is a formal proposal or request for change (of Application or
Configuration item) with appropriate approval from the management of customer and
IT service provider. The proposal are recorded either on manual paper or as electronic
format as function within the Service Desk system and tool. The scope of Service
Desk is to provide interface and support for Change Management process.
Change Management is the process responsible for controlling the lifecycle of all
changes. The primary objective of Change Management is to enable beneficial
changes to be made, with minimum disruption to IT services. Change Management
ensure standardized methods, processes and procedures are used for all changes,
Page 20
facilitate efficient and prompt handling of all changes, and maintain the proper
balance between the need for change and the potential detrimental impact of changes.
Change Management is more commonly referred to application changes than
configuration changes. Change of configuration is usually covered under the topic of
Configuration Management. However, request for configuration changes in the
context of this project is part of the Service Request.
Service Desk and Help Desk
The term Help Desk is often used as a synonym for Service Desk. IT Information
Library explains Help Desk as “A point of contact for users to log Incidents”.
However, a Help Desk is usually more technically focused than a Service Desk and
does not provide a Single Point of Contact for all interaction.
As the scope of a Help Desk functions is usually limited to specific technical area(s),
non-integrated multiple Help Desks could not provides a consistent level of service,
or even operate using a standardized set of process and procedures. The Service Desk
differs from a Help Desk by way that it offers a more broad and user-centric
approach, which seeks to provide users with an informed single point of contact for
all of their IT requirements. A Service Desk seeks to facilitate the integration of
business processes into the Service Management infrastructure. In addition to actively
monitoring and owning Incidents and user questions, and providing the
communications channel for other IT Service Management disciplines with the user
Page 21
community, a Service Desk also provides an interface for other activities such as
Change Requests for application program, relationship with third parties (e.g.
maintenance contracts with vendors), and software licensing.
Historically, IT Service Management has been thought of by many to be the
management of service quality delivered by the Help Desk. The evolution and
improvement in IT Service Management is changing the Help Desk to become
Service Desk with expanded responsibilities that touch on service provisioning, asset
deployment and management, monitoring of service level, and many other disciplines
depending upon the organization. Responsiveness and customer management by
Service Desk personnel are both critical and important since it is very often the
Service Desk personnel who are directly touching customers and partners, influencing
their perception of the company.
Benefits of Service Desk
Implementing and effective Service Desk provides a number of benefits to IT
organization and the enterprise. The following list of benefits for implementing
Service Desk is adopted from an article titled “Service Management Functions”
(Broadhurst, 2008).
• Improved customer service that augments the customer's perception of the IT
department service delivery capabilities and increases customer satisfaction.
Page 22
• Increased accessibility to the functions of the IT department through a single point
of contact, providing a channel for communication and information.
• Better quality of responses and speedier turnaround of customer requests.
• Improved teamwork and communications both within the IT department and with
customers of the IT function.
• Enhanced focus on support requirements.
• A proactive approach to service provisions.
• A better understanding of the business processes supported by IT services, leading
to a reduced negative business impact.
• Better-managed IT infrastructure and better control of its development.
• Improved use of support resources and increased productivity of business
personnel.
• A basis on which to charge for benefits provided by the support desk.
In addition to the tangible benefits listed above, a Service Desk provides value to an
organization such that it:
• acts as a strategic function to identify and lower the cost of supporting the IT and
support infrastructure;
• supports the integration and management of change across distributed business,
technology, and process boundaries;
• reduces costs by enabling more efficient use of resources and technologies;
• supports the optimization of investments and management of the business support
services;
Page 23
• helps to ensure long-term retention and satisfaction of external customers; and
• assists in the identification of business opportunities.
Literatures on Service Desk and Help Desk
In a related service operation similar to Help Desk, centralization provides managers
with the ability to influence decision making, while decentralization provide the Help
Desk operators opportunity to exercise authority in managing the organization’s
communications with customers (Adria & Chowdhury, 2004). Considering the
implication of centralization and decentralization enable Help Desk organization to
capitalize on the moderating effect on competitive strategy.
Most large organizations use more than 30 different applications and types of
hardware. While most organizations prefer the convenience of a centralized Service
Desk, some companies were found to have separate Help Desks for different IT
products or application systems. Such arrangement causes managing the Help Desk
becoming an increasingly difficult job over times as the size and complexity of IT
organization multiplies (Holt, 1999).
Workman and Bommer (2004) find that focus on increasing employee involvement in
work processes gives the most moderating effect on the technology-based phone
support centre such as Help Desk towards increased job satisfaction, organizational
commitment attitudes, as well as on performance (i.e. improved customer satisfaction
Page 24
scores, increased closed problems, reduced problems escalated, and fewer repeat
calls).
Page 25
PART 2 - THE PROJECT
2.1 Objective
The broad objective of this project is to propose the establishment of an integrated
Service Desk for the IT Division of an insurance and takaful company (BO-A) as an
important function to manage and improve the level of service in IT function. In
particular, the following analyses are conducted to achieve the objective of this
project:
• To investigate the setup of current Help Desk function
• To examine the issues and impact on its internal and external customers
• To propose appropriate course of action to address the issue
To investigate the setup of current Help Desk function
Investigating the current environment and setup of the Help Desk operation is the
basis of the analysis and recommendation for appropriate actions for the project.
Understanding what has been accomplished to date and leveraging on the lesson
learned from the experience is consistent with the IT Information Library
recommendation for ‘continual service improvement’. While continuous improvement
provides continuity with minimal disruption of current process, more riskier approach
of ‘reinventing the wheel’ is very much avoided in fear that it takes a much larger
effort and longer process, and a higher rate of failure.
Page 26
To examine the issues and impact on its internal and external customers
Defining the scope of areas for improvement that will benefit from the project
requires examining the problems and limitations experienced by IT organization and
business users of the current Help Desk function. The main method utilised to achieve
this objective is by interviewing a number of selected IT personnel and business users
who are believed to be key stakeholders of the Help Desk, have extended experience
in getting involved in the help Desk operation, and have understanding of the issues
faced by the stakeholders.
To propose appropriate course of action to address the issue
The project will be of no benefit to the audience if it does not formulate appropriate
course of actions to address the issues revealed from the objective above. Alternatives
and improved state of the Help Desk is the basis of the recommendation out of this
project. However, it is upon the deliberation and decisions of BO-A management to
adopt and implement the recommendation laid out in this project.
2.2 Justification for Focus of Project
This section discusses the justification for choosing the organisation and focusing on
Service Desk implementation for this project.
Page 27
IT as Business Driver
IT has been continuously developing into all aspects of business applications, which
makes organization to be highly dependent on IT to support its business operation.
Today, as business activities grow in terms of magnitude, scope, and complexity,
organization relies mainly on strategic IT implementation as enablers to the business-
related capabilities like human resources management, product design and
development, customer relationship management, and other business operations.
IT is the enabler for the value proposition and product differentiation for company to
compete in business. Thus, it is always sensible to look into ways of continuously
improving the operation and management aspect of IT to keep pace with the business
expectations.
Based on a study issued by Gartner in early 2008 titled ‘Making the Difference: The
2008 CIO Agenda’, enterprises expect IT to deliver solutions beyond the generic
technologies that do not contribute to a unique customer experience. Business
executives have growing expectation on IT to deliver a difference on the IT solutions
that help enterprise to attract, engage and retain customers. Delivering on these
expectations requires IT to create distinctive solutions that make the enterprise stand
out in the business. This will also change the role of IT organizations from technology
provider to solution partner.
Page 28
Strategic IT Planning
Effective IT Service Management requires proper planning and implementation, not
just within IT, but must also be aligned with business objectives. As one of the
important and integral element of IT Service Management that connect IT with
internal and external customers of a company, Service Desk is apparently an
important area that business organization should consider to help achieve the IT and
business objective.
Mesaglio and Aron (2007) reported that it is critical for Chief Information Officer
(CIO) and IT organization to participate effectively in corporate planning for the
success of business and IT function. Effective participation in corporate planning
ensures that the IT organization is contributing the right things, in the right ways, to
support the business. CIO can use a variety of methods and best practices to influence
and align with the corporate planning process, and to achieve a good balance between
short-term pressures and long-term strategic goals.
IT Outsourcing – A Global Phenomena
In order to maintain competitive advantage in the global market, business model need
to be more innovative. While outsourcing of non-core IT function free-up many
resources to focus on the core competencies, it also requires special attention to
Page 29
maintain control over the function and minimize the risk of failure in the business
front.
Companies may be looking for ways to better leverage its IT assets, or simply looking
to a vendor to provide a wider range of support, including IT Help Desk. Having an
outsource arrangement with an external vendor, OV-B, for its Help Desk function in
BO-A IT Division (ITD) may be strategic in nature. However, ensuring the outsource
vendor to perform up to the expectation of business user is a renewed challenge to the
business administrator.
Litan and Knox (2003) concluded that outsourcing is now a strategic issue in financial
services. Outsourcing is not just about cutting costs, but also about allowing
enterprises to focus on core competencies and spend less on managing commodity
activities. However, enterprise must be cautious on adopting the strategy or risk to
take in more costs than the benefits. Two case studies were analysed which one of it
was a United States-based insurance provider.
It is rather common that IT organization and the business enterprise get more negative
perception on the external service providers that produces results of many deals less
than successful. Scardino (2002) analysed and listed out six common mistakes made
by enterprises when outsourcing IT services to external service providers. Learning
from these mistakes and leveraging to improve the situation helps to create best
practices for the enterprise.
Page 30
The following list of common mistakes from outsourcing arrangement of IT services
is adopted from an article published by Gartner titled “Inside Outsourcing: Six
Mistakes for Enterprises to avoid”. The analysis was based upon more than 10 years
unique experiences gained by Gartner having interacted with business enterprises at
the beginning, middle and end of their outsourcing deals.
Short-term focus: Executive management sees outsourcing primarily as a way of
cutting costs in the short term and does not consider the long-term implications.
Poor communication: Failing to keep staff members fully informed about
outsourcing plans causes morale to plummet and leads to an exodus of the most
valuable staff members.
Inadequate service levels: Enterprises fail to set Service Level Agreements from a
business perspective and do not communicate results to the right people or business
units.
No benchmarks: Without benchmarks, an enterprise cannot analyze an outsource
vendor’s performance, a problem that is exacerbated because most outsourcing
contracts are not designed to cope with the inevitable changes in business
requirements.
Failure to recognize risk: Enterprises consistently enter into outsourcing deals
without considering their own risks or those of the external service provider, and how
those risks can be mitigated.
Page 31
Insufficient resources: Enterprises do not make plans or budget for sufficient
resources to manage their outsourcing deals, assuming that once the contract is
signed, internal resource is no longer required for the outsourced functions.
Service Level Management
According to IT Information Library, Service Level Management (SLM) is the
process responsible for negotiating Service Level Agreements (SLA), and ensuring
that the said level of service is met. Service Level Management also includes
monitoring and reporting on service levels of IT functions, and conduct of regular
customer reviews of the service levels.
Being a function to receive, channel, and even resolve request and problem reporting
from business users, Service Desk is a critical component to bridge and provide
efficient channel between IT and users towards effective Service Level Management.
In addition, a key objective of outsource arrangement in the BO-A IT services is to
improve service levels between IT and business users.
Brittain and Matlus (2002) defined the Service Level Management as the process of
negotiating, defining and managing the levels of IT services that are offered to
business users. In other words, Service Level Management is the extension of the IT
Service Management effort. The challenge for IT organizations is on how to develop
the strategy to successfully implement the SLA.
Page 32
The authors outlined on the methodology to strategize the delivery and
communication of IT service to the end users with appropriate quality, and integrate
the IT measurement into the operational and strategic IT management.
The basis of the strategy to implement IT Service Management begins with ‘planning’
and followed with the ‘productization’. Planning is the process of identifying and
defining the end state of IT services, amalgamated for the internal and external
context of the business enterprise and the IT organization. Productization is to solidify
the definitions above into Service Level Agreements (SLAs) that are made up of
service types, business applications, operational services and external services.
‘Delivery’ and ‘review’ are the routines of each resource, human and tool, in the IT
organization. Delivery is the execution of IT operation in accordance to the SLA,
including effective use of Service Desk for capturing and monitoring problems,
requests and processes correlated to the delivery of services identified within the
SLAs. Data captured from users and IT is only of value when the areas of success and
failure are reviewed against the metrics agreed on within the SLAs.
To complete the cycle, a ‘revise’ process is critical to enable IT organizations to
leverage on the knowledge gained to improve the services. Enterprises must
continuously revise the IT services because of the constant changes that take place in
the IT organization and business units. This can be attained by way of re-evaluating
the SLAs and making use of new and improved technology to enhance the
processes/procedures and automation. The result provides the IT organization with
Page 33
SLAs as an effective tool for measuring and managing IT services. Business
enterprises must consider an IT Service Management framework because it links the
IT organization to the business units through offering services that add business value.
Managerial Problem with Existing Vendor
Review of secondary data was performed on minutes of IT Management Team
meeting conducted between November 2006 and January 2008. Based on the review,
there seems to be lack of monitoring of performance of Help Desk function by
outsource vendor (OV-B) discussed by the IT management of BO-A. The
management of IT began an attempt to receive regular reporting and monitor the
performance of Help Desk by the outsource vendor, as quoted from the minutes of IT
Management Team meeting in July 23rd, 2007, page 1:
Tabled/Discussed Resolution/Action
(OV-B) Services
The Chairman mentioned that he had directed (Manager M) to initiate a review with OV-B team on the following:
• Helpdesk function
• PC related matters
Action: (Manager M) to initiate discussion with OV-B team to review the state of OV-B Helpdesk service and PC purchase through OV-B.
Although there has been relevant reports tabled in the management meeting in
November 2007, there is no satisfactory comment or follow-up on the continuity of
the issue reported above either in that particular meeting or in any of the subsequent
ones.
Page 34
2.3 Research Methodology
Research Design
This project is qualitative research in nature, in which the project emphasis on the
interpretation of an individuals or the organizations that are being studied. The
researcher does not start with a theory and prove it; qualitative research starts with an
area of study – whereby the researcher allows the relevant study to emerge (De Vos et
al., 2002, pp. 274). In qualitative research, questions can be changed and/or rephrased
so that the results are truly drawn from the respondents as the research develops. The
assessment and outcome of the study is explained in ‘The Analyses’ chapter that
describes the current issues and problem faced by IT and business users in BO-A
business and IT environment. The research design of this project is exploratory in
nature. Exploratory research gains insight into a situation or phenomenon.
The phenomenon that is explored in this project is how to resolve the current issues of
OV-B Help Desk operation in supporting its internal customers. The other research
methodology used is by use of secondary data and through observation. The sources
of secondary data are minutes of meetings of BO-A ‘Group IT Steering Committee’
and ‘IT Management Team’ of slightly more than one year prior to this project,
documented internal policies and procedures, best practices recommended and
research conducted by industry practitioner, annual financial reports, and data from
the company’s website and Bursa Malaysia. The observations are conducted on the
common and routine activities of Help Desk personnel, IT technical teams, IT
Page 35
Application teams, and business users when contacting and obtaining service from
Help Desk.
Preliminary Study
De Vos et al. (2002, pp. 337) express the opinion that a preliminary study in
qualitative research provides the researcher with the means to test the nature of
questions in an interview schedule and to make modifications with a view to quality
interviewing during the main investigation. Apart from the above the preliminary
study will also assist to:
• evaluate the guidelines to the non-structured interview;
• determine the estimated time that will be used during the non-structured
interviews;
• pre-empt any problems that may arise during the non-structured interviews;
• determine from the respondents the names of organizations (and possible
contact persons within these organizations) that have involved with IT Help
Desk; and
• determine from the respondents in the preliminary study the target group at
which the non-structured interviews should be targeted at.
Page 36
The data collection process followed in the preliminary study was as follows:
• The project team approached some of the departments via telephone
conversations, identified possible respondents by asking for the names of their
respective key Help Desk users.
• After obtaining these names and requesting to speak to them, the project team
identified himself and explained the reason of the project and requested from
the possible respondent if they would be willing to participate in the
preliminary study.
• Four respondents indicated that their respective organizations would take part
in the preliminary study, after which individual appointments with the
respondents were arranged. For reasons of confidentiality the names of these
organizations are not published, but can be obtained from the project team for
verification purposes.
• At these scheduled interviews the discussion focused on Help Desk in general,
as well as requesting from the respondents the names of department known to
the respondents that have extended use and involvement with Help Desk (and
possible contact persons).
Sample Framework
In qualitative research non-probability sampling techniques are used instead of
purposive sampling techniques. Qualitative research’s intended purpose is to study
Page 37
individuals, groups or settings where the specific phenomenon being studied is most
likely to occur. De Vos et al. (2002, pp. 334) express the opinion that in qualitative
research “data are derived from one or two cases”. In this instance it is therefore
unlikely that these cases are selected randomly out of the population.
A benefit of the above sampling methodology is that the respondents knew and
provided the project team with the names and contact details of the key Help Desk
users and/or strategic business and technology developers within the organizations.
Target Group
The targeted group was identified through the preliminary study which consists of
managers and key personnel who are responsible in managing business unit and IT
unit, as well as strategic business and technology developers, who are involved in the
development of the strategic area of the organization. Strategic business and
technology developers who were identified through the preliminary study would be
able to assist the company in identifying the major critical factors in the
implementation and operation of the current Help Desk model. These strategic
business and technology developers have in-depth knowledge of the organization’s
strategic intent, metrics and measures required to measure the value contributed by
various projects in BO-A.
Page 38
Data Collection
The source of data collection was through non-structured interviews, guided by an
interview schedule. This constitutes the most important part of the empirical study as
the analysis of this data should confirm or contradict the researcher’s proposition and
model.
Interviews
This section of the empirical study describes the process followed by the researcher
during the interviews. The respondents (target group) in the organizations identified
through the sampling method were contacted by the researcher. The respondents’
names (managers and key personnel of and strategic business and technology
developers) and contact details identified and respondents through the sampling
methodology and preliminary study. These details are available from the researcher
for verification purposes.
During the first contact (via telephone) the project team introduced himself, briefly
explained the purpose of the project and enquired from the respondent whether they
would be willing to participate in the project. If the respondent indicated their
willingness to participate in the empirical study a date and venue for the non
structured interviews were determined. The respondent is also provided with an
electronic copy of the guidelines for the non-structured interviews. An additional
Page 39
benefit that flows from providing the respondents with an electronic copy of the
guidelines is that they can themselves determine if they are the correct manager to
respond to the non-structured interviews.
During the introduction to the interview, the respondent is made aware that both the
organizations’ name and that of the respondent would remain confidential. The
confidentiality of “business specific” information relayed to the project team is also
confirmed and the assurance was given that it would be used in the project results
without mentioning either the respondent by name. The respondent’s permission was
also gained to record the non-structured interviews (these recordings are available
from the project team for verification.
Secondary Data
In research, Secondary data is collected and possibly processed by people other than
the researcher in question. Common sources of secondary data for social science
include censuses, large surveys, and organizational records (McCaston, 1998). In
sociology primary data is data the researcher have collected and secondary data is
data the researcher have gathered from primary sources to create new research. In
terms of historical research, these two terms have different meanings. A primary
source is a book or set of archival records. A secondary source is a summary of a
book or set of records.
Page 40
There are two different types of sources that need to be established in order to conduct
a good analysis. The first type is a primary source which is the initial material that is
collected during the research process. Secondary sources on the other hand are
sources that are based upon the data that was collected from the primary source.
Secondary sources take the role of analyzing, explaining, and combining the
information from the primary source with additional information (McCaston, 1998).
Secondary data analysis is commonly known as second-hand analysis. It is simply the
analysis of preexisting data in a different way or to answer a different question than
originally intended. Secondary data analysis utilizes the data that was collected by
someone else in order to further a study that you are interested in completing
(McCaston, 1998). In contrast to secondary data, primary data comes from
observations made by the researchers themselves. This often creates credibility issues
that do not arise with secondary data.
Common sources of secondary data are social science surveys and data from
government agencies, including the Company’s Website, the Bursa Malaysia and
various other agencies. The data collected is most often collected via survey research
methods. Data from experimental studies may also be used. Sources of secondary data
may be classified into qualitative and quantitative. Examples of qualitative sources are
biographies, memoirs, newspapers, etc. Quantitative sources include published
statistics (e.g., census, survey), data archives, market research, etc (McCaston, 1998).
Today, with Internet capabilities, thousands of large scale datasets are at the click of a
Page 41
mouse for secondary data analyst. Globally, there are many sources available. These
sources can arrive from the data arranged by governmental and private organizations,
to data collected by any social researcher. Secondary data analysis is a growing
research tool in our modern day society. Social scientists have the opportunity to
explore massive amounts of secondary data (McCaston, 1998).
As for this project, sources of secondary data are minutes of meetings of BO-A
‘Group IT Steering Committee’ and ‘IT Management Team’ of slightly more than one
year prior to the research project, documented internal policies and procedures, annual
financial reports, best practices recommended and research conducted by industry
practitioner, and data from the company’s website and Bursa Malaysia. Minutes of
management and committee meetings contain data about information, events and
issues that occur in the organization and are acknowledged by the management. This
provides quick gains in data collection for the project, although in sometimes the data
requires clarification or updates of the current status. Internal policies and procedures
explain the formal and documented process involved in the Help Desk activities and
other IT processes. However, where enforcement is lacking or update on the
documented process is not up-to-date, the policies and procedures may not reflect the
actual practice.
Financial statements of the company were used to determine the company’s strength
as one of the reason for company selection for the project. This reference made upon
such secondary data is the published annual financial report, financial statement in the
newspaper and financial magazines.
Page 42
Observation Method
Observational research techniques solely involve the researcher or researchers making
observations. There are many positive aspects of the observational research approach.
Namely, observations are usually flexible and do not necessarily need to be structured
around a hypothesis (remember a hypothesis is a statement about what you expect to
observe). For instance, before undertaking more structured research a researcher may
conduct observations in order to form a research question. This is called descriptive
research. In terms of validity, observational research findings are considered to be
strong. Trochim states that validity is the best available approximation to the truth of a
given proposition, inference, or conclusion (Babbie, 1992).
Observational research findings are considered strong in validity because the
researcher is able to collect a depth of information about a particular behaviour.
However, there are negative aspects. There are problems with reliability and
generalizability. Reliability refers the extent that observations can be replicated.
Seeing behaviours occur over and over again may be a time consuming task.
Generalizability, or external validity, is described by Trochim as the extent that the
study's findings would also be true for other people, in other places, and at other
times. In observational research, findings may only reflect a unique population and
therefore cannot be generalized to others.
There are also problems with researcher bias. Often it is assumed that the researcher
may "see what they want to see." Bias, however, can often be overcome with training
Page 43
or electronically recording observations (Montgomery, 1991). Hence, overall,
observations are a valuable tool for researchers.
Types of Observations
Direct (Reactive) Observation
In direct observations, people know that you are watching them. The only danger is
that they are reacting to the observer presence. There is a concern that individuals will
change their actions rather than showing the observer what their true self. This is not
necessarily bad, however. For example, the contrived behaviour may reveal aspects of
social desirability, how they feel about sharing their feelings in front of others, or
privacy in a relationship. Even the most contrived behaviour is difficult to maintain
over time. A long term observational study will often catch a glimpse of the natural
behaviour. Other problems concern the generalizability of findings. The sample of
individuals may not be representative of the population or the behaviours observed are
not representative of the individual. Again, long-term observational studies will often
overcome the problem of external validity. Ethically, people see the observer, the
subject know the observers are watching them and the subject can ask the observer to
stop (Montgomery, 1991).
Page 44
Two types of commonly used direct observations
Continuous Monitoring:
Continuous monitoring (CM) involves observing a subject or subjects and recording
(either manually, electronically, or both) as much of their behaviour as possible.
Continuous Monitoring is often used in organizational settings, such as evaluating
performance. Yet this may be problematic due to the Hawthorne Effect. The
Hawthorne Effect states that workers react to the attention they are getting from the
researchers and in turn, productivity increases. Observers should be aware of this
reaction. Other CM research is used in education, such as watching teacher-student
interactions. Also in nutrition where researchers record how much an individual eats.
CM is relatively easy but a time consuming endeavour (Montgomery, 1991).
Time Allocation:
According to Montgomery in 1991, Time Allocation (TA) involves a researcher
randomly selecting a place and time and then recording what people are doing when
they are first seen and before they see you. There are several sampling problems with
this approach. First, in order to make generalizations about how people are spending
their time the researcher needs a large representative sample. Sneaking up on people
all over town is tough way to spend your days. In addition, questions such as when,
how often, and where should you observe are often a concern. Many researchers have
overcome these problems by using non-random locations but randomly visiting them
at different times.
Page 45
Unobtrusive Observation
Unobtrusive measures involve any method for studying behaviour where individuals
do not know they are being observed. Here, there is not the concern that the observer
may change the subject's behaviour. When conducting unobtrusive observations,
issues of validity need to be considered. Numerous observations of a representative
sample need to take place in order to generalize the findings. This is especially
difficult when looking at a particular group. Many group posses’ unique
characteristics which make them interesting studies. Hence, often such findings are
not strong in external validity. Also, replication is difficult when using non-
conventional measures (non-conventional meaning unobtrusive observation).
Observations of a very specific behaviour are difficult to replicate in studies
especially if the researcher is a group participant.
The main problem with unobtrusive measures, however, is ethical. Issues involving
informed consent and invasion of privacy are paramount here. An institutional review
board may frown upon the researcher study if it is not really necessary for the
researcher not to inform to the subjects.
Description of two types of unobtrusive research measures:-
Behaviour trace studies involve findings things people leave behind and interpreting
what they mean. This can be anything to vandalism to garbage. The University of
Arizona Garbage Project one of the most well-known trace studies (Montgomery,
1991). Anthropologists and students dug through household garbage to find out about
such things as food preferences, waste behaviour, and alcohol consumption. Again,
remember, that in unobtrusive research individuals do not know they are being
Page 46
studied. Surprisingly Tucson residents supported the research as long as their
identities were kept confidential. Trace studies may yield enormous data.
Disguised Field Observations:
In Disguised field analysis the researcher pretends to join or actually is a member of a
group and records data about that group. The group does not know they are being
observed for research purposes. Here, the observer may take on a number of roles.
First, the observer may decide to become a complete-participant in which they are
studying something they are already a member of. For instance, if the researchers are
a member of a sorority and study female conflict within sororities the researcher
would be considered a complete-participant observer. On the other hand the observer
may decide to only participate casually in the group while collecting observations. In
this case, any contact with group members is by acquaintance only. Here the observer
would be considered an observer-participant. Finally, if the observer develop an
identity with the group members but do not engage in important group activities
consider the observer self a participant-observer. Ethically, participant-observers have
the most problems. Certainly there are degrees of deception at work. The sensitivity
of the topic and the degree of confidentiality are important issues to consider.
Watching classmates struggle with test-anxiety is a lot different than joining
Alcoholics Anonymous. In all, disguised field experiments are likely to yield reliable
data but the ethical dilemmas are a trade-off.
Primary data for this project is obtained using methods of interviews, direct
observations, as well as meeting logs (objective data sources). Primary data is a
reliable way to collect data because the researcher will know where it came from and
Page 47
how it was collected and analyzed since they did it themselves. As for the observation
conducted for this research are unobtrusive; however, the observation is carried out
continuously throughout a period of time by observing the Help Desk employees in a
disguised field analysis.
Page 48
PART 3 - THE COMPANY
3.1 Background of the Company
The insurance and takaful company (BO-A) was formed in 2001 as collaboration
between Malaysia’s largest local bank (BO(P)-A) and one of the largest providers of
integrated financial services in Europe. With a stake of 70 percent by the bank and 30
percent by European financial institution, the partnership encompass the grouping of
all the bank’s general insurance, life insurance and takaful business under the strategic
formation of BO-A as an ‘Insurance Group’.
Insurance Business Unit for a Leading Financial Institution
BO-A is a subsidiary of a leading financial institution in Malaysia (BO(P)-A) as the
major shareholder. BO-A was established to take up the role in consolidating and
strategizing the running of the three insurance and takaful operators to maximize the
shareholders’ value. BO-A is a Shared Services Management Company with the
Divisions of Human Resource Division, Information Systems, Actuarial Services,
Property Management & Administration and the Higher Management under its wing.
Page 49
The ‘Insurance Group’ Of Companies
As a result of the market changes with the entry of more foreign players, the insurance
and takaful industry had become even more competitive. In an effort to stay ahead of
the competition, combining related insurance companies and takaful was an ideal
solution to complement and support each other instead of encroaching into each
other’s markets. Upon its inception for business operation, BO-A was a holding
company of three different licensed operators of general insurance (BO-G), life
insurance (BO-L), and takaful (BO-T). In addition, BO-L also owns an offshore life
insurance company (BO-LL) located in Labuan.
With the strength and trustworthiness of a leading bank in the local market and
expertise of a European partner in bancassurance, the strategic partnership has seen a
growth of gross written premiums issued by the Insurance Group from RM 0.7 billion
in 2002 to RM 1.4 billion in 2005. The Insurance Group, the country’s most
successful bancassurer, envisions to be the leading insurance and takaful provider in
all distribution channels and to venture its takaful business globally.
Page 50
Vision and Mission
Vision of BO-A
“To be the premier provider of Insurance services to the organization through
technologies that enhance business processes under best practices, and to be the
industry leading provider of access to Insurance and Takaful products and services
anywhere, anytime.”
Mission of BO-A
“To provide reliable, effective and efficient Insurance services those promote
innovative services and timely information to support all lines of businesses and
enable aggressive business growth.”
Key Business Principles
The followings are key business principles and high level business objectives of the
organization for the next 3 to 5 years derived from the merger aspirations:
• Manufactures both Insurance and Takaful products for both retail and enterprise
markets. Due to Bank Negara Malaysia requirements, these two lines of
businesses will be manufactured through two separate legal entities
• As a multi-channel company, all products shall be available through all sales
channels
• Solutions will focus on self-service for agents and customers
Page 51
• Establishes one-stop solutions for customers especially for proposal/application
and claims.
• Operations is centralized at Head Office; supported by automated solutions
wherever possible
• Financial processes are centralized and generic for all business lines
• Improves cross-selling and up-selling to existing customers
• Aims for a long-term relationship with customers and promotes customer loyalty
Merger and Acquisition
After 5 years successful operation in its specialised market, BO-A advanced on
another big step through Merger and Acquisition in late 2006 to pursue on becoming a
bigger and stronger player in the insurance and takaful industries in Malaysia.
Merger with other insurance and takaful companies
Moving forward, BO-A has grown significantly with the recent acquisition of BO-C,
Malaysia’s largest national insurer and its subsidiary, BO-N, Malaysia’s premier
takaful provider. BO-T has also proven itself as one of the world’s top takaful
provider with a strong and dedicated agency force. Furthermore, holding company has
the added advantage of the foreign expertise of the Corp. European, a premier
insurance company in Europe which could contribute significantly to the
enhancement of its services and products.
Page 52
Financially, through the merger, the Insurance Group has been upgraded to the second
largest insurer in the Malaysian market. Eventually, the marriage of financial giants
has an ultimate goal to create an “Insurance and Takaful Champion” of the nation,
which will provide complete range of insurance and takaful products and services
under one roof.
Resulting from the merger and consolidation of related business entities within the
enlarged Insurance Group, a new functional structure is used as basis for aligning
business operations and initiatives of each entity within the group with the BO-A
business direction and aspiration.
The following Figure 3.1 and Figure 3.2 illustrate the relationship of entities within
the enlarged Insurance Group and the high level functional structure and IT Division,
respectively.
Figure 3.1 – Relationship of entities within the Insurance Group.
Page 53
Figure 3.2 – High level functional structure and ITD within the Insurance Group.
The New Brand Vision
With the different identities, one of the merger milestones initiatives is to streamline
all of its entities into a single branding identity. On November 15, 2007, BO-A re-
branded the organization under a new name and identity that symbolizes our efforts to
humanize insurance and Takaful by removing the industry jargon and streamlining
processes. In an industry where there is little product differentiation – where
agreements and policies are typified by triplicate and use of jargons that are difficult
to understand in small print – the new brand aims to make the process easier for
people by being clear and transparent. The brand essence of humanizing insurance
and takaful is further supported by four brand attributes.
In conjunction with this new brand exercise, BO-A have conducted extensive Brand
Ambassador and Introduction to Brand Training programs for selected staff and
Page 54
agency members. The Ambassadors are aware of our new brand attributes and ready
to coach our fellow colleagues to ensure the success of our new identity.
BO-A New Brand Attributes
Hand in Hand
“Strong partnerships are important to the success of our business. We form
partnerships with agents, companies, families and individuals based on solutions. We
aim to be fully accessible so our partners will associate with total convenience.”
Rock Solid
“Success in takaful, bancassurance and conventional did not come overnight. We’ve
earned it. We will help the whole industry progress, because we will share in
progress. We are proud of our rich history, but we also recognize that BO-A’s future
will be written by us.”
Performance With Conscience
“We are very ambitious about our future. To achieve this, we will innovate in a slow
moving industry. However, we still respect the rules and believe that caring for people
is very important to achieving our goals.”
Page 55
Crystal Clear
“We have the confidence to say what we mean. Small print is how the competition
does business, but not us. We have the systems, people and products to back our
claim. Most importantly, we are ready to be creative and innovative.”
With the many entities, there is a lot of diversity in order to create opportunity for the
organization. The new merged entities have a firm foundation to build on. The goal of
the new entity is to keep things clear and simple. The new entity is instilling qualities
in the organization by caring the things they do.
3.2 Business Activities
The Insurance Group has been growing in its contribution in revenues and profits to
its primary shareholder BO(P)-A. BO-A achieved this by integrating its insurance and
takaful products with the ever successful banking and financial services of BO(P)-A.
In 1994, BO(P)-A became the first financial institution in the country to exceed the
RM1 billion profit mark.
Ratings of the Group Business as at 31/04/2008 (BO(P)-A) gives us a general
indicator on the healthy state of the Insurance Group.
Page 56
• Moody's Investors Service Long Term : A3
Short Term : P1
Sub Debt : Baa1
FSR : C
Outlook : Stable
• Standard and Poor's
Long Term : A-
Short Term : A-2
Sub Debt : BBB+
FSR : B
Outlook : Stable
• Fitch Individual : B/C
Support : 2
Long Term : A-
Sub Debt : BBB+
Outlook : Stable
• Rating Agency of Malaysia (RAM) Long Term : AAA
Short Term : P1
Sub Debt : AA1
Outlook : Stable
Business Operation Model
Being a subsidiary of a major bank in the country, BO-A leverages on the advantage
of the bank’s branches throughout the country for its distribution channels. The
Insurance Group focus is to ‘manufacture’ its range of bancassurance products and
Page 57
garner a commanding lead in the bancassurance market through strategic marketing
and distribution via its various channels of the bank’s well established branches,
agency channels within its general insurance business, reputable broker force,
recognised corporate insurance business, strong relationships with the government
and Government Linked Companies (GLCs).
Business Portfolio
A shared product portfolio will be established for all existing and new products
targeted for retail and enterprise markets. Refer to Figure 3.3 that provides illustration
of business portfolio of BO-A. Products will be differentiated according to Insurance
and Takaful as per regulations:
• Innovative products that addresses the needs of individual and corporate
customers will be developed
• Products should be easily marketable through all available distribution
channels
• Fast product development and implementation are required so that time to
market new products is short
• “White-label products” will be developed to allow for re-branding by other
companies
Page 58
Figure 3.3 – Business portfolio of BO-A
Business Performance
Illustration of the Balance Sheet, Income Statement, and Cash Flow statement (refer
to the Appendix 2) that there is no significant change in the line of business for BO-A
(General Insurance), there is an increase in the asset balance sheet due to considerable
contribution in the investment. The significant contribution is the investment which
contributes to the bottom line of the Balance Sheet of General Insurance of BO-A.
Even though the Management Expenses more than double and reduction of
investment income due to sluggish stock market, other income and the new tax rate in
2007 improves the net profit for the financial year 2007. As for the Income Statement,
there is slight increase in net profit due to reduction of income tax for the company.
Page 59
As for the Cash Flow Statement, there is no cash outflow in Financing Activities in
2007 thus making the cash flow statement to have an increase from the previous year.
As for BO-A (Life Insurance), there is a tremendous growth compare with the
previous year due to a series of capital guarantee launches and it was over subscript in
year 2007. BO-A Life Business in year 2007 shows that the Investment link products
through BO(P)-A tremendous contribute to the Balance Sheets. With better operating
revenue and better income contribute to the better net profit in year 2007. The cash
flows improve in tandem with the better balance sheet and income statement.
BO-G on a composite insurance license for year 2007 shows a slight increase in profit
and the tax rate reduction for year 2007 really increase the company profits. The
Operating activities affect negatively the cash flows for BO-G in year 2007. The BO-
A (Takaful Composite) is still in deficit as it started in operation in late year 2002.
There is no zakat charge for the year as the Company has no income that is assessable
for zakat. The detail financial reporting entities are still separated due to the separate
license received from Bank Negara Malaysia (BNM). As for BO-T financial report,
the largest takaful operator business, the growth for takaful business is tremendous;
however, the financial report is unavailable as it is privately owned by BO-G. The
merger initiative is still relatively new that its takes 3 to 5 years to consolidate the
financial operation and reporting of all entities according to the merger master plan.
As for BO-T Composite, the purpose of the cash flow statement, cash and cash
equivalents include cash and bank balances, excluding fixed and call deposits
classified as investments. The cash flow statements have been prepared using the
indirect method.
Page 60
3.3 IT Operation
IT services forms up as one of the major infrastructure to support BO-A business
operation.
IT Operation Model and Group IT Policy
Information Technology Division (ITD) is one of three shared services, besides
Accounting and Finance, and Facility Administration, that leverages on sharing of
resources (of human, financial, and equipment, and others) to support the business
operation of BO-A to reduce cost. Strategic planning is highly critical to operate the
service in most efficient manner while making sure its effectiveness in meeting the
business objectives of the enlarged entities.
Alignment and compliant with group IT policy of BO(P)-A is a challenge for BO-A.
ITD of BO-A is dictated by virtue of clear ‘group IT policy’ and long practiced
culture that BO-A IT function must be strategically aligned with the corporate
direction of BO(P)-A. For instance, ITD of BO-A should adopt the same operation,
delivery, and support model of IT infrastructure by outsource vendor. However, there
is often lack of clear guidelines on how to implement the group IT policy.
Page 61
PART 4 - THE ANALYSES
4.1 Current State of IT Services and Support
ITD is generally a division being provisioned to manage the IT services and support
activities for various business units in BO-A. Under the outsourcing arrangement by
the parent company, BO(P)-A, ITD is only focusing on application development
services and support as its core activities, while the role of delivering and managing
the IT infrastructure services and Help Desk function are performed by the outsource
vendor, OV-B.
IT Help Desk
Although OV-B is currently running and managing the IT Help Desk operation for
both IT application and infrastructure related for BO(P)-A, there is different practice
at BO-A, by preference of its IT management, that OV-B only address the Help Desk
function for IT infrastructure while request and problem management of IT
application is managed internally by ITD of BO-A.
Page 62
IT Help Desk by Outsource Vendor
Help Desk services of OV-B is the provision of a single point of contact to facilitate
problem management and IMAC (Install, Move, Add, Change) asset management
request for IT services. It caters for the logging of request and problems reported by
BO-A end users, assigning, tracking, and reporting towards resolution by technical
support team.
The Help Desk also provides limited self-help facilities to enable technical support
users to service themselves using tools such as team assignment and status update. In
addition, it will own and manage the root-cause analysis process to understand and
implement appropriate measures to prevent recurring problems and/or trends.
A set of Service Level Agreement is also established to guide the operation and to
benchmark the performance of Help Desk. Details of the Service Level Agreement for
OV-B Help Desk are shown in the next table:
Page 63
Table 4.1 – Service Level Agreement of OV-B Help Desk.
Service Level Description
Targ
et
Serv
ice
Leve
l
Min
imum
R
equi
red
Perf
orm
ance
Mea
sure
men
t In
terv
al
SLA
C
ateg
ory
Time to Answer
(Priority)
Time to answer a call to the Help
Desk for Priority users
90% within
30 seconds
80% within
30 seconds
Monthly B
Time to Answer
(Normal)
Time to answer a call to the Help
Desk for Normal users
90% within
60 seconds
80% within
60 seconds
Monthly B
Time to
Respond to a
Fax or a
Voicemail
Time to Respond to a Fax or a
Call answered by voicemail
during Normal Business Day
100% within
1 hour
95% within
1 hour
Monthly C
Time to
Respond to a
Fax or a
Voicemail
Time to Respond to a Fax or a
Call answered by voicemail
outside normal business day
100% within
1 hour on
next
business day
95% within
1 hour on
next
business day
Monthly C
Time to
Respond to
Time to Respond to e-mails to
the Help Desk during Normal
Business Day
100% within
1 hour
95% within
1 hour
Monthly C
Time to
Respond to
Time to Respond to e-mails to
the Help Desk outside normal
business day
100% within
1 hour on
next
business day
95% within
1 hour on
next
business day
Monthly C
Call
Abandonment
Number of calls abandoned Less than
3%
Less than
5%
Monthly B
Incident
Resolution
Calls Resolved on First Contact More than
65% of calls
resolved by
first contact
55% of calls
resolved by
first contact
Monthly B
Page 64
Note on the Service Level Agreement:
Category A - Service Levels which are measured and consistently met for a period of
at least six (6) months immediately prior to the Commencement Date, meet and
continue to meet those Service Levels as at and from the Effective Date;
Category B - Service Levels which are measured and not met prior to the
Commencement Date, but are industry standard measures, the Vendor will meet and
continue to meet those Service Levels by a date no more than 180 days from the
Effective Date; and
Category C - Service Levels that are not measured prior to the Commencement Date
or which are measured and not met and are not industry standard measures;
implement measurement tools and processes to measure and achieve mutually agreed
minimum Service Levels which will be based on a six (6) month measure of current
performance and then meet and continue to meet those Service Levels by a date no
more than 180 days from the date measurement commences as specified in the
Transition Plan or as otherwise specified in the Statements of Work.
Page 65
IT Application Support
IT Application Support for computer program change management is performed
internally using a self-help software tool. The software enables business users to
submit new request and report application problem, receive reference number and
status notification, create request extension to higher management for approval, and
update status to “close”.
ITD regularly report the statistical figure and performance level of IT Application
support activities to both management committee and steering committee of IT on
monthly and quarterly basis, respectively.
Based on review of documented process and procedure, discussion and explanation of
relevant internal IT as well as Help Desk personnel, and general observation, the high
level process flow for the relationship of Help Desk and Application support functions
at BO-A is established and explained in Figure 4.1.
Page 66
Key processes:
• Business users need to initiate contact with outsourced Help Desk and internal
programmer for the IT Infrastructure support services and IT Application
support services, respectively
• Help Desk would assign all required services item to respective technical team
to act upon
• Business users requires the support of Help Desk to obtain status of service
item from the technical team
Figure 4.1 – High level process flow of OV-B Help Desk and BO-A Application
support services, based on observation.
Page 67
4.2 Weaknesses and Issues of Current IT Support Structure
The following section discusses on the weaknesses and issues identified from the
current setup of Help Desk and IT Application support structure for BO-A users.
Analytical Observation
As the BO-A Application support services and OV-B Help Desk are of two different
entities and does not have formal arrangement to coordinate the two functions, it is
necessary for end users to have knowledge and understanding of the scopes covered
by each of the two functions, and the processes involved when contacting the different
support team.
Users could face the state of confusion when a simple process rendered by one
support team requires more steps or takes longer time by the other team. For example,
when a user contacts the IT programmer to report a program error discovered on one
Application system, the Application team would immediately initiate a task to
troubleshoot the reported error and would still accept a formal submission of the error
submitted after the programmer confirm the state of the reported error. However, a
user who wishes to lodge a request with the OV-B Help Desk to reset a locked user
ID need to complete the request form and obtain endorsement of the Head of
Department before the request is formally logged and worked upon by the technical
support team.
Page 68
Being non-IT background, business users who experience unusual technical situation
would face difficulties to determine whether to seek help from the BO-A Application
Support team or the OV-B Help Desk. For example, a user would face frustration if
issue about quality of network is reported to the Application Support team and is not
looked into promptly or responded timely because the issue is within the scope of
OV-B Help Desk.
Based on the analysis above, there seems to be a lack of effective process engineering
in the design of the overall BO-A IT support structure. The following are key issues
of the limitations explained in the paragraph above:
• The operation and management functions for both the infrastructure and
application support activities are separated, that cause ineffective co-
ordination between the two functions.
• Business users need to assess their request/problem on their own to determine
whether to engage OV-B Help Desk or BO-A Application support team. The
self-assessment may result in a low efficiency level of process flow.
• There is no leveraging of resource availability and expertise of OV-B Help
Desk team in term of support personnel, operating hours, and software tool;
and
• Service level of receiving and logging the request and problem tickets for both
Infrastructure and Application support cannot be standardized
This analysis considers process re-engineering to improve the overall process flow
and address the limitation highlighted above.
Page 69
As process management becomes an enterprise-wide critical success factor for
performance improvement, IT organizations are increasingly adopting process
management as a core discipline either mandated by senior business executives or part
of the IT overall vision for organizational performance and credibility (Young, 2003).
A study conducted on a global manufacturing company that implemented IT Service
Management since 2002 revealed that process re-engineering not just improve the
performance of IT services, but also generate saving of USD 30 million in two years,
more than a year earlier than its original targeted long-term vision (Brittain, 2004).
Management Report
Analyses on the secondary data were performed on minutes of Group IT Steering
Committee meetings of BO-A conducted since second half of 2006. Seven meetings
were conducted in quarterly basis since the formalization of the committee in August
2006. Review on the minutes of the committee meetings reveals that there has been
one-going concern with the overall management and performance of the OV-B Help
Desk function.
Page 70
Lack of access to the state of support service
Group IT Steering Committee (GITSC) is the highest level IT committee which
address policy matters, deliberate and approve major IT project proposal, and review
the status and performance of various IT functions presented by respective functional
heads who are also appointed members of the committee. However, status reports of
the Help Desk function observed from the minutes of Group IT Steering Committee
meeting on 5th March, 2008, are presented by representatives from OV-B as BO-A
does not have direct access to the function.
The above is also prevalent based on Figure 4.1 where the responsibilities of IT
management team of BO-A are limited within the boundary of the Application
support structure. BO-A ITD does not have any representation in the operation and
management of OV-B Help Desk.
Negative user perceptions on OV-B Help Desk
There is general concern from the high-level management to improve the user
perception of Help Desk service, to establish effective communication between users
and Help Desk, and to manage the expectation of general IT users in relation to the
performance of Help Desk. As quoted from the minutes of meeting of the BO-A
GITSC in 5th March 2008, page 5:
“ That OV-B to prepare monthly communication and Frequently Asked
Question (FAQ) on the Help Desk Statistics to improve the user perception on
OV-B Help Desk. The communication and FAQ to include the following:
Page 71
• What has happened in the last couple of months
• What is currently taking place
• What to be expected in the near future
• Tickets remain outstanding for more than a month with explanation of
the root cause”
Slow turnaround time for user ID and password
IT Help Desk is slow in resolving request to reset user ID and password and creation
of new user ID for new IT users, as mentioned in the minute of the ITSC meeting in
5th March 2008, page 5:
“ That OV-B is currently addressing the slow turnaround time for tickets on
password and user ID via the following:
• Password and ID reset to be done on the spot, pending connectivity
issues
• Creation of new ID and password to be distributed via a faster method,
pending feedback from BO-P IT Security”
Interview with the Employees
Interviews with 13 selected employees of BO-A were carried out as part of the
analyses. The interviewees are identified among IT and non-IT staffs at executive and
managerial position that are either key or experienced Help Desk users, user
Page 72
managers, experienced Help Desk supervisor, technical support team and technical
managers. List of interviewees and his/her functional background are presented in the
following table:
Table 4.2 – List of interviewees with functional background
No Personnel Position Level
Department Functional Area
1 Interviewee 1 Senior Manager
IT Core Application System
2 Interviewee 2 Manager IT Core Application System 3 Interviewee 3 Manager Finance Investment Accounts 4 Interviewee 4 Manager IT Core Application System 5 Interviewee 5 Senior
Officer IT Quality Assurance
6 Interviewee 6 Senior Officer
IT Core Application System
7 Interviewee 7 Manager IT Project Management Office
Business Analyst
8 Interviewee 8 Manager Corporate Performance
Cost Management
9 Interviewee 9 Manager Retail Processing Retail Processing Centre 10 Interviewee 10 Manager Enterprise
Processing Enterprise Business Support
11 Interviewee 11 Officer Finance Financial Reporting 12 Interviewee 12 Officer IT Project Mgmt
Office Business Analyst
13 Interviewee 13 Officer Retail Processing Retail Processing Centre
In summary, from a range of 1 through 5 (1.Poor, 2.Can be improved, 3.Acceptable,
4.Good, or 5.Excellent) 12 interviewees rate the service level of Help Desk function at
level 2 (Can be improved) ) and 1 interviewee rate at level 3 (Acceptable).
The following paragraphs discuss and analyze the relevant and important extract from
the interviews.
Page 73
Slow responses
A general perception by Interviewee-4 is that “The responses to user request are
always slow”. In addition, providing the resolve status and managing the
communication with, and expectation of, users are two critical areas that require
attention, according to Interviewee-1:
“ I think the critical areas are to provide resolve status, (and) inform and
communicate to the user on what to do next…”
Unfriendly process
Synonym to the definition of ‘Help Desk’ mentioned at the beginning of this project,
the Help Desk process flow is “too technical” and unfriendly. As commented by
Interviewee-3:
“ Some process too bureaucratic e.g. Password re-set, password unlock, use
different forms. Too rigid on forms over substance (even slight version
different is also not acceptable)”
Interviewee-3 also supports the concern of Interviewee-1, as he commented:
“ Follow-up was always be done by users (requestors) instead of Help Desk take
the initiative to ask the users whether somebody has attended the user
request.”
Page 74
Outsource Help Desk is out of control
Low performance on areas affecting external customers requires more attention, as
highlighted by Interviewee-12. The interviewee further commented on the option to
bring back the Help Desk service in-house and proposed on regular status update by
the Help Desk, as the interviewee noted:
“ I believe that an in-house as (opposed to an outsourced) function would
deliver a more effective solution especially in complicated & peculiar
issues…. Perhaps regular status updates on outstanding requests would be
good to have too.”
However, Interviewee-4 thought otherwise and suggested of having a shared Help
Desk function including both teams from BO-A and OV-B to improve the Help Desk
function:
“ Combination of internal and outsourced Help Desk where the internal oversee
the application related issues and the external focus on hardware and network
maintenance.”
Interviewee-4 went on further to propose that “the SLA must be function-specific, not
a blanket SLA covering all functions”.
Efficiency and effectiveness issues of Help Desk
User interface and functionality of the OV-B Help Desk system is not as friendly as
that of BO-A’s internal Help Desk system. While internal Application support system
provides self-service capabilities and workflow function for approval process, the
Page 75
approval process for Infrastructure request are done on manual paper, as explained by
Interviewee-5 who is also an experienced former Help Desk supervisor:
“ With the internal (Help Desk) system user can do everything on the screen,
from creation, routing and send notification to manager, approving, and
submit it completed request to Application support team. But requesting a PC
new user one has to get the right form from Help Desk, and complete it with
all the unfamiliar technical and commercial term and approval from both users
and IT. Users can only submit to request through appointed internal BO-A IT
personnel who is often not at the workplace to receive the request.”
Interviewee-6 argued on the effectiveness of the outsource Help Desk as he
commented that the outsource sentiment had become too cost conscious on every
request that come in:
“ Outsourcing had become ‘too conscious’ on dollars and cents, chargeback
costs, even sometime to the extent of overlooking the actual issue.”
The OV-B is just being a middle man to handle calls and relay to the resolver group,
as there is no proactive action to solve simple request, as Interviewee-7 put it:
“ It just record user requests. Even a simple few second password re-set also
need to go through entire ‘approval’ process.”
Page 76
Other Findings from Interviewees’ Responses
Based on the employees’ responses from the interview exercises, additional findings
are also revealed on the overall level of service of current Help Desk, the ability of
Help Desk to support the new brand vision, and effectiveness of Help Desk by
internal team instead of the outsource vendor.
For the overall level of service of current Help Desk, interviewees were asked to
respond based on 5 Likert scale answer (1.Poor, 2.Can be improved, 3.Acceptable,
4.Good, or 5.Excellent). For the ability of Help Desk to support the new brand vision
and effectiveness of Help Desk by internal team instead of the outsource vendor,
interviewees were asked to respond based on “Yes/No” option. The findings are
tabulated and explained in the following paragraphs.
Overall service level of current IT Help Desk
Question: How would you rate the service level of IT Helpdesk function?
Answer: 1. Poor, 2. Can be improved, 3. Acceptable, 4. Good, or 5. Excellent?
There is 1 respondent that rates the general perception is “Acceptable” and 12
respondents rate the current IT Help Desk as “Can be improved”. In overall there is
strong indication that the Help Desk performance is well below the expected level of
service. The chart in Figure 4.2 illustrates tabulation of the responses.
Page 77
Overall service level of current IT Help Desk.
92.3% Can be improved
7.7% Acceptable
Figure 4.2 – Overall service level of current IT Help Desk
Ability of current IT Help Desk to support new Brand vision
Question: Do you think the current IT Helpdesk can meet the expectation of the new
brand vision (Yes / No)?
There are 2 respondents that believe the current IT Help Desk can meet the
expectation of the new brand vision, while 11 respondents believe otherwise. In short,
there is strong believe that the Help Desk implementation is not aligned with the
corporate direction of BO-A. The chart in Figure 4.3 illustrates the distribution of the
responses.
Page 78
Current IT Helpdesk meet the expectation of the new brand vision?
84.6%No
15.4% Yes
No Yes
Figure 4.3 - Ability of current IT Help Desk to support new Brand vision
Internal IT can improve Help Desk
Question: Do you think the performance of IT Helpdesk would improve if it is fully
handled internally instead of being outsourced (Yes / No)?
There are 4 respondents that tend to believe the internal IT team can make the IT Help
Desk more effective than the outsource vendor can, while 9 respondents do not feel
the same. While majority of the responses believe that bringing back the operation of
Help Desk to the internal IT may not improve the performance, there is considerable
percentage (31%) of the respondents that have more trust on internal IT than the
outsource vendor to deliver better Help Desk service. The chart in Figure 4.4
illustrates the distribution of the responses.
Page 79
Internal IT can improve Help Desk
No69%
Yes31%
No
Yes
Figure 4.4 - Performance of IT Help Desk would improve if handled internally instead
of being outsourced
Insource Versus Outsource
Today’s rapidly changing environment, combined with information technology skill
constraints and increasing salaries, is causing many companies to seek outsource
service providers to support or augment the internal support structure. Outsourcing the
Help Desk is an option to offset the expense and investment of building a support
structure from scratch, to reduce the impact and costs of staff turnover, to provide the
needed skills and expertise that the Help Desk staff does not have, or to allow a
business to focus on its core competencies.
Page 80
There is no standard practice in the industry in deciding whether IT Help Desk should
be outsourced or maintained in-house. Table 4.3 in the following pages is adopted
from the journal titled “Service and Support Handbook” published by Help Desk
Institute (Christensen, 2002), illustrates some of the guiding criteria to help determine
if outsourcing is more appropriate for the IT Help Desk.
Analyses on the state of IT service in BO-A based on the guiding table shows that
either outsourcing or combination of both insource and outsource, is the better options
to be adopted. However, more appropriate planning and implementation of the option
is necessary to address the weaknesses and issues there discussed in the preceding
paragraphs.
Table 4.3 – To outsource or not to outsource
Issue Insource Outsource Combine Benefit
High staff turnover X According to the Gartner
Group, the cost of replacing
staff is about USD10,000. This
cost includes recruiting,
training and human resources
processing costs. Outsourcing
moves the burden of staff
turnover to the vendor.
High number of
internally-developed
line of business
applications
X X Usually an internal Help Desk
is more familiar with unique
business processes and custom
applications. However, if there
is an adequate knowledgebase
Page 81
Issue Insource Outsource Combine Benefit
in place with support
documentation, a vendor could
adequately provide support for
these applications. A
combination of internal and
outsource service providers
could be considered.
Infrastructure not in
place
X It can be expensive to purchase
the infrastructure for a best-in-
class Help Desk. Outsourced
vendors can spread these costs
across multiple customers,
reducing the cost of purchasing
and supporting high-end
technology.
The Help Desk role
in the overall IT
career path
X Many companies use the Help
Desk as a key step in an overall
information technology career
path. Help Desk analysts must
become skilled in supporting
multiple hardware and software
platforms, making the Help
Desk an ideal point to launch a
career in information
technology.
High volume of
incidents for off-
the-shelf software
X X Support for off-the-shelf
software, such as Microsoft
Office or Exchange, can be
provided very efficiently by a
vendor, enabling the customer
to avoid training and
certification cost of
maintaining those skilled in-
Page 82
Issue Insource Outsource Combine Benefit
house.
A combination of in-house and
outsourced services can reduce
staffing requirements by
maintaining a small number of
staff to handle the incidents for
the line of business
applications, while routing the
calls for off the shelf software
to a vendor.
24/7 support
required
X X Depending on the volume and
priority of calls received during
off hours, weekends and
holidays, off hours support can
often be provided more
efficiently and economically by
an outsource vendor.
Determining the right number
of staff and finding people with
the right skills is difficult.
Low volumes often make it
impractical to require a
physical presence at the Help
Desk. By sharing resources
with other customers,
outsource vendors can provide
skilled 24/7 support at a
reduced cost.
Page 83
4.3 Proposed Course of Action
The following section discusses on the proposed course of action to address the
weaknesses and issues of Help Desk.
Summary of Issues
The followings are summary of issues prevalent in BO-A’s IT Help Desk function:
• Users are deprived of the first-level support when faced with unfamiliar
computer problems as users have to determine the type of problem between
the Application and Infrastructure, and call different numbers for each of them
• Users are often in the dark about the status of each request / issue recorded at
the outsource Help Desk
• There is no effective monitoring and escalation of outstanding issues by
outsource Help Desk to get it attended and resolved efficiently by technical
support team
• Certain process to log problems at the outsource Help Desk are unnecessarily
too technical and not user friendly, such as User ID and password reset
Page 84
• There is no appropriate Service Level Agreement definition for User ID and
password reset, thus leading to longer than the required timeframe to resolve
such request
• BO-A does not have access to the necessary data to facilitate an effective
governance of the Help Desk operation and performance by the management
committee
• Overall performance of IT Help Desk by outsource vendor is well below the
expectation of IT and users
• Help Desk implementation is not aligned with business direction
Proposed Solution: Integrated Service Desk
Based on the analysis above, a consolidated and integrated Service Desk model as
Figure 4.5 is proposed to address all the shortcomings.
Page 85
Management oversight
Governance and escalation
Assignment and status follow-up
Logging and status update
Deliver solution within required
timeframe
Joint-Committee of BO-A and OV-B
Integrated
Service Desk
BO-A Users
BO-A Board of Directors (BOD)
BO-A Application
OV-B Infrastructure
Technical Support
Figure 4.5 – Proposed Integrated Service Desk Model
The proposed integrated Service Desk model requires the following modification and
enhancement on the existing Help Desk service structure at BO-A:
• In order to have single point of contact for all users, the hot-line number for
OV-B Help Desk to be used as the sole number
Page 86
• Service Desk personnel need to be trained to understand on how to handle
application related issues
• Appropriate personnel from BO-A to be assigned to work within OV-B Help
Desk team to supervise and manage the process of Application support
activities
• The procedure and process flow for supporting IT Application need to be
incorporated into the OV-B Help Desk Standard Operating Procedure (SOP)
• OV-B to enhance the system and tool used in the Help Desk with (i) workflow
capabilities to enable self-help change management process for IT
Application; (ii) assignment to and access by Application team; and (iii) daily
and monthly report for Service Desk management and submission to the joint-
committee
• Service Level Agreement for certain type of incident need to be established
more specifically (e.g. user ID and password)
• A joint committee comprising of key management officials from both BO-A
and OV-B should be established to cater escalation and good governance of
Service Desk function
• The status and service level of IT Help Desk would be included in the
management oversight of BO-A’s Board of Directors (BOD)
Page 87
Rationale of Recommendation
Consolidating the two Help Desks into a single point of contact offers many benefits
to BO-A IT organization, outsource vendor OV-B, and the users. By successfully
consolidating into a single point of contact, the whole service chain can:
• lower the cost per incident by eliminating redundancy,
• reduce the number of staff required to maintain service levels;
• consolidate data to allow more accurate root-cause analysis and problem
management; and
• improve customer satisfaction by improving consistency of support and
improving response times
When planning a consolidation it isn’t necessary to locate all staff in the same facility;
it is actually preferred to have multiple locations to provide for fail-over, which
allows the organization to staff more efficiently especially as the Service Desk
support customers in multiple time zones (e.g. different business days for different
states in Malaysia). Further savings can be realized by implementing a “virtual
Service Desk” using Computer Telephony Integration (CTI) technology to link them
together, allowing Service Desk analysts to telecommute.
Whether the Service Desk is consolidated physically or logically, there are some key
considerations to successfully implementing this model. First, it is essential that the
person selected to manage the consolidated Service Desk possess the right skills.
Page 88
According to the Gartner Group article “Pitfalls in Help Desk Consolidations”
published November 17, 1999, the following management skills are required when
managing a consolidated Service Desk:
• Business knowledge
• Financial skills
• Leadership skills
• Internal and external negotiation skills
• Communication (i.e., written, verbal, presentation) skills
• Effective customer service skills
• Technology skills
• Training skills
• Quality-assurance skills
Page 89
PART 5 - RECOMMENDATION AND CONCLUSION
5.1 Service Desk Infrastructure
There is more to a Service Desk than having people available to answer the phone,
and the days of a level-one support staff that does nothing more than “triage”, or sort,
prioritize, and select to work based on the most critical issue due to insufficient
resources, are going the way of the dinosaur. The Service Desk today is expected to
respond to the customer in a manner of seconds whether the request comes via voice,
e-mail or chat, and to quickly resolve the customer’s problem during the initial
contact or, at a minimum, gather and analyze enough data to diagnose the problem
and get it to the right support partner who can resolve the problem.
The Service Desk is also expected to provide business value by identifying problem
trends and eliminating recurring problems, to maintain ownership of critical outages
until they are resolved, and to learn and use new technology to streamline the support
process.
Analysts who are the first point of contact for the customer are fully occupied with
meeting service levels and resolving problems, with little time left to devote to
supporting other tasks. Therefore, meeting additional expectations requires an
effective support structure to the Service Desk to handle tasks such as:
Page 90
• Problem management (tracking problem trends, root-cause analysis
and problem resolution)
• Developing knowledge-management content and Service Desk training
programs
• End-to-end management of critical outages, including an outage
notification process
• Collecting data and reporting on service-level metrics
• Participating in change-management activities; and
• Implementing and sustaining Service Desk technologies, such as
incident management systems, password reset tools, remote-control
tools, and self-help and knowledge-management tools.
Process Flow
Adopting the proposed integrated Service Desk model would lead to enhanced
process flow of the Service Desk function. The following diagram illustrates the high
level enhanced process flow of the integrated Service Desk for BO-A IT services.
Page 91
Figure 5.1 – High level process flow of the proposed shared Help Desk function.
Business Process and Procedure
Good business operation needs good processes and procedures. As Service Desk is
about creating good service experience to users, the processes and procedures should
be developed and improved regularly based on user experiences and feedbacks. The
following best practices are adopted from an article ‘Thirty-One Best Practices For
The Service Desk’ published by Forrester Research on June 01, 2005, that can serve
as a starting point for such an evaluation and improvement process.
Page 92
Provide timely update
While technology users tend to be pleased with the demeanour of the Help Desk staff,
they are least likely to be satisfied with the timelines of updates regarding the status of
their issues. Seventy six percent of users who are satisfied with their Help Desk,
compared with just 10 percent of users who are dissatisfied with their Help Desk, are
pleased with the timelines of updates received. When we asked technology users what
the IT organization could do to improve, 41 percent overall suggested more timely
information on the status issues. But two third of users who are displeased with their
Help Desk versus 36 percent of those who are satisfied with the Help Desk, are likely
to suggest timely update as a necessary area of improvement.
The Service Desk is the eyes, ears, and face of the IT organization to the vast majority
of business users. When you think you are communicating enough, take two steps
further, communicate information an service expectation with each incident,
summarize and report – both up the management chain and out to the users – on a
monthly and quarterly basis at a minimum. It is far easier to cut back on
communication than it is to repair the damage and aloof and out of touch Service
Desk can cause for all of IT.
Set user expectation at every contact
When a service incident is initiated, set customer expectations for service. Let
customers know when they can expect resolution, or at least an update of status, based
upon organization policies and service levels. Don’t assume that the users know the
policies.
Page 93
Let user needs override default service level expectation
Defaults are fine, but check them with the users to ensure that they are no unknown
business issues that would point to higher or lower service level requirements. A user
should always be able to request priority service based upon business needs without
requiring multiple levels of approval from senior executive whose times is likely
better spent on other tasks. When in doubt, meet the user set expectation and include
numbers and type of expectation in monthly and quarterly reports to serve as input to
future service level agreement.
Implement SLAs, not CYAs
Design a service level agreement with both organization cost and benefit in mind.
When to o low, business value is negatively affected. When set to high, additional and
unnecessary cost may be incurred. Establishing and agreeing on the appropriate
service levels require two way communications between the Service Desk and the
user groups. Most often we see service levels that are set just below the level that is
expected to be achieved, rather than the level that provides the best balance of costs
and benefits.
Balance operational metrics with outcome metrics
Help Desks/ Service Desks most frequently lead with operationally oriented metrics.
Good operational metrics includes:
• First-call resolution rate; percentage of questions handled on the first call
• Number of system outages (network downtime, dead printers, phone system)
• Overall number of phone calls to support desk by agent, day, hour, system
Page 94
• Overall number of incidents opened with the support desk by agent, day, hour,
system
These and related metrics track how many problems customers are encountering and
how quickly they are getting the answer they need. Plotting numbers on a weekly /
monthly basis helps track service levels and agent productivity. Adjust schedule and
staffing to fit the peaks/valleys for support, which is more complicated as large
companies consolidated help Desk operations and one Help Desk must service
employees in multiple time zones. Metrics also allow reporting on root cause analysis
and trends like hardware failures.
Balance these operational metrics with metrics that point to the mission of the Service
Desk – to prevent or cure interruptions in employee productivity. On this front, track
such metrics as:
• Number of incidents per employee. Ideally, problem prevention will lower
this number.
• Average minutes of downtime per employee. Likewise, tracking the time
spent fixing problems, on a per-employee basis, will point to prevention and
problem avoidance. This type of metric is often difficult to track, as many
service management applications measure the time that an incident is open,
rather than the time that an employee is affected by the incident.
Page 95
Balance outcome metrics with predictive metrics
In addition to operational and outcome metrics, which look at what happened in a
previous period, a best practice organization will also define, monitor, and
communicate predictive indicators. This metrics will help the organization better
forecast future support demand and may point to areas requiring proactive
intervention. For example predictive metrics can include:
• Diversity of assets. The number of hardware mixed, models, configuration,
software versions, or the deviation of installed hardware, and software from
published and tested standards can predict future conflict and service costs.
• Age of installed hardware. PCs, laptops, printers, routers, and other such
devices fail more frequently as they age. Tracking and reporting this metrics,
as an indicator of likely hardware failure and future business interruption, also
points to the targets for future preventative maintenance.
Know your customers
Build bridges to your user communities; send Service Desk people out to regularly
meet with the business groups in a semi – formal situation, such as brown bag lunch
with the users. Listen to what they say – they are your customers. Bring back the
information about what makes them tick and what is important to them, what your
organization is doing well, and what they tell you that you can improve.
Page 96
Steal mercilessly from other organizations
Join a local, regional, or national organization of your peers. Read the report, attend
the events, and mingle with your peers. When possible, ask your peers if they have
ever faced a situation similar to one you are facing. If their solution sounds good, steal
the concept and bring it to your organization. Pilot and adapt it to suit your needs.
Don’t worry about “not invented here”. Worry about results.
Conduct satisfaction surveys
Surveying for satisfaction is not a one –time event. It means having an ongoing
program in place to measure how satisfied employees are with all aspects of Service
Desk support – courtesy, competency, competency, and communication. Surveys
highlight potential problem areas for managers. While surveys identify pain points
and potential problems, make sure you understand the reasons for dips in satisfaction,
if they occur. In one organization we work with, clients did not like a business-
imposed policy, and they took it out on the messenger. Satisfaction drops, and it really
had nothing to do with the Service Desk.
Invest in the right amount on process frameworks
Many organizations are looking at IT Information Library to provide the model for
optimal performance. Whether you turn to IT Information Library or any other model,
don’t necessary jump in with both feet. Frameworks are fine, in the proper dosages.
There are no panaceas, and, if not careful, an organization can invest more time in
training, modelling, and discussion than in implementing positive changes. Look at
the systems and processes defined by your chosen framework, adapt them when
appropriate, and adopt them in the proper amounts and at the proper interval. Don’t
Page 97
parachute in an entirely new process unless absolutely necessary, as wholesale
changes rarely take hold successfully.
Leverage internal/external filters on knowledge base and self-healing fixes
Employee self-service can be a controversial topic. Conventional wisdom says to
make as much information available to clients as possible. However, before
implementing employee access to a knowledge base or self-service options, evaluate
the type of problems you want your employees trying to fix on their own. Resetting
their own passwords is one thing; downloading and installing operating system
patches, hardware drivers, or other technical fixes is probably a bad idea. For these
problems, you can do it better and faster and avoid lost data. Packaged knowledge
base and eSupport products, and even the knowledge base bundled with Service Desk
software, allow all content to be labelled as internal or external, with only content
labelled as external visible to customers performing self-service.
System Design
In the earlier section, three necessary enhancements to the current Help Desk system
and tool are identified to cater for the integrated Service Desk model, namely
(i) workflow capabilities to enable self-help change management process for
IT Application;
(ii) assignment to and access by Application team; and
Page 98
(iii) daily and monthly report for Service Desk management and submission to
the joint-committee
The following diagram illustrates the suggested system functional flow of the high
level enhanced program routine for the integrated Service Desk system.
Figure 5.2 –High level enhanced program routine for the integrated Service Desk
system.
Page 99
Human Resource
Good processes and procedures are a prerequisite for building a service proposition
but they do not of themselves deliver the goods - this is what we employ people for.
The shared Service Desk should use the existing workforce of the OV-B Help Desk to
leverage and optimize their readily available skill, with addition of supervision and
managerial role by personnel from BO-A. This is necessary to ensure that the
operation and management of shared Service Desk effectively receive, log, assign,
and maintain the status of issues related to the Application support.
As generally there is no issues related to handling the volume of incident reported to
OV-B Help Desk, there is no need to increase the size of the existing workforce to
operate the Service Desk. The following chart is the proposed generic organization
structure is for the Service Desk operation.
Figure 5.3 –Organization structure of the consolidated Service Desk.
Page 100
Training
Unlike products, which can be built in highly automated factories by robots and sold
in bulk, service is less tangible and relies more on the way in which it is delivered -
what is widely known as the service experience. A good service experience is not
only about how good the solution was that may have formed part of the arrangement
amongst the users, Service Desk team, and the technical support teams, but also the
way in which the solution was offered.
An important aspect of service is that of implied quality. User satisfaction depends on
their service experience, also called as a Moment of Truth (MOT). A MOT occurs
every time a user and a Service Desk operator interact. Each MOT may only last a
few minutes, but that experience of a service delivery will affect the user’s perception
of the entire business.
The MOT concept, originated at Scandinavian Airlines in the 1980s as a means of
removing everything that was not adding value to the customer experience, would
help Service Desk to refine processes, tasks, and even requirement for information
gathering to be at the optimal state.
By restructuring the service philosophy through ensuring good service delivered at the
point of consumption and putting customer experience on the main focus, the Service
Desk would achieve more efficient service level and increased user satisfaction.
Teaching the Service Desk operator about customer values based on the MOT
Page 101
principle is as important to performing in the service business as teaching them about
giving technical solution to the users’ problems.
New Service Level Agreement
While the overall existing Service Level Agreement is still relevant as users are
generally satisfied with the level of the service attained by Help Desk, a new Service
Level Agreement items need to be included for the integrated Service Desk to address
the issue of low performance request related to new creation as well as reset of User
ID and Password.
As User ID and Password are critical components of an application system to support
the business process, it is sensible to set the service level high. Anything otherwise,
not being able to get workable User ID and Password for the user is equivalent to no
business for BO-A. The following table defines details of the new Service Level
Agreement for tickets related to User ID and Password.
Page 102
Table 5.1 – Service Level Agreement for request to create new user ID and password
and request to reset User ID and Password
Service Level Description
Targ
et S
ervi
ce
Leve
l
Min
imum
Req
uire
d
Perf
orm
ance
Mea
sure
men
t In
terv
al
SLA
Cat
egor
y
Time to create
new User ID and
Password
Time to resolve request to create
new User ID and Password
100% within
1 hour on
next
business day
95% within
1 hour on
next
business day
Monthly B
Time to reset
User ID and
Password
Time to resolve request to reset
User ID and Password
More than
95% of calls
resolved by
first contact
90% of calls
resolved by
first contact
Monthly B
Work Area
One major consideration in creating an effective Service Desk and promoting job
efficiency is ergonomics environment. Ergonomics is commonly thought of as how
companies design tasks and work areas to maximize the efficiency and quality of their
employees’ work.
However, ergonomics comes into everything which involves people. In a Service
Desk environment, work systems, sports and leisure, health and safety should all
embody ergonomics principles if well designed. The goal of ergonomics and human
factors is to make the interaction of humans with machines as smooth as possible,
Page 103
enhancing performance, reducing error, and increasing user satisfaction through
comfort and aesthetics.
The emphasis of an effective and successful Service Desk workplace is the needs for
pleasant and comfortable environment. Too often that support staff being considered
as an expense, and is often relegated to second-class status. The Service Desk needs
great working conditions, because it is a challenging job to handle request, complaint,
and anger of unhappy customers.
The following tips for designing the physical setup for the Service Desk are adapted
from TechRepublic article “Setting up a successful help desk--physical
considerations” published on 23rd December, 2003.
Teamwork
The work area is a where all the problems of IT related matters are collected. Cubicles
arranged facing each other, instead of in a neat and straight row, enable employees to
hear and communicate with each other, so they can ask for, and offer, help and
solution to resolve issues as a team. Besides, it promotes mentoring to support staffs
with various level of expertise in the team. The goal of the Service Desk is to close
the call quickly and satisfactorily.
Proximity
The space between each support personnel could tip the scale between good and bad
service. If the work area is crowded and a support staff can hardly hear the customer’s
Page 104
voice over the phone because of disturbance by the other staffs conversations, this
could lead to failure in attending to the customers call.
Harmony
The overall sense of harmony in the workplace is important. Atmosphere that is well
blended, peaceful, non-primary colors for the surroundings, open floors with movable
partitions that can quickly be rearranged to adapt to the size and workflow of the
Service Desk, and sufficient and bright lights create harmonious environment. It could
alleviate the mood and stress level among staff, thus it leads toward improved the
quality of call handling, and reduce staff turnover.
Workflow
Proper design and arrangement of workstation can provide efficient workflow for
staffs with multiple tasks. With the extended scope of Service Desk to handle
additional tasks such as creating new user ID and password, the support staffs need to
print a formal issuance letter for user acceptance and signoff as required by the IT
Security Policy. Printing area and out tray for the internal mail collection that are
adjacent to the support staff workstation would keep the time for the whole process at
the minimal, while the staff is always available to attend to the next call on the phone.
Tools
Use of headsets that include mute buttons and a volume control enables the staffs to
move about, use both hands, and adjust the volume up for those callers with soft voice
or turn it down when they start ranting. Wireless models would allow the staffs to
Page 105
move back and forth between his or her desk and other workstation, or server room.
Some employees even work better if allowed a little movement.
Governance
The issue of poor monitoring of the Help Desk performance by the outsource vendor
is associated with poor governance. IT governance is the preparation for, making of
and implementation of IT related decisions regarding goals, processes, people and
technology on a tactical or strategic level (Simonsson & Johnson, 2007). It was also
highlighted that Cobit (Control Objectives for Information and related Technology),
as the most renowned framework for support of IT governance concerns, focuses on
monitoring of decision.
Implementing good IT governance requires a framework based on three major
elements (Symons, Cecere, Young, and Lambert, 2005):
• Structure – Decision maker, structural organizations and member of the
organizations, and roles and responsibilities of the organization
• Process – The decision-making process and detailed process of proposing and
implementing decision, and how they are being enforced
• Communication – The mechanism for monitoring, measuring, and
communicating the processes and decisions to the management, internal and
external customer, vendors and business partners, and all other stakeholders
Page 106
Poor governance of the overall Help Desk performance could be addressed by way of
establishing a joint committee comprising the management and senior management
officials from BO-A and OV-B. The committee should meet on regular basis, and
chaired by a senior management from BO-A. The following Term of Reference
should form part of the framework of the governance committee:
Term of Reference of Integrated Service Desk Governance Committee
Membership
Chairman : Chief Operating Officer, BO-A
Alternate: Head of IT, BO-A
Members: Head, IT Application, BO-A
Head, IT Compliance, Risk, and Quality Management, BO-A
Head, Business Analyst, BO-A
Manager 1, Service Desk
Manager 2, Service Desk
Quorum
• Present of Chairman, or alternate Chairman, with at least two member from
BO-A and at least one member from Service Desk
Meeting Frequency
• Monthly, or as and when instructed by the Chairman. At the minimum, the
Committee should meet at least once for every two months.
Page 107
Roles and Responsibility
1. Strategy
• To ensure alignment of Service Desk function with the BO-A’s IT initiatives
and business strategies
• To establish and review long term strategic plans of the shared Service Desk
2. Standards and Guidelines
• To consider and approve policy standards and guidelines of the Service Desk
function in respect of:
o Application and Infrastructure support process
o Service Level and performance standards
o Organizational policies and procedures of Service Desk operation
3. Operational and Performance Governance
• To review the Service Desk performance report and to release for the monthly
communication
• To direct and consider reports from respective manager of each support team
• To resolve and decide issues that conflicts with direction of BO-A and OV-B
which could not be resolved at the operational and managerial level
• To prioritize and approve major initiatives affecting the operation and
performance of the shared Service Desk
• To include the overall governance in the reporting for BOD oversight.
Page 108
Service Desk Communication
• Service Desk monthly communication to be issued and posted at the portal, to
include:
o Performance report with number of issues resolved and outstanding for
last month, by department, type, product, and criticality of the issues
o Upcoming initiatives and products affecting users
o Frequently Asked Questions (FAQs) to guide users with common IT
products and services
5.2 Project Implementation and Key Milestone
Successful implementation of any initiatives requires proper planning and execution.
Identifying the key milestones for implementing the integrated Service Desk is one of
the important tasks in the project planning. While other areas of the planning process
requires other consideration such as approval from the management, availability of
resources, and priority against other initiatives in the pipeline, the key milestones is
very much dependent on the functional objective of the project.
The following table illustrate the suggested key milestones for implementing the
system enhancement to cater for the functional objective of the consolidated Service
Desk.
Page 109
No Description Timeframe Major Deliverables
Requirement study and analysis 2 man-month Requirement Definition Document (RDD)
Analyze and establish business user and Service Desk operational requirement
1
Develop and establish RDD
Development and integration testing 2 man-month Pre-UAT program object
Develop technical specification and network diagram
Programming and testing
Conduct integration testing with other Application team
2
Develop user access matrix
User Acceptance Testing (UAT) 1 man-month UAT Signoff
Prepare user test plan
Acceptance testing by users
3
Problem rectification and re-UAT
4 Documentation and training 1 man-month Standard Operating Procedure (SOP)
Implementation 1 week System Live
Pre-implementation review and task
Program migration and cut-over task
5
Post-live verification and live test
Post Implementation Review (PIR) 1 month PIR Report
Gather and analyze user feedback
Conduct PIR meeting
6
Issue PIR report
Table 5.2 – key milestones for the integrated Service Desk implementation project
Page 110
5.3 Conclusion
IT services at BO-A has been guided by the Group IT Policy to ensure alignment with
the business direction of the larger enterprise. However, management and business
and technology users have concerns that the overall performance of current IT Help
Desk does not satisfy its users, lacks management control, is well below the
expectation, and does not seem to support BO-A business visions. Adopting the
philosophy of IT Information Library on continuous improvement and Service Desk
implementation could help improve the state of IT Service Management at BO-A.
IT organization of BO-A must continue to look into ways of improving the
satisfaction level of business users and to better aligning its strategy and
implementation with BO-A business objective. Consolidating the two separate setups
of support functions for IT Application and Infrastructure into one integrated Service
Desk is to move away from technology focus to people perspective and true customer
satisfaction.
Adopting a consolidated Service Desk model would ensure efficient flow of support
services to users and effective monitoring and control from BO-A IT management.
The Service Desk must leverage on the existing resources and skills of both internal
IT Application support team and the outsource vendor and enhance the current
technology and system tools to obtain optimized result of the implementation.
Implementing a consolidated and integrated Service Desk for ITD of BO-A would
enable effective co-ordination and management of IT support services. It improve the
Page 111
service level of IT deliveries to the end users and transform IT services to be more
customer focused. Consolidated and integrated Service Desk also facilitates BO-A to
leverage on resources and skills available from outsource vendor and free-up BO-A
with more staffs to focus on its core competencies. Thus, it generate cost-saving from
better optimization of human resources and system tools.
However, setting up the infrastructure for the Services Desk based on industry
practices and procedures must be performed with proper planning, selection, and
implementation. Careful selection and configuration of IT Information Library and
other best practices that match with BO-A environment would best support the
operation of its IT organization and the needs of the business requirement.
Page 112
Reference
Adria, M., & Chowdhury, S. D. (2004). Centralization as a design consideration for
the management of call centers. Information & Management, 41(4), 497.
Bayan, R. (2003). Setting up a successful help desk--physical considerations. (2003).
Retrieved 25th March, 2008, from http://articles.techrepublic.com.com/5100-
10878_11-5112459.html
Brittain, K., & Matlus, R. T. (2002). Road Map for IT Service-Level Management.
Retrieved 29th March, 2008, from http://www.gartner.com/resources/
104100/104108/104108.pdf
Broadhurst, B., Batell, N., Brooks, B., & Jones, P. (2008). Service Management
Function., Retrieved 2nd February, 2008, from
http://www.microsoft.com/technet/solutionaccelerators/cits/ mo/smf/smfsvcdk.mspx
Cartlidge, A., Hanna, A., Rudd, C., Macfarlane, I., Windebank, J., & Rance, S.
(2007). Service Operation, In A. Cartlidge & M. Lillycrop (Eds.), An Introductory
Overview of ITIL® V3 (pp. 29-34). UK: IT Service Management Forum Limited.
Christensen, P. (2002). Service and Support Handbook. Help Desk Institute, 3-6.
Evans, M. (2005). IT Metrics And Successful Measurement. Retrieved 20th March,
2008, from http://www.csulb.edu/~msaintg/ppa696/696scond.htm
Page 113
Froehle, C. M. (2006). Service Personnel, Technology, and Their Interaction in
Influencing Customer Satisfaction. Decision Sciences, 37(1), 5-39.
Gliedman, C. (2005). Thirty-One Best Practices for the Service Desk. Cambridge,
MA: Forester Research, Inc.
Holt, S. (1999). Help desks must help themselves. InfoWorld. San Mateo, 21(4), 67-
69.
ITIL IT Service Management: Glossary of Terms and Definitions. (2007). UK: Office
of Government Commerce.
Litan, A., & Knox, M. (2003). Outsourcing Is Now a Strategic Issue in Financial
Services. Retrieved 25th March, 2008, from
http://www.gartner.com/resources/115800/ 115823/115823.pdf
McCaston. (1998). Tips for Collecting, Reviewing, and Analyzing Secondary Data.
Partnership & Household Livelihood Security Unit(PHLS), Retrieved 12th April 2008
from http://www.livelihoods.org/info/pcdl/docs/work/SL_Nepal/Reference_Sheets/
Tips_for_Using_Secondary_Data.doc
McDonald, M. P., Nunno, T. & Dave, A. (2008). Making the Difference: The 2008
CIO Agenda. Retrieved 25th March, 2008, from http://www.gartner.com/resources/
154700/154777/executive_summary_making_the_154777.pdf
Page 114
Mesaglio, M. E., & Aron, D. (2007). Executive Summary: IT and the Art of Corporate
Planning. Retrieved 28th March, 2008, from
http://www.gartner.com/resources/153400/153461/executive_summary_it_and_the_
153461.pdf
Minutes of Group IT Steering Committee (GITSC) Meeting 4/2006 through 1/2008,
2006 – 2008.
Minutes of IT Management Team (ITMT) Meeting 12/2006 through 2/2008, 2006 –
2008.
Office of Government Commerce. Retrieved 10th January, 2008, from
http://www.ogc.gov.uk/
Pitfalls in Help Desk Consolidations. (1999). Stamford: Gartner Group
Robb, D. (2006). How to Ensure a Successful ITIL Implementation. Retrieved 12th
February, 2008, from http://www.itsmwatch.com/itil/article.php/3622786
Scardino, L. (2002), Inside Outsourcing: Six Mistakes for Enterprises to avoid.
Retrieved 25th March, 2008, from http://www.gartner.com/resources/107500/
107544/107544.pdf
Simonsson, M., & Johnson, P. (2006). Assessment of IT Governance - A Prioritization
of Cobit. KTH, Royal Institute of Technology.
Page 115
Symons, C., Cecere, M., Young, O., & Lambert, N. (2005). IT Governance
Framework.. Cambridge, MA: Forrester Research, Inc.
Workman, M., & Bommer, W. (2004). Redesigning computer call center work: a
longitudinal field experiment. Journal of Organizational Behavior, 25(3), 317
Page 116
Appendix 1 – Interview Questionnaire
Proposal for setting up integrated Service Desk for Information Technology (IT) Division of a prominent insurance and takaful company in Malaysia Interview question
1. How would you rate the service level of IT Helpdesk function? 1.Poor, 2.Can be improved, 3.Acceptable, 4.Good, or 5.Excellent?
2. What is your general perception on the current IT Helpdesk?
3. What are the good, bad and issues about the IT Helpdesk services? Please elaborate:-
4. What are the critical areas in IT Helpdesk that require more attention than others?
5. Do you think the current IT Helpdesk can meet the expectation of the new brand vision (Yes / No)? Please elaborate.
6. Do you think the organization has effectively managed the implementation and operation of IT Helpdesk?
7. Do you think there is sufficient number of staffs manning and supporting the IT Helpdesk operation?
8. Do you think the performance of IT Helpdesk would improve if it is fully handled internally instead of being outsourced (Yes / No)? Please elaborate.
9. If the management were to re-engineer the IT Helpdesk function, what would you like to be included, changed, or removed?
10. Do you have any other comment or suggestion?
Page 117
Appendix 2 – Financial Reports
Financial Statements of BO-A (General & Life Insurance), BO-G, T.
BO-A (General Insurance)
BALANCE SHEET
AS AT 30 JUNE 2007
2007 2006
RM'000 RM'000
ASSETS
Property, plant and equipment 55,829 56,051
Investment properties 1,430 1,803
Intangible assets 603 1,227
Investments 573,337 486,401
Staff loans 6,856 6,823
Receivables 45,069 47,827
Cash and bank balances 16,102 9,574
TOTAL ASSETS 699,226 609,706
EQUITY, INSURANCE FUND
AND LIABILITIES
Equity attributable to equity
holders of the Company
Share capital 178,171 178,171
Reserves 143,686 83,208
Total equity 321,857 261,379
Insurance fund
Unearned premium reserves 115,756 117,567
Liabilities
Deferred taxation 3,533 2,102
Provision for outstanding claims 197,978 181,501
Payables 53,187 40,873
Tax payable 6,915 6,284
Total liabilities 261,613 230,760
TOTAL EQUITY, INSURANCE
FUND AND LIABILITIES 699,226 609,706
Page 118
BO-A (General Business) Cont’d
INCOME STATEMENT
2007 2006
RM'000 RM'000
Operating revenue 369,234 367,708
Surplus transferred from revenue account 92,146 93,258
Surplus transferred from revenue account 92,146 93,258
Investment income 1,380 3,861
Management expenses (1512.00) (668.00)
Other income (net) 3,600 479
Profit before taxation 95,614 96,930
Taxation (28,951) (31,055)
Net profit for the financial year 66,663 65,875
Earnings per share - Basic (sen) 37.4 37.0
Net dividends per share (sen) - 47.1
CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 2007 2006 RM'000 RM'000 Profit before taxation 95,614 96,930 Adjustment for:
(Decrease)/increase in unearned premium reserves (2,359) 7,877
(Write-back)/provision for doubtful debts (3,070) 5,201
Interest income (21,745) (19,261)
Interest expense 2 2 38
Gross dividend income (3,665) (3,646)
Net gain on disposal of investments (7,794) (6,543)
Impairment of investment properties 0 253
Net write-back of diminution in value of investments (3,204) (2,105)
Accretion of discounts net of amortization of premiums (274) (747)
(Writeback)/impairment of investments (631) 4,978
Amortization of intangible assets 647 339 Write down of property, plant and equipment 0 319 Depreciation of property, plant and equipment 2,610 5,099 Gain on disposal of property, plant and equipment (109) (827)
Information technology project cost 0 63
Property, plant and equipment written off 26 0
Short-term accumulating compensated absences 44 84
Profit from operations before changes in operating assets and
liabilities 56,092 88,052
Page 119
Net increase in loans (33) (240)
Purchase of investments (164,842) (248,766)
Proceeds from disposal/maturity of investments 128,763 386,546
Net increase in structured deposits (15,000) 0
Net increase in fixed, repurchase agreement and call deposits (28,203) (30,174)
Decrease/(increase) in amounts due from insured,
agents, brokers, co-insurers and reinsurers 11,630 (7,357)
(Increase)/decrease in other receivables (4,966) 3,124
Increase/(decrease) in outstanding claims 15,799 (9,286)
Increase in amounts due to insureds, agents, brokers,
co-insurers and reinsurers 2,418 4,888
Increase in other payables 10,029 1,162
Foreign exchange fluctuation (554) (809)
Cash generated from operations 11,142 187,140
Interest received 20,311 23,177
Interest paid (2) (38)
Net dividend received 3,128 3,553
Net dividend paid 0 83,883
Net tax paid (26,201) (30,236)
Net cash generated from operating activities 8,378 99,713
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,454) (1,344)
Purchase of intangible assets (26) 0
Proceeds from disposal of property, plant and equipment 110 1,305
Recovery on impaired investment 631 0
Net cash used in investing activities (1,739) (39)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital distribution to shareholders representing net cash
used in financing activities 0 (96,212)
NET INCREASE IN CASH AND BANK BALANCES 6,639 3,462
EFFECT OF EXCHANGE RATE CHANGES (111) 82
CASH AND BANK BALANCES AT BEGINNING OF YEAR 9,574 6,030
CASH AND BANK BALANCES AT END OF YEAR 16,102 9,574
Page 120
BO-A (Life Business)
BALANCE SHEETS AS AT 30 JUNE 2007 Group Company 2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000 ASSETS Shareholders’ fund assets
Property, plant and equipment 13,707 14,420 13,706 14,384
Investment in a subsidiary - - 11,076 13,225
Investments 149,814 121,879 138,846 110,735
Cash and bank balances 224 156 139 4
Total shareholders’ fund assets 199,887 165,343 199,521 166,856
Total life insurance assets 6,457,510 4,601,222 6,433,126 4,570,958
TOTAL ASSETS 6,657,397 4,766,565 6,632,647 4,737,814
EQUITY, INSURANCE FUNDS AND LIABILITIES Equity attributable to equity holders of the Company
Share capital 100,000 100,000 100,000 100,000
Retained profits 98,478 62,142 97,286 63,519
Other reserve (1,192.00) (521.00) - -
Total equity 197,286 161,621 97,286 163,519
Insurance funds
Life policyholders’ fund 3,003,384 2,774,048 3,001,007 2,771,509
Investment-linked funds 223,228,769 1,722,569 3,208,980 1,697,580
Currency translation reserve (259.00) (123.00) - -
Total insurance funds 6,231,894 4,496,494 6,209,987 4,469,089 Liabilities Shareholders’ fund liabilities
Payables 442 563 90 190
Deferred tax liabilities 342 37 342 37
Tax payable 1,817 3,122 1,803 3,110
Total shareholders’ fund liabilities 2,601 3,722 2,235 3,337
Total life insurance Liabilities 225,616 104,728 223,139 101,869
Total liabilities 28,217 108,450 225,374 105,206 TOTAL EQUITY, INSURANCE FUNDS, AND LIABILITIES 6,657,397 4,766,565 6,632,647 4,737,814
Page 121
BO-A (Life Business) Cont’d
INCOME STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000
Operating revenue 2,102,505 1,594,980 2,101,246 1,593,350
Shareholders’ fund:
Investment income 7,559 6,084 7,045
5,665
Other income (net) 3,708 346 1,582 339
Management expenses (1,268) (930) (1,210) (912)
Profit from operations 9,999 5,500 7,417 5,092
Transfer from life fund
revenue account 36,000 28,287 36,000 28,287
Profit before taxation 45,999 33,787 43,417 33,379
Taxation (9,663) (9,588) (9,650) (9,576)
Net profit for the financial year 36,336 24,199 33,767 23,803
Earnings per share - basic (sen) 36 24 34 24
Page 122
BO-A (Life Business) Cont’d
CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 Group Company CASH FLOWS FROM 2007 2006 2007 2006 OPERATING ACTIVITIES RM’000 RM’000 RM’000 RM’000
Profit before taxation 45,999 33,787 43,417 33,379
Adjustments for: Depreciation of property, plant and equipment 4,676 2,109 4,667 2,050
Amortization of intangible assets/depreciation
of intangible assets previously classified
as property, plant and equipment 737 858 737 858
Depreciation of property, plant and
equipment 21,142 - 21,142 -
Fair value adjustment of investment
properties (effects of FRS 140) (70) - (70) -
Property, plant and equipment written off 29 - - -
Loss/(gain) on disposal of property and equipment 1 (60) 2 (60) (Writeback of)/provision for diminution in value of investments (24,307) 32,266 (24,307) 32,266 Provision for impairment loss on subsidiary - - 2,149 - Accretion of discounts net of amortization of premiums (27,809) (18,258) (27,809) (18,258)
Gain on disposal of investments (64,095) (29,413) (62,342) (27,738) Gross dividend income (16,230) (12,709) (15,861) (12,342) Interest income (195,44) (155,923) (194,552) (155,058)
Other investment income (37) - (37) -
Provision for/(recovery of) bad
and doubtful debts 290 (158) 290 (158)
Life fund surplus 1,806,098 1,193,023 1,810,122 1,247,520
(Increase)/decrease in value of
investments in investment-linked funds (96,131) 25,196 (93,951) 24,940
Translation differences (2,145) (2,952) - -
Transfer of life fund surplus to
shareholders' fund (36,000) (28,287) (36,000) (28,287)
Profit from operations before changes
in operating assets and liabilities 1,416,706 1,039,479 1,427,597 1,099,112 Net purchase and proceeds from
investments (1,023,421) (1,324,764) (1,033,213)
(1,380,197)
Increase in derivatives (143,974) (8,592) (143,974) (8,592)
Increase in loans (47,865) (5,405) (47,865) (5,405)
(Increase)/decrease in receivables (9,855) 37,656 (9,991) 29,712
Page 123
BO-A (Life Business) Cont’d
CASH FLOWS FROM OPERATING ACTIVITIES
(Increase)/decrease in fixed and call deposits (361,996) 185,879 (362,167) 182,609
Increase/(decrease) in provision for
outstanding claims 14,921 (3,833) 15,242 (3,833)
Increase/(decrease) in payables 12,267 (24,563) 12,350 (16,265)
Cash used in operations (143,217) (104,143) (142,021) (102,859)
Income taxes paid (27,604) (17,038) (27,592) (17,031)
Dividends paid - (21,640) - (21,640)
Dividends received 12,616 10,890 12,260 10,519
Interest received 176,818 132,961 175,931 132,073
Net cash generated from operating activities 18,613 1,030 18,578 1,062 CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (2,249) (1,725) (2,249) (1,704)
Proceeds from disposal of property,
plant and equipment 9 174 8 174
Net cash used in investing activities (2,240) (1,551) (2,241) (1,530) NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS 16,373 (521) 16,337 (468) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,816 5,337 4,000 4,468 CASH AND CASH EQUIVALENTS
AT END OF YEAR 21,189 4,816 20,337 4,000 Cash and cash equivalents comprise: Cash and bank balances: Shareholders' fund 224 156 139 4
Life fund 19,427 4,381 18,672 3,725 Investment-linked funds 1,538 279 1,526 271 21,189 4,816 20,337 4,000
Page 124
BO-G (Composite Conventional license)
BALANCE SHEET AS AT 30 JUNE 2007 2007 2006
ASSETS RM'000 RM'000 General Insurance and Shareholder's Fund Assets
Property, plant and equipment 31,623 36,389
Investment properties 1,700 618
Intangible assets 301 397
Subsidiaries 171,125 171,125
Due from related companies 2,377 378
Investments 1,064,185 1,102,296
Loans 52,918 31,308
Deferred tax assets 20,414 15,193
Trade and other receivables 324,534 231,044
Tax recoverable 87,288 116,933
Cash and bank balances 50,407 61,729
1,806,872 1,767,410
Life Insurance Fund Asset 4,309,450 4,066,735
TOTAL ASSETS 6,116,322 5,834,145
EQUITY, INSURANCE FUNDS AND LIABILITIES Equity attributable to equity holder of the Company
Share capital 152,151 152,151
Reserves 938,310 833,386
Total equity 1,090,461 985,537 Insurance funds
Unearned premium reserves 160,060 167,199
Life Insurance Policyholders’ Fund 4,073,629 3,868,872
Life Insurance Asset Revaluation Reserve - 1,825
Total insurance funds 4,233,689 4,037,896 Liabilities
Provision for outstanding claims 231,808 231,166
Due to related companies 18,625 17,098
Trade and other payables 300,944 296,986
Tax payable 4,974 69,424
556,351 614,674
Life Insurance Fund Liabilities 235,821 196,038
Total Liabilities 92,172 10,712
TOTAL EQUITY, INSURANCE FUNDS AND LIABILITIES 6,116,322 5,834,145
Page 125
BO-G (Composite Conventional) Cont’d
INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 2007 2006 RM'000 RM'000
Operating revenue 1,160,257 1,537,137
Shareholder's Fund:
Investment income 14,522 29,263
Other operating income/(expense) – net 22,872 (878)
Management expenses (1,690) (3,310)
35,704 25,075
Surplus transferred from revenue accounts:
- General insurance fund 37,655 63,045
- Life insurance fund 38,000 40,000
Profit before tax 111,359 128,120
Taxation (7,398) (58,422)
Net profit for the financial year/period 103,961 69,698
Earnings per share - Basic (sen) 68 46
Page 126
BO-G (Composite Conventional) Cont’d
CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 2007 2006 RM'000 RM'000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 111,359 128,120 Adjustments for: Depreciation of property, plant and equipment 5,989 16,010 Amortization of intangible assets 373 - Fair value adjustments on investment properties (90,794) - Reversal of asset revaluation reserve (1,825) - Net accretion of discounts (9,477) (6,419) Gain on disposal of property, plant and equipment (3) (7,615) (Decrease)/increase in unearned premium reserves (7,139) 10,085 Decrease in Life Policyholders' fund 204,755 237,306 Decrease in Investment-linked fund 48,261 - Provision for/(writeback of) doubtful debts 1,479 (5,950) Credit balance written off - (3,329) Gain on disposal of investments (66,191) (32,667) Interest income ( 244,056) ( 325,197) (Writeback of)/provision for diminution in value (28,839) 24,837 Impairment loss in properties 1,121 - (Writeback of)/provision for impairment loss in investment properties (17,723) 8,331 (Loss)/profit from operations before changes in working capital (92,710) 43,512 Changes in working capital: Increase in trade receivables (74,495) (18,000) Increase in other receivables (58,352) (39,751) Decrease in tax recoverable 33,109 - Increase in loan receivable (121,456) (27,169) (Increase)/decrease in amount due from related parties (472) 17,472 (Decrease)/increase in other payables (34,085) 63,668 Increase/(decrease) in outstanding claims 3,655 (23,529) Increase in trade payables 56,445 36,686 Decrease in fixed deposits 113,007 70,292 Proceeds from disposal of investments 756,132 507,812 Purchase of investments (777,078) (712,441) Investment income received 239,010 316,846 Cash generated from operations 42,710 235,398 Tax paid (69,928) (123,012) Net cash (used in)/generated from operating activities (27,218) 112,386
Page 127
BO-G (Composite Conventional) Cont’d
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of shares in a subsidiary - (76,000) Proceeds from sale of property, plant and equipment 370 37,616 Purchase of property, plant and equipment (5,210) (7,675) Purchase of intangible assets (1,039) - Net cash used in investing activities (5,879) (46,059) CASH FLOW FROM FINANCING ACTIVITY Dividend paid - (23,005) Net cash used in financing activity - (23,005) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (33,097) 43,322 CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL PERIOD/YEAR 110,179 66,857 CASH AND CASH EQUIVALENTS AT END
OF FINANCIAL YEAR/PERIOD 77,082 110,179
Page 128
BO-A (Composite Takaful Business)
BALANCE SHEET AS
AS AT 30 JUNE 2007
2007 2006
ASSETS RM'000 RM'000
Shareholder's assets
Equipment 300 440
Investments 89,988 30,707
Receivables 8,407 5,638
Tax recoverable 1,161 435
Cash and bank balances 68 20
Total shareholder's assets 99,924 37,240
Total family takaful assets 129,741 46,551
Total general takaful assets 17,241 7,018
TOTAL ASSETS 246,906 90,809
LIABILITIES
Shareholder's liabilities
Payables 5,673 3,196
Deferred tax liabilities 207 234
Total shareholder's liabilities 5,880 3,430
Total family takaful liabilities 2,316 1,486
Total general takaful liabilities 9,371 3,212
TOTAL LIABILITIES 17,567 8,128
TAKAFUL FUNDS
Family takaful fund 62,366 45,065
General takaful fund - -
Unearned contribution reserve 7,870 3,806
Investment-linked fund 20 65,059
Total takaful funds 135,295 48,871
SHAREHOLDER'S FUND
Share capital 100,000 35,000
Accumulated losses (5,956) (1,190)
Total shareholder's fund 94,044 33,810
TOTAL LIABILITIES, SHAREHOLDER'S FUND
AND TAKAFUL FUNDS 246,906 90,809
Page 129
BO-A (Composite Takaful Business) Cont’d
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2005
2007 2006
RM'000 RM'000
Operating revenue 109,148 45,119
Shareholder's fund:
Wakalah deficit (8,180) (2,306)
Investment income 3,223 1,789
Other operating income/(expenses), net 164 (9)
Loss before taxation and zakat (4,793) (526)
Taxation 27 (139)
Net loss for the year (4,766) (665)
Net loss per share - basic (sen) (7) (2)
Page 130
BO-A (Composite Takaful Business) Cont’d
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2007
2007 2006
RM'000 RM'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before taxation (4,793) (526)
Adjustment for:
Depreciation of equipment 174 158
Provision for doubtful debts 106 17
Provision for diminution in value 189 -
Profits from Islamic deposits (692) (723)
Profits from other investments (3,063) (1,310)
Gain on disposal of investments (475) -
Net increase in unearned contribution reserves 4,064 3,707
Accretion of discounts net of amortization of premiums (2,052) (1,168)
(Loss)/profit from operations before changes in operating
assets and liabilities (6,542) 155
Increase/(decrease) in general takaful fund 1,968 (2,191)
Increase in family takaful fund 15,672 29,067
Issue of investment-linked units 64,795 -
Purchase of investments (130,176) (33,039)
Proceeds from disposal of investments 33,575 -
Decrease in Islamic fixed and call deposits (50,890) 1,735
Increase in receivables (1,980) (481)
Increase/(decrease) in payables 3,467 (372)
Increase in benefits payable and outstanding claims 3,798 2,862
Decrease in due to ultimate holding company - (94)
Decrease in due to holding company (241) (188)
(Decrease)/increase in due to fellow subsidiaries (929) 976
(Decrease)/increase in due to other related companies (2) 2
Cash used in operating activities (67,484) (1,568)
Income taxes paid (726) (484)
Profits from Islamic deposits received 692 723
Profits from other investments received 3,063 1,310
Net cash used in operating activities (64,455) (19)
Page 131
BO-A (Composite Takaful Business) Cont’d
CASH FLOW FROM INVESTING ACTIVITY
Purchase of equipment representing net cash used in investing
activity (34) (161)
CASH FLOW FROM FINANCING ACTIVITY
Proceeds from issuance of ordinary shares representing net
cash generated from financing activity 65,000 -
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 511 (180)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 306 486
CASH AND CASH EQUIVALENTS AT END OF YEAR 817 306
Cash and cash equivalents comprise:
Cash and bank balances
Shareholder's fund 68 20
General takaful 502 130
Family takaful 233 156
Investment-linked fund 14 -
817 306
Page 132