A BUSINESS DEVELOPMENT PROPOSAL TO SET UP AN INFORMATION

TECHNOLOGY FIRM IN MALAYSIA

A Major Project

Prepared by

Uvaneswaran Vijayan

0014WLWL0513

Master of Business Administration

Cardiff Metropolitan University

26/01/2015

2015

Major Project

ContentsExecutive Summary 5

1.0 Introduction:-

1.1 Industry Background 6

1.2 Business Opportunity 6

1.3 Purpose and rationale 7

1.4 Term of reference 7

1.4.1 Research Question

1.4.2 Research Objectives

1.4.3 Research Framework

1.4.3.1 Fill and Viser’s framework

1.4.3.2 Mclvor

2.0 Business Review 11

2.1 Providing quality service 11

2.2 Service Level Agreement And Key Performance Index 12

2.3 Cost saving 14

2.4 Core competency areas 16

2.4.1 Technical

2.4.2 Core

2.4.3 Leadership

3.0 Research Design 19

3.1 Research Methodologies 19

3.1.1 Research Methods

3.1.2 Sampling Unit

3.1.3 Sampling Method

3.1.3.1 Quota Sampling

3.1.4 Sample Size

3.1.5 Survey Location

3.1.6 Collection Methods

3.1.7 Ethical Issues

3.2 Questionnaire Design 21

3.2.1Introduction of Questionnaire 21

3.2.2Objective 21

3.2.3Questionnaires 21

4.0 Data Analysis 22

4.1 Primary Data Analysis 22

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4.1.1 Introduction

4.1.2 Data Analysis Sample

4.1.3 Conclusions

4.2 Business Implications 25

4.2.1 Technology

4.2.2 SLA and KPI

5.0 Business Model Canvas 27

5.1 Business Model Canvas for Netcom Sdn Bhd

5.1.1 Priority customers

5.1.2 Competition or competitive strategy

5.1.3 Key partnership

5.1.4 Channels

5.1.5 Key activities

5.1.6 Value chained based resources

5.1.7 Superior value propositions

5.1.8 Customer relationship

5.1.9 Identity

5.1.10 Costs and cost budget

5.1.11Revenue stream and cash flow

5.2 Business model elements 30

5.2.1 Customer value

5.2.2 Initial implementation

5.2.3 Differentiation

5.2.4 Cost

6.0 Business Plan 32

6.1 Vision and Mission 32

6.1.1 Vision and Values

6.1.2 Mission

6.2 Objectives 33

6.3. Marketing Plan 33

6.3.1 The 4P’s 35

6.3.1.1 Product and Service

6.3.1.2 Place

6.3.1.3Price

6.3.1.4 Promotion

6.3.2 Market Penentration 36

6.3.2.1 Internal Marketing

6.3.2.2 External Marketing

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6.3.2.3 Interactive Marketing

6.4 Organizational and operational plan 37

6.4.1 Organization chart

6.4.2 Operational plan

6.4.3 Selection process

6.4.4 Training and development

6.4.5 Compensation

6.5 Financial plan 39

6.5.1Investment

6.5.2 Forecasted cash flow

6.5.3 Forecasted income statements

6.5.4 Forecasted balance sheets

6.6 Implementation schedule 42

6.7 Critical success factor 42

6.8 Risk Mitigation and Contingency plan 43

6.8.1 Operational risk

6.8.2 Mitigation

6.8.3 Financial risk

Appendix 45

References 19

Figure 1 8

Figure 2 9

Figure 3 10

Figure 4 24

Figure 5

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EXECUTIVE SUMMARY

Netcom Consultancy Services Sdn Bhd is an information technology consulting firm to

provide outsourcing service in Infrastructure and data center services. The consulting services

are focused predominantly in providing Information Technology (IT) Outsourcing services for

small and medium organizations (SME’s). This company will be based in Kuala Lumpur

Malaysia as operations and management center.

Netcom primary objective to enable business growth IT industry where Netcom exist as an

outsourcing business which able to enable business growth for customers that looking for

outsourcing services of their own in a manner can that grow Netcom’ value whereby offering

an alternative to the customer’s organization.

Netcom’s mission sets the direction and ambition for the future and the type of business and

employer that Netcom want to be. Its values are set of guidelines to help small and medium

customers provide an organized IT delivery and services.

Considering the competitiveness in the current market, Netcom will build from the solid

relationships with customer based on trust where placing customer at the center of the delivery

according to their needs. Outsourcing is one of the areas Netcom will provide in order to meet

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the requirement of the customer that will not burden them by hiring full time professionals. In

this context, Netcom will provide the varieties of expertise with consultation to meet

customer’s demand and requirement.

Netcom’s vision will be based on four factors providing quality services, achieving the trust

by meeting service level agreement and key performance index, reducing financial cost and as

organization Netcom will focusing and improving the core competency areas in information

technology.

This proposal will be cultivating how importance an outsourcing playing a role in IT industry

at the ends of this research in setting up and IT company while it will proves how cost

efficient will be for small and medium organization with outsourcing their IT.

1.0 Introduction

1.1 Industry Background

As an IT outsourcing service provider, the company will be introduced to variety of concept

and requirement from the customers in providing value for its service. IT industry is an

evolving industry over the years and dramatically changes according to the technology. More

SME businesses is outsourcing their infrastructure, payroll and Human Resource function.

This thesis will specifically will integrate how any outsourcing company as IT outsourcing

service provider will come into the picture in this IT outsourcing and consultancy industry.

There are many terms where IT outsourcing or shared services will enable them to save cost

and provide quality services to the customers in infrastructure. Mainly, the outsourcing

company will focus on outsourcing desktop and laptop, server management and network

management. In Malaysia, which previously is a hub for cheap labor, hiring fresh graduates

without any skillset is a priority with option to nurture them but lack of quality in providing

the services internally will suffer massively. Large organization has the capacity in arranging a

good quality by hiring a qualified professional with while, SME organizations to companies

will be struggling in meeting the requirement hence hiring a qualified professional (Jae-Nam,

et al., 2004).

1.2 Business Opportunity

According to (Aalders, 2001) ‘outside resourcing’ which means of getting resources or

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services from external. This term is to develop the business which the current economic

situation where SME’s largely in the manufacturing, engineering and human resource

development sectors will be looking to outsource their IT Infrastructure. IT is considered vital

in these companies to expand their business growth. With more demanding landscapes in

client’s organizations whereby customers may demand more sophisticated and highly

customized products, consultancy will be a best option to meet their requirement. It will be an

expensive to hire an IT professional internally than outsourcing their infrastructure. IT

outsourcing and consultancy will be the best option for these companies in order to save on

labor cost and efficient providing services mainly to avoid loss of services and getting best

infrastructure services according to the current technology. With more demanding landscapes

in customer’s organizations whereby customers may demand more sophisticated and highly

customized products, consultancy will be a best option to meet their requirement. Outsourcing

will be providing more reliable service framework such Information Technology

Infrastructure Library (ITIL) where it includes capacity management, configuration

management, asset management and disaster recovery planning. Drafting terms such as

service level agreement and key performance index will be under the benefit over customers

that an outsourcing company is well disciplined and as trusted service provider. With these

frameworks, there will be more direct approach in managing the customer’s infrastructure

(Cullen, 2009).

1.3 Purpose and rationale

Information Technology outsourcing industry will see process of delegating a company’s

business process to third parties such IT service provider firm with a point to benefit from

cheap labor, improving quality on delivery and services and providing service innovation.

Company relatively involved in outsourcing will ensure a lower operating cost and labor.

This is primarily in order to save their impact on their company’s revenue and further save

their cost in spending over their infrastructure. Outsourcing will further provide a buffer for

capital investment in order to boost their impact on their respective industry (Paravastu,

2007). According to (Jilani, 2011), below chart shows rising of outsourcing business since

1999 where most of US based companies are outsourcing to other countries and cutting on

jobs in US. This shows how outsourcing has become a good investment among of the

organizations.

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Figure 1: Source (Jilani, 2011)

1.4 Term of reference

IT outsourcing is responsible in providing elevated scope for Information System of an

organization. Due to inability of in-house support and provide service expected most of the

company notably SME organizations outsource their infrastructure service ranging from

Technical operations and Infrastructure services.

1.4.1 Research Questions

1.4.1.1 What is the influence of outsourcing the IT on cost reduction for client

organization?

1.4.1.2 What is the influence of outsourcing the IT on productivity for outsourcing company

and Client organization?

1.4.1.2 What is the influence of outsourcing the IT on profitability for Client

organization ?

1.4.2 Research Objectives

The research will provide an assessment in providing the benefit in outsourcing for the

Information Technology in cost saving, improving the productivity and gaining trust and

profitability.

1.4.3 Research Framework

There are few frameworks to analyze decision process in outsourcing. The research will be

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analyzing outsourcing decision process. This thesis will be using Fill and Visers’ and Mclvor

framework. Both framework are illustrated in figure 2 and 3.

1.4.3.1 Fill and Viser’s framework

According to Fill and Viser’s framework (Fill C, 2000), the framework consists of three main

components which are contextual factors, strategy and structure and transaction costs. The

first factors contextual factor which represent quantifiable and non-quantifiable criteria of

external and internal aspects. Quantifiable criteria are based on cost, fixed costs, investment

and revenues. Non-quantifiable criteria are mainly on planned interest, confidentiality,

operations, stability of employment and service provider. The second framework is about

strategy and structure. This is for client organization and outsource company should analyze

the strategy and structure of the organization including the effect on the human resource

related. The last factor will be on transaction cost which include the service and agreement

cost.

Figure 2 : Source (C. & E, 2000)

1.4.3.2 Mclvor

Mclvor framework (J, 2008) consists of four stages. First stage identifying core and non-core

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activities which client organization perceiving outsourcing as added value in competitive

advantage in their industries. Second stage is analyzing the competencies of the company’s IT

core infrastructure activities which maybe include third party application or system provider.

The third stage is measure of actual and potential cost which include cost estimation which is

being spend internally and cost will be spend in outsourcing. The last stage is about analyzing

the relationship with the outsourcing vendor and client organization. The advantage of this

framework is ability to distinguish core and non-core activities as this is important to analyze

if some of the activities can be remain as in-house support due to confidentiality. An

outsourcing firm will be more reliant on small and medium organization, indeed this

framework will be more understandable evaluating the decision process especially when

identifying core and non-core activities of the client organization.

Figure 3 : Source (McIvor, 2000)

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2.0 Business Review

2.1 Providing quality service

IT outsourcing is widely accepted as a strategic option in providing quality and reliable

services. In current economic condition or climate, Information Technology stands as biggest

spender. Information technology changes every two or three years whereby product providers

such as Microsoft and Linux will be enhancing the quality of their product which make the

product as competitive. The need of specialization for these products is in dire need to support

the organization client’s infrastructure. With the world changing rapidly, SME’s often left

behind and unable to meet their specific demand for their operations. Where most of the

SME’s will not able to meet their security requirement and often fail their audit. The

outsourcing company will provide the options as a standalone company and reliable in

meeting this requirements. An outsourcing company will provide personal with skillset

together providing fast and good quality services. Advisory on products to meet their specific

requirement and within their allocated budgets. According to (Erik, et al., 2006) there is

persistent negativity suroounding outsourcing. Currently, as per management point of view in

the SME is where there is a perception that SME’s are unable to manage their own IT

Operations. But due to this perception this is mostly due to assumption made because of the

expectations from the users of the organizations. Its is imperative that IT outsourcing will be

best strategic options in order to meet the targets and objectives of the SME

organizations.Furthemore Outsourcing in current economic condition is the best option to

provide more opportunity in saving their costs and ability to increase their shareholders value.

According to Elizabeth Sparrow on outsourcing, (Sparrow, 2003), it is proven according to

this article, in order to compete in the nature of business, SME’s will be struggling in to hire

or provide support to their users with high skilled personnel. Apart from that, with current

market condition, outsorucing will definitely enable the SME organizations to sustain their

position and remain competitive. With agreements such as data privacy and breach will be

totally manage and monitored from oursourcing the infrastrcuture . An example bsuniess

email can be monitored to avoid code of conduct by selling information of the

company.Outsourcing also helps to provide data security and availability. With the services

provided around the clock outsourcing comes with strict regulations and to be adhered with

management of the SME’s will be continue to concentrate on their core businesses.

It can be assured that outsourcing will provide highly competent services. Example of success

stories can be eased by taking an example from outsourcing and split of Aker Solutions which

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is large Organizations which operating with nearly three thousand equipment of IT hardware.

(Padnis, 2014).A nearly 100 million dollars’ worth of contract over 5 years see a significant

savings of investment in IT related operations with laying off its in house IT personnel as

well. Where laying off is another negativity but with equipped with small number of IT

personnel which is a small price to pay that can benefit the rest of thirty thousand employees

and provide value for its shareholders and boost its competitiveness in oil industry. With the

nature of business and specializing in outsourcing, Tata Consultancy Services will be playing

an important role in managing the infrastructure services. This is an example of a large

outsourcing process whereby the impact will be greater for SME’s. Quality will be measured

based on experience of outsourcing provide including data security. In outsourcing, speed and

quality are vital ingredients. Poor service will give a poor indication on outsourcing. Quality is

the key in proving that outsourcing is a correct option for its client. An example of

outsourcing personnel supporting a revenue generating company, well-trained personnel

proactively will be solving queries and issues which likelihood solving a major incident

involving cost transaction by restoring their data availability such as applications using SAP.

An experience and skillful engineer will be able to provide assistance with highly decisive and

quick alternative. This will reduce mistrust of the customer, which can paint a bad image of an

outsourcing company. To manage a quality service, outsourcing will ensure their staffs are

well equipped and provided with necessary work instructions to monitor its infrastructure and

ability fixes an issue before the system collapse. Implementation such as monitoring system

and quality management will key to outsourcing company in order to protect its customer

infrastructure from any disaster (Ren & Zhang, 2009). Providing quality service will be an

outsourcing company’s first value for its venture in IT outsourcing industry. Developing its

base by its quality services which will be any outsourcing company’s core value.

2.2 Service Level Agreement And Key Performance Index

Service Level Agreements and Key Performance Index is an important factor for outsourcing

business. SLA and KPI will measure productivity and quality of the service. SLA also will be

key in determining real worth of an outsourcing business. It also endorse if the agreement

between the outsourcing company and its client are met. When a SLA is met it plays an

important image of the outsourcing company. SLA will help to improve its client

standardization and its volume. It will determine to meet its client objective on superior to the

current business and technology service. In the current outsourcing business, SLA becomes an

increasingly integral part in order to provide it services to its client. It is made in the way of

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variation on client expectation. Each client has its own expectation and SLA will measure the

best possible way to serve its client. In this review, will show how SLA will be designed while

implementation and managing of SLA will be major factor for any outsourcing company

(Goo, 2010).

An outsourcing company will introduce SLA based on the delivering project of business

requirement with cheaper alternatives and using key performance index in order to measure

the quality on the completion. SLA will also be based by the client’s business productivity. A

single disaster or failure to meet the SLA requirement will tarnish the reputation of the

outsourcing company. The SLA is always vital of being drafted according to client’s business

objectives to improve the productivity and avoid financial losses. SLA will focus on escalation

process in the operation and based on technology expertise depending on the product of its

client. This include on how to handle a business critical applications which used for daily

transaction for example. This scenario will be measured when its client providing its annual

report .When there is a losses recorded due to failure in meeting the SLA (Karten, 2004).

Key performance index will evaluate the performance of the service delivery in this context.

Key performance index will be primary accountability in outsourcing relationship with clients.

It will also provide a baseline in achieving its functional efficiency in outsourcing business.

SLA will benefit not only the outsourcing company on the delivery approach but also set the

stage to surpass technology levels and also identifying loopholes in the technology when

outsourcing begins. A well designed SLA will reduce the risk from the loopholes and elevate

its client productivity with minimum damage (Huang & Goo, 2009). SLA’s also provide in-

depth analysis on root cause analysis and fix procedure. This also turns to improve on the

quality of service delivery.

SLA basically designed to current best practices. From start of the building the block of SLA,

customers current and future achievements needs to be taken account. Identifying the clients’

goal and vision will make outsourcing company to understand on their service delivery. The

next step is to provide and develop agreements and contract between both parties. The rest of

the step will be structuring the SLA which will base on other service provider such as

hardware and application based skillset providers. This needs to be including in the SLA for

overseeing a better communication process. The need to understand the importance of this

external service provider will be vital as any breakdown in communication, Outsourcing

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company will be hold for responsible as they will be the primary contact. After this agreement

captured in the SLA, implementation on the SLA will be evaluated by either score cards or

process review systems. Improvements and failure on meeting the SLA will be reviewed using

these systems (Robinson, 2007).

In the event of renegotiation, SLA must be defined that any improvements needed due to

technology loopholes need constant escalation as remedy for fixes may involve additional cost

such as security applications. For example, network availability maybe providing correct

response time however users in the client organizations may find it is slow due to heavy

transaction cost. In the vent of upgrade needed, renegotiation with the management of the

client side will be necessary as it involve expenditure for the upgrade. A recommendation and

high level intensified round of agreement will be outsourcing company responsibilities to

initiate and execute the upgrade of the infrastructure. The evidence that this factor will be an

important role to play in promoting outsourcing business industry. When designed and

executed appropriately, SLA will become fundamental in outsourcing business for

establishing the target on business objective set by an outsourcing company. This will be an

overall beneficial for greater assurance that service quality will be met (Marcolin, 2002).

2.3 Cost saving

Current estimation outsourcing value around globe stands at 3 billion US dollars. This

estimation provides outsourcing business has considerably increased its presence in IT

industry. Many critical applications businesses such as financial, human resource,

procurement and legal services have overall incremental volume in outsourcing. According to

(C.Lacity & Wilcocks, 2013), many organizations ranging from small to large has initiated

outsourcing as their prime target in cost savings and meeting minimum contractual

requirement. Furthermore, current organizations are doubtful on big bang approach and want

outsourcing company to be more technology oriented and being inventive. In this review, how

an outsourcing company will integrate its finding n how it can provide a service with

minimum cost in terms of operations and service delivery.

Many organizations around the globe mainly small and medium entrepreneurs are concern on

their operating cost. Main reason will be running their own IT infrastructure. Outsourcing will

be their primary option to provide cost reduction where some companies even will be doing to

get higher return in their investments. The outsourcing generally not only targeting their cost

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on their IT infrastructure but also on labors running it. Hiring internally will be expensive and

no primary service level agreement in attending an incident. Whereby, cost of human resource

related benefits such as medical insurance, bonuses and other miscellaneous benefits.

Outsourcing will provide this savings without hiring an engineer to manage their own IT

infrastructure. There will be significant change in expenditure when outsourcing takes place

where there will be fewer burdens on managing their own IT personnel and their welfare.

With the current economic situation increments and other increment in benefits can be

avoided (Han & Mithas, 2014).

IT outsourcing is known to be not only an alternative for internal IT investments. Even though

it is based on cost reduction on IT personnel by saving space in working environment will be a

major plus. Operating cost of these internal personnel which can be deemed as hidden cost.

Utilization of the facilities for instance gives a greater impact on cost reduction. It also can

increase its operational competences of current process as well as giving space on other

department’ resource allocation. (Han & Mithas, 2013).Question on quality also does not

suffer. There a great number of assessments that quality being provided between internally

and externally has variance. But according to (Corbett, 2004), greater quality shown on

outsourcing. Where call center agents have adequate qualification and do not have any

language barrier. Due to low wages and English speaking populace, India becoming a

preferred destination for outsourcing.

Apart from that, client organizations can concentrate and investing the money saved on

outsourcing in their core businesses. Maintaining own infrastructure will be burden than

outsourcing the services to an outsourcing company. Time and effort such as cost reduction on

training the internal employee according to the current technology or purchasing expensive

product and investing in latest technology (Hococht & Trott, 2006). With the current saving

most organizations will increase their value in productivity, quality and their core business

value. Outsourcing will monitor client’s infrastructure with monitoring system 24X7. Internal

IT employees for instance mostly will be working during business hours. After business hours

they may not respond to any critical system issues. Whereby outsourcing will save the cost on

business critical systems by monitoring the system even after office hours to avoid any

financial loss incurred.

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Outsourcing will not only save the organization on operation cost or human resource related

cost. It also saves non-core business related cost. Cost of facilities such as snacks and high tea

breaks or annual dinners or department dinners can be saved. This is comes under one of the

internal hiring benefits where they are entitled to. Cost on toiletries, office related equipment’s

such as tables, chairs, office badges, desktops, laptops and monitors, where it all comes under

hidden cost. There will be o favor in paying overtimes for employees coming in for

maintenance weekends. IT can be considered vital in every organization where during public

holiday IT will need to respond, whereby in case of such incident employees required to come

during their off day the organization need to be able to pay them in double of their. This

hidden cost can be averted in outsourcing where the outsourcing company will be monitoring

and remotely fix the issues. (Hutchings, n.d.).

An outsourcing company will provide an opportunity for SME’s for ability to save their cost

on operations by providing cheaper in operating and monitoring their infrastructure with

minimum risk of financial losses. Whereby remote fixes and offshore outsourcing by

permanently placing an outsourcing employee with low wages in the SME’s working

environemnt will further elevate the organization’s coffer.

2.4 Core competency areas

In order for an outsourcing to compete and stay competitive in the current outsourcing market,

the firm has to be on par with the current technology offered. With limited budget, it can

provide an opportunity for fresher’ with opportunity to learn the latest technology. The

expenses in training of course will elevate the budget but with hiring a fresh graduate with

limited knowledge can substitute the cost. Most prominently, it can also assure on the job

placement or for industrial training to get exposure on the technology.

2.4.1 Technical

Technical expertise could be a barrier for small and medium supporting IT outsource

company. Netcom will face an issue when to get a contract or service level agreement from its

client it will need to provide an alternative that it can support wide ranging technology. It also

needs to demonstrate to its client that it has what it takes to offer than the client’s internal

support. It will need to show that the services it offers it can support the technology that being

used by its client. Most of the SMEs will not offer range of latest technology since it has less

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users ranging 50 to 150, however when the contract signed, an outsourcing will need to show

it can advise or recommend to its client for range of latest technology or current technology

needs an upgrade. As an IT outsourcing company it need to be up to date in order to provide a

range of services of the current and future technology. According to (ESSENT, n.d.),

compliance and security plays an important role in this technical competency. IT outsourcing

company will determine its clients assets details if it is been audited, does the hardware has it

maintenance agreement or does it need any upgrade.

2.4.2 Core

Effective communication putting an outsourcing company into strategic position and elevate

their status as prominent market leaders in small and medium businesses. Communication is

considered a holy grail in outsourcing industry. This is to make understand the senior

management of outsourcing client on outsourcing procedure. Expectation and deliverables

will be closely managed if there is effective communication between the client and vendor.

For example, where current status of a client organization has ten percent of internet and

intranet usage but however the network availability seems to be poor. This need to be

communicated with precise data and documentation for any recommendation. Communication

difficulties are almost under bad light due to cultural differences or usage of medium. Medium

such as electronic email can be misunderstood with point. Old method such as meeting the

client directly with statistics has been decreasing nowadays. It is as similar of shortage of

resources. Communication failure may result in things didn’t go as per the right direction and

lack of understanding will emerge. Although cultural differences rarely a major reason, but

still due to language barrier will take its toll. Thus in this current outsourcing industry saving

the cost is the primary objective whereby communication will be built after the contract has

won. Knowledge in grey areas of unknown issue or recurring issue in previous environment is

important. This shows that communication is an important value to make outsourcing a

success.

2.4.3 Leadership

An outsourcing company proactively needs to show leadership quality. Outsourcing company

will need the ability to provide high level strategy and planning together with criteria to make

sure the client organization network running under maximum capability .Gaining high level

expansion with project leadership by developing an organizational chart which will include

the communication pattern with client organization in order to smoothen the process of

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planning and execution. Apart from that, outsourcing company need to take lead on managing

and proactively recognize any issues or incidents may occur. As per leadership concern, all

documentation regarding SLAs needs to be presented and coordinated with third party vendors

and outsourcing personnel who will be involved with support on the services. A proper

communication with leadership excellence for monitoring purpose needed to combine high

level strategy with onsite services (Stopper, 2005).

This will stress importance on leadership in order to provide better services and

communication flanking with best services. An outsourcing will serve as an independent

outsourcing recommendation and take lead on coordination with other third part vendors

which does not falls under it skillset scale.

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3.0 Research Design

3.1 Research Methodologies

The following study will show the research method for this thesis. This research is specifically

designed to any outsourcing company as a profitable and successful outsourcing company.

The survey this study being used is quantitative research data. As quantitative data review, the

research will be based on answering research questions and making conclusion from the result

will provide how an outsourcing company can be successful in outsourcing business with

research being undertaken (Lundberg, 2003).

3.1.1 Research Methods

The survey technique will be a mechanism to evaluate plaintiffs approach toward the review

factors. A series of research questions will be developed in order to provide data collection

based on these study purpose. The following method of quantitative data research question

will discuss the analysis and discussion of the findings with the research questions.

3.1.2 Sample Unit

This study is aiming to provide an understanding on how will be the outsourcing business will

be beneficial and dealing with issues in future and how to avert them in outsourcing industry.

In this research, the sample collected from the target respondents which are in the IT industry

specifically. Most of the respondent involved in IT outsourcing business and from the research

will be analyzed on the current climate in IT industry. This sample will be integrated on how

an outsourcing will impact as a firm and grows into a leading player and hold a substantial

market share in outsourcing industry.

3.1.3 Sampling Method

3.1.3.1 Quota sampling

This sampling method aims to represent the characteristics of population involved outsourcing

industry and non-outsourcing industry. This sampling method will be a good platform to

identify how many are there directly and in directly involve in the outsourcing industry. Based

on the ratio they will be further collection based on the quantitative research method with

series of questions on how beneficial advantages and disadvantages of outsourcing.

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3.1.4 Sample Size

The sample size will be based on population size. The sample size will be handful of

people selected in IT industry. These people are directly or indirectly connected with

outsourcing industry. The larger the sample is expected based on this study where it

will reflect a true opinion on outsourcing. The sample will be collectively from

different working environment of IT industry. It also include from people are working

internally in an organization where under IT department.

3.1.5 Survey Location

The survey research is an important measurement. A survey based on this design in

based on questionnaires. It is basically are usually paper and pencil instruments that

the respondent completed. These questionnaires will be open – ended questions. The

type of questionnaires is chosen in this research is group administered questionnaire.

Respondents from IT industry specifically targeted from Klang valley in Malaysia.

This is due the extensive knowledge and number of experience of them in IT industry.

This questionnaire will be given to respondent face to face and requesting to get the

questionnaires to be completed.

3.1.6 Collection Method

The quantitative data collection methods to rely on the targeted respondents’ response

on the questionnaire. They produce responds from the questionnaires given to this

targeted respondent to get clear indication and summary. These are less expensive and

comparisons can be made easily and size of the result can be easily conversed.

3.1.7 Ethical Issues

This paper stress importance of ethics in this research. Ethical considerations focus on

disciplines of this research on outsourcing. The ethical considerations will be stressing

on consent form where it will be attached with the questionnaires whereby consent will

be presented to the respondents or participants in order to agree to participate this

survey. Apart from that, the survey will ensure on privacy and confidentiality of the

participants. This survey also stress on impartiality whereby it will be free from bias

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survey in order to support this thesis. This will be a totally depend on the opinion of

the respondent’s which can be varies. Last but not least, this survey will avoid

plagiarism where this survey will be conducted with actual participants which will be

met face to face.

3.2 Questionnaire Design

3.2.1 Introduction of Questionnaire

In this part of questionnaire represent on respondents details such as Name, job title,

company, location, email identification and number of years in IT industry. There is no

specification on outsourcing experience as this questionnaire may not be entitled to

answer due to regulation on their profession. However the question will be based on

opinion on outsourcing will be stressed.

3.2.2 Objective

The objective of this questionnaire is to provide a multiple choice and gather the data

of benefits and disadvantages of IT outsourcing. This will enable to get a data what

will be needed in outsourcing company to continually succeed. The questions will be

combination of closed-formation questions, Dichotomous questions and Likert

questions. Likert questions can help to provide data from the respondents if they agree

with the questions. Such questions will be helpful in order to assess the targeted

respondents on questions regarding outsourcing.

3.2.3 Questionnaires

(Appendix)

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4.0 Data Analysis

4.1 Primary Data Analysis

4.1.1 Introduction

Quantitative data is in an underdone data form such as questionnaire. These data will be

processed and analyzed accordingly. Quantitative data will refer primary data from research

strategy. The research method which was used for this research thesis is quantitative data. The

quantitative data will be evaluated in this part were produced from a questionnaire of 15

questions in total whereby it will take minimum 10 minutes in average to fill. This include the

type of questions varies such as combination of closed-formation questions, Dichotomous

questions and Likert questions. In general, this research is mainly to investigate if the

outsourcing business in Malaysia has a future. All the research questions will be perceived

based on targeted respondents where are from outsourcing industry point of view. To analyze

this opinion this research will focus on how beneficial the outsourcing industry in Malaysia.

The target respondents opinion and relationship with the outsourcing industry will be

considered as representative of the outsourcing industry.

4.1.2 Data Analysis Sample

The questionnaire will be starting with an introduction on outsourcing plan in to be initiated in

Malaysia. This will also include questions to the target respondents from the opinion on

outsourcing benefits until what criteria is best to be met in order for outsourcing company to

be successful.

Question 1

Out of 15 respondents, all the respondents are involved in IT outsourcing industry. The sample

is collected according to the calculated quota being target respondents from the IT industry.

According to the sample, all of them completed the following question. Most of them from IT

company such as Hewlett Packard, DELL, IBM and telecommunications company.

Question 2

Out of 15 respondents, the sample of population which is the target respondents 4 of the

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having experience of less than five years and 11 of them having 5 to ten years. This shows

combination of experience from target respondents varies. This shows target respondent

targeted are from specifically from having experience in the following industry.

Question 3

All 15 respondents are involved in IT service support. This shows the target respondents are

involved in information technology most of them are professionals and having extensive

experience in business process outsourcing and information technology outsourcing.

Question 4

All the 15 respondents agree that technology play an important role in outsourcing decision.

Question 5

Since all the respondents are from IT service support this question is not applicable to be

answered.

Question 6

14 respondents agree that IT outsourcing is mainly for cost reduction with one respondent

unable come in conclusion that whether to agree or disagree with the question.

Question 7

14 respondents agree with IT outsourcing will improve the service delivery while one target

respondent disagree that it will improve the service level.

Question 8

All 15 respondents selecting technology as major beneficiary for IT outsourcing industry.

Since all of them involved in outsourcing company or vendor, the question gave a straight

Question 9

Ten respondents agree with the question that clients’ delivery will improve the service

delivery whereby four of them disagree where internal hired professional will have the same

impact and one respondent being neutral in this question.

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Question 10

All 14 respondents agree that SLA will become an important factor in providing outsourcing

industry while one respondent remain neutral.

Question 11

All 15 respondent s agree that in order to evaluate the performance of an outsourcing company

KPI will be an important value in measuring the performance.

Question 12

All 15 respondents agree that current outsourcing has high risk in delivery shortcomings

according to the promise service level agreement. These incudes in current technology and

lack of knowledge in delivering the services that agreed.

Question 13

Ten respondents agree even though there is high tendency in making mistakes but it has the

integration capability in identifying the loopholes in the delivering the designated services.

Question 14

Ten respondents do not have technology limitations and five of them having limitation and

lack of certain skillsets. This shows the majority respondents do not have limitation on

technology skillset or providing the technology requested by the clients.

Question 15

13 respondents agree that outsourcing business will provide a new revelations in IT industry

with great opportunity with two respondents did not agree with IT industry still may have

other alternative.

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Figure 4 Variable frequencies in outsourcing business

4.1.3 Conclusions

From the survey analysis data shows that the target respondents which are in outsourcing

industry agree that the outsourcing is mainly for betterment for client on cost saving and

quality of service delivery. Moreover that, technology will play a major part in outsourcing

business and providing SLA and KPI will make an outsourcing business become a good

proposition in Malaysia.

4.2 Business Implications

Setting up and outsourcing company in Malaysia certainly a good decision in terms of

industry and growth. Outsourcing certainly given a nod from the survey analysis where

majority respondent almost 90 percent of 15 respondent feedback shows starting an IT

outsourcing company is a beneficial. However there are implications can be faced by any

outsourcing company in order to claim a market share.

4.2.1 Technology

Technology plays a major role. An outsourcing company will need to make sure to be up to

date in terms of technology savvy. Their services need to be up to date in the technology they

provide in their service delivery. To be a successful in outsourcing industry, any outsourcing

company need to consider the fact is technology not only can be a decide but also being an

advantage than other competitors out there in the market. Outsourcing solutions associated

with achieving ultimate results with minimum amount of expenditure. Most of the

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Target respondents Related to IT outsourcing 15

IT Service Support or IT Service

Delivery

IT Service Support 15

Technology or quality of delivery Technology 15

Cost reduction or Service

Improvement

Both 14

SLA and KPI Both SLA = 14 ; KPI = 15

IT outsourcing will be a great

beneficial in term of job placement

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outsourcing solutions will be based on how to integrate few systems into simplified

technology. For example, a client organization outsourcing it infrastructure and applications,

while and outsourcing company will be responsible in resolving issues rise in the

organization. An outsourcing company who takes on the services needs to be able to have the

knowledge on the infrastructure connectivity and application skillset knowledge. Failure to

address an issue will not only hamper the solutions to be preferred or to be suggested but also

lose it clients trust in any solutions provided. As part of being a service delivery provides, an

outsourcing company need high level commitment in dealing an issue rise in the client’s

organization. Outsourcing company needs to be able to commit any shortcomings in solving a

complex issue without pointing any fingers and take initiative in solving even though it is not

their jurisdiction. An outsourcing company needs to show that outsourcing is not about cost

saving but also can able to provide a quality delivery even though not much expenditure can

be spend on the technology. They need to present themselves as an avid problem solver at

any cost. The will need to be dependable by their own client and have confidence in solving

and provide guidance. According to the survey analysis, all the respondents are agreeing

anonymously that technology is the main reason for outsourcing. This shows this respondent

which have years of experience that technology plays an important factor due to current rapid

change in technology previously and coming years.

4.2.2 SLA and KPI

SLA and KPI and an important element in client engagement in outsourcing business. SLA

whereby it provides an indicator on how the outsourcing will take place while KPI will be

evaluates the performance on the outsourcing. SLA provide an important rule and metrics in

alienate a high priority and low priority issues. In IT industry, the SLA will be measured how

severe is the case dispatched either from the service request or monitoring tools. For example,

when receive a high priority case, agreed SLA for solving according to the priority need to

meet either response time or resolution time. In an event unable to solve an issue according to

SLA this will be serious breach of agreement and outsourcing company may lose its contract

with client. While SLA is an important factor, KPI is another value is plays an equal

important role in this outsourcing business. KPI will be measurement on how successful the

outsourcing become. Failure to provide performance metrics will not able to show cast the

outsourcing progress whether it is agreed in all level negotiation between the management.

For example, annual meeting with management from outsourcing and client management will

shows integration opportunity to find the out coming of the yearly performance on the service

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delivery. From this meeting a series of metrics will be presented to evaluate the performance

review of the outsourcing company. IF this is not presented, there will literally no metrics to

shows or to identify any shortcomings or issue faced which will contribute further more

implications in future. This can be averted if KPI is reviewed in order to provide an input.

5.0 Business Model Canvas

The Business Model Canvas for Figure 5 designed for Netcom Sdn Bhd. This will be a new

company to be aligned for the startup of the company in IT outsourcing industry. Netcom will

be IT outsourcing company to be introduced with this business model. Based on the survey

data this plan is drafted according to meet the best solutions possible to provide a quality

service delivery.

5.1 Business Model Canvas for Netcom Sdn Bhd

Figure 5: Business Model Canvas designed for Netcom Sdn Bhd

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Priority Customers

Business Owners of SME that with cost limitation for internal hiring

Superior Value Propositions

Cost Effective of individual and quality service delivery

Competition/Competitive Strategy

Only from other outsourcing firms

Channels

Emails, Conference call and meetings

Key Activities

IT monitoring / resource services

Key Partnership

Vendor of technology foservices Costs and Cost Budget

Low budget on personnel and service delivery to start up the company

Fixed cost covered by Client on Salary of engineer and marginal cost v covered by revenue on service delivery

Revenue Stream and Cash FLow

Positive cash flow on service provided based on the technology and consultancy.

Customer Relationships

Integration services SLA and KPI

Value chain based resources

Provided by Netcom on resource and support

Identity

Being a market leader in outsourcing business

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5.1.1 Priority Customers

Netcom Sdn Bhd priority customer will be for providing cost effective support and service

for their IT infrastructure. Services such as monitoring and cheap labour for engineers will be

main priority in this outsourcing contract.

5.1.2 Competition or Competitive strategy

The competition will be faced by Netcom will be from other outsourcing firm which

providing a similar services. But since there is handful of SME’s for internal economy placed

, Netcom has a bright chances to be being market leaders and securing contracts for

outsourcing services.

5.1.3 Key Partnership

Netcom will integrate with the business owners which is the client for integration services

such as business improvement plan. Netcom also as well will sign a contract with vendor

based on the technology to provide support in term of difficult of the skillset. Furthermore

that, in the vent of needed of priority assistance in incidents vendor needs to provide global

support on order for Netcom engineers to be able contact the vendors support link.

5.1.4 Channels

The channel for communication will be based on emails and meeting with the clients.

Communication for the services will be based on the personnel stationed on onshore of the

Client Company and escalation. Meeting will be held bi-weekly for updates and information

sharing and yearly to evaluate the performance of the SLA.

5.1.5 Key activities

Netcom will provide 24*7 support of their clients infrastructure monitoring. Flanked with

monitoring tools, Netcom engineers will be standby to attend if there is any incident towards

the infrastructure/application hosted devices. Engineers also will be given standby allowance

or rotating duty to monitor such proposition will allow easing their worriedness on their

critical applications monitoring which may impact their revenue.

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5.1.6 Value chain based resources

The key resources will be engineers with various skillset can be offered to the client’s

infrastructure. Engineers will be equipped with necessary training and experience in handling

the client’s infrastructure organization. Engineers will be given training on latest technology

in order to be well prepared and to support its customer’s infrastructure.

5.1.7 Superior value propositions

Netcom Sdn Bhd will provide a cost effective business propositions where it can provide in

terms of engineers or personnel with less expensive and quality services. Hiring internal

professionals will be expensive with personal incentives will be included. However, Netcom

will ease this burden by hiring a professional with less expensive with opportunity to grow

themselves with latest technology. This will be a good proposition for new personnel who

want to venture with technology Company. Apart from that, this will be equipped with

delivery model where, integrations services such as position account manager to oversee the

performance or escalation procedures.

5.1.8 Customer relationship

Netcom also will be providing integrations services with client organization. This will be

overseeing their service level agreement and key performance index. Netcom will be

honouring the service agreement level where negotiation will be done at customer front.

Customer will evaluate the agreement details in terms of support priority, response time and

downtime of their infrastructure. This all needs to agree upon with the customer. Key

performance index will be evaluated annually or monthly meeting with customer in terms of

performance on Netcom.

5.1.9 Identity

The targeted customers are from small and medium entrepreneurs. They are mainly can be

from manufacturing and industry related business. These clients are depending on improving

the technology of their core business but not their IT infrastructure this is due to their

importance on their business. Netcom plan will be scrutinizing the following clients which

will have difficulty in hiring or upgrading their infrastructure. Their expenditure will be

mainly on their core business. Netcom will take the advantage in this scenario to provide cost

effective consultancy and service delivery to manage their infrastructure.

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5.1.10 Costs and cost budget

Netcom will provide cost effective service delivery whereby charging based on the service

provided such as maintenance and monitoring the infrastructure. This will be paid in month

as salary to engineer provided to Netcom and maintenance services by monthly. This contract

will also include penalty to be imposed to Netcom if there is breach of the service level

agreement. CAPEX income will be based on the marginal cost delivered by consultancy and

delivery. Whereby salary of engineers will be paid by the customer.

5.1.11 Revenue stream and cash flow

The revenue stream will be based on service provide d and salaried employee which will be

imposed on the client payroll. The employee will be working under Netcom but the salary

will paid by the customer. Furthermore, Netcom will benefit from the service delivery cost

which will be charged according to the priority service such as maintenance fees, service

tickets and onsite maintenance. This will be a positive cash flow as Netcom do not only get to

pay the engineers salary but also do not burden with additional expenses on the engineers.

Netcom will get a sold income from their consultancy and delivery service based on

technology needs.

5.2 Business Model Elements

5.2.1 Customer value

Netcom will be offering a service that will be a good proposition where it allows clients to

use this as benefit for their industry. Outsourcing is one area where it helps the client for save

the hassle to get Netcom to monitor their infrastructure with stringent monitoring without any

extra expenses to be paid.

5.2.2 Initial implementation

Customer value is based on cost reduction. Netcom can provide a cost effective service in

order to give the client an alternative in order to concentrate their core business. Apart from

that the client can able to provide feedback and offering where it will not only improve but

elevate the future position of a trustworthy outsourcing company.

5.2.3 Differentiation

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Netcom will provide an innovation in terms of technology. Netcom not only provide an

improvement but as well provide enhancement in the client’s infrastructure organizations.

Basically advanced monitoring systems and highly skilled personnel with adequate training

will be provided in delivery its quality.

5.2.4 Cost

Cost is an important factor for Netcom to continually to sustain its position as market share

holder. Netcom will be providing a cost effective service with highly skilled personnel.

Netcom will be hiring cheap labour and train them into highly skilled workforce in order to

meet the requirement according to client infrastructure support need. Apart from that, service

cost will be based on the priority incidents or downtime. On-call rotations and shift are

included for Netcom engineers will be fully burden by Netcom. This will save clients cost

whereby hiring internal professional will actually elevate the cost of their own.

6.0 Business plan

6.1 Vision and Mission

6.1.1 Vision and values

‘Excellence in Service’

Netcom Sdn Bhd vision is to provide cost effective solutions and delivery services preferred

by small and medium entrepreneurs. It sets the complete route of Netcom business while

replicating ambition for future and market leader in outsourcing business. Netcom will

provide a service where it will be valuable for its customer and achieving client’s goal in their

core businesses. Netcom will reiterate with three values where the foundation lies on quality,

cost and trust. Netcom value on quality will be based on where it will understand the need

and requirement by the customer and deploying a service based on the agreed cost structure.

Apart from that, trust will be an important value to achieve Netcom vision in building its

relationship with its client where it is the foundation of this business. Netcom will provide a

cost effective service in order to elevate its client’s core business.

6.1.2 Mission

Netcom goal in order to accomplish its vision will be being a market leader and provide

technology expertise to its client. Netcom will be providing a service where it is aligned with

its vision to be a market leader for SME’s. Netcom will be a trusted partner for the clients in

terms of delivery and solutions expertise. Netcom will be an important solution expert in

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future and grow together with the technology and being a frontrunner providing the services.

Netcom will focus on cost effective delivery where it will provide a model of cost reduction

together with quality in outsourcing business. Netcom will ensure that agreement for these

services are met and build their trust among its clients in future. Netcom will build its

foundation in IT outsourcing, based on their expertise on IT infrastructure, monitoring and

solution upgrade.

6.2 Objectives

Netcom Sdn Bhd will be based in business hub of Malaysia is Kuala Lumpur. Starting as

small firm with partnership with third party vendor where it will be beneficial by space and

time. The vision for Netcom Sdn Bhd will be providing services in terms outsourcing IT

infrastructure and value for money. Netcom success will depend on quick and reliable

technical assistance when in needed. Netcom will also provide future improvement

consultancy. The primary service will be based on technical expertise and priority incident.

The contract signed with clients to be met and provide trust and capability in future

engagement. Financially, Netcom will be providing cost effective services for its client. This

business though showing promises in near future that consulting business relatively easy to

start. The local market segment is targeted for small and medium entrepreneurs. The business

will be a different then outsourcing large market segment supporting more than 500 users.

The objective for Netcom apart from providing affordable services is to provide business plan

for the next three year where including written framework and procedures for starting up

Netcom and managing its outsourcing business. Furthermore, a planned policy to be provided

for developing marketing plan. The intended target will be business owner and the plan is not

envisioned to obtain example of other outsourcing source. The choice of this plan is to

provide detailed yearly projection and summaries and for the following two years.

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The next objectives for Netcom will be profit and growth. Netcom will provide adequate

revenue to future financial development and to provide the capitals needed to achieve.

Netcom will be looking in grow the business at a rate where it is both exciting and practicable

with leading the market with innovation and flexibility. Therefore Netcom will be a

knowledgeable and an asset to the SME and its environment. Enabling Netcom to be

profitable company within 3 years with sustainability and growth.

6.3 Marketing Plan

Within 50 kilometres radius SME outsourcing business is a good opportunity for Netcom.

Located in the heart of business capital Malaysia it provides a good platform in terms of

reaching the customer. Netcom will be committed providing outsourcing service to small and

medium business to increase their potential and being more successful with current plan.

Building their brand is the most priority agenda in being successful and elevates their status

as successful and trusted partner. Netcom will work entirely with small and medium clients

where it will be planning a concrete and short term action in order to move their business to

right path. Netcom will provide a range of skills in order to improve the SME organizations

in terms of IT implementation. As well in Malaysia lack of quality in SME consulting will be

a major plus where Netcom can give a different alternative as well as improving their

organization quality.

With the substantial amount of growth in SME due to nature of business their IT maintenance

and delivery will be affected as investment will be subside to IT infrastructure. By

outsourcing the services of IT, SME clients will have opportunity to look into their core

business respectively. In other area where they can relatively become a very competitive

company on their business.

Netcom will take advantage as cheap IT service provide with providing more openings and

job placement for cheaper labours with opportunity to learn different technology. This may

open a good opportunity for fresh graduates and less working experience who wanted to

venture in new technology and learn. This may less the burden of the SME client’s

expenditure to hire in an IT engineers or consultant which will be more expensive. The hired

in’s will be not able to provide consultancy services but also need to spend for training this

personal which may elevate their cost. This expenditure can be spending on developing their

business where it will improve their outcome on financial results.

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Overall Marketing Strategy for market penetration and market development are based on the

interactive services offered in providing more reliable outsourcing services. The services such

as cheap labours, quality delivery and consultancy on improvement of SME infrastructure

will be the proposition. The mission is to help the SME in overcome their lack of expertise in

their infrastructure also improve their delivery of their own. Where hired n will be not able to

provide any development instead of monitoring and maintaining the current infrastructure,

Netcom can provide an alternative in providing a consultancy services improve to better

infrastructure without even proving technology expertise but with Netcom engineer to

execute the implementation.

Apart from that, Netcom strategy will be solving most of the complex issue faced by the

SME clients in daily operational activities. Netcom will provide client relationship

management to support the issues or daily operational activities faced by the customer where

this management will be closely watching and in priority working closely with client to

overcome or avert the issues in near future.

6.3.1 The 4Ps

Netcom marketing strategy will be based on 4Ps strategy combining from marketing mix in

order to provide a clear strategy and framework.

6.3.1.1 Product and Service

Netcom services and products based on INT infrastructure services. Monitoring will be

monitored in the command center to constantly monitor the day to day operations on client

side. The customer will not have to depend on internal while monitoring will show every

trigger of the operation such as network and transaction speed. Furthermore the services can

be done remotely. The services can be chosen by the customer by remotely monitored or

hiring an outsourcing engineer where will be even effective but the clients will be responsible

for the engineers pay check. Though it will be less expensive than hiring and internal

professional. Competitors will have remotely or incident related service logged to take action

but will not have the onsite engineer services where it will narrow down the response time.

Furthermore Netcom partnership with other vendor will create even more faster response to

solve the issue.

6.3.1.2 Place

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Netcom will host its base for most of its services. Communication will be via account

managers for each client or contract for escalation. Engineers will be either based in the

Netcom or offshore site with client. Netcom will have competitors and competitors will have

same brand and services, and Netcom will provide even more viable option for the clients

such as consultancy and maintenance implementation part of the contract.

6.3.1.3 Price

The value for product services will be the cost effective services and cheap labours.

Engineers supplied by Netcom will be paid by the clients but with minimal rate according to

the business industry. Oil and gas, insurance and others have high pay rate for IT personnel

but for outsourcing will have proposition when proving the personnel training will mininmize

the asking price of salary. Personnel will have opportunity to learn with training given, where

IT training nowadays is expensive.

6.3.1.4 Promotion

Netcom will be hiring a technology consultant and will be running campaign by inviting

SMEs for talk and meeting in various places. This will be then channelled through all the

board of directors of all SME companies. This will be done by direct marketing approach

with the companies. There is no season promotional value but indeed this will be a

proposition to help SMEs for their own development and can be done in various stages or any

financial quarters of the clients. Netcom promotion on outsourcing service will not be as

different from other companies but the value and variety of services definitely will give

Netcom stronger position.

6.3.2 Market Penetration

Objectives Year 1 Year 2 Year 2

Launch Netcom Sdn Bhd √

Secure Contracts with SME √

Secure customer base Consultancy √

Trusted partner with Vendors √

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6.3.2.1 Internal Marketing

Netcom Sdn Bhd will build upon the core services such as monitoring infrastructure

equipment. Netcom therefore will build and plan their framework the best possible way to

provide these services. Securing products and modify them for in house use will be main

priority for Netcom to provide a service where client feel that they are able to secure their

infrastructure. Netcom will ensure their vision and mission will be to be defined with client

aligned with their objectives.

6.3.2.2 External Marketing

Netcom will be strictly promoting the external marketing on IT outsourcing services. This

will be contract based where Netcom will be providing cheap labour with training facility but

cost of wage and extra incentives will be burden by clients. This will be based on onshore and

offshore outsourcing concept, where onshore engineers will be based in Netcom office for

hardware service and monitoring while offshore will be internal services under client. Both

will be integrated and be managed by Netcom. This service will be signature on how reliable

and stagnant the service will be. Netcom will introduce its source from hiring a consultant in

order to promote its services to SMEs.

Netcom will introduce a campaign and arrange invitation on Netcom establishment to SME.

The reach will be from consultant to the SME. There will be enough scope by hiring

consultant in order to broker the deal and sign the contract.

6.3.2.3 Interactive Marketing

Netcom will provide integration with internal and external marketing plan to create an

opportunity in order to create a true value to its client. Its model of services will be the major

marketing tool. The services will be comfortable to client and convincing that it can elevate

their return of investment and meet their expectations.

6.4 Organizational and operational plan

6.4.1 Organizational Chart

The organization chart of Netcom

Managing Director

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Human Resource and Finance Manager Account managers

Supervisor Onshore Supervisor Offshore

Engineers Engineers

6.4.2 Operational Plan

Managing Director of Netcom will be the stakeholder where will be running on the

operational and promotion of Netcom. The position main responsibility will be securing

contracts and empowering the innovation on providing the operational plan of Netcom. The

operation plan will be including in managing the company planning and implementation.

Human resource and finance manager will be the reporting line to Managing director. Their

primary responsibility in providing support on human resource related such as hiring

selection, interview and incentives such as medical and providing and approving the training

needed for the engineer as requested by offshore and onshore supervisors. The responsible is

integrated for day to day finance related activities such as debit and credit expenditure and

maintaining balance sheet of the company’s overall financial performance.

The account managers will be mainly being a client relationship manager. Number of account

managers will be varies depending on the SME contract secured. Each contract secured with

different company will have an account manager which will be overseeing the contracts

regulations and service level agreement as agreed with the customer. They will be responsible

to secure agreement with vendors for overall support beyond their knowledge. They will be

monitoring the day to day activity and will be primary escalation point for incidents or any

major escalation procedures. They also will be providing consultancy to improve the clients

infrastructure based on yearly key performance index.

The onshore and offshore supervisors will be overseeing the day to day operational and

managing their engineer’s affairs such as leaves and replacement of personnel and being

contact point for any issues on personal or work front. Supervisors will be providing moral

support and resource support for the engineers.

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Engineers will be varies on their expertise and will be either stationed on clients place or will

be in Netcom they will be overseeing day to day activities and arrange for planning and will

be responsible for front and back services to solve the issues. They will be working based on

the monitoring and priority ticket based systems and also involved in implementation for new

services and technology.

6.4.3 Selection process

The selection will be done by stages of screening and interviews on skillsets. Interview on

matching the skills and campus interview will be conducted to get best graduates. A job

reference also will be given through job agency which will be an effective way and faster the

screening process before interview and selection process comes to Netcom.

6.4.4 Training and development

Netcom will provide adequate training for fresh graduates of experience in information

business management and in order to provide more opportunity for the engineers.

Technology will be a pit stop in order Netcom to provide a service that matches their

requirement of their client.

6.4.5 Compensation

Netcom will provide a compensation for their staff that matches their security for future such

as insurance and medical claims. Employee provident funds and other benefits as such

overtime will be provided in order to compensate the staff.

6.5 Financial plan

6.5.1 Investment

The capital investment will be RM 1 million ringgit (MYR).This including a small office

setup and renovation cost plus server room. This capital should be repaid within 3 years,

where. The other subsidiary cost will be hiring consultant and promoting Netcom services via

consultant and will launched via a campaign with arranging meetings and venues with SME.

The cost of promotion will be space rented in magazines and newspapers. As for the start up

the margin of profit is targeted as 50 percent to 70 percent over 3 years. This is an achievable

figure based on calculation of success for considerable firm in Kuala Lumpur. The Net profit

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6.5.2 Forecasted Cash Flow (‘000)

Year 1 Year 2 Year 3Cash in Flow 500 650 1000

Cash Out FlowOffice Setup /renovation /upgrade 150 250 350Operating Cost 50 150 250

Operating cash flow 300 250 150

Capital Expenditure Office Setup renovation (500)Server room (300)Command center room (200)

Capital Repayment 300 250 150

6.5.3 Forecasted Income Statements (‘000)

Total Sales 500 650 1000

Cost of Sales 150 250 350

Gross profit 350 400 650

Operating Expenses 50 150 250

----------------------------------------------------------

Profit Before tax 300 350 400

Profit To Sales Ratio 60% 50% 40%

Gross Profit 70% 62 % 65%

6.5.4 Forecasted Balance Sheets (‘000)

ASSETS Year1 Year2 Year3

Current Assets

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Cash 1000 500 1000

Inventory (contracts) 200 500 1000

-------------------------------------------------------------------------------------------------------------

1200 1000 2000

Non-current Assets

Office furniture and setup 150 250 350

Server room 300 400 500

Command Centre 50 100 100

--------------------------------------------------------------------------------------------------------------

500 750 950

---------------------------------------------------------------------------------------------------------------

Total Assets 1700 1750 2950

CURRENT LIABILITIES

Account payable 150 200 250

Tax Liability 30 50 75

NON-CUR’ LIABILITIES

Business Loan for renovation 0 100 150

TOTAL LIABILITIES 180 350 475

NET ASSETS 1520 1400 2475

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6.6 Implementation schedule – Gantt chart

1st Year(Month )1 2 3 4 5 6 7 8 9

10

11

12

Office Setup and implementation

Setup Server Room and monitoring centre

Setup Command Centre

Marketing Campaign

Hiring account managers and engineers

Training personnel and contract negotiation

2nd Year(Month )1 2 3 4 5 6 7 8 9

10

11

12

Full implementation on support and services

Review of SLA and KPI

3rd Year(Month )1 2 3 4 5 6 7 8 9

10

11

12

Upgrade and renovation for upgrade

Vendor contracts negotiation

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Full implementation support and services with vendor partnership

Review of SLA and KPI

6.7 Critical success factor

Netcom for the first year of business will be mainly start up with setting the resource for

providing an input to future clients on how strategic the organization will be. Service support

model and framework will be introduced and developed to be included in the marketing tool.

Service and support model on cheap labour and reliable and attentive service will be the

priority of the model introduced to the client. The ratio will give from 50 to 70 percent

according to income statement where the percentage will be varies but it is but it is consistent

in meeting the least target of 50 percent profit. This is forecast income which can be met as

for new business over the 3 year plan.

As for the profit margin elevated and the reward system will kick an especially bonuses will

be paid upon due to the success of contract negotiation which is based on the service

specification. All the contracts won by account managers have responsibility in leading the

support and services which need SLA and KPI to be met will be rewarded based on the

performance.

Based on the setup the monitoring base until providing onsite engineers, requirements need to

be met align with the services and support provided. Monitoring tools and a monitoring

schedule will be taken at brisk pace to show the value to the client that they have taken good

decision. Management will need to be given a priority in handling issues and support line to

show an example to down line staff to improve the discipline and morality of the employees.

Market visibility and its communications needs to be take extra care by to make sure it

reaches to clients and investigate on competition arise to provide more services which is

lacking in the local market.

Furthermore, Netcom need provide intensity in client relationship by preferring services to

client and needs to be attentive where the customer service models will the priority. Meeting

the SLA and KPI according to the agreement will be the upmost important to in order to

create Netcom brand as trusted partner.

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6.8 Risk Mitigation and Contingency plan

6.8.1 Operational risk

Low High

Poor services √

High resignation turnaround √

Consistency meeting the SLA √

6.8.2 Mitigation

Poor service will be the main concern where it will arise when support team did not execute

as per the agreement prompting the clients to lose its trust on Netcom. Consistency will be

the key in order to provide the support and services agreed with the clients. Constant

improvement will be needed as always will be a flaw when starting a service at first. The

experience will be different taking over from in-house support for the client and Netcom need

to adapt of the difference according to the clients nature of business.

Apart from that high resignation will a risk taken by Netcom by hiring fresh graduate or

engineers which has less experience. Netcom needs to give freedom and variety on training

and development programs for engineers to keep their engineers not seeking for experience

and opportunity. Netcom needs to provide market rate for their benefits in order to keep their

staff happy and environment an efficient to work for.

6.8.3 Financial risk

The financial risk is the cape x investment on the business, which should be recompensed in

three years. As for all business the financial risk measured with the forecasted market

assessment which is needed in current economy climate. Since this is a local market venture

and the target business opportunity will be from local organization this is unlikely to see any

deviation from the projected vision. The responsibility lies with the management in order to

share the vision to its staff to understand in terms of operational and success value.

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Appendices

When undertaking a research or enterprise project, Cardiff Met staff and students are obliged to complete this form in order that the ethics implications of that project may be considered.

If the project requires ethics approval from an external agency such as the NHS or MoD, you will not need to seek additional ethics approval from Cardiff Met. You should however complete Part One of this form and attach a copy of your NHS application in order that your School is aware of the project.

The document Guidelines for obtaining ethics approval will help you complete this form. It is available from the Cardiff Met website.

Once you have completed the form, sign the declaration and forward to your School Research Ethics Committee.

PLEASE NOTE: Participant recruitment or data collection must not commence until ethics approval has been obtained.

PART ONE

Name of applicant: Uvaneswaran Vijayan

Supervisor (if student project): Dr. Kui Juan Tiang

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School: Westminster International College

Student number (if applicable): 0014wlwl0513

Programme enrolled on (if applicable): MBA

Project Title: A BUSINESS DEVELOPMENT PROPOSAL TO SET UP AN INFORMATION TECHNOLOGY FIRM IN MALAYSIA

Expected Start Date: 03/11/2014

Approximate Duration: 12 weeks

Funding Body (if applicable): Not Applicable

Other researcher(s) working on the project: None

Will the study involve NHS patients or staff? No

Will the study involve taking samples of human origin from participants?

No

In no more than 150 words, give a summary of the project

This thesis will highlight the benefits of outsourcing business and how it can help the IT industry. This purpose of this study is to conduct a research on setting up and outsourcing company in Malaysia where it will cater and act as an independent service provider to provide service delivery and services to small and medium organizations. This study will stress how beneficial and outsourcing business and current industry are moving towards. This study will integrate upon factors such as quality services, SLA’s and KPI’s , Cost reduction and focusing on core competency areas. End of this study will show. At the end of this study the research will be discussing on 3 year business plan of setting up a new outsourcing company.

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PART TWO

A RESEARCH DESIGN

A1 Will you be using an approved protocol in your project?

No

A2 If yes, please state the name and code of the approved protocol to be used

Not Applicable

A3 Describe the research design to be used in your project

Research Design

Research Methodologies

The following study will show the research method for this thesis. This research is

specifically designed to any outsourcing company as a profitable and successful outsourcing

company. The survey this study being used is quantitative research data. As quantitative data

review, the research will be based on answering research questions and making conclusion

from the result will provide how Netcom can be successful in outsourcing business with

research being undertaken (LUNDBERG, 2003).

Research Methods

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The survey technique will be a mechanism to evaluate plaintiffs approach toward the review

factors. A series of research questions will be developed in order to provide data collection

based on these study purpose. The following method of quantitative data research question

will discuss the analysis and discussion of the findings with the research questions.

Sample Unit (Target Respondents)

This study is aiming to provide an understanding on how will be the outsourcing business

will be beneficial and dealing with issues in future and how to avert them in outsourcing

industry. In this research, the sample collected from the target respondents which are in the

IT industry specifically. Most of the respondent involved in IT outsourcing business and from

the research will be analyzed on the current climate in IT industry. This sample will be

integrated on how an outsourcing will impact as a firm and grows into a leading player and

hold a substantial market share in outsourcing industry.

Sampling Method

Quota sampling

This sampling method aims to represent the characteristics of population involved

outsourcing industry and non-outsourcing industry. This sampling method will be a good

platform to identify how many are there directly and in directly involve in the outsourcing

industry. Based on the ratio they will be further collection based on the quantitative research

method with series of questions on how beneficial advantages and disadvantages of

outsourcing.

Sample Size

The sample size will be based on population size. The sample size will be handful of

people selected in IT industry. These people are directly or indirectly connected with

outsourcing industry. The larger the sample is expected based on this study where it

will reflect a true opinion on outsourcing. The sample will be collectively from

different working environment of IT industry. It also include from people are working

internally in an organization where under IT department.

Survey Location

The survey research is an important measurement. A survey based on this design in

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based on questionnaires. It is basically are usually paper and pencil instruments that

the respondent completed. These questionnaires will be open – ended questions. The

type of questionnaires is chosen in this research group administered questionnaire.

Respondents from IT industry specifically targeted from Klang valley in Malaysia.

This is due the extensive knowledge and number of experience of them in IT industry.

This questionnaire will be given to respondent face to face and requesting to get the

questionnaires to be completed.

Collection Method

The quantitative data collection methods to rely on the targeted respondents’ response

on the questionnaire. They produce responds from the questionnaires given to this

targeted respondent to get clear indication and summary. These are less expensive and

comparisons can be made easily and size of the result can be easily conversed.

Ethical Issues

This paper stress importance of ethics in this research. Ethical considerations focus on

disciplines of this research on outsourcing. The ethical considerations will be

stressing on consent form where it will be attached with the questionnaires whereby

consent will be presented to the respondents or participants in order to agree to

participate this survey. Apart from that, the survey will ensure on privacy and

confidentiality of the participants. This survey also stress on impartiality whereby it

will be free from bias survey in order to support this thesis. This will be a totally

depend on the opinion of the respondent’s which can be varies. Last but not least, this

survey will avoid plagiarism where this survey will be conducted with actual

participants which will be met face to face.

Questionnaire Design

Introduction of Questionnaire

In this part of questionnaire represent on respondents details such as Name, job title,

company, location, email identification and number of years in IT industry. There is

no specification on outsourcing experience as this questionnaire may not be entitled to

answer due to regulation on their profession. However the question will be based on

opinion on outsourcing will be stressed.

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Objective

The objective of this questionnaire is to provide a multiple choice and gather the data

of benefits and disadvantages of IT outsourcing. This will enable to get a data what

will be needed in outsourcing company to continually succeed. The questions will be

combination of closed-formation questions, Dichotomous questions and Likert

questions. Likert questions can help to provide data from the respondents if they agree

with the questions. Such questions will be helpful in order to assess the targeted

respondents on questions regarding outsourcing.

A4 Will the project involves deceptive or covert research?

No

A5 If yes, give a rationale for the use of deceptive or covert research

Not Applicable

B PREVIOUS EXPERIENCE

B1 What previous experience of research involving human participants relevant to this project do you have?

None

B2 Student project onlyWhat previous experience of research involving human participants relevant to this project does your supervisor have?

My supervisor has undertaken research projects that included both quantitative and qualitative methods.

C POTENTIAL RISKS

C1 What potential risks do you foresee?

None

C2 How will you deal with the potential risks?

Not Applicable

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When submitting your application you MUST attach a copy of the following: All information sheets i.e. Questionnaire and/or Discussion Guide Consent form

Consent form and Questionnaire

PARTICIPANT CONSENT FORM

Participant name or Study ID Number:

Title of Project: A business development proposal to set up and information technology firm

Name of Researcher: Uvaneswaran Vijayan 0014wlwl0513

___________________________________________________________________

Participant to complete this section: Please initial each box.

1. I confirm that I have read and understand the information sheet for the above study. I have had the opportunity to consider the information, ask questions and have had these answered satisfactorily.

2. I understand that my participation is voluntary and that I am free to withdraw at any time, without giving any reason.

3. I agree to take part in the above study.

The following statements could also be included on the consent form if appropriate:

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1. I agree to the interview / focus group / consultation being audio recorded

2. I agree to the interview / focus group / consultation being video recorded

3. I agree to the use of anonymised quotes in publications

_______________________________________ ___________________

Signature of Participant

Date

_______________________________________ ___________________

Name of person taking consent Date

____________________________________

Signature of person taking consent

* When completed, 1 copy for participant & 1 copy for researcher

Name: Designation:

Date: Email address:

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This study shows an initiative in setting up and outsourcing company in Malaysia. Do

you think it is a good proposition for Malaysia to start builds its own outsourcing

business? Outsourcing companies from India and other continent are starting to make

an impact in this industry. This study will target specific respondents which are

involved in IT industry. The questionnaire will be used for mainly study purpose to

review the participants’ point of view which it is not a script but guidelines to the

subject areas for discussion.

1. Are you directly involved with Outsourcing project or working in Vendor

Company mainly providing outsourcing services?

A. Yes B. No

2. How long you have involved in outsourcing industry?

A. <5 years B. 5 to 10 years C. > 10 years

3. What services are you involved in IT department/industry in your

organization?

A. Service IT Support B. Service IT Delivery

4. IF Service IT Support, do you reckon the need to technology skills plays an

important presence in outsourcing decision?

A. Agree B. Disagree C. Not Applicable

5. IF Service IT Delivery, do you reckon the need to communication and

project management skill plays an important role in success of the

outsourcing IT integration?

A. Agree B. Disagree C. Not Applicable

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6. The ultimate benefit of IT outsourcing is to achieve cost reduction of an

organization.

A. Agree B. Disagree C. Neither

7. Or, benefit of outsourcing an organization IT infrastructure of an

organization to elevate service improvement?

A. Agree B. Disagree C. Neither

8. What is the greatest benefit of IT outsourcing?

A. Technology B. Quality of Delivery

9. Do you agree, IT outsourcing will overtake the quality of client’s delivery to

its customers/users rather than internal IT?

A. Agree B. Disagree C. Neither

10. One of the factors to make an IT outsourcing an attractive proposition is

through proving service level agreement (SLA)?

A. Agree B. Disagree C. Neither

11. ‘Key Performance Index’ will be a perfect measurement to find the

loopholes of outsourcing project?

A. Agree B. Disagree C. Neither

12. Do you agree, IT outsourcing business will have tendency for mistakes in

delivering its promises according to service level agreement?

A. Agree B. Disagree C. Neither

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13. Do you agree, IT outsourcing will provide a platform in dealing with

technology loopholes?

A. Agree B. Disagree C. Neither

14. IT outsourcing relying in variety offerings in technology, in your organization do you have such limitation in technology?

A. Yes B. No

15. IT Outsourcing business will give a great impact in IT industry, thus will create more opportunity and job placement in future?

A. Yes B. No

Reference

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