IT for Managers, Organizational Strategy and Is/ It Management at Hulhumalé Development

Introduction

Hulhumalé Development Corporation (HDC), initially a government owned corporation, had the sole duty to develop and manage Hulhumalé since 2009 (Housing Development Corporation, 2011). Hulhumalé Development Corporation is tasked with handling the housing activities of the government in Maldives as a whole. To this effect, its name is now housing Development Corporation. This came after its immense success in modernization and development of Hulhumalé as a unique and modern island.

The main goal of HDC is to relieve congestion in the urban areas of Maldives through provision of affordable and quality houses to all classes of people. However, the main objective remains modernizing Hulhumalé to a unique city island by generating opportunities for modern facilities like healthcare, education, recreation and employment opportunities. HDC is the largest real estate agent and company in Maldives; thus undertaking the major roles in the construction of Hulhumalé. HDC invests a lot in technological solutions to run some of the operations. Examples of these solutions are the document management and retrieval system, the staff control and attendance system. The company also collaborates with other private investors for funding purposes or developing projects on their behalf. These projects include medical facilities, real estate, road construction, and industrial establishments. The projects are fully undertaken by HDC with contractual terms prepared between HDC and the client. On completion, the projects are open to the partner institutions for inspection and approval. These business involvements enable HDC to generate additional income and not only rely on funding by the Maldives government. These cover master developer, builder, and regulator.

HDC has a small IT department charged with overseeing and maintaining the company’s intranet, website, IT/IS related software, hardware, security and access control. All HDC staff use desktop computers and laptops for day-to-day work activities as well as accessing the internet. IT/IS further plays a major role in strategic planning since the IT personnel participate in the planning process at the decision making level. Furthermore, HDC is developing an oracle office automation system to be used by the staff. The system will positively affect the efficiency of all management aspects of the corporation in all departments and levels. With the high success of HDC, this analysis explores various IS/IT management mechanisms utilized to leverage the immense company’s success.

How HDC manages involvement in IT

IT/IS adopted by businesses offer a strategic advantage through increasing productivity, offering avenues for planning and problem solving, improve quality, customer service. It also enables business to process automation and engineering, enhance collaboration and communication. HDC has an IT department, which manages and implements all the IT/IS needs of the company (Information Resources Management Association & Khosrowpour, 2006). The leader of the IT department at HDC is an IT senior Manager. The structure has three unit heads for the server unit, hardware and software maintenance units. The section heads are equally technical personnel and have supportive technical staff under them. The server section has the network setup, maintenance and troubleshooting team, network security team and the helpdesk team (Kizza, 2005). The hardware unit has the procurement and quality assurance team and hardware installation and troubleshooting. Whereas, the software unit includes the software development team, troubleshooting and quality assurance department. The head of IT at HDC sits at the board and participates in critical planning and decision making in addition to presenting the department’s budget for approval (Burgess, 2002). The IT department also holds departmental meetings three times a week. At these meetings, IT personnel raise and discuss various issues including how they affect the routine business (Information Resources Management Association & Khosrowpour, 2006). These cover network security, uptime, staff training on the use of new systems, software and hardware upgrades, backup and recovery review.

The IT department’s structure is depicted in figure 1 below.

How HDC Integrates IT in business strategic planning

HDC’s adopted strategic planning aligns the company’s activities with equivalent activities of its corporate, business partners. By involving such partners in the annual business strategic planning, HDC can easily keep in pace with the rapid technological changes in the market and refresh its plans to adapt to these industry changes (Abrams, 2003). By doing this, HDC stays ahead in technology and utilizes the current technology for maximum returns. It enables HDC to focus on serving its customers well by spending its limited resources on the housing investments. The strategic planning is vital for addressing the rapid technological changes and the challenges that come along with it (Reading, 2004). To achieve this, the approaches adopted should be:

• Integrated. HDC’s IT department has been able to align its strategic calendar to the company’s overall planning cycle in order to synchronize it with the main company’s objectives. This department easily delivers its milestones before the main HDC decision-making points during the board deliberations for review and consideration.
• Holistic. The planning process effectively aligns HDC’s main objectives to the company’s IT and technology investments. This ensures that the technologies adopted are relevant to the current business environment.
• Sustainable. As HDC moves to adopt new technologies and systems, it also ensures that such systems are relevant for a longer projected period. The changes in the business environment and how they affect the construction industry has to be put into consideration. Such reviews should be made quarterly in order to have a currently evaluated plan that can be implemented to capture such changes.

The system adopted by HDC involves planning, decision-making and measuring. This helps the IT department align its objectives to the company’s main goals and measure its performance. The planning process starts early in the year focusing on business environmental scans (Boar, 2001). These scans assess the major business drivers at 360 degrees approach both internal and external. In addition, they cover the way they will eventually affect the business attainment of its goals for the next 3 years. The results of the environmental scan narrowed down would guide the decision making process with regard to factors affecting the company for the next period (Glaser & Salzberg, 2011). The planning concentrates on long time goals, alternative solutions like cloud computing, networking via social media, outsourcing, main suppliers and external collaborations. The present capabilities of the IT department undergo assessment and analysis with reference to HDC’s long-term business outlook. This gives an insight into various aspects like cross company capabilities, company functions, network services, which connect users, computers and data management capabilities. This assessment helps HDC identify gaps in resources and equipment, hence advising on the main spending areas. A scorecard developed by HDC facilitates measuring of efficiency and effectiveness of the entire planning process. Departmental health surveys also assist in assessing whether the staff understands the direction of the company.

How HDC Uses Project Management Methodologies across the Organization

To be able to stay ahead in the present competitive economy, companies are adopting project management methodologies to deliver consistently on business solutions. Great project management begins at the lower portfolio level from where it drives the company’s vision and objectives (Charvat, 2003). HDC has a project management solution office with the main objective of standardizing the entire process, templates, tools, and techniques. The IT project manager normally has a repository with HDC’s project plans and proposals, change requests and status reports. S/he oversees the company’s various IT projects while ensuring compliance to the company’s set standards and procedures. S/he also ensures improvement and growth of HDC’s project management ability through mentoring, training, and providing leadership to help staff improve their skills and competence (Harrison & Lock, 2004).

Why HDC adopted Project Management tools and methodologies

Project management is important and widely adopted across businesses to manage costs and boost project results. The project success rate observed by HDC increases by sticking to project management methodologies and tools thus reducing costs and risks. This helps HDC plan its future projects with oversight avoiding risks, reducing cost and standardizing the project delivery process. The value derived from the project management methodology increases as the strategy matures. This gives HDC a high competitive edge in the dynamic and high-risk construction sector. Project management provides a mechanism for measuring of the project success and the necessary changes and modifications. This facilitates estimating of the project’s value and the return on income on project completion. Outlining the project’s value also helps to align the project to the company’s main goals and objectives and ensure all the parties impacted by the project fully avail the resources. Project management at HDC breaks down the project into phases with each phase having timelines and milestones. This helps in delivering on projects before time, saving costs and having a standard approach to the company’s projects. Having the correct resources, a comprehensible delivery timeframe and management support, HDC can effectively and efficiently deliver on its projects.

How HDC approaches IT business processes

HDC has adopted business process management (BPM) to enable it to get closer to customers, reduce costs, nurture innovation, and improve on efficiency. As the name indicates, BPM increases customer value by refining and optimizing business processes from end to end (Gillot, 2006). BPM is a leading technology trend and delivers up to 50% of production. Full implementation of Business Process Management at HDC offers the following benefits to the business:

• Saves operational cost. It covers automating most of the manual processes at HDC, thus reducing waste, increase efficiency and accuracy, for instance, automation of some activities on the company’s website, the IT systems and applications. This reduces the operational cost by cutting the number of personnel involved in the process. This further reduces the training costs and overall costs for the company.
• Increased sales opportunities. With reduced production cost, the products of HDC are of a high competitive edge since they offer affordable prices. End-to-end process optimization also increases the value offered to customers.
• Good customer retention and satisfaction. BPM at HDC improves the customer experience by developing the business processes. Customers are vital to the business hence putting their satisfaction at the center of HDC makes it stand out to its competitors.
• Automaton of processes at HDC is high with each business process providing value to the customer crossing functional boundaries. There is orientation of personnel at HDC from the functional thinking to a process mindset. This enables them to focus on the process and its outcome.

There are four main steps involved in BPM at HDC

• Process engineering. At this stage, identification of the business objectives to be achieved takes place. The main goal is improving overall customer service hence the key performance indicators at HDC apply. The applicable metrics include customer service percentage and customer satisfaction. With these metrics clearly identified, it is more convenient to outline the processes that act as drivers for these metrics. At this step, HDC is interested in processes that add value to the customer. Such benefits should be demonstrated and achieved quickly.
• Process re-engineering. This happens when optimization is not achieving the desired results, and the process is unusual. There is re-engineering of the whole process cycle to achieve productivity and efficiency at work (Robson & Ullah, 1996).
• Process automation. At this step, there is conversion to code the identified processes in diagrams. There is high involvement of the BPM solutions. The BPM tool automates the previously manual procedures and processes.
• Process optimization. On completion of the process automation, HDC has more automated processes which need to be evaluated if they achieve their intended purposes. There is a review of the newly automated processes with the target metrics to check if they match. If there is a gap, then the process is re-done and measured as per the target metrics to determine the results’ success. It is good to note that HDC has successfully automated several processes, including

  • An automated, staff control and attendance monitoring system, which makes use of card and fingerprints.
  • An automated document management system, which manages document storage, retrieval and access.

How HDC benefits from Outsourcing practices

Hulhumalé Development Corporation has operational procedures and policies that guide the way procurement and outsourcing of services can be done. Handling of outsourcing by the procurement section starts after forwarding them the request through the IT department. Given that the head of IT participates in the decision-making process, request approval and go ahead of the finance department, the services and goods are outsourced. With outsourcing, drafting of the contractual agreements is done by the procurement department containing details of terms and service maintenance services. Regulation of purchases is carried out by the amount on budget and goes through different approval procedures depending on the amount. With outsourcing, HDC has been able to benefit in various ways, which include:

• Enables HDC to focus on its main construction activities. During HDC’s rapid growth, their back office operation expands almost at a similar rate (Leimeister, 2010). Such an expansion sometimes takes a toll on the company’s resources both in finances and personnel at the expense of its core goals and objectives. Such outsourcing allows HDC to re-focus on its core objective of affordable housing without compromising the quality of its services (Power, Desouza & Bonifazi, 2006).
• Efficiency and cost saving. Outsourcing some back office and IT operations helps HDC save the cost involved in setting up such services. Since HDC is a large company, some back office operations are complex to establish; hence outsourcing is cost effective and convenient.
• Reduce overhead. The overhead costs involved in performing some back office and IT functions are high. HDC considers outsourcing some of these costs to save on cost. A tender is given for outsourcing and different partner organizations offering the service places their bids for consideration.
• Operation control. Some departmental operational budgets often get out of control; hence considering such services for outsourcing. Outsourcing of such services brings in better skills of management than those currently available (Schank, 2005).
• Personnel flexibility. With outsourcing, operations that have seasonal cycles allow the company only to bring in such personnel when required and release them when done. This happens at HDC for the case of external auditors.
• Risk management and continuity. Outsourcing guarantees continuity since the services are always available when required. Staff turnover may affect operations with permanent staff, but outsourced operations are always available.
• Internal staff development. When the outsourced staffs work on a project that requires special skills not available within the company, the internal staffs get a chance to work alongside them and acquire some skills. This helps to grow their knowledge and skills for better productivity.

Several organizations enter in a contract agreement that involves offering of goods and services on behalf of each other. HDC has been able to benefit by eliminating shortage of skill to perform some tasks and help in achieving the core objectives, which is developing affordable housing. This offers great control and flexibility of the budget.

The importance of corporate governance and IT at HDC

Having a well-defined corporate governance structure helps the board understand their oversight role in the running of the company. Such a structure should contain attributes that aid in successful governance and tools to take care of any governance risks (VandenBerghe & Ridder, 1999). This also provides a means of evaluating how the board’s oversight role fits in with management’s responsibilities. HDC has a board of directors who meet quarterly to approve policies and budget expenditure. Implementation of such policies is consistent by all staff across HDC, by each having a clearly defined responsibility in the whole process to be done. The management has an oversight role to enforce, ensures full implementation and compliance to the policies, gives penalties for violation of policies and procedures by any employee irrespective of rank. However, such policies can be amended by the board of directors to capture the present business environment and address new challenges.

HDC’s board of directors consists of the managing director, the chairperson and other directors. The board facilitates discussion and approval of the annual budget, and the Managing Director has powers to delegate some authority to various heads of departments. All the expenditure by various heads of departments at HDC should be within the approved annual budget, and any additions should be vetted and confirmed by the board and the Managing Director. The people authorized by the board are the only ones who can contractually bind the company, through the execution of any contract on behalf of the company. The limited authority can be delegated by the board to the Managing Director or a head of a department for execution of a contract. Heads of departments handle any other unbudgeted requirements through the finance department by requesting them to relocate any unused funds within the departmental budget. This relocation and purchases are subject to approval by the Managing Director or his/her deputy. This governance structure helps HDC streamline its operations and avert operational risks.

The HDC board framework ensures that critical governance elements such as performance, talent, governance, strategy and integrity must be strictly upheld and cannot be easily delegated to the management (Fernando, 2009). Stakeholders at HDC highly expect that the board play an oversight role in overseeing success of these elements along with other company organs. Key activities and objectives set for each governance element can be described as follows:

• Governance. The HDC board has the duty to establish the processes and structures that fulfill its responsibilities considering the perspectives of regulators, management investors, and clients. The board has the right to select various leaders and heads of departments, the HDC’s strategy and objectives, as well as carries out disciplinary action.
• Strategy. The board sets up the goals and objectives of HDC, advises and guide management on priorities and planning in line with these goals. The board periodically monitors the management’s long- and short-term focus and execution of the strategic plans approved, and ensures adequacy and transparency.
• Performance. The HDC company strategies are subject to review by the board as well as financial and annual operating arrangements. The board ensures that the company’s goals and objectives are adhered to and monitors the execution of the approved annual budget.
• Integrity. The operating and policy manual by the board defines acceptable ethical standards at HDC. Management implements and adopts the procedures and policies defined for compliance, integrity and honesty at HDC. Disciplinary procedures have also been defined for non-compliance.
• Risk governance. The board understands risk exposure as it monitors its operational, strategic, compliance and financial risk exposure. It liaises with management to assess risk levels against the company’s priorities, goals and objectives.
• Talent. The board establishes and monitors talent programs within HDC as well as selecting, compensating and evaluating the CEO. It is through this program that identification and development of potential leaders applies for succession. This ensures smooth continuity and more productivity from the personnel. The board also utilizes attributes of process, knowledge and skills, information and behavior to evaluate their performance and identify areas for improvement within each of the elements. This helps in monitoring the overall framework to set improvement opportunities and necessary tactical changes. These corporate management techniques have assisted HDC to be on track and easily trace the progress of the annual objectives with reviews in the quarterly board meetings.

Conclusion

HDC has been able to leverage on the above methodologies to post a high success in the modernizations of Hulhumalé. Furthermore, it has turned out as the best partner to investors and its clients. This has seen its figures in terms of income rise as well as attainment of its set goals and objectives. To be able to improve on customer service, HDC is developing a customized Office Automation system by Oracle systems. This system is to be fully implemented to impact on customer service efficiency and effectiveness across all departments. HDC has also successfully implemented other successful systems such as document management, archiving and encryption, the access control and attendance system, which uses card and fingerprints.

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