By Rolo B. Cena
Published in Shaheen, Official Corporate Magazine
Astra Industrial Group, Riyadh, Saudi Arabia
May 2010 Issue
The egress of 2009 business year, after the Mid-2008 US Financial Crisis that lasted almost until the end of the 2009 second quarter suggests the possibility of an equally profound change in business climate vis-à-vis economic life of every company as a whole. Astra Industrial Group (AIG), as it sets its best foot forward for 2010, is undergoing many major transitions to date, some of which involve clearly defined meaning of corporate life, character and shape that carry them out.
Among the major and notable planned changes are the standardization of Human Resources Management Policies and the introduction of a new Business Process Solution (ERP) for the conglomerate.
Standardized HR Policies
As early as May 2009, AIG organized a meeting of all Human Resources In-Charge from all subsidiaries to discuss common grounds that would eventually become materials to create a standardized HR Policies. After the meeting, several steps have been undertaken to proceed with the project, including the creation of HR Committee, interviews with key officers and visits to all subsidiaries by the HR Advisor Emmanuel Robueno.
Using the existing Administration / HR Policy Manual of Astra Polymers as one of the major sources or reference for the AIG-wide Human Resources Policies Manual, the HR Committee is, as of even date, all set to finalize the standardized Policy for implementation across the subs. The product shall be fully implemented in the business year 2010.
Enterprise Resource Planning (ERP)
With the current scenario that our Group is seen as a major regional industrial player, it is critical to have efficient and effective business processes across the group that can result to maximum return on investments while employing the highest standard of quality. Along this line, growth strategies that can keep all subsidiaries attuned to common ground and connections should be implemented to support the business growth: enterprise resource planning fully backed up by quality IT Infrastructure.
As Chairman Sabih T. Masri stated in his letter dated 19th November 2009, “Information Technology is a very effective tool that is going to be instrumental in fueling our growth plans.” As such, the need to streamline business processes across the group is extremely necessary as well as the integration of an enterprise resource planning platform to support all operations thus providing operational visibility and excellence in financial control and reporting features.
Chairman Masri further demanded, “We are therefore embarking on an initiative to opt a best-fit integrated ERP platform that enhances our business operations and provides common view of truth between finance, operations and commercial functions. AIG is going to facilitate the process of putting up the enterprise-wide solution in place.”
Creating an AIG-wide IT infrastructure is a complex task. A conglomerate-wide awareness on the project should yield expected buy-ins from all subsidiaries regardless of ranks. Undertaking the initial steps can be crucial; implementing such an ambitious project requires team-based effort to achieve the target.
The clear and present danger
Change has been very difficult. Modern-day management scientists have identified one major roadblock to Change: Corporate Attitude.
The broad spectrum of “attitude”, which of course encompasses the character and behavior of the company and the individual, determines the way the company or the individual shall handle planned or introduced change. In most cases, resistance is apparent among those employees who served the company for quite a period or to those whose ages do not reconcile with the advent of technology.
Corporate attitude, which should be sensibly and sensitively addressed to alongside with employee attitude, can overpower the latter. The former can be an indicator of the successful implementation even if the project is on its planning stage yet regardless of whether or not the employee attitude is in tune with the corporate. Corporate attitude speaks about the ultimate support from the Top Management and line managers, authority and budget.
Once Corporate Attitude becomes overly aggressive or extremely weak, it cannot overpower the indifferences of the employee attitude in which case, the project may fail. Corporate Attitude should propel employee attitude in accepting change process in which case, it should only be at its best implementable and comprehensible level.
Therefore, it is critical for the management to look into the corporate attitude deeply by analyzing its corporate agenda to keep it attuned to the employee attitude, in relation of course to the project and its impending implementation. The need to integrate at the same time the study of the employee attitude into the corporate should be considered for control and accountability purposes. When this action is overlooked, then consequently these two attitudes may clash and may produce negative internal commotion. The resultant extent would be sour-graping after informal organization ensues.
Management Support, Authority & Budget
Management support is not limited to the mere proclamation of the project and the creation of the Team who shall handle the nitty-gritty of the project. It includes empowerment of the Team with blanket authority based on the undertaking originally mandated by the Board. The Management should be able to back up its recommendations and decisions also in order to maintain the integrity and credibility of the Team. The Team’s integrity and credibility should be the concern of the Management if successful implementation is ultimately its objective.
More to management support, budgetary constraints should also be the concern of the management. Enough budgets to cover the infrastructures, manpower requirement and the incidental expenses should be allocated and approved.
The fully integrated conglomerate
As Chairman Masri stressed, “AIG’s inherent strength lies in industrial and geographic diversification that serves to ensure business stability and enhanced performance.” These two apparent strengths should favorably conjunct with each other to create a marriage that would bring about the synergy that can propel change process.
While all subsidiaries may believe that working on their business processes using their own system works as planned, fully integrated system or policy or procedure is still the best way to further enhance the strength our conglomerate is known for.
As a diversified conglomerate, the need to streamline business processes and integrate enterprise resource planning infrastructure should be on top of the line as this, once implemented across the subs, will bring about the harmony that would standardize protocols and facilitate processes. Full integration should cater the need to address the geographic diversification that concerns the management.
As the Board involves everybody to participate actively in this initiative, Chairman Masri finally urges that “Arriving at the best fit enterprise-wide IT solution for a conglomerate like ours is a complex task. Your usual dedicated involvement is solicited in selecting such a platform that maps with our processes and instill best practices of the industry that our subsidiaries belong to. Further, I wish to emphasize the organization responsibility vested in you in transforming our company through change management initiatives that will streamline our processes and introduce operational excellence, thus unlocking value from this strategic investment.”
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