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IT Shared Services Drives Operational Edge at Sunway Group

The practice of IT shared services is becoming more significant in supporting organisation’s operations via improved productivity for sustainable business growth.

 IT Shared Services Drives Operational Edge at Sunway Group

Sunway Group is one of the most recognized household names in Malaysia. Starting out as a tin-mining company in 1974, Sunway Group has thrived to become a property-construction powerhouse with a multitude of established businesses including retail, hospitality, leisure, healthcare, education, trading and manufacturing, commercial, building materials, quarry and REIT. Listed on the Main Board of Bursa Malaysia, Sunway Group is now a conglomerate with a 13,000-strong employee base operating in more than 40 locations worldwide and growing.

To ride out the rapidly shifting business dynamics, the Group made a milestone decision to leverage the practice of IT Shared Services to support a sustainable growth for the business. Formed in 2003, Sunway’s IT Shared Services Centre (IT SSC) was tasked as a special division to drive two key organisational objectives: a) To achieve operational efficiency via standardisation, and b) Consolidation and optimization of the usage of IT resources across its subsidiaries. 

Through a decade of IT transformation and upgrades, Sunway IT SSC today is well-equipped with next generation IT solutions including Oracle JD Edwards’ enterprise resource planning (ERP) system, Hitachi Data Systems’ storage systems solution, Virtualization and other world-class enterprise IT solutions to support and drive the Group’s diverse business operations and ventures. All of these technologies, IT strategies and infrastructures are provisioned from the Group’s technology arm - Hitachi Sunway Information Systems (hereinafter referred to as Hitachi Sunway).

Tackling Operational Costs and Complexities in Data Administration
Director of Sunway IT SSC’s Kevin Khoo said, “Prior to IT Transformation, Sunway did not have a single platform that could capture all the information residing in multiple server systems.”

“Data was siloed across different locations and resulted in the spending of hundreds of  thousands of dollars over the years to manage the under-utilised servers placed everywhere in different divisions and subsidiaries, while being managed by a number of employees.”  

Additionally, as the business expanded regionally, Sunway also encountered significant challenges to source for and to manage suppliers, labour, customers and channels across mixed geographies and demographics.

Often, the Group found itself insufficiently flexible to adapt to the dynamic business environment, and had to work within their rigid and siloed legacy business structures.

Kevin Khoo said, “We needed to restructure the fragmented business functions to better support the Group’s business goals in a more collaborative manner. This includes streamlining and synchronising of customer information amongst subsidiaries, building data sharing models between finance, human resources and procurement offices, capturing and automating point-of-sales transactions etc.” 

Need for Dynamic and Flexible IT Support
Cheah Kok Hoong, Group CEO / Director of Hitachi Sunway said that IT services can be one of the hardest business areas to get ‘right’ in terms of delivering the expected return on investment.
“For Sunway Group, we went through many rounds of detailed evaluations and used a top-down ‘services-based’ approach to build Sunway IT SSC in managing the multi-faceted business processes of all the subsidiaries.

This exercise included benchmarking against other IT competitors so that Hitachi Sunway could set cost reduction goals and operational efficiency targets across the board.”

He added that Sunway Group’s entire IT transformation started by determining the necessary levels of services required by the business users; and then structuring the cost-cutting measures around the business functionalities that allow users to work effectively.

“To support the Group’s diverse businesses, the Sunway IT SSC achieved consolidation of business processes and rationalisation of all IT applications. It has also taken advantage of the existing ERP capabilities instead of relying on legacy systems.”

“Cost savings was also derived from lower maintenance and licensing costs, as well as a lesser need for data storage and server space to run multiple applications – all of which also translated into fewer hardware purchases and upgrades.”

“We found out that streamlining the IT portfolio and installing the necessary operational discipline to keep it this way – is one of the most effective ways for Sunway IT SSC to deliver the right technologies to support the business needs and at the right price,” said Cheah.

Kevin Khoo said, “the Group’s journey to this point had been lengthy, but Hitachi Sunway made it easy for us. With their proven expertise, Hitachi Sunway consulted us on the most optimal way to standardise and automate everything to achieve operational excellence.”

Today, Hitachi Sunway has successfully helped Sunway IT SSC eliminate the need for additional hires to operate the unnecessary IT infrastructures which resulted in staffing cost savings of close to RM400,000 per year. Now, the Group’s subsidiaries can produce daily reports such as financial reports for property investments, thirty percent faster than before.

“Also, in line with Sunway Group’s vision towards achieving green living for the community that we build for, this IT transformation by Hitachi Sunway has made us more environmentally friendly through the significant reduction of our carbon footprint in the IT SSC-based data centre via energy savings on cooling equipment usage,” he said.  

He concluded, “It is unlikely that any company can move directly and easily from having no experience of shared services at all to a multifunctional approach. As businesses continue to transform themselves, there will be more challenges along the way and therefore selecting the right IT partner to walk through the path of IT transformation is imperative to success.”

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