The business environment
With the rapid expansion of the Singapore Telecommunications Limited (SingTel) in overseas markets, a simple yet effective performance measurement system is needed to integrate the business units. The Balanced Scorecard (BSC) was designed from the Management’s perspective and recommended for the company to stay focused in their strategy. The interviews conducted reviewed that some of the key personnel welcomed a system that enable the divisions to measure common performance, which include both financial and non-financial indicators.
A detailed analysis of SingTel’s vision and mission; followed by its strategic intent to grow its business domestically and overseas. Using Kaplan’s four areas of BSC, the company’s goals in financial, customers, internal processes, and innovations and learning were derived. With these goals as foundations of BSC, performance measurements were derived. Finally, the group put forward a recommendation and implementation plan to the Management.
BSC is not an end to the means, it needs to be expanded into the business units’ level and as part of everyone’s life to be the ‘best’ management strategy to meet the contingencies of situations and to motivate each individual staff. This report explored the suitability of SingTel for the implementation of BSC after a detailed analysis of the business environment it faced and the strategy it adopts to meet its goals and mission. Following, a BSC system is designed for the company, supported with an implementation plan aimed at persuading the Management to accept the concept.
SingTel Group is a full-fledge telecommunications company with business in mobile phone, paging, Internet, IT consultancy services, investments, submarine cables and telecommunication equipments. The three groups of shareholders include Temasek Holdings (government-linked company), Capital Group and the Public. As seen in Chart 1, SingTel Company is divided into two main groups, the principle business and functional support units.
The principle units are differentiated by customers they served, as corporate, consumer and global customers; and they are supported by network, strategic investment, human resources, information systems, and corporate affairs and finance units. SingTel’s focus is to create a strong presence in key growth markets in the Asia-Pacific region over the short to medium term. As quoted by Sin Hang Boon, chief executive of SingTel International: “Future growth will have to come from overseas expansions, given the small local market.
“SingTel’s strategy has been to reduce risk by tying up with strong local partners. Each of these joint ventures is either to tie up with the leading player, or among the top leaders in its respective markets. For example, SingTel’s partners with the Bharti Group in India, Shinawatra in Thailand, and Ayala in Philippines to establish a foothold in each of the market. SingTel maintains a semblance of a growth strategy. The company continues to spin cash in its home market, and has used these dollars to take stakes in the region’s dominant telcos.
For instance, SingTel has major shareholdings in Globe Telecom (the Philippines’ number one cellular operator), Bharti Group (big in India), AIS (dominant in Thailand), Optus (Australia’s number two mobile outfit) and Telkomsel (Indonesia’s biggest cellco). In Financial Year 2003, its overseas operations contribute 73% to SingTel’s revenue. Before proceeding with the design of BSC for SingTel, it is important to try to consolidate and match some of the existing performance measures to their strategic intent under the four perspectives of BSC.
This is so that SingTel does not need to “re-invent the wheel” by discarding all their existing indicators and gap or misalignment could be surfaced for follow up. A table showing the performance indicators and the strategic intent under the four perspectives will be setup to check for coherence and alignment. In the event that gap such as misalignment of measurements or unclear measurement is detected, recommendation on a new measurement indicator, lead or lag indicator, will be proposed. Finally, a strategic map linking the performance measurement indicators under the four perspectives of BSC will be setup.