Hubbing new opportunities

Hubbing new opportunities

Kwek Buck Chye joined StarHub from pan-Asian info-communications group Singapore Technologies Telemedia, and was actively involved in the 2002 merger between StarHub and Singapore-based cable TV operator Singapore Cable Vision (SCV). According to Kwek, the intricacies involved with the merger demanded astute management skills.

"We needed to employ change management policies to integrate the two separate management teams into a single cohesive organization," recalls Kwek. "After which, we needed to meld the different financial systems and customer relationship management platforms."

One of his roles was managing the migration and integration of SCV's and StarHub's separate billing systems.

Different billing systems

"SCV and StarHub had different billing systems at the time of the merger," says Kwek. "It was clear we needed to upgrade the billing engine first, and then integrate the two systems to create 'hubbing' services for our customers."

StarHub has a strategy of offering discounts to customers who subscribe to all three of its major services: broadband internet, mobile phone line and cable TV, a system the company calls 'hubbing'.

The company targets both the consumer and corporate markets in Singapore and offers a range of information, communications and entertainment services across its fixed line, cable, mobile and Internet platforms. At the end of 2007, StarHub had 1.76 million mobile customers, 504,000 cable TV subscribers and 346,000 cable broadband Internet users.

Going public without profit

The completion of the merger did not end Kwek's challenges. After the corporate coming together, he was tasked with spearheading StarHub's bid to be listed on the Singapore Exchange (SGX) in 2004, a project made all the more ambitious because the company had yet to attain profitability.

"The challenge lay in raising additional long-term banking facilities so that would-be investors would not under-rate our financial strength on the day of our IPO (initial public offering)," says Kwek. "This was particularly important since we were not yet turning a profit when we listed.

Four years post IPO, and Kwek's team of 200 now focuses more on growing the company's cash-flow and profits, which Kwek describes as 'diligent capital management to yield higher shareholder returns'.

Take 'calculated risks'

'Multifaceted', is how the CFO describes his role. His portfolio comprises overseeing risk management, governance and compliance. Kwek stresses the need for 'calculated risks taken in decisions within specific measures', and 'minimizing the impact of business interruptions'.

"The Taiwan earthquake in December 2006 damaged undersea cables which, in turn, disrupted our customers' overseas calls and Internet connectivity," says Kwek.

He says, properly harnessing IT can also greatly improve a finance department's processes.

"Business Intelligence tools," explains Kwek, "have helped improve the quality and promptness of financial analysis, which in turn builds greater competency in helping our senior management quantify the risks in their action plans and to reduce overtime costs significantly. Financial controllers can also use such tools to help them forecast purchases."

Industry challenges

He believes companies need to continue to be 'financially driven, marketing led and customer-centric' to succeed. Being focused on the customer also requires innovative thought, in a world where technology trends change rapidly.

"A major challenge in the telecommunications industry lies in determining the timing for investment in many new converging technologies, such as wireless mobile broadband versus wired cable broadband," says Kwek. "It is equally important to assess the impact and viability of when older products and services should be changed to newer productive models which reduce total cost of ownership.

"It was free incoming calls, per-second billing and free IDD calls to selected destinations in the early days, not to mention the 'hubbing strategy', that even our competitors talk about," says Kwek on what he feels were some of the correct time-to-market decisions he took part in throughout StarHub's history.

Kwek says it is the 'prioritization' and 'coordination' of such product launches that keeps the company competitive. He is one CFO who chooses not to view the emergence of new technologies as threats which could hurt the company's bottom line.

"New technology initiatives are better viewed as opportunities to open up the market, rather than as threats," says Kwek. "Voice-over-IP was once viewed as a threat to the IDD base, but we adopted it as part of our overall suite of services. WiFi was once perceived as a threat to fixed broadband, but we were the first to offer WiFi services (at Suntec Singapore and Singapore's Changi airport).

"Every business action involves taking some commercial risks when customers upgrade their plans or sign up for new services," says Kwek. "There are also risks involved when the company invests in new suppliers technologies for the business.

Relationship with the CIO

No successful company has its board of directors working independently of each other, and Starhub is no exception.

"An activity such as the charting of annual key performance index (KPI) targets involves the role of the information systems, and this results in the CIO having to work with other operational teams," says Kwek.

"StarHub recently made a major commitment to improve its customer relationship systems, a crucial component of our 'hubbing' strategy, and this involves IT investment in every customer touch point."

Stressing the need for collaboration between the CFO and CIO, Kwek says, "The CFO depends on the CIO to stay committed to running the billing, fraud management, inventory and monthly general ledger systems so that the company can continue to accurately report cash flows and profitability, and track KPI achievements," said Kwek. "On the other hand, the CFO ensures that the CIO has the support to make the necessary additional investment in IT infrastructure to meet the company's growth needs."

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