Taking your Franchise to Indonesia

Indonesia is one of the countries that franchise owners often enquire about when thinking about brand expansion. The close proximity of Jakarta to Singapore and the number of Indonesians that come through Singapore gives Singapore brands a happy unfair advantage in Indonesia. Singapore brands are well received and offer a great balance of International appeal and local familiarity to the Indonesian market. Brands like Fish & Co, Imperial Treasure, Shilin, Seoul Yummy, Eton house, Seriously Addictive Maths, and most recently the much loved Joe & Dough have enjoyed success in Indonesia. We thought it might be useful to share some Indonesia centric information for business owners considering Indonesia as a possible destination for their brand growth.
To begin, entering Indonesia by appointing Master Franchises is a good way to enter this very promising new market. It allows the franchisor to focus on readying the brand for international market whilst leveraging local knowledge for real estate, human resource and navigating local legal requirements. This reduces the risk for both Franchisor and franchisee whilst each focus on what they do best. When implemented well, the brand can increase tremendous growth due to the large market potential of Indonesia. Given that the bottom line can be very attractive when a brand is well executed, Some franchisors owners also use the franchise model to enter into Joint Venture agreements to co build the brands in the country. This format increases the upfront risks, but when well executed, both parties can enjoy the rewards of a profitable partnership.

In this article we will cover the following:
1. Franchise Landscape of Indonesia
2. Considerations when entering the Indonesia Market
3. Legal Framework for Franchising
4. The Franchise Registration Certificate
5. Criteria that triggers Franchise Registration requirements
6. What is the Best Market Entry Strategy into Indonesia?

Franchise Landscape of Indonesia
Indonesia has a relatively young population of 288 million represents both a sizeable workforce and pool of consumers. This is complemented by the country’s steady economic growth of 5.1% in 2017, and 5.1-5.5% expected for 2019. 58% of the population is now living in Jakarta making it the most populated region.
The Franchise (Both local and international Brands) sector has been buoyed by the increased spending power of its growing middle class. In the more populous cities, major International and very creative local franchise brands have been growing exponentially. Brand owners should not disregard the creativity of local Indonesian brands like Jco, Upnormal Coffee Roasters, Kitchenette, Union Tanamera, Pizza&Birra, Social House, DJournal certainly offer lifestyle concepts that can rival international brands. In order to compete with the local brands, franchisors need to be aware that in Indonesia, although the market is still developing, and likely to be exponentially bigger than home country, they need to put in conscious effort to localise their brands, be conscious of the lifestyle factor and be well priced to reflect the value.
According to Ministry of Trade, there are 1,000 legal franchise in Indonesia; 540 of it are Indonesian companies and 460 foreign franchise companies. The franchise industry led by Food and Beverages companies for 62.4% and Education companies for 18.1%. The rest of it is contain of retail (14.9%) and service (4.6%). Allegedly there are 1,400 other non-franchise businesses that cover Indonesia franchise sector. In 2016, International Trade Administration projects that there will be 8% increase in local franchise, and 14% in foreign franchise each year F&B Industry in franchising is the biggest compares to the other sectors, in 2017 it has 624 franchise brands which 317 of it International brands and 307 domestic brands.
Not surprisingly, of the International franchise brands in Indonesia, almost 40% of the brands are from the US followed by a strong presence of Made in Singapore Brands. F&B remains the MOST sought after franchise category.
This finding is in line with Ministry of Industry report indicating the continued growth of F&B industry at an estimated 9% in 2019. As a whole, the F&B sector now contributes up to 34.33% of the countries non Oil& Gas GDP. The Indonesian government encourages the growth of this sector as most of the owners of F&B businesses are Micro and small Businesses, a driving force behind the increase of earning power equality.
International brands that have performed well in Indonesia are KFC, Mc Donalds, Wingstop, Bread Talk, Canele, Killiney, Lawson, Mothercare, Snap fitness, Charles & Keith, On the whole, rentals and manpower work very favorably for brands that come from countries with very high real estate prices and man power scarcity. As a result, franchises thrive in these markets because the net profit margins are very comfortable, even after paying the franchise royalties.

Considerations when entering the Indonesia Market
In order to capture the market, brands entering Indonesia need to recognize that a fair amount of localization is required in order for the franchisee to enjoy a successful market entry. If a brand insists on franchisees implementing the brand exactly as its home country, it exposes the brand to a high amount of uncertainty as to brand acceptability. Brands like Joe & Dough entered Indonesia successfully invested a fair amount of time and research to understand local consumer habits, lifestyle, competitor offerings to develop a final market specific strategy.
Legal Framework for Franchising
In order to protect the Indonesian franchisees from Unscrupulous and Fraudulent Franchisors, Indonesia has a franchise regulatory regime aimed at controlling the activities of franchises. Franchisors are required to register for a franchise Registration Certificate also known locally as the Surat Tanda Pendaftaran Waralaba-STPW.
The Franchise Registration Certificate
The franchisor and the franchisee each must file for, and obtain, an STPW. Each STPW is valid for five years and may be renewed each time for five years. In addition, an annual report must be filed with the Ministry of Trade.
The franchisor must apply for, and obtain, its STPW before the franchise agreement may be signed. The following are required for the STPW submission by the franchisor:
• The disclosure document in the Indonesian language (and a legalized disclosure document if prepared in another language) the minimum content of which is explained above
• A copy of the passport of the franchisor’s representative
• Legal documents of the franchised business, i.e., technical business permits or the license issued in the franchisor’s home country
• Statement Letter/Reference Letter issued by the Trade Attaché of Indonesian Consulate in the franchisor’s home country
• The franchisor’s Indonesian trademark registration certificates
• The local content statement
• A list of manpower to be employed for the operation of a typical outlet
A copy of the draft franchise agreement in the Indonesian language (translated by a sworn Indonesian translator)

For foreign franchisors, there are pre-contract disclosure requirements that need to be legalized. The documents are:
• The franchisor proof of identity and the legal documents of the franchise business
• Franchisor’s business history
• Franchisor’s organizational structure
• Audited balance sheets for the last two years (for medium and macro businesses)
• The number of franchise business
• A list of franchisees
• The rights and obligations of the franchisor and franchisee

The franchisee must apply for its STPW following execution of the franchise agreement and must also file an annual report. Its STPW submission must include:
• The franchisor’s Disclosure Document in the Indonesian language
• Copies of the signed agreements in the Indonesian language
• The local content statement
• A list of manpower to be employed at the typical outlet
• The franchisor’s Indonesian trademark registration certificates
• The franchisor’s STPW
• The franchisee’s Deed of Incorporation/Articles of Association with its approval from the competent government authority

Criteria that triggers Franchise Registration requirements
Business are required to be registered as a franchise if it triggers the following criteria:
• Having specific business characteristic or Unique selling proposition;
• Franchisor must have approximately three to five years’ experience in business.
• Have written SOP and a description of the proposed goods and service provided
• Minimum 10-year term for a master franchise
• A Replicable system (easily applied and taught)
• Giving continuous support
• Registered or Have Applied their Intellectual Property Rights (IPR) to Directorate General.
• Ongoing Support.
• Have a system that is easy to learn and apply

What is the Best Market Entry Strategy into Indonesia?

Depending on the area of business your franchise exists in, you need to make sure you enter the market with the right mindset. There is no magic formula for success but we have found that companies that followed a broad foundational market entry strategy usually find more success than others. Some of the areas these successful franchisors invested time in are:
1. Conduct Due Diligence on the market, including research on the existing competitive landscape, pricing of the competition’s product of service, Cost of products or service and identify targeted audience
2. Spend time to find a like-minded franchisee or JV partner who will willingly handle the local operations and allow you to build on the brand.
3. Get the brand positioning and brand communication right. Here franchisors should ensure the franchisee invests in both effective off-line and Digital marketing so that the Go-To Market Strategy is well executed.
4. Invest in technology to ensure that you as a franchisor gets access to real time information.
5. Ensure training and on-going audits are conducted to ensure sustainability.
About Astreem Consulting
Astreem Consulting was founded in 2005 for the purpose of building Franchises across Asia. Over the last 14 years, Astreem has been steadily building the Franchise brands across the region from Singapore, Malaysia, Indonesia, Thailand, Philippines and Australia.
Through in depth franchise development plans to well executed market entry strategies, and localised Market research, Astreem is confident in bringing effective and result oriented solutions for brand growth.

For more information on taking your business to Indonesia, contact [email protected] or +65 6732 0803.

Implementing Change Management to ensure successful Business Process Transformation

Change management is a systematic approach to dealing with the transition or transformation of an organization’s goals, processes or technologies, often through the process of Business Process Transformation. More recently, this Change management is not something that is reserved for the large enterprises but something that almost all companies large and small need to engage in to stay relevant and competitive as the world dashes into a future environment of AI driven technology transformation.

What is the purpose of Change Management?

The purpose of change management is to implement strategies for effecting change, controlling change and helping people to adapt to change. Often, this change management is implemented as a part of business process transformation, This is something that all businesses need to gravitate towards and adopt new tools that help them manage improve their business processes and remain competitive. There are many a times when most business will think that “Yes digitising and redesigning my workflow is something I will do soon… once I have reached a certain revenue, once I have launched this new product or when I have more time or when we hire a new CTO.” As they say, Time and Tide wait for no man. Everyday we put aside equipping our business for the future is another day we exposed ourselves to being vulnerable to a lack of transparency & just in time information, unnecessary repetitive tasks, human errors, and additional manpower costs. In a world where every one is blind, the one eyed man shows the way. However, when more and more people start to see the benefits of implementing technology, this new standard of leveraging technology for improved business operations becomes the new norm. Today, most companies adopt some kind of technology.with the goal to optimise their business performance.  The issue lies in the fact that most of this technology is implemented in piecemeal formats, usually without an organisational mandate on how each of these technology impacts the other. In order to implement the effective adoption of new technology and processes, businesses need to adopt an organization wide Change Management exercise in order to successfully navigate the journey towards industry 4.0.

The types of Change Management

In general, there are two major kinds of organizational change; change imposed by circumstances and change that is planned and adopted to encourage growth or improvement. This applies to both small and large-scale enterprise organizations. Change management systems are designed to help businesses plan for change instead of react to it.

In a world where so much technology is available, navigating the company can still be difficult. This is due to the incongruent, non aggregating and siloed models that most technology applications are built upon. So whilst many businesses imagine they are adopting change and embracing the digital age, they are actually adopting new tools that do not work in harmony one with another, which in itself, creates a new issue. This is the time where a holistic plan that comes in the form of Business Performance Management is activated and where implementing Change Management processes can help.

There are concrete reasons for accelerated growth in the business process transformation and change management industry. Products, technology, or ideas that used to take years to design, develop, test, and deploy are now being squeezed down to months or even weeks. The evolving consumer expectations for better, faster, and cheaper products also drive the need to reorganize the work culture to meet demand. Business owners are expected to respond faster and more effectively to market demands. Without a fundamental change in how data is collected, how it is analysed, decisions made and actions taken, business owners would consistently be forced to take actions that are late and mostly no longer impactful in the scope of things. In a world of almost immediate satisfaction, actions taken months after the fact only sound like excuses and bad management.

How do we implement change management?

There is an overabundance of frameworks and models available to guide and educate on change management practices, it can be difficult to find a perfect fit for your business. Regardless of the models available, business need to take charge of what business model transformation and change management approach suits them most.

6 Essential Steps for Implementing Effective Change Management Process

As your company constantly experiences change caused by new technology implementation, business process updates, compliance initiatives, reorganization, or customer service improvements, change is constant and necessary for growth and profitability. Inline with implementing business performance management actions, businesses should ensure that change management at the human resource level takes into consideration the following:

1. Identify the Goals

Since Change management usually happens simultaneously with overall organisational change, the goals of why the the company has embarked on a Business Transformation Process must be made clear. Change mostly occur to  improve a process, a product, or an outcome. Know what needs to change and why it needs to change helps the team understand why the actions taken are necessary and what their roles are in the process.

2. Present a Solid Business Case to Stakeholder

As with the case of Business Process transformation, Change management is the natural next step to ensure there is organisational buy in from all levels of the company. Every level of stakeholders different expectations and experiences and it is important to convey the urgency and importance of a successful business process transformation, changing the way things are done. The process of onboarding the different parts of the business varies but with a structured change Management plan, all departments can be onboarded one at a time.

3. Develop a Plan for the Change

This is the “roadmap” that identifies the beginning, the route to be taken, and the destination. This is where the resources needed, the objective of the business transformation and costs of implementation needs to be planned. As in all business performance management planning, areas of change, how processes will alter, what are the KPIs, measurable targets, incentives, aggregation of results and analysis.

4. Resources and tools needed

Here, it helps to have a technology platform that allows the businesses to align all its plans. If all the tools needed can be presented on one platform, that would add another layer of simplicity in the change management process. It will not only reduce the time needed to collate data from different sources, it will also allow easier cross platform data interpretation and also save on subscription and implementation costs. The clarity of clear reporting allows for better communication, allow managers to take proper actions and measuring successes and milestones.

5. Monitor and Manage Resistance, Dependencies, and Budgeting Risks

Resistance is a very normal part of change management, but it can threaten the success of a project. Most resistance occurs due to a fear of the unknown. Formal Training sessions  and communication channels to deliver the necessity of the Business Process transformation process  can help to reduce resistance to the project. Where there exists inherent resistance, in can create a fair amount of risk associated with change – the risk of impacting dependencies, return on investment risks, and risks associated with allocating budget to something new. As such, ensuring there is significant BUY-IN from all levels of the organisation is critical to the success of the implementation of Change management in Business Process Management Transformation.  Anticipating and preparing for resistance by arming leadership with tools to manage it will aid in a smooth change lifecycle.

6. Review, Revise and Continuously Improve

As much as change is difficult and even painful, it is also an ongoing process. Even change management strategies are commonly adjusted throughout a project. Like communication, this should be woven through all steps to identify and remove roadblocks. And, like the need for resources and data, this process is only as good as the commitment to measurement and analysis.

Why Using A Business Process Management Expert Can Help With Change Management

Astreem Consulting is a business growth consultancy and has been responsible for the growth of many SMEs regionally. Inherent in the delivery of their processes is the deep understanding of what the key success drivers of businesses are. They leverage their expertise in translating best practices into specific key Business Performance Management areas of SMEs. Manual and Analog process can be translated into automated processes that reduce human errors and repetitive actions. Process flows can be designed so only the high value activities are actioned by manpower, transparency and real time reporting becomes possible.

The expertise provided by experts that help businesses become more efficient and productive can cut done the time needed to execute such a project, offers a different perspective other than the internal view of how change can be implemented, provide additional resources and also provide the trainers needed for the actual Change management implementation.

Contact us at [email protected] for more information. We believe in democratising the availability of ERP and Performance Management Systems for ALL SMEs. Let us know how we can help. We would love to work with you on that!

 

 

What is process improvement

Business Process Improvement (BPI) is a singular initiative or project to improve the alignment and performance of a particular process with the organizational strategy and customer expectations. BPI includes the selection, analysis, design, and implementation of the (improved) process.

The Importance of Efficient Processes

The various kinds of processes have one thing in common: they’re all designed to streamline the way that you and your team work. When everyone follows a well-tested set of steps, there are fewer errors and delays, there is less duplicated effort, and staff and customer satisfaction is higher.

Processes that don’t work can lead to numerous problems. For example:

  1. Customers may complain about poor product quality or bad service.
  2. Customers complain about long wait time
  3. Colleagues get frustrated.
  4. Work may be duplicated, or not done.
  5. Costs increase.
  6. Resources are wasted.
  7. Bottlenecks can develop, causing deadlines to be missed

 As businesses accelerate growth, there’s always a desire to manage quality, reduce costs and efficiency through process improvement.

Traditional Business Process Improvement Disciplines

Business Improvement stems from various disciplines that have been developed over time. Methodologies like Lean and Six Sigma are various disciplines that can stand alone but over time, there has been additional modifications to include sectors beyond manufacturing.

While Business process improvement is often associated with Lean and Six Sigma, Astreem also leverages value stream mapping, as our underlying business process improvement methodology.

Foundation of Process improvement Methodologies:

LEAN manufacturing, was a process that originated by Toyota Production System, today known as the TPS. It was implemented to streamline the company’s production chain and dramatically reduce operating and overhead costs. Lean thinking frames TPS around five key principles – Value, the value stream, flow, pull and perfection

The key idea is to base process improvement on the customer perspective; taking the time to understand what they value from the product and then using LEAN process improvement to eliminate unnecessary waste, errors and other things that drive up costs. By focusing on value, the entire process is organized to drive more of what the customer is willing to pay for.

Six Sigma is a process improvement example that focuses on achieving the maximum level of obtainable quality within an organization. At the Six Sigma level, that is a rating of near 100% perfection (or 99.9966%).

The Six Sigma approach looks closely at the root cause of problems, defects, and variations that reduce the effectiveness of processes. At its heart, there’s a philosophy of constant improvement that is in place to consistently and progressively improve results until that max level of perfection is achieved

However, today’s concept of Process Improvement, is a series of continuous actions that positively impact the bottom line and require further investments in time and resources to make operations more effective.

Astreem’s View on Process Improvement

Astreem Consulting takes a practical view of continuous improvement, leveraging the Plan-Do-Study-Adjust method to solve performance issues, capitalize on market opportunities, plan new products and improve the delivery of existing ones.

As an expanded view from Lean and Six sigma, Astreem uses Value Stream Mapping to offer more holistic views of how work flows through entire systems and provides effective means to establish strategic direction for making improvements. Value stream mapping allows for various perspectives ranging from the macro perspective to finer layers of granularity.  Stream Mapping also allows for a deeper understanding about the work systems that deliver value and support the delivery of value to customers. Finally, value stream maps reflect workflow from a customer experience perspective verses the internal focus of typical process level maps. This allows different departments to move from a silo mentality to a more holistic and cross functional view point, making customers the key stakeholder  the process.

Contact our Business Process Transformation experts if you are seeking to increase your efficiency, reduce redundancy and increase profitability.

Your Franchise Development Strategy

Developing your Franchise Strategy

Every business is unique and develops its own business plan. Similarly in Franchise development, Each business needs to develop its own unique franchise strategy. Whilst many businesses have grown to become international giants through franchising, the road to successful franchising can be complex.

Franchising is about more than just the legal agreement that binds the franchisee and franchisor. There is a whole host of business management areas that a franchisor needs to invest time and resources in to build a franchise development strategy to ensure successful replication and local adaptation of the brand over time.

I am often asked about how much a business should charge for a franchise fee and royalties. This is a question that cannot immediately garner a responsible answer. If one chooses to look at the closest market competition and decide on pricing, the answer is already out there. However, I believe that the success of a franchise is more than just the economics of the franchise. Those who already franchise will testify that franchising is certainly more than these magic numbers. Ultimately, it is the quality of the franchise management, the relationship between Franchisor and franchisee and the strength of the brand that influences the franchise success most.

While there are usually legal documents that frame the agreement between the franchisor and franchisee, it is really the business decisions that make up the agreement that ultimately determine how the franchisor and franchisee work together.

So what does it take to develop a strong Franchise Strategy?

The franchise strategy used in structuring the franchise offering is the foundation for every successful franchise system, and proper strategy development can ensure that your goals are attainable. This means we need to consider if the franchise strategy is to be developed as single units in home territory, in different territories in the same country or is it to handle international growth. The challenge is knowing what is right for your organisation, so that you can create a franchise offering that is easily replicated and marketable to the franchisees you want to target.

Underlying any successful franchise system is the determination of the economics of the franchise and the franchisor franchisee relationship, with a focus on creating a business model that is both marketable and sustainable.

We focus on understanding the key drivers that make your business successful, identify performance targets, systems to monitor progress. Other important areas to understand are the elements of support provided by you, the franchisor to help strengthen the performance of your franchisees, like set up support, training support, supply chain management, audit implementation, marketing support and many other aspects. Looking at your business from a holistic view, we build credible financial simulations and then make our financial recommendations regarding initial and continual fees based on extensive economic modelling.

Once the financial models are developed, we then go about pulling all the features that make your franchise different and more attractive than other similar franchises that are out there. Offering a franchise program to potential franchisees is no different from selling your products to end consumers. It is important to have a quality franchise offering that is well positioned and clearly differentiated from the other franchises out there.

Alongside a strong franchise development strategy is the need for strong Standard Operations Protocols to ensure increased replicability. Our award winning clients like The Manhattan Fish Market stated that it was their Standard Operating Protocols (SOP’s) that have helped them to accelerate and grow their business. Today, these SOPs have become integrated into a business operating system that leverages cloud technology to offer easily accessible, updatable processes and provide reports and business intelligence for the franchisor to take action.

Your Franchise Partner

Astreem’s success as a franchise development advisor is that we focus on the business’s state of franchise readiness, identify the key success drivers, strengthen the fundamentals, build sound Franchise growth strategies that are scalable. We focus on designing our clients’ franchise systems for long term success. We balance the economics of the business and the ongoing franchise relationship with the goal of ensuring sustainable growthfor the franchise system. Technology today makes it much easier for franchisors to manage their franchisees. Franchise management technology helps franchisors to monitoring performance, communicate to franchisees, streamline business processes, provide information to take pre-emptive actions when necessary as well as to ensure compliance within the franchise system.

7 Steps To Developing Better Audits

Audits are key to improving the operational performance in any multi store operation. Both Internal and external Audits help to ensure compliance and consistency in successful business management. However, audits are only useful when designed correctly, easily implemented and provide insights to help managers make decisions. Audit programs are designed to improve operational standards, improve customer service and audit compliance. Ensuring consistent quality and service delivery is critical to businesses on the brink of expansion and international growth. Being able to ensure consistency and quality is the key to sustainable growth. This article aims to provide you with an easy 7 step guide to developing better audit plans that are easy to manage and implement.

Step 1: Start with the Why

As with any goal, starting with the Why is the necessary first step. Defining the objectives of the audit and the Key Performing Indicator (KPI) criteria will help operations managers design a better audit plan.

For example:

  • Do you want to track compliance to the brand?
  • Do you want to track the customer service over different stores ?
  • How often do you track the hygiene standards of your outlets?
  • Do you want to check the completion of operational processes?
  • Are your outlets following merchandising guidelines?

Whatever your audit needs may be, the objectives of the audit need to be clearly defined so as to reap the benefits of an operations audit.

Step 2: Identify the Areas of Audit

Once the goals are set you need to identify all the Key Performance Indicator (KPI) areas that need to be audited.  If you want to audit brand compliance across all stores, you need to identify all areas that may affect how the brand is perceived. For example:

  • In-Store Corporate Identity
  • Staff Appearance
  • Customer Experience
  • Handling Customer Complaints

Step 3: Identify who conducts the audit

Generally, we have people in 3 roles that involved in conducting audits

  • Field Team: Either the Store Manager or Area Manager
  • Internal Dedicated Quality Assurance: Person whose only job is to conduct audits
  • 3rd Party External Auditor

Using an internal Field Team is cost most effective way to conduct audits. The disadvantage of using an internal field team is that there are certain conflicts of interest in the scoring of the audits. Having a dedicated quality assurance team to conduct audits may be provide for more unbiased scoring of the audits, however as this option menas a whole team dedicated to implementing and maintaining audits, this is a solution that works better for very large companies.

Using a 3rd Party Auditor may be good solution to help reduce both conflicts of interests that may arise by using internal field teams and avoid the high costs incurred in maintaining a dedicated quality assurance team. Since they are not tied to the operating metrics of the stores being audited, the audit scores are likely to be more unbiased. These 3rd Part Auditors are paid by the audits they conduct.  Astreem Consulting is a 3rd Party Auditor to help you conduct audits. The experienced team at Astreem designs practical audit programs that are targeted at key performance areas and conducts operational & brand audits for F&B, Education & Retail businesses.

Step 4: Designing the Audit Questions

The designing of audit questions depend on several factors:

  • Who is conducting the audit: If the field team member is conducting the audit, you want to keep the audit simple and short.
  • Type of Questions asked – The audit questions should also be from the view of  recording a fact (objective) rather than asking for opinion (subjective). Statements with a Yes/no answer or those with a graded range are the most commonly used audit question formats.
  • Frequency of the audit – Designing the audit is closely related to the frequency of the audit. If you are going to visit the store every day, then the audit can be short and you can vary the sections covered. But if the frequency is once a quarter, you would rather design a more comprehensive audit to cover the various aspects of an operational audit.

Step 5: Conducting the Audit

Before conducting the audit, you need to decide which tools will be used to conduct the audit. It is totally fine to use excel sheets or physical hard copies for Audits. The problem occurs while collating the data from hardcopies and making sense of the data. Copious amounts of Man hours are often invested to harvest the data.   Another issue happens when you need to look back at records from last quarter or the year before to make performance comparisons between periods. This can be resolved by using smart online audit tools like Tree AMS (Automated Management System). This system helps you to seamlessly collate data, run different reports between time periods and key performance areas. You reduce a lot of time in data collation and data storage.

Step 6: Analyzing the Results

The whole point of the audit system is to give you insights about the performance of various key performance areas of your business. Analyzing the results and taking decisions is key to performance improvement of your brand. For example, if the Customer Service Audit is consistently showing poor audit scores in specific outlets, then specific action at the store level to address the way the staff is trained to handle customers. A re-training may be scheduled for the staff. A post training audit will show better results and also improve your customer service.

Step 7: Improving the Audit Program

The last and important step is to make sure that the audit program stays relevant with the management goals. A regular relook is essential to improve the quality of the audit program.

To conclude, a well-designed audit program is about providing insights, feedback and enforcing accountabilty through out the organisation. It is one of the best ways of improving and sustaining performance of your brand.

Develop Your Own Audit Programs to Increase Your Brand Performance

Increase your Brand Profitability through increased Productivity.

Are you a Singapore business owner or operations manager who is wondering why all the profit you used to make has reduced over the years.

Are you in search of fresh business ideas that improve profitability ratios? Given that High Rentals and Human Resource restrictions are external forces that we, as small business owners and operation Managers cannot control, we can only look toward building business ideas to improve the way we manage our business. The usual way to increase profitability is to increase revenue and reduce costs. However, given the levels of competition and pressure placed on increasing expense, one major way to increase profitability ratios is to increase productivity.

Business Productivity is more than a buzzword. In a march 2018 report in Straits Times, it was reported that the SME 1000 ranking saw turnover and profits for smaller companies fell 11.8 per cent while profits declined 17.1 per cent. This means the real decrease in profitability ratio was almost double. Whilst many SME owners try to engage technology to improve the way they manage their businesses, very few have approached it from a holistic viewpoint. Leveraging technology needs to be part of the overall business plan. When executed well, leveraging technology into business development plans can improve the entire business management process can help to increase productivity, reduce human errors, decrease repetitive non value-add work and ultimately, increase profitability ratios.

Productivity can be increased through redesigning your current business processes

What does Business Model Transformation really mean to business owners and operations managers? Business Transformation is the process of fundamentally changing the systems, processes, people and technology across a whole business or business unit, to achieve measurable improvements in efficiency, effectiveness and stakeholder satisfaction. Business Transformation is a change management strategy that aligns People, Process and Technology initiatives of a company with its business strategy and vision. In turn this helps to support and innovate new business strategies that lead to the improvement of the business competitiveness as a whole.

Business Model Transformation entails more than just the blind automation of workflows that is currently being used. It is about strategic thinking to identify overall business objectives, identifying key business drivers and its associated key performance indicators (KPIs). Once the workflow processes are mapped out, it is streamlined to achieve specific performance metrics (Specific KPIs) and outcomes. Besides measuring KPI’s, another important area of Business Model Transformation is the ability for Business owners and operation managers to take appropriate and timely action through automated triggers and alerts. Using a Management dashboard as a control centre to monitor key performance criteria (KPI) and analysis of Business Intelligence (BI) gleaned from the business workflow management tool can allow the business owner to take the appropriate actions and decisions quickly. Business model transformation can be implemented in specific workflow like retail operations, customer service, restaurant operations, logistics, production, and any other business workflow area that requires the collaboration of more than one department.

How do you know if you need to Redesign and Automate your business process and workflow?

Ask yourself: 

  • Are you finding it more and more competitive?
  • Is your profit margin decreasing?
  • Are you having constant challenges meeting customer expectations?

To find out how you score take this questionnaire.

If your answers indicate you may be losing competitiveness, your business will benefit from a business strategy re-calibration and , a change in approach brought about by business model transformation.

Contact our Business process redesign experts at [email protected]  if you have a question on how Business Model Redesign or Business process automation can increase your business productivity and eventually your bottom lines.

Redesign and Automate Your Business Process to Increase your Business’ Profitability

Are you a Singapore business owner or operations manager who is wondering why all the profit you used to make has reduced over the years. Are you in search of fresh business ideas that improve profitability ratios? Given that High Rentals and Human Resource restrictions are external forces that we, as small business owners and operation Managers cannot control, we can only look toward building business ideas to improve the way we manage our business. The usual way to increase profitability is to increase revenue and reduce costs. However, given the levels of competition and pressure placed on increasing expense, one major way to increase profitability ratios is to increase productivity.

Business Productivity is more than a buzzword. In a march 2018 report in Straits Times, it was reported that the SME 1000 ranking saw turnover and profits for smaller companies fell 11.8 per cent while profits declined 17.1 per cent. This means the real decrease in profitability ratio was almost double. Whilst many SME owners try to engage technology to improve the way they manage their businesses, very few have approached it from a holistic viewpoint. Leveraging technology needs to be part of the overall business plan. When executed well, leveraging technology into business development plans can improve the entire business management process can help to increase productivity, reduce human errors, decrease repetitive non value-add work and ultimately, increase profitability ratios.

What does Business Model Transformation really mean to business owners and operations managers? Business Transformation is the process of fundamentally changing the systems, processes, people and technology across a whole business or business unit, to achieve measurable improvements in efficiency, effectiveness and stakeholder satisfaction. Business Transformation is a change management strategy that aligns People, Process and Technology initiatives of a company with its business strategy and vision. In turn this helps to support and innovate new business strategies that lead to the improvement of the business competitiveness as a whole.

Business Model Transformation entails more than just the blind automation of workflows that is currently being used. It is about strategic thinking to identify overall business objectives, identifying key business drivers and its associated key performance indicators (KPIs). Once the workflow processes are mapped out, it is streamlined to achieve specific performance metrics (Specific KPIs) and outcomes. Besides measuring key performance indicators(KPI’s), another important area of Business Model Transformation is the ability for Business owners and operation managers to take appropriate and timely action through automated triggers and alerts. Using a Management dashboard as a control centre to monitor key performance criteria (KPI) and analysis of Business Intelligence (BI) gleaned from the business workflow management tool can allow the business owner to take appropriate actions and decisions quickly. Business model transformation can be implemented in specific workflow areas like retail operations, customer service, restaurant operations, logistics, production, and any other business workflow area that requires the collaboration of more than one department.

How do you know if you need to Redesign and Automate your business process and workflow? Ask yourself:

Are you finding it more and more competitive?
Is your profit margin decreasing?
Are you having constant challenges meeting customer expectations?

To find out how you score take this questionnaire.

If your answers indicate you may be losing competitiveness, your business will benefit from a business strategy re-calibration and , a change in approach brought about by business model transformation.

To encourage Singapore Business owners to ready themselves for today’s more complex business environment, Enterprise Singapore (ESG) has crafted some Government Grants to help reduce the financial burden Business owners face when they engage in the adoption of Business Process workflow improvement, Business Transformation and Business Process Automation.

Business Owners can apply for Enterprise Singapore for financial support for the projects that improve core capabilities and productivity. Approved projects are granted up to 70% of the Project costs. Enterprise Singapore(ESG) support projects that involve Business Model Transformation.This enterprise Singapore grant can be found Enterprise Development Grant (EDG) under the scope of Business Process Redesign and Business Process Automation.

The Business Process Redesign grant is designed to help companies review existing business processes and identify areas to improve business efficiency. This is the first step business owners must take in redesigning their workflow before introducing automation into their businesses. The scope of this specific Singapore Government grant covered includes:

  1. The review and streamline of workflow and processes to reduce or remove redundant workflow processes
  2. Explore how technology can be used to automate processes and reduce manpower on repetitive actions
  3. Develop key performance metrics to track and measure the effectiveness of workflows

The Business Process Automation grant is designed to cover:

  1. The adoption and development of hardware and software solutions,
  2. The development of solutions that involve the purchase of machinery and integration of systems.
  3. The training of staff to deploy these solutions.

If you are a Singapore Owned business and want to find out more about these government grants, please go to the following link:
https://www.enterprisesg.gov.sg/financial-assistance/grants/for-local-companies/enterprise-development-grant/innovation-and-productivity/innovation-and-productivity

Want to find out if your business can benefit from this grant? Speak to our experienced consultants today.

Enterprise Development Grant (EDG): Frequently Asked Questions

Since the merger of IE Singapore and Spring Singapore to become Enterprise Singapore (ESG), there have been some changes in the way the Government supports the grants that are available to help in the growth of SMEs in Singapore. Many SMEs have been asking us what areas of support they may be able to expect from ESG and so, we have shortlisted a few questions we think can help business owners navigate this important area of government support. Astreem works with business owners who seek to improve and grow their businesses in most of the areas supported. We welcome questions about how your business may be able to grow through the specially curated areas of government support that has been crafted by ESG.

What exactly is the Enterprise Singapore EDG grant?

The acronym EDG actually refers to ‘Enterprise Development Grant‘. This is a financial assistance programme, initiative of Singapore government agency – Enterprise Singapore (ESG). It is a program to assist with SME growth and is designed to offer  more flexibility and extend more coverage to support our local SMEs.

This grant assistance programme is aimed at helping local SMEs develop and upgrade their organization’s business capabilities under three pillars:

Development of Core Capabilities

The Grants are designed to assist SMEs to develop their Core Capabilities to help prepare for growth and Business transformation by strengthening their business foundations. This can include formulation of growth strategies including corporate driven expansion, Franchise development and Joint venture partnerships. Companies can also look towards development of Business strategies and processes to protect and monetise intellectual property assets as well as optimise their operations.

Another area that is important in the quest to grow your business is to look at better capturing your business’ target audiences and markets by differentiating your brand proposition, and your products and services. In some cases, brand localisation in the targeted market can also be a critical success factor when entering new markets.

Other areas that fall under the Core capabilities development include Financial Management, Human Capital Development and Service Excellence.

Innovation and Productivity

The Innovation and Productivity projects support companies to explore new areas of growth, or look for ways to enhance efficiency. These could include reviewing and redesigning  workflows and processes. Companies could also tap into Business automation and technologies to make routine tasks more efficient. The successful Implementation of Business Automation can greatly increase productivity and reduce human errors, thereby increasing profitability.

Market Access

Projects under Market Access support Singapore companies that are willing and ready to venture overseas. Companies can tap into the EDG to help defray some of the costs of expanding into overseas markets especially where Mergers and acquisitions is the growth strategy, developing overseas presence.and developing international standards.

Who Qualifies for the Enterprise Singapore (ESG) EDG government grant?

EDG is only applicable to Small Medium Enterprises (SMEs). Typically, a SME would be eligible as long as they meet the following criteria:

  • The company must be registered and operating in Singapore
  • Has a minimum of 30% local shareholding
  • Is in a financially viable position to start and complete the project

Enterprise Singapore assesses your company’s overall financial performance to ensure that your business can comfortably see the project through and benefit from it as well as the overall productivity of your company. The competency of the selected consultant or service provider is also a key consideration. Ultimately, ESG seeks to support Business owners who clearly understand the scope of the project, why they wish to embark in that area of specific capability improvement or business strategy development projects and how your business will benefit from the projects supported by the government grant.

What  does Enterprise Singapore Enterprise Development Grant (EDG) support?

The EDG grant supports up to 70% of qualifying project costs namely third party consultancy fees, software and equipment, and incremental internal manpower cost.

How long is the duration of an Enterprise Development grant (EDG) project?

As EDG project may take between 4 to 12 months to complete. However, it is really subjected to the scale of each project that is undertaken.  A typical Franchise Development project by Astreem can take between 4 to 6 months and an International Business expansion project into a specific country may take 3 to 4 Months to complete.

Internationalizing Your Brand through Franchising – Are you Ready?

You started your own business and it was an exciting affair, especially since, nothing could beat the thrill of being your own boss. Over time you have then set the systems in place, figured out what works and what doesn’t and you have grown your business locally. Now you think this is the right time to take your business to the international shores. Franchising your brand can help you achieve a larger brand footprint.

Some Benefits of Franchising Internationally:
– Builds market share.
– Increases revenue channels.
– Grows brand equity, Brand reputation and recognition.
– Lowers risk through diversification in new countries.
– Balances out temporary losses locally with international earnings.
– Decreases production costs by moving certain operations to countries where labour and materials are cheaper.

Getting started:
Before you franchise internationally, do ensure you are prepared with the following:

1. Strong Brand Identity: At the centre of any good franchise operation is the brand’s identity. Franchisors must develop the brand well enough to gain international market recognition because people buy a product or a service depending on how much they can relate to it. There must also be a proven track record of the brand’s success in the local market.

2. Clear Franchise Strategy: You must ensure that your business has a clear and easily communicated sales proposition before you start to look for franchisees. Price, quality, service, logistics, operations and anything else that you want to include in the Franchise offering needs to be clear in your franchise marketing collateral.

3. Well Documented Operations: You know that you are ready when you have clear, reliable and documented operations processes for creating or delivering your service of product.

4. Replicable Business Model: Your company must already be making decisions and be implementing activities consistently based on agreed methods of business process management. This is important because in the end franchisees are not buying your product or service but they are buying a process by which your brand can be run.

5. Adaptability: International markets often put the franchisor out of his or her comfort zone. The franchisor must be flexible enough to adapt to the nuances of the new markets. Not everything that worked in your local marked can be applied to international markets.

6. Strong Franchise Management System: Finding a franchisee, whilst is important, is less vital to the success of a franchise’s success than their ability to manage their franchisees. Using a Franchise management platform can simplify many repetitive tasks and ensuring processes are automated also allows for smart contract agreements to be enforced.

Few Words of Caution:
1. Avoid the lure of short term profit: Take your time and plan on long term investment in the new international markets that you want to be in. Rome wasn’t built in a day and neither was a successful international brand expansion. Lasting business relationships and credibility in international markets are built over time.

2. Misjudging new markets: Even if your brand is doing exceptionally well locally, you need to see whether the products or services that you are giving through your business will fill a demand in international markets.

For franchisors who want to grow internationally, it is recommended that you take the support and services of franchise experts to help you exploit the intellectual property that resides in your business. Develop customized growth strategies for your business to help you successfully franchise and sustain your international brand growth.

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About the Author:
Hsien Naidu has over 25 years of experience in Franchising, Marketing, Branding and Intellectual Property Management across various industries including Food & Beverage, Education, Retail and Lifestyle as well as services. She is a Senior Practicing Management Consultant, a certified Intellectual Property Management Consultant, a Certified Franchise Executive and is presently the Director of Astreem Consulting Pte Ltd.