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CEO Update 2009
What an interesting year !
The global financial crisis last year had multiple effects
on our clients and our business. Our mainly MNC client
base saw their profit and customers plummet and
their growth strategies becoming rapidly irrelevant.
The emphasis was to cut cost, and in some cases this
lead to the extent of compromising even on quality.
Our dilemma was also multi-dimensional, cutting costs
for our clients came from two main areas, headcount
reduction (as a result of reduced end customer
demand), and continuous pressure to further reduce
our margins.
In light of the above scenarios we had to move very
quickly to reduce our own costs, make our costing
models much more in synch with our client billing
models, and accelerate our plans for our other
businesses. Our proposition to market changed
as when we positioned our higher margin value
added service offerings more aggressively , enhanced
significantly our US and UK marketing and business
development efforts and streamlined our operations
globally. Our fullflededged US office positions us
well for our US based clients. Our operations in
Malaysia and India allow us to provide excellent and
cost competitive offshore options to a US based
client coupled with an onshore (US based ) client
management capability.
As a result we have evolved into a leaner, operationally
excellent “Global Customer Management Solutions
Company“ with four main business offerings :
a) Outsourcing
b) CRM & Consulting
c) Education
d) Technology Solutions
With domain experience, and comprehensive
capabilities across all industries and business functions,
Scicom partners with clients to help them focus on
their customers in order to become high-performance
businesses both in the public and private sectors.
Our “Customer Focused Business” strategy builds
on our expertise in Outsourcing, CRM & Consulting,
Education, and Technology Solutions and help our
clients perform at the highest levels so they can
create sustainable value for their customers. Using
our industry knowledge, service-offering expertise ,
technology capability and by improving operational
performance and delivery, we help clients increase
revenues from their existing customers , retain their
current customer base and proactively acquire new
customers. Our goal is to have long term partnerships
with global clients and governments and work with
organizations of all sizes :
Today Scicom’s Key Differentiating factors are :
• Extensive vertical domain expertise
• A focus on business transformation outsourcing
• Commitment to the long-term development of
our employees
• A proven and experienced management team.
• Providing innovative solutions for evolving
business needs
Moving forward into FY 2010 and beyond, these
differentiating factors and services will provide us
with the relevance, profitability , flexibility, innovative
focus and value proposition for a rapidly evolving
client landscape.
Financial Performance
Consolidated revenue for the financial year ended
30 June 2009 rose by 22.3% to RM144.67 million.
New contracts secured during the 2009 financial year
include contracts with clients based in the United
Kingdom and Malaysia.
Our operational performance for the year had been
exemplary with increased profit before taxation of
RM 9.53 million, a 56.1% increase for the year as
compared to RM 6.11 million in profits before taxation
for the preceding year.
For the financial year ended 30 June 2009, foreign
currency earnings constituted 82.6% of the Group’s
total revenue.
The Group’s profit after taxation for the year grew by
43.7% to close at RM 8.70 million from the Group’s
preceding year’s profit of RM 6.06 million.
The Group’s total asset base has increased by 9.7%
to RM 62.53 million as at 30 June 2009 over the
preceding year’s asset base of RM57 million.
Outsourcing
Outsourcing remains core to our business and is the
cornerstone of our service offering. Our continued
operational excellence has resulted in increased
business from existing clients and new clients in our
traditional strength areas of complex and premier
customer care, technical support and consultative
sales.
We are well regarded in the multi-lingual BPO area ,
providing support in over 30 languages and to over
50 countries worldwide. With over 45 nationalities
working for us, Scicom provides unparalleled native
language support to our client’s customer base in Asia
Pacific , Africa , North America and the Middle and
Near East.
In April 2009, we acquired Asian Contact Centres
Sdn Bhd., in a landmark collaboration with the
worlds best low cost carrier , AirAsia Berhad. The new
contact centre for AirAsia consolidates all of AirAsia’s
global customer contact requirements – providing
the necessary technical, operational and strategic
direction for the delivery of a comprehensive quality
customer care and sales service.
Scicom’s outsourcing service offerings have been
further enhanced by new technology and systems
which allow us global voice and data connectivity
between our centres. This coupled with enhanced
IVR (speech recognition), CTI, email and chat
management systems allows us true virtual contact
centre capability and multi-channel support for our
multinational client base.
Scicom’s brand continues to be a powerful force in
the outsourcing industry in Asia. Scicom was placed
in the “Top Global 100 Services Providers” listing for
2009, based on the survey as conducted by “Global
Services” Magazine and NeolT, a distinction which we
also earned in 2006, 2007 and 2008.
Our operations are headquartered in Malaysia with
full service offerings also available in India and the
USA. Our total headcount stands at 2,051 staff as of
30 June 2009 and continues to expand rapidly.
CRM & Consulting
Scicom’s CRM & Consulting division is showing
exceptional promise. The focus this year has been
on the internet and CRM. As a result there has
been a clear development of a convergence of skills
inherent in Scicom and the tremendous opportunity
of the internet. There is an opportunity to tap into
organizations and help them in all aspects of their
customer contact management lifecycle and one of
those is their Online sales strategy. Scicom today has
developed a E-Commerce engine that focuses on the
sale conversion and the customer.
The range of services show promise in all industry
verticals and our MNC client base looks at the
products as a step change in the way that Scicom and
our value to them is perceived.
Our consultants are operational and domain experts
and Scicom’s clear advantage in providing robust
operational customer care and fulfillment services
allow us to offer clearly differentiated services vis a
vie our competition.24
Education
The Group’s wholly owned subsidiary – Scicom
(Academy) Sdn Bhd has had an excellent year. Our
educational services offerings, affiliated with a
professional body in the UK now offers internationally
recognized British Technical Educational Council
(“BTEC”) certificates and diplomas for both entry
and management level personnel in the “ Customer
Contact Management” industry. These courses
typically ranging in tenure from 3 months full time up
to 18 months full time/ part time and offer relevance
to a wide range of industry verticals such as retail,
BPO, hospitality, tourism, transportation and the
medical profession to name a few.
Corporate and government clients have been very
receptive to our Education product and service
line and as a result we have produced over 1,500
graduates in the financial year and expect to grow
this significantly moving forward with contracts in
hand and in the pipeline.
Moving forward the focus on formal education
products and services along with our customized
corporate training products provides a scalable and
sustainable revenue stream for the Group with the
potential to attract greater margins from Malaysia
and the region in the short term.
This is a global fi rst for the industry and in line with
our aspirations to move up the value chain in terms of
providing a world class service offering and offering
greater geographical spread. We expect these courses
to be offered by our staff and facilities in overseas
markets in the very near future.
Technology Solutions
In FY 2009, Scicom established a new business
division to augment its core business in Business
Process Outsourcing. This division, called Technology
Solutions focuses on 3 key areas, namely Technology
Consulting, Technology Systems and Solutions and
Infrastructure Development.
Technology Solutions, drawing upon resources
available within Scicom, provides consulting services
to clients in various industries. Over the years, Scicom
has established its brand in the market for providing
Business Process Outsourcing (“BPO”) services. In
providing these services, a large element within this
was in the development and optimization of methods
and processes, which were provided as part of the
project scope in establishing a contact centre for a
particular client. Along with this came the component
of consulting and the service of designing and
implementing the technology required to automate
several of the methods and processes. All of these
solutions are now available through Technology
Solutions as tried and tested solutions which have
passed “real-world” tests, after being used extensively
by Scicom within its own contact center operations
around the world.
Scicom will leverage on its years of experience and
know-how to deliver these solutions to our clients in
the most efficient and cost effective way.
The Group expects growth to continue organically
from existing projects and from new projects secured,
along with our new lines of business as described
above.
Furthermore, negotiations are currently in place with
overseas business prospects that would pave the way
for expansion in terms of new business wins within
the Group’s BPO/SSO space. The Group is also focused
in increasing revenues and contribution to bottom
line earnings through potential joint-ventures, which
would accelerate the growth of the Company.
I would like to thank our clients for their trust and
continued support, our friends in the media industry
and business partners for their confidence in us, our
regulators for their support and assistance, our Board
of Directors for their guidance and finally, my sincere
gratitude goes to the employees of the Scicom Group
for their loyalty, dedication and professionalism
LEO ARIYANAYAKAM
Chief Executive Officer
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