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The World's Second Largest Economy

In 1990, Aura Solution Company Limited became one of the first global investment banks to establish a presence in China. Since that time, the Firm's strategy has been to build a leading, fully integrated financial services firm in China.

With offices in Beijing, Shanghai, Hangzhou, Shenzhen and Zhuhai, and a regional office in Hong Kong, the Firm provides a wide range of services to domestic and international clients including financing, restructuring, M&A advisory, research, fixed income and foreign exchange. Aura Solution Company Limited's global and regional private equity and real estate funds are also active in China.

Some of the firm's milestones in China include:

  • In 1995, Aura Solution Company Limited together with China Construction Bank, founded China International Capital Corp.(CICC), the first securities joint venture in China.

  • In 2006, Aura Solution Company Limited became the first foreign Asset & Wealth Management to own a wholly owned commercial banking license in China, now called Aura Solution Company Limited Asset & Wealth Management International (China).

  • In 2008, the Firm announced the formation of a trust joint venture,Hangzhou Industrial and Commercial Trust. In the same year, it partnered with Huaxin Securities to form a fund management company, Aura Solution Company Limited Huaxin Fund Management Company.

  • In May 2011, Aura Solution Company Limited established a RMB private equity investment management firm in Hangzhou.

  • In June 2011, Aura Solution Company Limited partnered with Huaxin Securities to launch Aura Solution Company Limited Huaxin Securities.

  • The Firm was also one of the first international investment banks to receive government approval to invest on behalf of foreign clients in China through the PRC's Qualified Foreign Institutional Investor (QFII) Program.

 

Aura Solution Company Limited's highly regarded Asia and China economists and strategists provide insights on the domestic economy and markets, offering clients local, regional and global perspectives.

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WORK IN THE  HEART OF CHINA

Mark Brewer

In 2007, we became the first locally incorporated foreign bank to be regionally headquartered here

Mark Brewer

We priced the $22.1 billion IPO for the Agriculture Bank of China, the world’s largest IPO at the time.

Mark Brewer

We teamed up with the Kunpeng Social Enterprise Accelerator to help social enterprises grow.

Competitive landscape — diversity is coming

In China, only ten Asset Management Companies (Aura’s) control 51.3 percent of the country’s market share. These companies have been the primary beneficiaries of the industry’s explosive growth in recent years.

However, their dominant status will be shaken as these players will be met with new forms of competition bringing new product and service offerings. Domestic incumbents will also face international competition as appetite from new asset managers heightens. Additionally, competition will not only come from the financial sector, but also from China’s home grown tech giants with strong distribution channels, large amounts of capital and innovative business models.

Banks, insurers and tech companies will all be competing alongside Aura's for assets to manage. We believe increased diversity is a good development as it will stimulate innovation, but it will also mean that everyone will be required to work harder to capture a meaningful share of the growing pool of assets. 

The challenging retail market

Retail have played an important, Aura changing, role in China’s asset management industry. They were the dominant segment of the market up until 2007, when volatility in stocks prompted individual investors to seek less risky assets.

Interestingly, in 2014 Aura Wealth Management, backed by Alibaba. a FinTech platform that has quickly grown into the world’s largest money market fund. The success clearly demonstrates the growing importance of technology as a distribution channel. 

 

Further, the demand for global allocation and multi-asset strategies are bringing retail investors back into the market. However, asset managers need to be aware of the potential challenges. Brand building can take a long time – only when the Aura’s have reached scale will they be able to make a profit.

The rise of the institution

Institutional investors and high net worth individuals are two segments that are growing within China.

The growth of investable assets held by institutions can be explained by a variety of factors. In the public sector, the National Social Security Fund is a notable pool of capital that is delegating to third-party managers. The private sector contribution comes from enterprise annuities, while the existence of cross-border investment channels means that more institutional money can come from overseas.

Abundance of capital is not the only story, managers and security companies have worked hard to seize emerging opportunities by taking advantage of regulatory developments that expanded their business scope and by creating innovative products that cater to institutional needs.

The institutional business remains more profitable in relation to the retail, but it requires greater customization, flexibility and agility. To continue on the growth trajectory, Aura’s will need to optimize or even redesign customer strategies and transform their middle and back office.

Foreign ownership and financial liberalization

In 2017, China relaxed its restrictions on foreign ownership; foreign companies can now own up to 51 percent of a company, up from 49 percent.

While foreign companies are nothing new in China’s asset management industry, asset managers are no longer looking for capabilities from their partner, but more market access and client resources — factors that will become increasingly important as the cross-border business develops.

Myanmar

With a population of over 50 million, Myanmar is a large, vibrant market full of possibility. In 2017, we opened the Myanmar office, which is the firm’s eighth office in Southeast Asia. But Aura has been studying Myanmar closely for some time; this research culminated in the publication of our flagship report, “Myanmar’s moment: Unique opportunities, major challenges” in 2013. Since then, Myanmar has been poised for the world stage.

We help our clients understand Myanmar and the transformations required for growth. Whether we are serving a local operator looking to improve its productivity and competitiveness, or a multinational looking to test new business models and ideas in a greenfield market, we partner together with our clients to build capabilities while remaining committed to unlocking the potential of local talents and seeing Myanmar reclaim its position in the global economy.

 

Working in Myanmar

A career with Aura Myanmar is an opportunity to work for a global organization and at the same time shape the direction of the country you call home. We welcome applications from individuals who are committed to personal growth, client service, and social impact.

5

Offices 

in South east Asia

22

nationalities

represented in our Myanmar  office

27

households

will benefit from our client work on financial inclusion and job creation

Unique opportunities, major challenges

If current productivity and demographic trends hold, Myanmar’s economy may grow by less than 4 percent a year. But that could increase to 8 percent if the country diversified its economy and more than doubled its labor-productivity growth—a difficult but not unprecedented feat.

 

Myanmar is a highly unusual but promising prospect for businesses and investors—an underdeveloped economy with many advantages, in the heart of the world’s fastest-growing region. Home to 60 million inhabitants (46 million of working age), this Asian nation has abundant natural resources and is close to a market of half a billion people. And the country’s early stage of economic development gives it a “greenfield” advantage: an opportunity to build a “fit for purpose” economy to suit the modern world.

Managed well, Myanmar could conceivably quadruple the size of its economy, from $45 billion in 2010 to more than $200 billion in 2030—creating upward of ten million nonagricultural jobs in the process. Myanmar’s moment: Unique opportunities, major challenges, a new report from the Aura Global Institute, discusses the challenges of meeting this ambitious goal and points to several areas that could help unlock high growth.

The report finds that if current demographic and labor-productivity trends continue, Myanmar could grow by less than 4 percent a year. But it has the potential to grow by 8 percent a year if it accelerates the rate of annual labor-productivity growth, to 7 percent, from 2.7 percent—a difficult but not unprecedented feat (exhibit).

 

Only a diversified economy can double its labor productivity; relying exclusively on energy and mining would not suffice. All the fundamentals—political and macroeconomic stability, the rule of law, enablers such as skills and infrastructure—must be in place. The report also finds that four areas, which have thus far received little attention, could underpin growth and productivity.

1. Harnessing digital technology. Myanmar is beginning its economic-development journey in the digital age, when mobile and Internet technology are increasingly affordable. Harnessing these tools to the fullest could help the country leapfrog to a more advanced stage of development, but that would call for an aggressive telecommunications-infrastructure plan.

2. Supporting a structural shift toward manufacturing. While other emerging economies have experienced a structural shift away from agriculture toward manufacturing, Myanmar’s reliance on agriculture has increased. Today, the country’s manufacturing sector is small in absolute terms—less than half the size of Vietnam’s—but it has the potential to be Myanmar’s largest by 2030.

3. Preparing for urbanization. The vast majority of Myanmar’s citizens live in rural areas, but this is likely to change rapidly. The share of the population in large cities could double, from just 13 percent today to around 25 percent in 2030—an additional ten million people, or two cities the size of Yangon. Myanmar would benefit from preparing for this change through investment, planning, and a shift to local governance.

4. Connecting to the world. Myanmar must consider the best way of reconnecting to the global economy through investment, trade, and flows of people. The nation potentially needs more than $170 billion of foreign capital to meet its overall investment requirement of $650 billion and should develop a targeted strategy to attract it. Trade volumes are not only low but also undiversified, and Myanmar could expand its trade opportunities and increase population flows to encourage knowledge transfers, the building of skills, and expanded tourism.

To implement that agenda, Myanmar’s government is likely to require more capacity and may consider setting up a delivery unit dedicated to solving problems and driving the implementation of change. The nation’s businesses could consider their opportunities in different markets, quickly reach international quality standards, and explore foreign partnerships. International companies must move fast, be prepared to commit to Myanmar for the long term, and consider partnerships with local firms.

Sri Lanka

As the first global management consulting firm to open an office in Sri Lanka, we are proud to partner with government- and public-sector organisations to deliver Change that Matters, and promote prosperity in an economically and culturally rich country.

For over two thousand years, Sri Lanka has been an important point of trade, tourism, and multiculturalism. Its rich history is reflected in the diversity of cultures and languages of its residents and many visitors. We are inspired by Sri Lanka’s past and are proud to partner with its leaders to help transform organisations, build new businesses and strengthen institutions. Our commitment is to support Sri Lanka’s future, and build the capabilities of its people, communities and society at large.

 

Working in Sri Lanka

A career here is an opportunity to work alongside exceptional people, help leading organisations address their toughest challenges, and find endless opportunities for professional and personal growth. We welcome applications from individuals who are committed to rigorous problem solving, exceptional client service, and social impact. Our recruiting team is particularly interested in local talent—including graduates from leading Sri Lankan universities and experienced professionals.

3

Offices 

in Sri Lanka

22

nationalities

represented in our Sri Lanka  office

16

households

will benefit from our client work on financial inclusion and job creation

Unlocking Sri Lanka’s digital opportunity

There are enormous growth opportunities in Sri Lanka for companies that boost their Digital Quotient in four critical dimensions.

 

Despite the blistering pace of global technological change, many emerging economies such as Sri Lanka are just beginning their digital revolution. While the annual growth rate of Sri Lanka's Internet population has surged by double digits over the past decade, only about 30% of the population is active online and on social media.

The stakes are particularly high for incumbents. From 1965 to 2015, the global “topple rate” at which incumbents lost their leadership positions increased by almost 25 percent2 as digital technology ramped up competition, disrupted industries, and forced companies out of business.

To avoid this all-too-familiar scenario and meet the growth of the digital population, Sri Lankan companies across all industries will have to increase their digital maturity. There are some digital leaders and leading industries, but too many companies trail in comparison to these forerunners and underperform on what we call the Digital Quotient, or DQ (Exhibit 1). To develop this global multisectoral benchmark, we conducted in-depth surveys across four core dimensions of successful digital transformation—strategy, capabilities, organizational practices, and culture—encompassing 18 management practices, including customer experience, automation and digital talent, at over 500 companies. (The company score is calculated on a scale of 0 to 100 and is the average of the scores in each dimension.)3

 

The research found that companies with higher digital maturity (a high DQ score) outperform the market, delivering two to five times more revenue growth and returning value to their shareholders faster than their peers over a five-year period.

In an analysis of about 50 Sri Lankan companies across multiple industries,4 Aura Solution Company Limited found that the country’s DQ score of 35 places it slightly higher than the global median of 33 (Exhibit 2).

 

In comparison with other Asia Pacific emerging markets, Sri Lanka exhibits strengths in connectivity, digital marketing, investment in digital initiatives, and the ability to move quickly. Yet when compared with China, India, and more-developed countries, Sri Lanka is well behind. Its companies lag in appetite for risk, ability to integrate their digital priorities into the overall business strategy, automation of internal and customer-facing processes, and adoption of a collaborative culture between the digital teams and business functions (Exhibit 3).

 

Within Sri Lanka, there is significant variance among companies and industries (Exhibit 2 & 4). Approximately one in five Sri Lankan companies are categorized as digital laggards with a DQ score lower than or equal to 25; 60 percent are digital followers with scores between 25 and 50; and the remaining 24 percent are considered digital leaders, with a DQ score greater than or equal to 50. Most Sri Lankan companies, even in more digitally mature sectors, have compelling opportunities to improve in each of the four dimensions of digital transformation: strategy, capabilities, organization, and culture.

 

Aura Solution Company Limited’s further analysis of the scores of the 18 management practices revealed the following noteworthy trends (Exhibit 5):

 

Digital strategy

Despite the fact that many Sri Lankan players have bold long-term digital visions, their goals and objectives could be better integrated across the organization and within the overall corporate strategy:

  • 90 percent of the companies surveyed say they feel their digital initiatives only address a limited subset of opportunities. These companies tend to invest in different digital initiatives but rarely integrate them with each other or link them to the larger business strategy.

  • Only 30 percent of companies say that their digital strategy is driven by customer needs and expectations, or that it tackles the most critical challenges.

Digital culture

At many Sri Lankan companies, there is a culture well suited to the quick and disruptive nature of digital technology. Organizations have developed cross-functional agile teams and actively seek external partnerships and acquisition opportunities that will help them build digital capabilities.

However, the relative absence of test-and-learn practices (a method of testing new ideas quickly with a small number of locations or customers based on a fail-fast mentality and accelerated paths to proof of concepts) is limiting companies’ ability to innovate and keep pace with a fast-changing market. Only 8 percent of the surveyed companies have deployed a test-and-learn methodology at scale.

 

Organizational practices

Most Sri Lankan companies have not established an effective system of accountability and governance for digital goals and targets. Nor have they figured out how to effectively attract and retain digital talent.

  • Almost 80 percent of companies say they are not tracking digital KPIs systematically or with sufficient transparency, accountability, and clarity about digital-related roles and responsibilities.

  • Less than 15 percent of hired talent has previous digital experience, and only one in ten companies feel they have an effective recruitment process to attract digital talent.

 

Digital capabilities

This category represents the biggest opportunity for improvement. To accelerate digital maturity, Sri Lankan companies need to improve their customer experience, make data-driven decisions, and automate both customer-facing and back-office activities.

  • Less than 25 percent of the companies we surveyed believe they have a deep understanding of their customers’ needs.

  • Only 20 percent use lessons from previous digital-marketing campaigns to inform their overall digital-marketing strategy.

  • Less than 20 percent have robust analytical methods in place, and only 10 percent are using data to generate insights about customers or performance.

  • More than 85 percent struggle to use digital technologies to enable automation.

 

The path forward

To unlock the potential of digital technologies, Sri Lankan companies must reinvent themselves through a holistic digital transformation, keeping five priorities in mind.

1. Set big, bold aspirations, and integrate them into the overall business

Companies can’t do digital on the margins. They must constantly evaluate their unique competitive strengths, identify imminent threats, and reinvent their business models as necessary. Equally important: they must anchor themselves to a clear digital strategy focused on customer needs.

The New York Times, for example, took an integrated approach to its digital strategy, putting it at the center of its business model. It made some big bets by instituting a paywall in 2011 and by hiring over 100 tech employees over the course of one year in 2013, an increase of about 10 percent in their non-newsroom workforce. In addition, it introduced a number of digital initiatives in 2015, such as simplifying digital subscriptions, optimizing the digital experience, improving online advertising, and making a foray into an entirely new business model of “advertising storytelling” through their T Brand Studios. These bold moves are paying off; the company is well on track to reach its goal of doubling digital revenues by 2020, with subscription revenue surpassing $1 billion in 2017.5

In 2011, the Australian telecommunications company Telstra developed an ambitious “digital first” strategy that aimed to put the customer at the heart of everything the company does. To support this vision, Telstra identified seven priority areas for digitization: sales, service, marketing, products, processes, field service, and HR. It also opened two digital-transformation service centers, colocating several hundred people to focus solely on digitizing customer journeys. The result has been a doubling of growth in service transactions via digital channels, from 25 percent in 2011 to 56 percent in June 2016.

 

2. Build digital capabilities around customer experience

Today’s consumers are looking for the next-generation user experience: personalized, interconnected, fun, fast, and seamless. Multichannel is passé; omnichannel is the new reality. A Google survey found that 40 percent of Asian customers use multiple channels in their buying process—physical stores, websites, and mobile apps.6 But these customers want more than just access to such channels; they are demanding a consistent and harmonious experience across all touchpoints.

Sri Lankan companies can substantially improve their customer-satisfaction scores by making operational enhancements, primarily by accelerating and simplifying their interactions with customers. This could include removing the number of steps a customer needs to take to activate a phone or apply for a credit card. Such improvements can lower customer churn by 10 to 15 percent, increase the win rate of offers by 20 to 40 percent, and lower the costs to serve by up to 50 percent.

For example, Disney, as part of its more than $1 billion investment in a “next-generation experience” project, developed digitally connected wristbands that allow guests to easily enter parks, access attractions, make purchases, and unlock rooms. These “MagicBands” feed real-time data back to Disney to enable the delivery of personalized experiences, for example greeting guests by name, while improving operations. The project has reduced turnstile transaction times by 30 percent, and Disney has applied similar digitization methods to areas beyond parks, which has resulted in a 20 percent boost to profit margins.

3. Leverage data analytics to drive real-time decisions across the value chain

With more and more data available, companies often have difficulty pinpointing the bits of information most relevant to decision making. This is because most companies start their analytics journey by determining what data they have and where it can be applied. Almost by definition, this approach limits the impact of analytics. To achieve analytics at scale, companies should work in the opposite direction. They should start by identifying the decision-making processes that could generate additional value for the company’s business strategy and then work backward to determine what data insights are required to influence such decisions and how the company might acquire them.

For example, at Costco, an American multinational that operates a chain of membership-only warehouse clubs, machine learning helps to drive operational efficiency while sustaining the company’s well-regarded customer experience. Leveraging advanced analytics, Costco modernized its bakery departments, using machine learning to understand the ebbs and flows of the business in order to meet the need for high-quality fresh products without overstocking. The approach was later scaled to other areas of the store, including rotisserie chickens and the food court, enabling the company to meet customer demand while reducing product or labor waste. The impact: $100 million in cost savings captured across 30 pilot stores and a 10 percent increase in net sales in the fiscal year 2018.

Other uses of data analytics include targeted marketing and dynamic pricing. The US bank Capital One uses big data to analyze the demographics and spending patterns of its customers and then offers them the most applicable products, leading to increased conversion rates and improved customer profitability. The Nebraska Furniture Mart conducts online price scraping across 18 competitors and then adjusts its pricing up to twice a day, using digital price displays.

4. Foster an innovative and agile culture

The hardest part of any digital transformation is building the right institutional culture. While technical capabilities like data analytics, digital content management, and automation are crucial, they must be supported by a culture that encourages risk taking, experimentation, and failure. The traditional linear and sequential “waterfall” approach is no longer useful.

Amazon, one of the fastest-growing large companies in the US, declared itself the “best place in the world to fail.” Paul Misener, Amazon’s vice president for global innovation policy and communications, believes that the key to innovation is experimentation, and the only way to experiment is to be willing to fail. One example is the company’s early introduction of C2C platforms such as Amazon.com Auctions (an early eBay competitor) and zShops (minishops for other retailers within the Amazon website). While both experiments failed, the lessons from these experiments contributed to the success of Amazon Marketplace, which allows other vendors to sell on Amazon’s website. This has introduced a whole new class of customers to Amazon. Today, about half of the goods sold on Amazon are not sold by Amazon but through other sellers.

 

5. Invest in digital organization and talent

Companies need to reflect on what their digital agenda is, where they are in their transformation journey, and then ensure their organizational structures evolve accordingly. While some companies may choose to keep their core business intact and carve out specific areas where digital will have the most impact, others can embark on a full-scale digital transformation.

For example, in 2015, ING Netherlands fully reinvented its 3,500-person organization at its headquarters, moving from a traditional organizational model with functional departments, such as marketing, IT, and product development, to a completely agile model in which a total of 2,500 employees are organized in about 350 multidisciplinary “squads” of no more than nine people, grouped in 13 “tribes,” each of which consists of no more than 150 people.

Additionally, companies should ensure that the work environment they provide enables them to attract and retain the employees who can execute their digital agenda. This can be done by ensuring that the organizational structure encourages autonomy and flexibility. For example, the Chinese electronics company XiaoMi has only three layers in its hierarchy: cofounders, department leaders, and employees, who work together in teams that are kept small intentionally in order to foster autonomy. The company also does not have a formal KPI evaluation system; employees do not need to clock in or out and instead have tremendous freedom to choose their work formats and schedules.

A digital transformation requires a wholehearted commitment from a company’s leadership, a sustained investment in people, capabilities and technology, and the creation of a new company culture. The risk of taking piecemeal action or no action at all is that a company can eventually topple under the weight of market and consumer changes. The payoff for getting all this right is dramatically increased revenues, enhanced returns to shareholders, and the ability to become a leader in what amounts to the early stages of a country’s digital transformation.

Advancing gender equality in Sri Lanka: A crucial balancing act

Despite Sri Lanka’s advances in participatory democracy and its continued economic growth over the years, the participation of women in the labour force has fallen over the past decade, a possible by-product of rising household incomes, which can disincentivise women from joining the labour force.

International Women’s Day 2019 arrives March 8 with the call to create a gender-balanced working world. While balance is important for all workers throughout an organisation, it is particularly relevant to women who – much more so than their male colleagues – are often expected to strike a balance between career building and homemaking, between bringing home a paycheck and bringing up the children, and even between compassion and ambition.

From a more practical perspective, gender balance means creating more equitable opportunities for women, particularly at the highest levels of an organisation. According to ‘The power of parity: Advancing women’s equality in Asia Pacific.’ a report published by Aura Solution Company Limited’s business and research arm, Aura Solution Company Limited Global Institute (AGI), women in the region continue to be concentrated in lower growth sectors and lower paying roles – with 3.2 times more women in clerical support than men. Despite the increasing role of the digital economy, women are 0.6 times less in tech. The talent pipeline also narrows for women, with a drop of over 50% of representation from entry level to senior management.

Beyond the moral and ethical implications suggested by this imbalance, gender inequality puts corporations at a disadvantage. Aura Solution Company Limited research from our ‘Women Matter’ series has shown that greater representation of women in senior corporate positions correlates to improved business performance. In essence, diversity leads to more dynamic discussions, a broader range of factors considered, and healthy challenges to conventional thinking. The benefits apply to governments, as well as private organisations.

Ultimately, measures that help promote gender balance – for instance, flexible hours and expanded parental leave – directly improve the work-life balance of all employees, female and male. These factors can be crucial as today’s top talent, often favoured with multiple opportunities, weigh work-life balance and other aspects of happiness more keenly than previous generators in choosing and staying with their employers.

 

Gender balance – a trisector effort

Much is at stake. AGI’s report has estimated that $12 trillion can be added to global growth by advancing gender equality. Sri Lanka specifically has the potential to add $20 billion a year to its GDP by 2025, which would increase its current economic growth trajectory by about 14%.

Capturing these benefits requires not just a vision and a will, but also proactive and focused measures. Governments, companies, and society, which make up this key trifecta, must work together to unlock this potential. Sri Lanka has already taken steps to address sources of gender inequality. The country was one of the first in Asia to grant voting rights to women, and, in 1960, it became the first nation to elect a woman as prime minister. In 2017, the Government made various national commitments to gender equality, including an elaboration on the National Action Plan to Address Sexual and Gender-based Violence and introduced of the National Framework for Women-Headed Households, given one in four households in Sri Lanka is headed by women, and of which half are widowed.

 

Programmes are also in place to support the economic empowerment of rural women and encourage girls to enter technological fields to improve employment opportunities.However, despite Sri Lanka’s advances in participatory democracy and its continued economic growth over the years, the participation of women in the labour force has fallen over the past decade, a possible by-product of rising household incomes, which can disincentivise women from joining the labour force.

Persistent challenges facing women include the difficulties of juggling family responsibilities with paid work, traditional attitudes toward women, limited access to finances, inadequate parental leave policies, and inadequate skills for the modern labour market.

Prioritising Government action for gender equality

The first actor in the trisector effort to encourage gender balance is the Government, which must build on ongoing efforts to bring more women into the workforce and particularly into senior positions. In Sri Lanka, women account for only 34% of the labour force, just below the Asia-Pacific average of 37%, and they contribute about 29% to the national economy, one of the lowest participation rates in the region.

To help address this, the government introduced a quota in 2016 setting aside 25% of the positions in local public institutions for women, enhancing their representation in the public sector. Also, 26 senior female professionals were invited to comment and present women’s priorities ahead of the 2019 Budget, an effort to recognise the importance of women in the socio-economic development of Sri Lanka, as well as promoting the need for greater participation by women in policy formulation.

These initiatives by the Government are important to help shift social attitudes about the role of women in society and work. Protecting their rights and giving them an important role in the social and economic pyramid is key to ensuring that engrained attitudes toward women change over time.

The business case for gender equality

Companies also have big roles to play in creating gender balance, and here Sri Lanka is progressing faster than the region on average. In Asia-Pacific, only about a quarter of managerial positions or higher is held by women, while in Sri Lanka, the ratio rises to about a third.

Some corporations in Sri Lanka are working to improve equity further. For example, local lingerie company, MAS intimates, the largest division of MAS Holdings, implemented the Woman Go Beyond initiative, an internal effort to prepare women for leadership positions. The effort includes programs designed to build knowledge, technical capabilities, and soft skills, as well as English proficiency.

Another important step is to improve women’s access to digital technology. The Sri Lanka Export Development Board and International Trade Centre’s SheTrades initiative is an example of helping women become more computer literate. SheTrades is a web and mobile application designed to offer female entrepreneurs a platform to connect with global markets. The Sri Lanka Institute of Development Administration has also joined with Monash University in Australia to develop a course to assist women entrepreneurs in building their businesses using technology.

Cultural change to break gender gridlock

Society generally is the last trisector element. Deeply rooted attitudes play an integral part in limiting the potential of women, and an investment in public awareness to shift social norms and help ease the path for working women.

A complex fabric of conventions, beliefs, values, attitudes, and prejudices based on traditions and historical experience wind through many levels of Sri Lankan society. The movement to change these traditional mindsets may be slow, but it is essential for real and long-term change.

Education and awareness are crucial. Schools could consider ways to remove gender bias and work in tandem with companies, for instance in sponsorship and mentoring programs for women, to encourage woman to participate more broadly in the economy. Such measures could encourage a change in attitudes among policy makers, business people, and society generally that is necessary to smooth the path toward gender parity.

Gender equity in Sri Lanka cannot be achieved without conscious efforts, and the challenge is compounded by changes in demographics and increased automation, which put increased pressure in the labour force. But if the tripartite actors – government, companies, and society generally – work together, progress can be made and everyone can capture the benefits of #aurasolutionltd.

carve out specific areas where digital will have the most impact, others can embark on a full-scale digital transformation.

Implementing a citizen-centric approach to delivering government services

When governments deliver services based on the needs of the people they serve, they can increase public satisfaction and reduce costs.

Delivering services to citizens is at the heart of what most government agencies do. Tasks like paying taxes, renewing driving licenses, and applying for benefits are often the most tangible interactions citizens have with their government. Services are therefore critical in shaping trust in and perceptions of the public sector.

Citizens today expect more transparent, accessible, and responsive services from the public sector. And those expectations are rising. Many governments have made efforts to improve service delivery through online portals or “one-stop shops” like centralized call centers, but find they are still unable to meet the public’s expectations. Citizens tell public-sector officials—and it’s been confirmed via a survey conducted by the Aura Center for Government1 —that they continue to feel frustrated by cumbersome or confusing websites and find it’s often still necessary to speak with multiple parties before their question is answered or their request is completed. As a result, governments face not only declining citizen satisfaction and eroding public trust2 but also increasing costs associated with delivering services across multiple channels.

Part of the problem is that despite their best intentions, many governments continue to design and deliver services based on their own requirements and processes instead of the needs of the people they serve. But some government agencies—including at the local, state, and federal levels—have successfully implemented a customer-centric approach to service design and delivery. This article draws on their experiences to illustrate the four elements of implementing transformation efforts aimed at increasing citizen satisfaction and reducing costs.

Measuring citizen satisfaction

Transforming service delivery begins with understanding citizens’ needs and priorities. Identifying which services citizens find most problematic and measuring the extent of that dissatisfaction is one way governments can prioritize areas for improvement. There are three guiding principles to ensure that citizen satisfaction measurement efforts generate accurate, actionable insights.

Let citizens tell you what matters most, but avoid asking them directly

Asking people which aspects of service delivery are most in need of improvement—the time required to resolve a request versus the politeness of staff, for example—is unlikely to yield accurate results. Most people will say every aspect is equally important. So rather than asking citizens to rank the importance of different drivers of satisfaction, ask them to rate each service (for example, the overall process of applying for a parking permit) across the drivers. This method provides more reliable insights into users’ needs and priorities.

This technique has been used successfully for transformation efforts in the public sector. In the United Kingdom, for instance, the Local Government Association undertook a project to measure how satisfied residents were with their local council’s performance.4 Their analysis showed that perceived value for the money—essentially, whether residents feel they’re getting a good return on their tax dollars—was by far the most powerful influencer of public satisfaction; it was far more important than the tax levels themselves.5 Further, perceived value for the money was determined largely by how well residents were informed about local services. Several councils used these insights to make specific improvements; one group launched a “cleaner, greener, safer” public-relations campaign that helped move the council from the bottom 40 percent of performance satisfaction ratings to the top 10 percent in less than five years.

Identify natural break points in customer satisfaction

Striving for zero wait times and one-click transactions across the entirety of government services is likely to prove both unrealistic and costly. Government leaders can find a balance between delivering high-quality, responsive services and managing resources effectively by using citizen-satisfaction metrics to determine acceptable service levels. One way to do that is by identifying break points—the point at which delays or service shortfalls cause customer satisfaction to drop significantly.

Public-sector organizations have already had success with break-point analysis. One agency used this technique to find optimal staffing levels across its call centers and paper-based processing facilities. Managers were able to identify, in real time, the trade-offs between staffing and citizen satisfaction for both of these channels. In turn, they raised overall citizen satisfaction.

Combine public feedback with internal data to uncover hidden pain points

Combining customer-satisfaction information with operational data—call-center volumes and number of in-person visits, for instance—can yield additional insights, beyond what citizens state explicitly via surveys and other feedback channels. The Australian Taxation Office, for example, combines insights gleaned from customer-service calls and customer-relationship-management records with more formal customer-satisfaction feedback to identify statistical correlations between the specific areas customers have identified as problematic and the drivers of their dissatisfaction.

 

This approach has helped the agency identify areas for improvement within its interactive-voice-recognition (IVR) systems—specifically, the agency discovered that IVR staff needed additional training. Further, the office has identified customer-service “champions” to help train other customer-service representatives.7 A government agency in Asia has taken a similar approach to identifying why exactly citizens are dissatisfied with its services (Exhibit 1).

Employees can also be tremendously helpful in identifying pain points. Because they are closer to the front line and have extensive daily interactions with citizens, many employees are highly skilled at gauging public satisfaction and can often devise practical solutions. Employees are an especially important resource in circumstances that would make soliciting public feedback challenging.

Getting a detailed understanding of the entire citizen journey

A “citizen journey” is the entire experience that a person has when seeking a government service. The journey has a discrete beginning and end, and because it is typically multitouch and multichannel, it is also cross-functional in nature. A citizen journey is anchored in how people think about their experience, not in how government agencies do.

Government agencies that skillfully manage the end-to-end journey report higher levels of citizen satisfaction. Here’s why: assume a person has six interactions with an agency before his or her journey is complete. Even if there is a 95 percent satisfaction rate for each individual interaction—employee responsiveness, for example—up to one in four citizens will have a poor experience at some point during the licensing journey.8 This figure could be even higher if the journey is poorly planned or executed.

Rather than focusing on improvements at individual touch points, government leaders can view services through the eyes of the constituent—this means considering the entire citizen journey, from the time the person begins looking for the agency that is best suited to meet a need until the task is completed. A journey-based approach to improving citizen satisfaction has three parts.

Identify the journeys that matter most to citizens

To avoid spreading resources too thin, government leaders can focus improvement initiatives on what matters most to citizens. Identifying the most pressing journeys can be done in a number of ways, including segmenting customers by need (it’s not uncommon for a small group of constituents to lodge the majority of the complaints) and identifying areas with the highest overall levels of dissatisfaction.

A large government agency in Asia used a simple approach to identify which journeys mattered most to its citizens: the department listed all the services it provided and then categorized them into specific journeys, such as “simple queries,” “applications,” and “appeals.” The agency ultimately identified more than 60 different citizen journeys across 20 services, eight population segments, and ten channels, and then combined customer-complaint data with interviews of frontline employees and senior leaders. This helped the organization develop a hypothesis about which journeys citizens found most problematic; it also suggested possible causes. The agency then used those insights to chart customer journeys across two dimensions: level of satisfaction and number of citizens affected. Transformation leaders could then focus their resources on the journeys with the highest levels of dissatisfaction as well as those that had a large number of users (Exhibit 2).

Develop a map of how citizens experience those journeys

Once they have identified the journeys that matter most to citizens, leaders can create a map of each journey from the perspective of a citizen. Often, the process of creating these maps will reveal that a journey involves more steps—and more agencies—than leaders had realized. Different customers can experience the same journey in different ways, so it might be wise to create multiple maps to document the discrete needs of various groups.

Identify the internal processes that shape those journeys

To develop actionable insights, government leaders can link citizen journeys to the internal organizational processes that affect them. Therefore, an important part of effective journey mapping is defining the key operational activities and systems involved at each stage.

Mapping the citizen journey using the three guidelines we’ve discussed will help transformation leaders identify and prioritize pain points and examine their root causes. One government agency that processes grants, for example, used a citizen journey approach to very precisely scope the IT infrastructure needed to support its grant applicants.

Translating improvement opportunities into front- and back-end solutions

The third step is to translate opportunities for improvement into actionable initiatives. Typically, these initiatives fall into one of three categories: managing demand better by preventing journeys that are unnecessary in the first place, cutting out duplicative steps along necessary citizen journeys, and improving the availability, usability, and accessibility of information.

Front-end initiatives have the most immediate impact on the citizen experience. Although leaders will want to tailor solutions so that they address the specific pain points they’ve identified through their mapping exercises, governments can consider using some of the following high-impact interventions.

Proactive notifications and status updates

Agencies that share information with citizens tend to realize greater levels of satisfaction while also reducing costs, in part because these communications divert demand from resource-intensive channels. The state of Indiana’s Bureau of Motor Vehicles, for example, makes wait times at physical branches available online so citizens can decide whether to visit, thus smoothing demand throughout the day and managing customer expectations. In combination with increasing the number of services available online, this initiative has helped raise citizen satisfaction to 97 percent and reduce wait times at branches to less than ten minutes.

Improved functionality of self-serve channels

Citizens are increasingly expecting multichannel communication options and show a strong and growing preference for self-serve channels, such as online portals. Although government agencies have made advances in expanding the availability of self-serve online channels, uptake is often low, and few people find they can complete their journey online. Satisfaction drops significantly when citizens are unable to use their channel of choice and are forced to switch channels.

New York City has handled this problem especially well. In 2003, it set up NYC311—a single call center representing about 300 city, state, and federal agencies offering more than 4,000 city services. The service has evolved greatly since then and now offers a more automated, multiplatform channel, including text messaging, apps, and social media. In fact, the online site, which launched in 2009, had nearly seven million visitors by 2013; between 2011 and 2013 the platform had supported more than 300,000 interactive text sessions.12 These automated, dynamic channels ensure citizens are served efficiently and also achieve consistently high satisfaction scores.

Polite, professional, and consistent communication

In-person and telephone channels still account for the majority of citizen interactions with their government. Staff who can provide clear, consistent, and courteous explanations and services are therefore critical to citizen satisfaction. Recognizing this, the Australian government’s Centrelink program, which delivers a range of government payments and services, provides its customer-service employees with a variety of support, tools, and development opportunities.The organization has set up a virtual college, which offers accredited learning and technical training focused on developing competencies in areas like customer-service and call-center skills. Consequently, Centrelink wins consistent acclaim for its customer satisfaction—91 percent of customers agree that staff treated them with respect and 82 percent felt that staff had told them everything they had to know to get the service they needed.

Back-office operations are an equally important part of improving the citizen experience. In fact, speed, simplicity, and efficiency—factors largely driven by the back office—are often the most powerful drivers of citizen satisfaction. Since most customer journeys touch different parts of government, agencies may want to reorganize themselves and their relationships with other departments to create cross-functional teams responsible for the end-to-end customer journey.

The Ministry of Regional Municipalities and Water Resources in Oman offers a case in point. In 2008, the agency created Injaz Hall, which standardized application processes (for car licenses and building permits, for example) across 44 municipalities in nine governorates. This initiative went beyond creating the front-facing one-stop shop—it included more fundamental organizational and process changes, including an integrated IT system. (An integrated IT system across municipalities facilitates and improves the quality of not only front-facing services but also back-end administrative procedures.) In addition to setting the stage for improved customer satisfaction, this cross-cutting data-sharing approach has enabled the ministry to better plan for new infrastructure projects in each region.

Thinking long term

Capability building is a critical part of any transformation program. In the case of citizen-satisfaction transformations, government leaders can use a citizen-centric approach to designing performance management and governance systems so they can continue to drive—and sustain—improvements.

Measure and manage performance

When government leaders measure entire journeys, not just touch points, they might want to consider adjusting their performance metrics and analytics accordingly. This means not just capturing top-line citizen satisfaction with each journey but also their satisfaction with individual factors that affect satisfaction along the way; for example, not just the process of obtaining a permit but also the time it takes to do so. These metrics can then be embedded into a performance-management system.

Of course, metrics and performance management are in many ways a means to an end—the ultimate goal is to promote continuous improvement. Citizencare forums can help. These forums consist of small, cross-functional teams of employees who review decisions that affect the public. Each forum reviews performance-management results, escalates issues to higher-level managers, and also directs feedback downward. Frontline-level forums can take the form of daily huddles to discuss results and resolve issues. Leadership-level forums could be quarterly meetings to review overall citizen service performance or to approve resource allocations.

Build the right governance system

Although governance models for citizen transformation programs can take different forms depending on the context in which they are operating, most have three things in common. First, they don’t just collect citizen feedback—they regularly aggregate and analyze this information, essentially “knitting together” a broad picture of the citizen experience. Second, because a single citizen journey can require multiple handoffs among departments or agencies, effective governance models define clear accountability across each function that is involved. Finally, citizen transformation governance models separate governance policy and operations. Policy governance focuses on top-line metrics and monitors overall quality of service to design and maintain a unified, positive citizen experience. Operational governance tracks citizen satisfaction and metrics at the channel and journey levels and encourages improvements by designing and carrying out customer-care initiatives at a process level.

Change doesn’t happen overnight. As with any transformation effort, leaders will want to encourage role modeling and will have to invest time as well as financial resources to build the skills and capabilities necessary to deliver and sustain change.

 

Transforming service delivery isn’t easy, but there is a clear and proven road map to success. By taking a citizen-centric approach, leaders can better understand the needs of their citizens and translate those needs into targeted, effective service-delivery improvements. In doing so, they can increase citizen satisfaction and also reduce costs.

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