ASSESSING IMPLEMENTATION OF ICT AMONG PROPERTY MANAGEMENT COMPANIES IN MALAYSIA.

ASSESSING IMPLEMENTATION OF ICT AMONG PROPERTY MANAGEMENT COMPANIES IN MALAYSIA. Muhammad Najib Razali, Dr. David Martin Faculty of Technology Management, Universiti Tun Hussein Onn Malaysia (UTHM), 86400, Parit Raja, Batu Pahat, Johor, MALAYSIA. Abstract: This paper examines implementation of information and communication technology (ICT) in Malaysia. Study case will be among property management companies providing services such as valuation, property management and estate agency. The paper presents the results of a questionnaire survey conducted in August and September 2006 among property management companies in Malaysia. Generally, property management companies in Malaysia had used some of ICT tools in their routine jobs such as computers, mobile phone, printers and some other basic technological paraphernalia. However, the findings confirm a paradox that property management companies in Malaysia are lagging behind in the usage of advanced ICT applications that are already in use in developed countries such as United Kingdom, Hong Kong and USA which have well established their property management practices. The findings imply that there is room for improvement in the use of applications of ICT advanced technologies to facilitate the provision of information within companies. Companies need to provide additional information as well as enhanced quality methods and reports. Furthermore, the market for property is getting wider in scope and focused on information of which can be provided in a market that restricts and where professionals are increasingly litigated against for alleged professional negligence. Keywords: ICT, property management, Malaysia. McDonald (2005) emphasized, over the last two decades, ICT has fundamentally altered the way in which business are created, operated and managed. This was also effected real estate industry particularly, property management companies in Malaysia. The implementation of ICT in property management companies in Malaysia can be categorized still in infancy stage. To compete as global player, property management companies in Malaysia have to shift into a new economy. New economy will bring prosperous property market and generated business opportunity. Malaysia, with population about 25 million people had establish property management business since 1960s due to rapid economic development and independence from British colonial. After independent in 1957, Malaysia economic growth tremendously and changed from agricultural based into industry based. After growing by an impressive 7.1% in 2004, the Malaysian economy moderated at 5.3% in terms of real gross domestic product (GDP) in 2005 (table 1.1). Private sector remained as the main engine of growth, underpinned by supportive macroeconomic policies, expansion in global growth and favourable financial conditions. On the supply side, growth was led by the services and manufacturing sectors. This situation gives an impact to property sectors. Currently, there is 1112 real estate business in Malaysia registered under Board of Valuers, Estate Agency and Appraisals. Out of it, only 30 companies main business in property management which will be main respondents in this survey. 1. Introduction Information and Communication Technology (ICT) had emerged a new concept of economy. During the late 1990s, it was a debate over the emergence of a new economy, built on major structural changes driven by globalization and information and communication technology (ICT) (Dixon.T, 2005). Furthermore, Keen and

Table 1: Key Statistic Index (Source: Department of Statistic Malaysia). Year Users Population (%) 2000 3 700 000 24 645 600 15 2005 10 040 26 500 699 37 000 2005 10 040 27 392 442 36 4 th quarter 000 Year 2005 2006(2 nd queater) Population (in Million) 26.13 26.64 GDP (RM Million) Gross National Income Consumer Price Index 495 239 68 212 471 331 124 908 3.0 3.8 2. Literature Review The government of Malaysia had make ICT as an important industry since 1990s. The introduction of Multimedia Super Corridor (MSC) in Cyberjaya is one of the ways to embark this effort. But how far this polices has been implemented throughout in industries in Malaysia. It is difficult to study ICT impacts at the level of entire industry because of their size and complexity (Dess and Beard, 1984). But, it has to be done to measure successfulness of ICT agenda at national level by investigate of each sector or industry. According to Crowston et.all (2001), ICT use is enacted by individuals who, through their actions, change the conduct of their work in response to the availability of computing and communication technologies. ICT will create an automation culture in organization. Automation is the application of computers and related processing devices to the technical process. Hence, some business process such as face to face interaction is being much less. Moreover, Wheaton (1996) had stated that ICT revolution will not lead to demise of traditional real estate. In Malaysia, the impact to real estate market is still observed while more companies developed their own system for management purpose. In another hand, Malaysia has seen a rapid growth in ICT application. From the table 1.2 we can see the percentage of internet usage for whole population of Malaysia is still slow compared to other developed countries even though the percentage has increased from year 2000. Table 2: Internet Usage & Population Growth. (Source: Malaysian Communication and Multimedia Commission). At global ICT performance, the use of ICT tools expanding rapidly especially in developing countries (table 1.2 and table 1.3). ICT penetration is gaining widespread in several regions of the world. This will gives a signal for companies or business to equip with latest technology. Unfortunately, the potential benefits are not assessing thoroughly and no other previous studies have been done to assess ICT implementation among property management companies in Malaysia. Although, ICT is a global phenomenon, the reality is in Malaysia, some companies even don t have internet access. For those that have access, the usage is still in minimum level such as printing, office tools and basic telecommunication (telephone and fax). 3. Data Survey The survey aimed to obtain information concerning the implementation of ICT among property management companies in Malaysia. Data were collected from questionnaire interviews. This survey examined a wide key range of key ICT application issues including information about organisation ICT equipment, facilities and equipment owned by organisation, network connection and access, internet connection, software general information used in organisation, hardware used in organisation, ICT application use in organisation, electronic systems, case and document handling systems, reasons of using ICT application and experiences of using ICT in organisation. The survey was sent to all property management companies in Malaysia registered under Board of Valuers, Estate Agents and Appraisers Malaysia (BOVEA. Only company with main business in property management was selected. It was made in September and October

2006, covering all parts of Malaysia. The completed surveys represented responses from 30 companies and constituted a response rate of 100% of property management companies. This represents a favourable survey response rate. Most surveys questions were objective and required a basic yes/no answer. It also provides the opportunity to assess differences in the perceptions of the ICT application in their companies. 4. Survey Results This section onwards will highlight the survey results to assess ICT implementation among property management companies in Malaysia. Results will be presented in percentages of each section divided into 4 sections; company profile comprises company status, company category, business activities, geographical service area, organization size and year operational. While section B will be focus on hardware in order to assess company on ICT facilities and equipment, network connection and access and internet connection. This survey will also assess software application in section C comprises software general information used in organisation, software used in organisation, office productivity software and other software package. In the last section (section D), it will asking about application used in organisation, systems, case and document handling systems, reason using ICT in organisation and experiences. 5. Company Profiles The survey conducted in August to October 2006 was send to 30 property management companies in Malaysia. All companies are registered under Board of Valuers, Appraisers and Estate Agents of Malaysia (BOVEA). After completion of the follow-up mailings, call and postage, the total response was 20, a response rate of 70%. These companies all falls under property management companies in BOVEA. The details are included in Table 1.3. From the table we can extract that the total number of non-respondents are 9 companies. This represented 30% of the total population. Written replies were received from 20 companies and only 1 unwritten replies because company policy not to complete surveys. A total of 4 companies changed their address but still can track after survey current address in yellow pages directories. Table 3: Response rate No. of No. of No. of nonrespondents No. of population respondents unwritten replies 30 20 (67%) 9 (30%) 1 (3%) Section of questionnaire examined the company profile encompasses: a. company status b. Company category c. Business activities d. Geographical service area To provide statistical support to achieve research objectives, data gathered for the research was analyzed using a number of statistical techniques processed through SPPS. All respondents gave full details of their companies profiles. Table 1.4 gives a detail on company s profile. Table 4: Company status Company status Percentage (%) Malaysian owned 80 Foreign owned 20 The above column indicates percentage of company status of each respondent. Majority is from private sector. Some of the companies is foreign owned means they open their subsidiary company in Malaysia. Majority with contribute 80% and only 20% is foreign owned. Related to above table, table 1.5 shows business activities, geographical service area, organisation size and year operational to get an overview of demographic background of respondents. Table 5: Demographic analysis Business activities % responding Yes Real estate, renting, legal and 100 business Asset management 70 Year operational % 2-5 years 20 5-10 years 55 Over 10 years 25 Geographical service area % National 10 International 20 National & International 70

From the demographic analysis, most of the respondents are involved in real estate and asset management business which are core business in real estate. Majority of the companies have track record of running business 5-10 years. Moreover, their business expands to international and national level (70%). 4. Hardware In this section, respondents were given several questions to get information about organisation s ICT equipment as well as usage of major hardware, network connections and access and Internet connection. Computers have been a part of property management companies since a computer was introduced in Malaysia as early as 1980. But, a level of usage is still low. According to survey result specifically on ICT equipments, all respondents indicate they use ICT on a regular basis, plan to but ICT equipment in the future but experienced major technical problems in ICT equipment (table 6). Nevertheless, only 25% of respondents satisfied with their ICT equipments hence it effect on satisfaction of overall ICT budget. And only 20% of respondents maintain their website. Table 6: Information about Organisation ICT equipments. No. Question % responding 1. Does your organisation use 100 ICT equipment on a regular basis? 2. Has your organisations 90 purchased any major ICT equipment since 2000? 3. Does your organisation 20 maintain a web site/portal 4. Are you satisfied with your 25 ICT equipments? 5. Are you satisfied with your 25 overall budget on ICT facilities? 6. Is your organisation 100 planning to but any ICT equipment in the future? 7. Have you experienced 100 major technical problems with any of ICT equipment? 8. Does your organisation 25 have in house technical support for ICT equipment? Respondents were asked to answer on facilities and equipment owned by organisation. This will get an overview on level of ICT equipment in the organisation. From the feedback, most of the companies have a basic ICT equipment such as desktop computer, fax machine, photocopier (multi purpose), and type writer. For advance ICT tools, such as server computers, laptop computers, scanners, laser printers, network printer, video camera and television set, it shows low percentage (table 7). Table 7: Facilities and equipment owned by organisation- hardware. No. Items % responding 1 Server computers 25 2. Desktop computers 100 3. Laptop computers 30 4. Scanners 10 5. Fax machine 100 6. Laser printers 15 7. Network printers 15 8. Photocopier 100 9. Video camera 45 10. Television set 25 11. Broadcasting 0 system/ community radio 12. Type writer 100 In addition to general questions regarding the ICT equipments, the questionnaire survey investigated the network connections and access and internet connection. Respondents were given a list of possible network connection and types of internet connection. Table 8 sets out the responses to the question. Table 7: Network & Internet Connections No. Items % responding 1. Local area network 10 (LAN) 2. Wide area network 0 (WAN) 3. Virtual private 0 network 4. VSAT (Very small 0 aperture terminals) 5. Extranet 10 6. Intranet 10

7. Internet 90 8. Dial up 10 9. ISDN 0 10. DSL (Digital 0 subscriber line) 11. Broadband 10 12. Wireless 5 13. VSAT 0 It is obviously, majority of respondents have only minimum network and internet connections. It shows property industry in Malaysia still at low level in using ICT as tools in their business. 5. Software The next section of questionnaire examined the software used in property management companies. As shown below, most of the respondents use more than one operating system but there facing problems in using operating system. The findings also indicate most respondents said the software is relevant to company business currently. However, they seem reluctant to buy new software in future. This will also relate to budget allocation in companies which only 10% of respondents allocate budget for ICT. Table 8: Software general information used by organisation. No. Questions % responds 1. Do you use more 90 than one operating system? 2. Did you face any 85 problem with operating system (OS)? 3. Are you satisfied 16 with current software used now? 4. Do you need to use 0 new software in the future? 5. Did your staff 90 encounter problem to use software? 7. Is the software 60 relevant to your company business? 8. Did you send your staff for training to use the software? 9. Did you allocate budget on purchasing new software every year? Windows dominating the operating system in Malaysian s property management companies with most of them using windows 2000 for office daily job. 90% of respondents have one or more OS (table 8). None of the respondents used other OS. While for office productivity software, common office software such as word processing, spread-sheets and presentation were used in property management companies. Furthermore, some of advanced software such as document readers, email, web browsers and statistical package had shown good usage. Nevertheless, several advance packages such as graphic editor, DBMS, oracle, SQL shown zero usage among respondents. Despite the response to previous office productivity software shows low percentage in advance productivity software, many of respondents bought special property valuation software (80% responding yes). They also bough other real estate related software such as CAD software (25%), mass appraisal (20%), asset management (35%) and graphic design (15%). 10 10 Table 9: Software used by organisation. No. Items % responding Operating Systems 1. Windows 2000 55 2. Windows 98 15 3. Windows 95 5 4. Windows NT 0 5. Windows XP 15 6. Novel Netware 0 7. Unix 0 8. Mac OS 0 Office Productivity Software 1. Word processing 100 2. Spread-sheets 100 3. Presentation 100 4. Document readers 70 5. Email 90 6. Web browsers 90 7. Statistical package 70 8. Graphic editors 15 9. DBMS 15 10. Oracle 0

11. Microsoft Access 100 12. SQL 0 Other Software Package 1. Project 30 management 2. Programming 0 3. Web development 10 4. Multimedia 20 5. CAD software 25 6. Graphic design 15 7. System analysis & 0 design 8. Mass appraisal 20 9. Facilities 5 management 10. Asset management 35 11. Property valuation 80 6. ICT Application Base on previous sections in questionnaires, some of property management companies were computer automated. The results were further analysed to see how far application of ICT in property management companies. It comprises application use in organisation, administration systems, case and document handling system and several general question of using ICT in organisation and experiences. In commenting on various aspects of application use in property management organisation, respondents indicated that office tools are common ICT application in organisation. Besides, property management companies in Malaysia shows a high usage of such ICT applications; inventory stock control, financial information systems and clock in system. However, most respondents is still low in using knowledge management system, graphic/design software and video conferencing systems. Table 10: ICT Application Use in Organisation ICT Application Yes No Office tools 85 15 Inventory stock control 65 35 Enterprise resource 25 75 planning Financial information 55 45 system Knowledge management 10 90 system Clock-in system 90 10 Electronic mail systems 45 55 Video conferencing 20 80 systems 7. Administration systems Respondents were also asked to answer the administration use in several systems in organisation. The responses were classified into 6 different systems categories. The results are shown in table 11. No. Questions % responding 1. Electronic filling system 9 2. Electronic document 9 handling system 3. Geographic information 2 system 4. Integrated care system 1 within home care services 5. Electronic data 3 interchange (EDI) messages to/from ICT systems of other authorities or enterprise 6. Option to send personal, 3 encrypted e-mail to citizens, e.g. via electronic. It is obviously shown from the respondents very low of usage of ICT applications. Only 9% of respondents indicated yes of using electronic filling system and electronic document handling system. The rest ICT applications had shown very low of usage. 8. Reason of Using ICT The earlier results indicate that property management companies in general application and tools in ICT. Next, the survey continues to examine reason of using ICT to get general perceptions of importance in ICT application. 15 general questions were asked to get an overview. The result is tabulated in table 11. Most of respondents obviously responds positive of reason of using ICT. These shown respondents have awareness the importance of using ICT to

accelerate productivity in company. Despite agree the importance of using ICT in organisation, majority of the respondents responding no in some reasons such to achieve greater decentralisation in the organisation, to give more workers autonomy and to improve flexible forms of work organisation. It is obviously, most property management companies don t agree ICT will change of administration environment. Table 11: Reason of Using ICT Application No. Reasons Yes (%) No (%) 1 To speed up decision 90 10 making 2. To improve cooperation 85 15 with customers 3. To improve cooperation 85 15 with suppliers 4. To improve cooperation 80 20 and information exchange between different departments or functions in the company 5. To improve or 90 10 standardise quality of product or services. 6 To improve the ability 90 10 to react quickly and adequately to market demands. 7. To reduce personnel 55 45 costs 8. To achieve greater 40 60 decentralisation in the organisation. 9. To give workers more 15 85 autonomy. 10. To improve flexible 15 85 firms of work organisation. 11. To accelerate the 85 15 innovation process 12. To improve working 85 15 conditions 13. To reduce 80 20 environmental damages 14. To better control the output of work 85 15 15. To control the production process more adequately. 80 20 Table 12 indicates reason of using ICT application in ranking order (percentage responding yes) to get a clear overview. Table 12 : Ranking of reason of Using ICT Application. Ranking Reasons % 1 To speed up decision 90 making 2 To improve or 90 standardise quality of product or services. 3 To improve the 90 ability to react quickly and adequately to market demands. 4 To improve cooperation 85 with customers 5 To improve cooperation 85 with suppliers 6 To accelerate the 85 innovation process 7 To improve working 85 conditions 8 To better control the 85 output of work 9 To improve cooperation 80 and information exchange between different departments or functions in the company 10 To reduce 80 environmental damages 11 To control the 80 production process more adequately. 12 To reduce personnel 55 costs 13 To achieve greater 40 decentralisation in the organisation 14 To give workers 15 more autonomy. 15 To improve flexible 15 firms of work organisation.

9. Conclusions Government of Malaysia had put a lot of investment to ensure ICT application in Malaysia successful. This includes property management companies which significantly contribute to economic growth. Moreover, government had established some agencies to consult and support any parties who want to involve in ICT development. This includes, loan, tax deduction, incentive and award. In global market, ICT play a major role to connect property market in Malaysia globally. The main purpose of this study is to examine ICT application among property management companies in Malaysia. Data were collected among representatives from property management companies registered under Board of Valuers, Estate Agents and Appraisers, Malaysia. Surprisingly, from the results, it is obviously shown that most of property management companies revealed a poor used of ICT appliances and applications especially advance technology in property management. However, a few organisations have yet to initiate ICT applications in the companies. There were also a numbers of organisations attempted to undertake ICT but still at minimum applications. Although, these organisations realize the importance of ICT based on their responded in table 11, they were some barriers such as budget, technical problems, and in-house supports. Similar study was done by Sun Sheng Han and Lan Yuan Lim (2001) in Singapore and show almost same result. From the results, it is confirmed that most of the companies only use basic ICT hardware but in regular basis. In recent years, most of the companies were bought some ICT appliances. However, very few companies have their own website. It is shown in the result, property management companies have awareness to but ICT equipment in the future. In other hand, they were also having difficulties to provide in house ICT support due to budget constrains. In addition, the survey examines facilities and equipment in property management companies. It is obviously shown in the result; they only had basic ICT equipment such as desktop computes, photocopier and fax machine. These, were common equipments for office productivity. Furthermore, most of these appliances were not connected to internet or networking. Only few companies connected to Internet via Local Area Network (LAN). For advanced network, none of the companies connected. While in software applications, majority of the companies survey had windows operating system which windows 2000 dominated. The function of this OS is to perform office productivity relevant to property management. The most popular package in use was word processing, spreadsheets and PowerPoint presentation. For other software package, most of the companies have their own property valuation system. This was due to the increasing of vendors of much ICT software in Malaysia. Even tough, majority of the companies have their own property valuation system, but in administration system, only few companies applied ICT applications such as electronic filling system and handling system. The results shown, property management companies only use computers for office tools. It is shown the paradox in Malaysia s property management companies are lagging behind in using advance system. In general, property management business involves personal touches whereas computers are not helpful. In addition, most of property management managers are in old generation. Thus they, are more comfortable personal touch method. Thus, it will need more time to change because once, property market was much localised. It is believe, this research will contribute to give an overview of ICT applications in property management companies in Malaysia. Questionnaire was developed comprises several sections mainly in hardware, software and ICT applications to examined 20 property management companies in Malaysia. However, further research needs to be done by considering these issues: i. Expand property management companies as respondents which

ii. 10. Acknowledgement includes those not registered under BOVEA. All property managers including high rise shopping complex. The survey was undertaken with some budget from the National Institute of Valuation (INSPEN) Malaysia grant under National Property Research Coordinator (NAPREC). The authors gratefully acknowledge the contribution to this survey and constructive comments. Keen, P. and McDonald, M. (2000), eprocess Edge, Osborne/Mcgraw- Hill, Berkley,CA. Wheaton, W.C. (1996). A perspective on telecommunications technology and real estate: office, industrial, and retail markets, Real Estate Finance, Vol 13 No.2, pp. 13-17.. www.mcmc.gov.my, (8 th November, 2006), Suruhanjaya Komunikasi dan Multimedia. 11. References Crowston, K., Sawyer, S. and Wigand, R. (2001), Investigating the Interplay Between Structure and Information and Communications Technology in the Real Estate Industry, Information Technology & People, Vol 14, No.2, pp. 163-183. Department of Statistic Malaysia (2006), Key Statistic Index, Government of Malaysia, Kuala Lumpur. Dixon, T., Thompson, B. and McAllister, P. (2002), The Value of OCT for SMEs in the UK: A Critical Review of Literature, Report for the Small Business Service Research Programme, The College of Estate Management, Reading. Dixon, T., (2005), The Impact of Information and Communications Technology on Commercial Real Estate in the New Economy, Journal of Property Investment & Finance, Vol 23, No.6, pp 480-493. EU (2002), Towards a Knowledge Based Europe, The European Union and the Information Society, Brussels Han, S.S., (2001), Computers in Property Management Companies, Property Management, Vol.19, No.5, pp 433-440.