Software company Pentasoft Malaysia Sdn Bhd embodies the commitment to excellence and becoming world-class that the Multimedia Development Corporation (MDeC) wants to instill in its MSC-status companies. This software company, which specialises in the insurance sector, is the second Malaysian company to be certified with Carnegie Mellon’s Capability Maturity Matrix Integration (CMMI) Level 5 for software engineering. The CMMI is a globally recognised mark for software quality. ICT solutions provider Kompakar Inc Bhd was the first Malaysian company to be certified with CMMI Level 5 in 2005.

Aside from the CMMI certification, Pentasoft has achieved the Information Technology Service Management ISO 20000 last year and Six Sigma Green Belt earlier this year.

The certification programmes it undertook are part of MDeC’s Capability Development Programme (CDP), which is aimed at helping ICT companies maximise their potential by adopting global best practices and process improvements.

Getting certification is a tedious affair due to the documentation and auditing involved. CMMI requires the company to be audited every three years while the ISO 20000 certification, which Pentasoft obtained last year, requires yearly auditing.
Where Pentasoft is concerned, certification and innovation are linked.

“The direct link would be that we learnt quite a lot on process management, including the expectation of world-class processes and the practical side of it [processes],” says Pentasoft managing director K Kuppu in an interview on Dec 14.

Since embarking on CDP, Pentasoft has come up with two products — Spinoza and Pittacus. Spinoza was developed this year while Pittacus, an internal product developed in 2005, was externally marketed last year.

Getting certified isn’t cheap, however. Pentasoft spent around RM50,000 for the Six Sigma Green Belt programme. For the CMMI, which it applied for in 2005, the company spent RM200,000. It spent RM250,000 on consultation fees, of which RM100,000 was subsidised by MDeC as part of the CDP initiative.

Last year, the company spent RM170,000 for the ISO 20000 certification. The consultation cost was RM100,000, of which RM50,000 was subsidised by MDeC. 

Pentasoft’s investment in obtaining certification has certainly paid off. Since obtaining the CMMI Level 5 certification in 2006, the company has participated in 20 international tenders and won eight, which contributed around RM14 million to the company.

Kuppu believes that certification is inevitable for a Malaysian company to go global.

“If you want to go global, you have no choice. You just have to go in there and be the best. There is no way you can become the best if you don’t continuously improve yourself,” he says.

The company spends around RM1 million a year on its R&D, which focuses on three areas — the insurance business, technological development and process improvement. In driving innovation, the company has its own process and committees to supervise.

“We have [an] online system where staff can put in their innovations and there are day-to-day supervision to see what our people are doing best. For example, we have an estimation [for processes] and if people can do things faster than our estimation, we find out how they did it and share this with everyone,” says Kuppu.

He adds that there are separate committees made up of senior staff that reviews innovation, decides compensation for innovation, expands the idea and applies it throughout the company.

Looking back at its history, innovation has been in Pentasoft’s DNA since it started in 1998. In 2000, it developed an innovative software that groups together all lines of insurance such as life, investment-linked and general under one programme. This came about because Kuppu and the company’s other co-founders, who had worked in the insurance industry, noticed a gap in the industry — insurance companies had to obtain different software programmes for each insurance line and this incurred a lot of cost.

Kuppu says the company competes against international firms and while it was tough in the beginning, Pentasoft has steadily gained customers through word-of-mouth marketing and testimonials from satisfied customers. “This is the best marketing,” he adds.

With 70% of its customers coming from overseas, the software company posts an average of RM9 million in revenue.
Looking forward, the company is now focusing on optimisation. “In order for us to optimise, we are looking at specific activities and trying to improve the quality using Six Sigma,” says Kuppu.

“In optimising, we will make our software product even more robust and be able to really deliver what customers want. We are continuously looking at our processes to see how we can cut cost and implement them much faster.

Pentasoft, which has roughly 10% of the insurance software market, is looking to takaful insurance because of the many new players entering the market. It recently procured a contract with UK insurance firm Legal & General, which is in the midst of setting up its takaful insurance business in the Middle East.



This article appeared in Manager@Work, the monthly management pullout of The Edge Malaysia, Issue 786, Dec 21 - Dec 6, 2009.