When you compete globally in software and services, the differentiator in the minds of buyers is your capability, not which country you come from. It is about the quality of your products. This is where our various Capability Development Programme (CDP) initiatives help boost the competitiveness of our MSC Malaysia companies,” says Datuk Badlisham Ghazali.

But don’t take Badlisham’s word for it. Listen to some of the CEOs whose companies have shown the commitment and intent to become world beaters some day by gratefully grabbing the various certifications MDeC offers through CDP.

K Kuppu, managing director of Pentasoft Malaysia Sdn Bhd, says his company won an impressive 8 out of 20 international tenders it participated in after getting his staff to undergo the various certifications offered. The wins resulted in a combined boost of RM14 million in revenue for Pentasoft. Talk about return on investment.

To the 64 companies MDeC honoured last week at a gala ceremony (see table for full list), it was a no-brainer to participate and get as many of their people and processes certified as these companies clearly recognise that the CDP initiatives have both a top line and bottom line impact. For instance, the CDP Six Sigma was a programme that evolved significantly under the “Innovate My Process” initiative. The benefits derived from this initiative led 12 of the participating companies to project that they would collectively save RM3.13 million annually. No CEO would want to turn away from such savings.

Badlisham credits the strong response from companies to the CDP’s Innovate My Process initiative. “Early in the year, the MSC Malaysia CDP realised that it needed to help companies find ‘quick win’ steps that would deliver near-term ROI through cost-effective investment,” adds Badlisham. It then came up with Innovate My Process, which addressed the key areas of customer service, systematic innovation, cost optimisation, process improvement, product performance enhancement and brand management, among others. The initiative hit a sweet spot when 250 MSC Malaysia-status companies participated in 20 programmes conducted under it.

The CDP was introduced in 2004 to help MSC Malaysia-status companies achieve process improvement, professional development, product assessment and business management through knowledge sharing, a structured development programme, competence enhancement and financial reimbursement of part of the expense of achieving certification.

This last point is important to remember because all the companies have to pay part of the cost for some of the CDP initiatives, especially the cost of the exams which are globally recognised. And even for the free programmes, Badlisham points out that the companies incur an opportunity cost with staff given time to study.

But it is all definitely worth it, says Badlisham, who points to a revenue boost for those that go through the programme. “In 2008, companies that participated in our CDP programmes achieved a 93% growth in export sales compared to before they went for the programmes. This is an increase of 79.18% from the 2007 figure,” he says. He adds that the CDP helps companies enhance their capability and global competitiveness through 13 organisational development programmes and a professional development programme that together address the four focus areas of process, people, product and management.

About 1,600 MSC Malaysia-status companies have gone through one programme or another under CDP so far this year. About 20% of these then go on to the certification programmes. MDeC is hoping to see this increase to 40% by 2011. It is typically companies that are in the growth stage that go for the programmes as the deals they are competing for demand that they have certain globally recognised certifications and competencies.

While Badlisham cautions that the CDP is not a magic formula and that participation does not mean a company will be successful — “you still have to compete” — it does show a company’s desire to improve and deliver better quality to customers. This in turn has led to an unanticipated side benefit.

“Because these companies demonstrate a willing commitment to invest the time and resources necessary to increase their competitive advantage, the CDP has made significant strides in bringing about positive change to Malaysia’s ICT industry landscape. For instance, from a position of relative obscurity a few years ago, the Software Engineering Institute, in a May 2009 report, ranked Malaysia No 1 in Southeast Asia with the highest number of CMMI appraisals and No 14 in the world.

“Malaysia also registered the highest growth in terms of CMMI appraisals globally in 2007. Similarly, from having only 80 certified project management professionals in 2005, today we have around 2,000 in Malaysia, with more in the pipeline,” says Badlisham.

Encouraged by the success, MDeC is taking steps to do even more next year when it increases its focus on innovation and marketing. “New programmes will focus on intellectual property as well as expanding the current MSC Malaysia CDP marketing programme to look into aspects of product and service commercialisation,” says Badlisham. Under the expanded marketing initiative, MDeC is taking the bold step to support the introduction of a standard to certify the quality of a company’s product.

Details are sketchy for now but Badlisham says this will not be an MDeC-issued rating, but undertaken by a Malaysian organisation which will collaborate with international partners. There will be a Product Assessment Framework and an MSC Malaysia Product Rating Standard. “Together, these initiatives will seek to promote the development of quality products among MSC Malaysia-status companies,” Badlisham adds.

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, Issue 785 Dec 14 - 20 2009