Building International Strategic Alliances Between East and West

The Asian Boom

On the world map, Asia is the East. Today, Asia is more than an exotic tourist destination. It is the fastest growing economic region in the world and a land of lucrative, untapped opportunities. Malaysia, Thailand, Indonesia, Vietnam are all growing economies. China and India continue to grow in affluence with the middle class having higher disposable incomes. The steady influx of foreign investments is expected to continue as markets in Europe reach saturation, and USA faces a cyclical recession. Firms need to find new markets to sustain their business.

Singapore’s geographic position, its pool of management expertise in the corporate sector, coupled with its Western standard of living and infrastructure, English speaking population and rich Asian heritage makes it a perfect bridge for business developments between the East and the West.

Security and Private Investigations Industry in Asia

Compared to the West, the security and investigations industry in Asia is still in the infant stages.

In Singapore, the Private Investigations and Security Agencies Act was only established in 1973. It is one of the few countries in Asia that the private investigations business is regulated and licensed. It is only in the last 10 years that the private investigations business in Asia has really developed in Singapore, and there is still so much more room for improvement in terms of professionalism and service standards.

Since September 11, 2001, there has been a strong push to professionalise the security industry in Singapore with the support of the government. In October 2002, Singapore heralded the National Skills Recognition System which provides a benchmark for the skills and standards of security officers engaged by security firms in Singapore. Since then, the NSRS for the security industry as evolved to a new accredited standard known as the Work Skills Qualifications.

For most parts of Asia, the security practitioners and private investigators are mainly former officials from either the police or the military. It is a second career for these officials, and their commercial experience is limited. Hence, most of the investigations work is focused on obtaining evidence of adultery for matrimonial cases.

In Asia, most of the commercial investigations work (such as pre-employment screening, insurance verification, fraud investigations, due diligence) and high level risk management assignments and others are being done by foreigners from Western nations who have the expertise and are living in Asia.
In investigations work, there is often a lot of planning involved in the operations, brainstorming of ideas, compilation of evidence gathered, information analysis, before the report is produced and submitted to the client. Different skill sets are required, depending on assignment requirements in an investigations process. It may not be always possible to train and have an in-house team with all the skills required to cater to the client’s specific needs. Hence, strategic alliances are always useful for private investigators to tap the lucrative business opportunities in the market.

In the security industry, the scope extends to security manpower supply, security technology, security consultancy and security training. Each area of security is a different business. Strategic alliances can allow a security firm to offer an all under one roof service to its clients.

Value of Strategic Alliances

Strategic alliances can be in the form of cooperative arrangements, joint venture or collaboration on specific projects between competitors or potential competitors from different countries, or suppliers, or other firms with complimentary product or service that can enhance the existing product or service line

For both the security and private investigations industry, strategic alliances are formed to add value to service that is being provided to the client. It will also develop a unique selling point which will be the firm’s competitive advantage.

The value provided in strategic alliances encompass:

1) Quality Service to Clients

For instance, strategic alliances can be formed between law firms and private investigators Private investigators can then provide clients with quality service by having an all -under one roof service from evidence gathering to legal action should they wish to pursue the matter at courts. In intellectual property matters, law firms can assist with the filing of trademarks, but private investigators will be involved in the monitoring for infringement. Security manpower firms can have strategic alliances with electronic companies selling alarms and CCTVS. This will enable clients to be able to rely on the security company to supply personnel, and organise the installation of security technological products to supplement the work of security personnel.

2) Lower Prices for Clients

Through strategic alliances with suppliers such as database companies, private investigators benefit from lower costs in exchange for generating business for the database companies. Clients benefit from cheaper rates due to lower costs. This is the same for a security manpower company that conducts audits for its clients by aligning with security consultants. This is a win win situation for all parties involved.

3) Enhance Corporate Image

If the private investigators or security firm pair up with a renowned partners, the positive image of these companies will also rub off on the investigations firm. For instance, in supplying manpower alone it is difficult for the security firm to project itself as an international firm due to costs of setting up an office, organise the recruitments and business capital to operate the business. However, the company can do so once it establishes strategic alliances in its targeted countries that can supply the manpower.

4) Reduce Costs

The operational costs for private investigators can also be reduced through joint marketing efforts with its strategic partners. Furthermore, private investigations firm also save on wages by calling on resources with specialised skills, be it for surveillance, forensic accounting, maritime specialists to work in the investigations team on a project basis when required. Similarly in security projects, strategic alliances can be saved when resources from different countries are used. For instance, we may engage a security consultant from the Philippines, security equipment supplier from India and guardforce from Malaysia, and Project Manager from Singapore for a Japanese client in Singapore.

5) Improve Business Development

Through strategic partners such as expertise in intellectual property, IT forensics, maritime investigations or security consultancy, firm scan bid for projects requiring the specific services in addition to their normal requirements. Hence, the scope of market for private investigators and security professionals will expand.

Strategic alliances provide a win-win situation for all stakeholders – the investigations and security firms, client and its partners.

Developing International Strategic Alliances

With Asia’s present booming economy, more and more businesses in the West are establishing their bases in Asia, or entering the Asian markets through various strategic alliances. Within Asia, China and India today are the hot spots for new business investments from Western industrialized nations especially the USA, UK, Australia and also more mature Asian economies like Japan, Singapore, and Korea.

To establish any strategic alliances, it has to be a proactive approach for both parties concerned. Both organizations must have the same vision and identify the value that they can offer each other with the partnership. Building a relationship before a formal agreement is encouraged. It is like a marriage. Two parties make a commitment to grow together and work towards the same goal. Hence, it is necessary to understand each other’s style of working, and ascertain the compatibility, especially since in international strategic alliances, there is a greater barrier in terms of language and culture. Any potential conflicts which may arise should be identified and acknowledged. Compromises may have to be made in the process. Most importantly, both parties must have mutual trust and respect for each other.

Meeting the right partners is the first and most crucial step in developing the strategic alliance. Hence, participation in professional associations is beneficial in this regard.
A fellow member of an association is likely to share the same level of professionalism and business interests. He / she would have also gone through a vetting process to be be admitted as a member, especially for professional investigations associations such as the ASIS International, Council of International Investigators. There are also other members who will know of him / her, and can provide an opinion of the person.

Once the right partner has been identified, the next stage will be to identify the strengths and weaknesses of both parties, and ascertain how each partner can help the other grow. The areas of co-operation, and method of co-operation must be determined. The technicalities such as working arrangements must also be discussed and formalized. An action plan must be developed, and reviewed and evaluated.

Relationships are not built overnight. Similarly, successful strategic alliances cannot be expected to be established over a few meetings. Trust is an important issue and it needs to be nurtured. The strategic alliance may go through a process of trial and error, and the working terms may need to be reviewed and evaluated over a period of time.

It is important to remember that in developing a strategic alliance, it is a relationship and not a transaction that is being negotiated. Both partners are working towards the same goal – which is to maximize profitability from the business development efforts. The profits will come from the customers, and not from each other.

Minimising Your Risks

All relationships, especially international strategic alliances carry risks. Recognising the risks and thinking through them is a preventive step to avoid potential pitfalls. Some questions to ask before formalizing an international strategic alliance include:

o What are some of the potential problems of this partnership? From my perspective? From my customers’ perspective?

o Am I comfortable with the time-frame of this agreement?

o Is this agreement too narrow – or too broad? Will our partnership have room to grow? Does the agreement give my partner too much latitude?

o Does this agreement include provisions for resolving conflicts as they occur?

o Are our mutual responsibilities clearly outlined?

o Will this agreement benefit both parties?

It is always wise to have an attorney review the agreement before you sign. Always remember that no one thinks of contracts in good times. However, contracts become the bible when there are disagreements and dissatisfaction over money issues.

The Way Forward

Globalisation has shaped the economies of today. Businesses are going international, and the opportunities for the private investigations industry remain lucrative and abundant, if we only know how to seize them.

About Major (ret) Ponno Kalastree

Maj (ret) Ponno Kalastree is the Managing Director of Mainguard Security Services (S) Pte Ltd – a licensed security and private investigations firm which he established over 30 years ago when he left the Singapore Armed Forces.

Today, Mainguard is a leading player in the private security and investigations industry, specializing in corporate investigations in the South East Asia region. His clientele include some of the largest insurance companies, law firms and multinationals from the USA and Europe.

Ponno was Past Regional Vice President for Region 33 (South East Asia) for ASIS International, and he was also Chairman (2002-2003) and President (2001-2002) of the Council of International Investigators (CII), which is an elite organization comprising of top investigators from over 40 countries.

Maj (ret) Ponno Kalastree can be reached at:
Tel: +65-6296 5881 / 6297 1229
Fax: +65-6296 1171
Email: mainguard@mainguard-intl.com.sg

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