Urban Transformation Centre (UTC)
MINISTRY OF FINANCE MALAYSIA

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Urban Transformation Centre (UTC) was established in accordance with Government Transformation Program in ensuring accessibility to the public in obtaining government services. Service Delivery As the population in major cities grows at a rapid pace and the constant migration from rural to urban increases, so does the demand for government services. One of the common issues raised by the urban population was difficulties in getting government services. This was largely due to the working hours of government office where it operates on normal office hours during weekdays. The public needs to take off or time off from their organizations in order to get the services. Another problem faced by the public was the location of each office where commonly it’s located at secluded place where public transport is not an easy option. The massive traffic jam at major cities throughout the country also did not help as getting into town during peak hours can turn into hours on the road. The distance between each office is also a major problem for the people as few transactions with different agencies might take more than a day to be settled. An example is when a person wants to apply for their passport, they need to go to Immigration Department Office and produce their MyKad (Malaysian National Registration Identity Card) for verification. In the event their MyKad chip is unreadable, they then need to go to National Registration Department Office located at another place to replace their MyKad. The time to get the services due this factor as well the cost of travelling and taking leave was constantly raised by the urban population. Cost to Government Increase in demand for services calls for increase in supply in government services which demands opening of new offices at major cities. Building a new office or renting new premises will increase the operating expenses for the government. Abandoned or Underutilized Government Buildings Some of the government agencies at state level including city council were having abandoned or underutilized building which fails to generate income but cost them to maintain the premises. One of the common problems for getting tenants was the outdated designs and facilities of those buildings which were constructed some 10 to 20 years back. The government agencies at state level hardly have enough money to refurbish the buildings. The areas surrounding the building were also affected by illegal activities as public do not visit the place often. The buildings were also being a big eyesore in the city center as most of them were strategically located.

B. Strategic Approach

 2. What was the solution?
True to the spirit of National Blue Ocean Strategy, the UTC initiative was formulated using all the problems and issues to create an innovative and creative solution focusing on low cost, high impact, rapid execution and sustainable. A one stop center providing all the core government services together with statutory bodies and private sectors service were established at the strategically located abandoned or underutilized government buildings. The operation hours to provide services were extended up to 10pm as well on weekends.

 3. How did the initiative solve the problem and improve people’s lives?
Service Delivery With the establishment of Urban Transformation Centre, the demand for services from urban population was solved with the opening of major government agencies, statutory bodies and private sectors’ office under one roof. The one stop center concept of UTC makes it easier for the people to get multiple services at one place. This concept has made it cheaper to get services as they do not have to travel to multiple places and also saves time for the urban population. The location of UTC which was strategically located at major cities with multiple public transportation options making it accessible from any part of the state. Accessibility is never an issue for UTC even for the urban poor. The core services of UTC are divided into 10 clusters to address the major services needed by the people. The 10 clusters are as following; i. Major government services like National Registration Department, Road Transport Department and Immigration ii. Health services as outpatient clinic and dental clinic iii. Financial services by the banks iv. Business and entrepreneur development services provided by agencies providing grants and start-up funds v. Job hub as the public can register and attend interview at Jobs Malaysia Centre an agency under the Ministry of Human Resource providing a platform for job seekers in Urban Transformation Centre vi. Education and training services for the school leavers vii. Welfare services for the vulnerable groups to attend counselling, access the government incentives and as a center for the senior citizens to socialize viii. Youth centers equipped with gymnasium, futsal and other sports activities ix. Utilities services as Water Board and electricity company; and x. NGOs activity centers. Cost to Government and Abandoned or Underutilized Government Buildings Establishing UTC is not only beneficial to the people but also to the government in terms of cost saving. True to the principles of NBOS which are low cost, high impact, rapid execution and sustainable, UTC makes huge savings to the government as Urban Transformation Centers are established at existing abandoned or underutilized government buildings by the means of upgrading, renovation and facelift. Once UTC starts its operation, the surrounding area becomes viable which instils economic development opportunity especially for poorest and most vulnerable as they will be able to generate income through small and medium enterprise. UTC as Community Centre Although UTC main objective is to ease the process of getting services and transforming government service delivery, there are a lot more impact areas focused by the initiative. One of the activities conducted at UTC is Senior Citizen Activities Centre where daily gatherings followed by basic exercises and socializing platform are given. This activity is overseen by the Welfare Department in Urban Transformation Centre. Another key activity at UTC is being the job hub especially for the youths. Job Malaysia Centers at UTC provides the platform for the public to register and attend interviews. The agency also facilitates on job matching for the registered people with suitable agencies. As of 2016, 16,210 got their job placement through Job Malaysia Centers at Urban Transformation Centre. UTC also plays a key role in supporting the entrepreneurship development in the area. With the total customers averaging at 5,000 people per day, the small and medium entrepreneurs able to generate income though their business at Urban Transformation Centre’s premises.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
Urban Transformation Centre’s creative comprehensive organizational change has made breaking of silos between government agencies and private sectors possible. UTC is recognized as the forefront of innovation due the ability in bringing all the agencies that include private and NGOs under one roof which was never attempted before. The operation hours beyond normal office hours where government services’ are available after 5pm and on weekends is first of its kind in the world. The innovativeness of UTC is further proven by the use of existing government building to establish UTC. It is significantly low cost as well helps government agencies which are the building owners to generate income from an abandoned building and salvage the sunk cost of constructing the building. The time taken for the renovation which is between 4 weeks to 16 weeks is a trend setter and a benchmark that haven’t been achieved by any projects. The continuous monitoring and thorough procurement process in selecting a credible contractor makes this possible. UTC is unique from each other as existing buildings are used. UTC varies from markets, shopping complex, parking space as well as bus terminals converted to become Urban Transformation Centre. Most of the buildings still retains their original scope such a market although only partly.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
The Ministry of finance together with the State Government and local authority partners in implementing the establishment of UTC in each State capital and main towns. By December 2016, a total of 18 UTC was established to meet the needs of the people. With quick services, has put UTC as people centric. At the beginning of the establishment of UTC, the main factor was a strategic location is seen with regard to the local population. The earliest UTC is Melaka which operated in 2012. It has given benefits to local residents up to 800,000 people. With the formation of 18 UTC, services have been given to 44 million customers for the period 2012 to 2016. The benefits expected to be realized by specific deliverables: (i) The community will get direct benefit where people can get the services immediately. All UTC are strategic located where the public transportation hub existed to serve the people especially to vulnerable people (ii) Indirectly, the public benefit of the UTC through career opportunities through Jobs Centre that also are in UTC. But business opportunities were also obtained for local entrepreneurs who wish to promote local products. Low income people assisted with the introduction of entrepreneur incubator for the purpose of economic development. Most of the program conducted in UTC such as Jobs Fair@UTC, Women Bazar and Entrepreneur Hub give focus to increase the people's economy in the category of most urban poor and most vulnerable people. UTC also invites the Ministry of Women, Family and Community to implement economic and social program to help single mother and women who are low income.
 6. How was the strategy implemented and what resources were mobilized?
As mentioned earlier the whole funding for refurbishment and upgrading work is financed by MOF which is significantly lower cost than constructing a new building. Apart from the financing from MOF, all other partner agencies need to allocate their human resource to provide services at UTC. As UTC is focusing on low cost and high impact, no additional staffing are given to agencies, thus all agencies are required to redeploy their staff from existing branches in ensuring the staffs are utilized optimally. With initial funding by the Federal Government through the renovation of the existing building has changed the work culture. Move in special teams have given space and opportunity for all parties to implement their respective roles. The ERRC method as terminology, implementation plan has been designed as a guide to establishment of UTC. A major step in the establishment of UTC is ongoing monitoring by the Project Director. This is important since each UTC is completed between 4 to 16 weeks. Furthermore, the cooperation and support of the Federal and State Government agencies in the establishment of UTC could speed up decision-making. Involvement with all sectors has established a sense of belonging to the UTC. Strong leadership becomes indicator to the plan of implementation. The nature of good leadership is important in addressing issues of bureaucracy and procedures while performing the project. The building owner will also act as the UTC Manager, tasked to monitor the performance and ensuring smooth day to day operation. UTC’s innovation can be assessed from the policy stage up to implementation stage. Policy/Strategy Innovation: The change in working hours of up to 10pm, 7 days a week excluding public holidays including government and private entities for UTC purpose. Planning and Designing Innovation: From the beginning it was decided that UTC should not represent a typical government office structure where people will have to get access passes. UTC is designed in such a way that it represents as a Service Mall and provides ambience that are modern and sophisticated in line with the people’s demand. The fact that UTC buildings varies in terms of their initial usage adds weightage for this claims as UTC buildings consist of shopping malls, markets, bus terminals as well parking spaces. Financing Arrangement Innovation: Federal government provides the fund for the refurbishment of a state owned building itself is an innovation. The building then is used for UTC purpose, whereby the responsibility in ensuring the success of the project is shared equally between federal and state government. Governance and Administration Innovation: One of the unique arrangements in the management of UTC is that all the agencies operating in UTC will be answerable to the UTC Manager. UTC Managers are the one appointed by the building owner which can be local government or SEDC. While the agencies operating in UTC varies from federal, state, statutory bodies or even private entities reporting directly to their respective headquarters, they still need to follow the instruction of UTC Managers in ensuring smooth operation of UTC. Although the UTC Manager plays no role in assessing them or in their career path in terms of monetary rewards or promotions, these agencies still abide by the guidelines of the UTC Manager. This true blue ocean practice can be clearly seen in UTC where the spirit in ensuring the success of the initiative is given priority compared to personal achievements.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
The establishment of UTC relies heavily on Blue Ocean Strategy (BOS) which emphasizes on collaboration and partnership at all levels. The lead ministry for UTC is Ministry of Finance (MOF) Malaysia whereby all the policies, establishments and funding comes through them while the state governments mostly represented by local authorities (LA) such as Ipoh City Council, Kuala Lumpur City Hall or state economic development corporation (SEDC) acts as the superintending officer of the projects. This public – public partnership involves federal and state government collaboration where the federal government through MOF brings in the initiative and funding while the state government through LA or SEDC provides the building. The next level partnership involves public- -private-community partnership where the federal agencies, state agencies, statutory bodies, NGOs and private agencies that provides direct services to the people joins UTC and agrees to operate beyond their normal working hours and days. This kind of partnership makes it very convenient to the people to get access to services where they only need to visit one place (UTC) to get all the core services from obtaining passport (Immigration Department – Federal Agency), obtaining hawkers’ license (Local Authority – State Government), inquiring on their income tax (Income Tax Board - statutory body), paying their utilities (Utility Company – Private Agency) as well conduct meeting of their NGO. This partnership is definitely a win-win situation for all parties involved as Federal Government manages to deliver on their promise in bringing the services to the people. The state government manages to generate income through their abandoned/underutilized building while at the same time make the surrounding of UTC viable and create a good image for the city.

 8. What were the most successful outputs and why was the initiative effective?
UTC was the most successful Initiatives among the 105 NBOS Initiatives. It can be shown by the number of the transactions recorded/customers at UTC. Since the first UTC was established in June 2012 until the 18th UTC on December 2016, UTC recorded more than 44million customers until February 2017. Besides that UTC also plays a role as a career hub. There are a lot of activities for job seekers. They do job matching and the interview also can be done in UTC’s. Most of the time, once interview done, they can get the result right after the interview. Statistics for job replacement in UTC’s are 16,210 people. Other than core services, entrepreneurship development is also a role of UTC. Therefore, UTC also known plays a major role as an entrepreneur hub. It gives an opportunity to small business set up in UTC – insurance and food. One such example is Perak Best products in UTC’s Perak. This Initiative was effective as it can reduce cost to people since they can get the service under one roof and speedy services. People also can get the services after office hours and during weekend so they can fully utilized their time in the office and they can become effective worker. These initiatives also increase Happiness Index of people since they can get multiple services under one roof.

 9. What were the main obstacles encountered and how were they overcome?
During the early implementation of UTC, the main obstacle are resistant from the staffs which is they refused to work 8.00 am to 10.00 pm as it is a drastic change in their working hours. They also have to work on shift and sacrifice their weekend. However, with the engagement from the top to the ground, they find out a few alternatives to make sure Happiness Index of staffs at par. To make sure staff had their weekend they were implement job redeployment and also job rotation. Besides that, since there are many agencies in UTC, it’s quite hard to make sure they are following UTC’s Standard of Procedure (SOP). This is the time where the UTC manager had to play significant role where they have to have a periodically meeting to solve raised issue and complaint. Year by year, UTC increased and had caused a lot of agencies lack of staffs. Some agencies had to put only one officer from 8.00 am to 10.00 pm. So to overcome this problem, they are doing multitasking job. It means one person can answer for a lot of agencies. For example, officer from Job Malaysia can also perform SOCSO’s task and reciprocate. Other than that, to overcome staffing problem, they also implement One Serve. One Serve consist National Registration Department, Immigration Department and Road Transport Department. Before this, all this agencies are stand alone and also doing their general task. But under One serve, they were put together and does each other work meaning National Registration Department can produce output for Road Transport Department and so on.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
Never before in Malaysia or probably in the world existed a center like UTC. Before UTC, people need to go to each different agency that usually located far from each other in order to get their services. But now, people can get most of government services in one place without the need to move from one place to another. The usage of already existed, underutilized or abandoned government building to establish the UTC not only help to revitalize the area and make it more vibrant for the people, but also reduce the construction cost to the government. The impact generated by this concept to the public services includes improvement in public service delivery to the people. As the main objective of UTC is to bring the services to the people, UTC has more than achieved its objective. UTC is the new frontier in service delivery where the services provided are top notch and the quality of services provided outshine the services provided at agencies branches. Some of the services that received positive reviews/feedbacks include obtaining passport or identification card (IC) within 1 hour after payment. The people are satisfied with the service delivery at UTC and UTC manages to impact the happiness index of the people in obtaining services especially government agencies. Impact of UTC to the public was assessed by looking at the ways in which UTC implementation adheres to the principles of high impact, low cost and rapid execution. UTC was evaluated based on two indices which are Creativity Index and Fair Process Index. The Creativity Index measures the key blue ocean principle of simultaneously delivering high positive impact to the people at low cost to the government. While the Fair Process Index measures the level of involvement, communication and understanding among agencies in the UTC. A total of 5 parameters of high impact were identified for UTC which are: i. Income: Increasing public income through business activities within UTC, offering skills training to up-skill the workforce and held job fairs to help place job seekers into better paying jobs. ii. Cost of living: Lowering the cost of living through placing Kedai Rakyat 1Malaysia (KR1M) and My Farm Outlets (MFO) stores in the UTC. iii. Simplicity and convenience: The convenience of one-stop services and time savings. iv. Health, safety and security: Value of improved health and security shows by housing 1Malaysia & Dental Clinics, gymnasium and also Police Station in UTC. v. Harmony, recreation and national pride: Increasing community harmony through community events that bring people together. Using parameters above, UTC proved to be a very successful model with Creativity Index of 17.62:1, compared to the conventional alternative method with Creativity Index of 2.47:1. While Fair Process Index average (out of 20) was 17.1 for Lead Ministry with agencies and 13.3 for Partner Ministry with agencies.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
As a lot of agencies operate at UTC, Public Complaints Bureau is also opened in UTC. This enables public to make any complaints if they are not satisfied with the services rendered. Previously the bureau is located at federal buildings only and it was harder for the public but with the establishment of UTC, it is not only convenient for the people to lodge a complaint but also serves as the eyes and ears for government in ensuring the services provided by all the agencies at UTC are top notch. A feedback form is also located at all reception counters for the public to give their feedback. Ministry of Finance constantly checks with the UTC managers in ensuring actions are taken immediately for the feedback. Apart from that the agencies at UTC also provides customer feedback box for the public to give their comments. This feedback will be monitored by the respective headquarters of each agency. With three level of accountability platform, UTC always receives positive feedback from the public. It also makes it easier for people to hold the government accountable on the delivery of public services.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
One of the most important clusters in the UTC was welfare services. Implementation of this cluster in the UTC was successful with the collaboration of the Ministry of Women, Family, and Community Development (MWFCD). MWFCD provides numerous services in the UTC via several of the ministry agencies such as Women Development Office, Department of Social Welfare as well National Population and Family Development Board. With collaboration such as this, UTC was able to provide vast services for all age groups, women and vulnerable low income group. The services include day-care centers for the kids, Café@teen for the teenagers, gymnasiums and sports facilities for the young adults to Senior Citizen Activity Centre for the senior citizens. As for vulnerable low income group, they can get various services and help not only from MWFCD but also from several government agencies in the UTC. They can apply for a small loan from TEKUN to expand their business, apply for Governments’ Financial Aid (Bantuan Rakyat 1Malaysia (BR1M)) from LHDN, and participate or register with any skills training offered by Jobs Malaysia Centre and agencies under WFCD. From here we can derive that UTC manages to positively impact the social life for the women and vulnerable low income group in Malaysia especially in urban areas.

Contact Information

Institution Name:   MINISTRY OF FINANCE MALAYSIA
Institution Type:   Ministry  
Contact Person:   THIAGU VADIVALU
Title:   Assistant Director  
Telephone/ Fax:   +603-88906519 / +603-88906517
Institution's / Project's Website:  
E-mail:   thiagu.vadivalu@treasury.gov.my  
Address:   National Strategy Unit, Aras 1, Perbendaharaan 2, Kompleks Kementerian Kewangan, No7, Persiaran Perdana, Precint 2
Postal Code:   62592
City:   PUTRAJAYA
State/Province:   FEDERAL TERRITORY
Country:  

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