Tying up loose ends opened up a new business opportunity for Sena Traffic
ACCOUNTABILITY is an important element in running a successful business, says Sena Traffic Systems Sdn Bhd director William Tan Wei Lun.
The twenty-five-year-old has learned never to run away from problems. It is a principle that his father, Datuk Tan Boon Hock, 61, adhered to and managed the intelligent traffic management system company by.
His father hates it when people “leave things hanging”, says William.
Thanks to Senior Tan’s principle, the company survived the financial crisis of the late 1990s and stands to this day.
Back in 1997, Tan’s partner had tendered for a government contract to replace traffic lights in Kuala Lumpur and had engaged a foreign supplier for the project. The company won the bid and it would have been a straight-forward project to work on, except, the economic condition wasn’t in their favour.
During the Asian Financial Crisis, the ringgit depreciated significantly within a year starting from July 1997. By September 1998, the ringgit was volatile and hitting well above RM4.70 to a dollar. The rapid depreciation of the local currency caught businesses flat-footed, Tan’s company included.
Tan’s partner had tendered for the project based on the ringgit’s value at RM2.80 to a dollar.
The fluctuation of the local currency meant that the contract had to be carried out at a loss.
Although the project was already awarded to them, Tan’s partner balked. But Tan did not.
“My father’s philosophy was simple, it is unfair to the Government and taxpayers if we decided not to proceed with a project just because it was loss-making after the bid. Excuses and obstacles were irrelevant. When people trust you and give you a project, you must complete it, regardless of the cost,” William says.
Tan, an electrical contractor who does procurement and installation of street lights and airport lighting systems, did his math and realised he would lose at least RM500,000 from the project if he were to proceed.
But if he did not, he would be doomed as another entrepreneur who ran away from his responsibilites. That was something Tan could not live with.
Tan bit the bullet and got the project rolling. He gathered a team of people to implement the project and managed to complete the replacement of old traffic lights with new ones that had timing features at 40 junctions in the Kuala Lumpur area.
Dealing with traffic lights wasn’t Tan’s forte, but the experience taught him a lot about traffic lights and their installation and Tan started to see potential in this business segment.
In 2000, when the economy was recovering, Tan bid for a new traffic light project in Putrajaya.
With a reputation of delivering results in the toughest of times, Tan got the contract to set up new traffic lights at 120 junctions in Putrajaya from year 2000 to 2005.
The company managed to turn a profit from this project as the value of the ringgit had stabilised by then.
“Although my dad thought that there was potential in this business, he wasn’t content to just use a foreign product which hasn’t been innovated with the times. Apart from that, he wanted to give value to customers,” William says.
Tan wanted to develop traffic light solutions that could automatically respond to traffic conditions, thereby controlling traffic, rather than merely display lights at fixed intervals.
Such a solution would enable a traffic light to display the green light for a longer period of time when it senses more cars on the road. This would ensure a smooth and safe traffic flow.
However, William notes that development cost for a more innovative product was high and there may not be many clients for such products.
This is why it is a niche market with less than 10 players in this segment, William adds.
In 2008, Tan set up Sena Traffic proper in Seri Petaling, Kuala Lumpur to take a more serious look into how they could develop an intelligent traffic management system.
Developing the software from scratch was an uphill climb. It was also vital for the team to have an understanding of traffic engineering, which William notes, is not a popular subject of study in Malaysia.
“People ask, what is so complicated? There are only three lights to control!” William laughs.
But what they were doing was complicated. It involved integrating telecommunication technology with sensors and computer software that could analyse real-time information; an artificial intelligence (AI).
“It is not just simple logic using ‘On’ and ‘Off’ instructions,” he says.
“Imagine five policemen at five different junctions on the same road. They would be able to manage traffic better if they are in constant communication with each other. At each intersection, the officer is able to estimate traffic flow because he or she is updated. Our traffic lights will also be able to do this without any interference, ‘talking’ to each other to ensure smooth traffic flow at all times.
“The previous timer system is a thing of the past. Traffic lights need to detect the number of vehicles and adapt,” William explains.
With such complexities, Sena Traffic conducted many simulations for about three months. William says the software algorithms had to be bug-free and robust enough to take in that much of information without malfunctioning.
In addition, the new traffic light system would send out an alert if there were any malfunctions or breakdowns. The maintenance team would no longer need to wait for the public to call in to make a report.
“We will know in an instant as the system will send us an alert through SMS as well as via our app and our staff would attend to it without waiting for the public to inform us,” William says.
To develop all this, Sena Traffic invested over RM5mil in the first year and has invested over RM15mil to-date. The company also received a government grant of RM1.8mil for research and development.
They managed to put up their first traffic light system in 2010 in Kuala Lumpur and ever since, they have gotten a few contracts from the Government to implement the system at over 230 junctions in the Klang Valley, Johor and Negri Sembilan.
“The first traffic light that we put up in 2010 was not as robust as we had expected but we have since improved the system to withstand various weather conditions and cabling issues.
“The earlier traffic system is of yesteryears. We cannot give our clients a product that hasn’t evolved with the road conditions and the growing number of road users. We need to continue evolving. We can’t be stagnant in business or we will become obsolete,” he says.
The company, with a staff of 115, achieved a revenue of RM30mil in 2016 and William says they are expected to implement their system at up to 500 junctions in Malaysia by year 2018.
Staying on course and true to your responsibilities, says William, can help a company develop and grow.
“I realised that a lot can be done when we start the right way, and keep holding on to what we believe in,” he concludes.
Lessons from his father