ict strategy formulation: a case study of insurance company

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ICT STRATEGY FORMULATION: A CASE STUDY OF INSURANCE COMPANY Smilka Janeska Sarkanjac Ss Cyril and Methodius University in Skopje, Faculty of Computer Science and Engineering Rugjer Boskovic 16, Skopje, Macedonia Abstract ICT strategy is an important topic in management information systems research field, as it is in practice. The research approaches applied so far has focused mainly on analysis of the features of a successful ICT strategy, but not on the very process of its development. Insurance companies, as a part of a mature and prolific financial sector, rely to a large extent on information and communication technology in everyday operations. In developing countries, however, they often lack clearly formulated functional ICT strategy to harness the full power of ICT in their efforts to achieve the business objectives of the company. This paper describes the process of developing an ICT strategy for an insurance company from Macedonia according to Adams, Xia, and Ball method. In this case study the theoretical foundations of Adams, Xia, and Ball method are briefly presented as a part of the introduction. Then, the ICT strategy of the insurance company is conceptualized in terms of ICT roles, ICT organizational capabilities, and ICT governing policies and principles. Further in the paper an appropriate ICT strategy is proposed, in order to align the ICT and the business domain of the company according to Henderson and Venkatraman ICT/business strategic alignment model. In this particular case, the implementation of the strategy was accepted as one of the key priorities for the insurance company, and the strategy has been progressively implemented since 2009. There is sufficient evidence of improved business performance of the company, partly as a result of implementation of the ICT strategy. In this regard, this paper presents a case which can be used as a pattern that could be followed in the analysis of ICT roles, organizational capabilities, governing policies and principles in a given company, and as pattern that could give directions in developing and implementing an ICT strategy, in insurance companies as well as in business companies in the private sector. Keywords: ICT strategy, ICT management, ICT/business alignment, management information systems, insurance company, case study 626


INTRODUCTION Good ICT strategy is recognized as an important factor for achieving sustainable competitive advantage of the company. Unlike the process of formulating the business strategy, there is no one or a few widely accepted ways of formulating the ICT strategy. One of the most significant efforts in offering method of formulating functional ICT strategy of the company is conducted by Adams, Xia, and Ball [1]. In the next, second section we will briefly present the theoretical foundations of the aforementioned ICT strategy development method. Then, in the third section, we will present a case of formulating an ICT strategy for an insurance company, so that we can gain a good insight into the process and the results thereof. In the final section, we will discuss strengths and weaknesses of the applied method of the development of ICT strategy in the company of the private sector, in order to align the ICT and the business domain of the company according to Henderson and Venkatraman [2] ICT/business strategic alignment model. ADAMS ET AL. METHOD OF DEVELOPMENT OF ICT STRATEGY Adams, Xia and Ball from the University of Minnesota, USA, in 2004 made an attempt to conceptualize typology of ICT strategies based on the role of ICT in the company, ICT organizational capabilities and ICT governance. Role of ICT represents the degree of involvement of ICT in the value chain of the company, and the impact of ICT on achieving a business result. On the other hand, ICT capabilities can be defined as organizational "soft" inputs that contribute to achieving these results. ICT governance refers to the policies and principles of management in the company that manage daily ICT activities. According to this perspective, the ICT function must have the proper mix of capabilities to support its role in the company, and they have to be properly managed. The role of ICT in the company As a result of their extensive work with CIOs during the research that preceded the paper we analyze, Adams et al. identified four ICT roles defined in terms of expectations of ICT contribution in the value chain of the company. Every higher role is more demanding of ICT, compared to the previous role. The roles suppose ability to: 1. Support the individual activities of value chain of the company - enterprise systems must provide significant functionality for maintaining the basic functions in the company; 2. Integrate the value chain in the company –this fosters the ability to support individual activities and to integrate systems, applications, data and business processes across the company; 3. Change business processes –that is, to support and integrate the value chain, to improve business processes, and support relationships with suppliers and customers; 4. Change business scope and business models –this should be the catalyst in the changes of the organization regarding the products and services the company offers that improves the performance or the reach of the company on the market or catalyst of the paradigm shift of the company. ICT capabilities As Adams et al. define, capability is more than an organizational resource, or combination of resources, and it is the ability of the organization to mobilize resources in order to accomplish an organizational objective. 627


Besides business value chain, the company should manage its ICT value chain in order to deliver ICT products and services. Activities of the primary ICT value chain are: - Monitoring of the ICT market - monitoring emerging technologies, procurement of ICT or related services, benchmarking the ICT with the competing companies in the industry etc.; - IT research and development – acting as the first mover in the field of information technologies or their application; - Delivery of applications and solutions – timely and in the budget; - Implementation – testing, training the users, migrating the system and implementing; - IT operations and post-implementation services - dealing with low downtime and errors, maintaining low costs, achieving high quality, change management; - Management of business requirements from ICT - promoting the use of ICT, communicating business value of ICT, understanding the requirements and customer needs, communicating and managing the users' expectations and maintain the support of top management. The activities of secondary value chain of ICT are related to the general skills and abilities, and management of resources: - Planning and strategy development strategy; - IT organizational development; - IT integration; - Creation and strengthening of ICT architecture and standards; and - IT portfolio management. Resources management capabilities, as another secondary value chain include: - Management of technical resources - older technologies and systems, wide range of technologies, etc. - Management of ICT human resources - portfolio of skills, recruitment and retention of professionals, hiring external consultants if necessary, etc.; - Financial management of ICT resources; - Managing ICT relationships - maintaining partnerships with customers and suppliers, communication and negotiating ICT priorities with customers, management of outsourcing relationships, etc. ICT governing policies and principles ICT roles and capabilities position ICT strategy externally. As opposed to them, ICT governing policies and principles deal with the internal positioning of ICT strategy. According to Adams et al., ICT governing policies and principles guide the company through the individual elements of the position of IT: technical architecture, organizational architecture or structure, relational architecture, processes and resources. ICT capability maturity In order to determine the extent of involvement of ICT in the value chain of the company, the authors offer a matrix of ICT capability maturity. In the columns of the matrix, four levels of maturity of the role of ICT in the company are listed, and in the rows the ICT skills are listed. ICT skills are assigned with 3 levels - low, medium and high. The level of maturity of ICT capabilities is based on assessment of ICT skills in the company. The model of maturity of ICT capability, shown in Figure 1, contains 4 levels of ICT capability maturity: technical maturity, enterprise support, strategic management and 628


organizational learning and development. The matrix shows the appropriate level of maturity of ICT capabilities for each capability maturity level. Figure 1. ICT Capability Maturity Model

Source: Adams Carl R, Xia Weidong, and Ball Nicholas L., “IS/IT Strategy: Concepts, Frameworks and Case Observations”, SIGLead Conference 2004, Athens, Georgia, 2004, p.8.

By using a framework similar to the product/market matrix developed by Hayes and Wheelwright [3] that describes the product strategy, the matrix of the Role of ICT in the company/Level of capability maturity is a mechanism to describe the ICT strategy, and it is presented in Figure 2. According to Adams and his associates, the level of ICT capability maturity and the role of ICT in the value chain of the company, determine which ICT strategy fits that particular company. The possible strategies are: operational support strategy, enterprise integration strategy, organizational value creation strategy and organizational change and development strategy. The columns in the matrix are the role of ICT in the enterprise, and the rows are levels of maturity of ICT skills. Based on those two dimensions, there are 16 possible configurations of ICT roles and capability maturity. However, only those configurations that lie on the diagonal represent the optimal relation between the role of ICT and ICT capability maturity. These four configurations are ideal types of ICT strategies. Those configurations that lie below the diagonal represent the level of ICT skills in the company that exceed the level necessary to adequately perform the expected role of ICT in the company. In this case, it is considered that the company invested too much in its ICT capabilities without a corresponding benefit from that investment. Those configurations that lie above the diagonal represent the opposite situation - they lack some important ICT skills to achieve the expected role of ICT in the enterprise. These companies do not invest enough in developing ICT skills to be able to deliver the necessary capabilities. 629


Figure 2. ICT Roles/Capabilities Matrix

Source: Adams Carl R, Xia Weidong, and Ball Nicholas L., “IS/IT Strategy: Concepts, Frameworks and Case Observations”, SIGLead Conference 2004, Athens, Georgia, 2004, p.9.

Configurations that do not lie on the diagonal may represent transitional states. For example, during the change the business strategy, the company may decide that ICT needs to change its role in the company from support value chain activities to integrate value chain. Assuming that the company was on the appropriate level of ICT capability maturity and they satisfied the role of support value chain before the change, it can be expected that after the changeover the company will temporarily lack ICT capabilities to fulfill integrative role. In such case, the company will be in a transition stage before it develops the necessary skills to fulfill the new role. Other models of development of ICT strategy, such as Balanced Scorecard and Analysis of critical success factors are more business oriented and business managers would probably chose them as tools for creating an ICT strategy. The model that is presented in this paper, developed by Adams and his associates, is largely technically oriented and operates with the technical terms that are close to ICT managers, and probably represents a model of choice of ICT managers. Model and the steps for its implementation are intuitive and not very difficult to follow even for ICT managers who are inexperienced in the field of business and strategic management. INSURANCE COMPANY ICT STRATEGY In this section, we will introduce few general characteristics of a company from Republic of Macedonia, which, for the purpose of this paper, we will provisionally call “Insurance Ltd MKD”. The “Insurance Ltd MKD” company was founded in the early 2000s, five years before this particular ICT strategy for “Insurance Ltd MKD” was developed. The company started with about ten young but experienced employees who were appointed directors of departments. They set the foundations of the company that in just 10 year become the second on the insurance market in Macedonia, competing with companies 70 years old, or companies 630


that were almost monopolies, or with companies who were brand names in Europe and had powerful headquarters and strong financial and logistic support. Since its foundation, the company developed integrated insurance information system witch was built from the scratch with the business knowledge from inside of the company, and with outsourcing help of computing company “Computing Ltd”. Project manager of information system development project was the ICT department director of “Insurance Ltd MKD”. The company introduced an integrated insurance information system and ERP applications that not only automated individual processes of the business value chain of the company, but also integrated, in the most part, the individual functions, and in doing so the ambition of ICT function was never below the role of value chain integrator. The ICT department in the company was designed to have few employees, and to rely on complete outsourcing of ICT services from external software, hardware, system integration and ICT service companies, according to the contemporary business management philosophy of in sourcing only the core business. The time proved that it was a good approach, because with wisely spent money [4] the company received high quality ICT services originating from hundreds of ICT experts. Nonetheless, there was one shortcoming, namely ICT capabilities of “Insurance Ltd MKD” were tightly connected and highly dependent to the skills and abilities of the outsourcing companies. In the first five years the foundations of the company were laid in all business areas including ICT. Integrated insurance information system was up and running, ERP applications also, automating vast majority of the processes of the company and providing efficient substitution of human labor and real-time control of the processes at the same time. Besides the core information system, design, setting and maintenance of the computer network, Internet and VPN connections were taking place, and several document management systems for structuring of non-structured data in the company such as word documents, digital photographs, fax files, e-mails, etc. were also up and running. In the fifth year of the company’s existence, the company showed signs of maturity, and it was time to rethink the business strategy of the company, to evaluate its achievements and to develop future strategy and goals, including ICT strategy [5]. But, the support for ICT faded out during the time. That was the main reason that it was decided to develop separate business strategy and separate ICT strategy. The method of choice of ICT strategy development was the one from Adams et al. To make it clear, when the top management supports ICT function, ICT may introduce innovations and propose ICT enabled business models. When ICT function lacks such support, it still has to operate effectively and within the budget. So, ICT strategy is necessary in either case, but the former leverages the power of the information technology and creates conditions for innovation and flexibility. The first step of ICT strategy development in this company was to assess current situation, using the ICT capability maturity matrix. The results of the analysis are given in Figure 3. The analysis of the ICT capability maturity model conducted for “Insurance Ltd MKD” says that the role of ICT is somewhere between integrate value chain and change business processes. We will present the analysis in more details of each capability below: 1. Applications and Solutions Delivery - level of development of this ICT capability is directly dependent on the quality of service or capability of the main outsourcing partner in the application software section that we provisionally call “Computing Ltd”, and it fluctuates over the time. “Computing Ltd” occasionally experiences dynamic staff turnover, and in periods when the number of employees working as a support of “Insurance Ltd MKD” information system is reduced, or when the “Computing Ltd” employees are in the learning phase, the quality of services decreases, particularly response time dramatically increases. Generally, the cost out of this strategic partnership with a company that has made custom software solution is high, the highest of any other migration in technology in the enterprise. 631


Figure 3. ICT Capability Maturity Model for “Insurance Ltd MKD” ICT Capabilities 1. Application and Solutions Delivery 2. Implementation 3. Operations and Services 4. Project/portfolio Management 5. Manage Technical Resources 6. Manage Business Demand of ICT 7. Integration 8. Develop Architecture/Standards 9. Manage of Relationships 10. Manage the ICT Market 11. ICT Planning and Strategy 12. Manage ICT Financial Resources 13. ICT R&D and Innovation 14. ICT Organizational Development 15. Manage Human ICT Resources

ICT Capability Maturity High High Moderate to Low Moderate Moderate Moderate Moderate Low Moderate Low Moderate Low Low Low Low

The integrated insurance information system itself is a quality one, and possibilities of its development as “Insurance Ltd MKD” grows and develops are wide. “Insurance Ltd MKD” staff is familiar with the information system, and finds it helpful in their day-to-day operations. Weakness of the information system is that “Computing Ltd” owns the copyright, and it has the right to sell it and it did sale it to several insurance companies in MK. There are two possible negative consequences for “Insurance Ltd MKD” that could result form the sale. First one is that the information system is sold to insurance companies that compete on the same market (Republic of Macedonia). This may cause “Insurance Ltd MKD” to loose its competitive advantage, and other companies to gain it by using the information system. On the other hand, the system is custom made, especially for the company with experienced, but open-minded professionals, so that competing insurance companies which introduce the system, will need some time to learn to use its features with full capacity. Eventually, if “Insurance Ltd MKD” doesn’t develop the system, the position may change in favor of these competitors. Another drawback of the main information system is that is developed in older technology that is not very suitable for remote data processing (simply said, it is slow), and appears to be an obstacle for spreading the “Insurance Ltd MKD” in several branches throughout the country. The most efficient solution to this problem is a gradual migration of the application to a Web application, with retention of the existing database structure and data. This means that for the classes of insurance that have large number of clients and policies the information system has to migrate to Web technologies first. Large industrial property insurance, for example, that do not require a short response time, which are among the most complicated for processing and would cost the most to migrate, may remain in the old technology. Second negative consequence, which is, at the same time, a source of risk in strategic partnership with “Computing Ltd”, is the possibility to close the operations or even go bankrupt, although it has been on the market already 20 years. An effective solution to this problem would be to deposit the source code of an information system to a notary. Other applications that are purchased from “Computing Ltd” or other software companies are not essential for the operation and their impact on strategic advantage of “Insurance Ltd 632


MKD” is minor. In any case, the delivery of applications and solutions for other applications so far went according to plan, with no major problems. General assessment of IT capabilities of “Insurance Ltd MKD” with respect to applications and solutions delivery is that the capability is high. 2. Implementation – The capability for implementation of new software is generally high. Applications are created on the user friendly way and the versioning is automatic, getting a new version of software is on one click. On the other hand, all new employees are trained as they are employed, including the use of software applications in the company. Cooperation and mutual assistance among employees is high, and the introduction of new applications and their implementation is conducted without major problems. 3. Operations and services – general assessment of the operations and services ICT capability in “Insurance Ltd MKD” is medium with periodic shifts to low. Historically, the company started with 10 employees, with no branch offices outside the headquarters and 10 desktop PCs in 2002-2003, and with one person in charge of ICT function. In 2008, at the time this strategy was written, the company had about 70 employees, 16 branch offices besides the headquarters and about 100 user PCs, but only two employees in ICT department. During all that period, total spending in ICT was kept relatively constant and well below the industry average, which is between 4 and 5% of the gross premium of the company, as shown in Figure 4. Figure 4. Financial analysis on ICT spending Year

Total ICT Maintenance spendings

2005 2006 2007

718 478 1 719 884 2 126 239

620 499 1 657 998 1 999 216

Investments in ICT

Gross Premium

97 976 61 885 127 023

336 000 000 403 500 000 525 500 000

Investments in ICT/Gross Premium 0,2% 0,4% 0,4%

As in the case with software services, the company decided to outsource hardware and networking services. It made a choice of a company, “Computing Two Ltd”, and it became “Insurance Ltd MKD” subcontractor for ICT services but application software. Here, with the hardware and services, as well as in software, the weakness of complete outsourcing repeats, that means that the quality of service is directly dependent on the capabilities of employees in the outsourcing company. When the staff of the “Computing Two Ltd” reduces, problems with the large response time in administering the database and the server arose. Second negative issue for the insurance company in choosing “Computing Two Ltd” as a partner in hardware and system support is that it is based in Skopje only and has no branch offices across Macedonia. They have only one company vehicle and a modest number of employees in the hardware and system support section, so the quality of support is inevitably low. Third issue is that “Computing Two Ltd” has no experience in creating and supporting an enterprise which has branches throughout Macedonia and that need to work on-line at full capacity and reliability. At this stage of development “Insurance Ltd MKD” needs a strategic partner who has experience as a systems integrator in banks or insurance companies, and which may transfer best practices from the operations of other enterprises to “Insurance Ltd MKD”. 4. Project/portfolio Management - moderate level of maturity. The fact that “Insurance Ltd MKD” company is young, that it uses its own custom made integrated insurance information system from the very beginning, and has no legacy systems, simplifies the situation [6] and does not require a high level of skills management portfolio and projects. 5. Manage Technical Resources – the same analysis applies from the previous section. 633


6. Manage Business Demand of IT – moderate. Business requirements are delivered in the ICT department, smaller and less requiring in terms of resources are implemented immediately, and major ones are presented and discussed at the Board of directors and accessed to deliver with the approval of the Executive Director. A steering group is not established or any formal body in charge of the priorities that will be awarded on ICT projects and resources. 7. Integration – moderate level. In terms of geographical spread, enterprise integration of LAN and WAN networks and the communications in general becomes a thorny issue that has been addressed incidentally. This issue became a turning point in the ICT domain in this stage of development of “Insurance Ltd MKD”. The current solution of the telecommunications and the WAN was applied at the end of 2005, when the company opened the first branch office. The intention of introducing interim solution was to allow branch offices to access the headquarters by acceptable cost, because of a modest workload. Also, because of the small workload of the new branch offices, lower speeds of WAN connections were rented. The plan was to introduce professional and stable WAN solution when the branch offices will become developed enough. Meanwhile, the number of branches increased from 3 in 2005-2006 to 17 in 2008, which stress the network and slowed down the larger branch offices in their work and the situation demanded a better solution. Attempt to resolve the situation with a free VPN service that was installed in all branch offices starting in September 2007 was a success, until the number of branch offices grew drastically and that solution proved not to be stable and fast enough to support the growth of the company. At this stage of development “Insurance Ltd MKD” needs a strategic partner who has experience as a systems integrator in banks or insurance companies, and which may transfer best practices from the operations of other enterprises to “Insurance Ltd MKD”. First contacts with the company “Computing Three Ltd” are realized, and it has a reference list with a number of banks not only the country but in the region, and has a specialized department for system integration. 8. Develop Architecture/Standards – Low. Market experience shows, in terms of the correlation between market share and standardization of the work in insurance companies is not positive, but it has negative correlation. For these reasons, there is lack of support from the top management to introduce the ISO, ISMS or other formal standards. 9. Manage of Relationships – Moderate. The relations with the outsourcing companies are on continuous basis, but the quality varies depending on the quality of the job done, that is on the quality of the current staff in the outsourcing company. 10. Manage the ICT Market – Low. Amounts on cost reducing management. 11. ICT Planning and Strategy – Moderate. Plans that take place in the company are financial ones, and this is a first effort for written ICT strategy, probably the first one in the industry in the country. 12. Manage ICT Financial Resources – Low. Lack of the top management support for ICT. 13. ICT R&D and Innovation – Low. Companies from the financial industry usually work on the safe side, and do not prefer innovations, especially not ICT innovations. 14. ICT Organizational Development – Low. Because of the lack of the support of the top management, ICT is not counted as a part of the core business, but as a supporting service. That is why it cannot serve as catalyst of an organizational development. 15. Manage Human ICT Resources - Low. There is no political will of the top management to employ more ICT specialists, and the company cannot influence outsourcing companies in their staff selection process. According to the analysis of the level of ICT capability maturity and the role of ICT in “Insurance Ltd MKD”, the conclusion states that the role of ICT is between levels 2 and 3, that is between integrate value chain and change business process. The level of capability maturity is between 1 and 2, respectively, which is technical capability and enterprise support. 634


This shows that in the recent past the role of ICT has come to change as a result of the development of the company and as a result of the business strategy shift. As a result of the changing role of ICT, a discrepancy between the ICT role in the company and level of capability maturity appeared. Solution for this discrepancy is to raise the level of maturity of IT skills. Proposed ICT strategy for “Insurance Ltd MKD” is to strengthen enterprise integration strategy, which takes part in some ICT areas, but not comprehensive enough in other ICT areas. The ICT strategy document for “Insurance Ltd MKD” continues with practical recommendations as to how the implementation of the enterprise integration strategy should be conducted, such as to change system integration outsourcing partner, with the specification of requirements that a new partner should fulfill in order to strengthen operations and services capability and integration capability; how to rise the level of telecommunication services in the company; to audit the network and the configuration of network servers to optimize their work and adapt to distributed access from multiple remote branch offices; to introduce a new database server taking into account cost/benefit analysis and the price of RAM, which is necessary to supplement the existing server; to purchase new anti-virus software that will make tighter control of viruses and other malicious software and increase network reliability and reduce the need for interventions on computers in branch offices in order to strengthen management of technical resources capability; to deposit the source code of integrated insurance information system from “Computing Ltd” to a notary in order to strengthen development of architecture/standards capability; to develop written procedures for the main ICT processes in order to develop architecture/standards capability; to initiate establishment of a steering committee in order to improve management of business demand of ICT; and other technical recommendations that exceed the interest of this paper. After fulfilling previous tasks, project/portfolio capability and management of relationships capability will become more mature as a result of the actions taken in other ICT areas. CONCLUSION There is no one or a few widely accepted ways of development of an ICT strategy, in theory and in practice. Our opinion is that Adams, Xia, and Ball method should be a method of choice of one ICT manager in developing an ICT strategy of a company. This paper presents a case of developing an ICT strategy for an insurance company in Macedonia. This case study is meant to help ICT practitioners to translate general, abstract method descriptions into specific, tangible, day-to-day ICT issues, during the process of development of ICT strategy in a company. Of course, the development of high quality ICT strategy is just a prerequisite of the final goal – its successful implementation, and becoming important factor in achieving the business goals of the company. References [1] Adams Carl R, Xia Weidong and Ball Nicholas L., “IS/IT Strategy: Concepts, Frameworks and Case Observations”, Proc. SIGLead Conference 2004, Athens, Georgia, USA, 2004. [2] Henderson John C. and Venkatraman N., “Strategic alignment: Leveraging information technology for transforming organisations”, IBM Systems Journal, 32(1), 1993. [3] Hayes, R. H. and Wheelwright, S. C. (1979). Link manufacturing process and product life cycles.Harvard business review, 57(1), 133. 635


[4] Rapp William V., Information Technology Strategies: How Leading Firms Use IT To Gain An Advantage, Oxford University Press, New York, 2002. [5] Earl Michael J., Information systems strategy formulation, in R.J. Boland and R.A. Hirschheim, eds, Critical Issues in Information Systems Research, John Wiley & Sons, Chichester, UK, 1987. [6] Ward John and Peppard Joe, Strategic planning for information systems, John Wiley & Sons Ltd, Hoboken, 2006.

IMPLEMENTATION OF RAPID SERVICE FOR VEHICLES REGULAR MAINTENANCE, AS GOOD MANAGEMENT IN PRACTICE Vasil Stamboliski, M.Sc., Lecturer, Vancho Donev, Ph.D., Full Professor,Radmil Polenakovik, Ph.D., Full Professor BAS-Business Academy Smilevski, Skopje, AVNOJ 74A, 1000 Skopje Abstract In the last few years the authors of this paper have measured the customers satisfaction after completed service of the vehicle in to the importer service center on the territory of the Republic of Macedonia. The Satisfacion refered to a long duration required for completion of small (regular/current) service operations. Having analysed the literature and the international experiance of the principal, authors have come to a solution of organizing a service department for rapid interventions, where team of repairers and technicians after implementation of new solution satisfied the customers needs and increase their satisfaction level. In this paper authors presented key costumer complains and offered solutions. Keywords: Service, Satisfaction, Clients, Service package, Rapid Service, Customer Relationship Management INTRODUCTION The demographic changes in the last few years made the time of each individual an economic important parameter. The working hours have been changed, it has been worked overtime or additional engagements have been required, weekends are no longer days for relaxation, especially in companies which deal with services and which offer 24 hours assistance to their customers. As a result to the above mentioned the customers’ requirements have been changed too, the value of their free time has been changed and using the definition of „high –quality spent time“is very often. [1] In order to meet the requirements of this paper work, the authors have chosen one of the biggest sales and service importer center in the Republic of Macedonia. The company has been operating since 1991 on the Macedonian market and it has already had an organizational set up in all sectors of its operation. After measuring and analyzing the results of the same, as well as examination of the good practice of the European Council, an implementation has been made with a purpose of improving the existing situation. After the implementation of the 636