Human Capital Analysis of Insitek Company

Company Background

Based on World Bank data (2014) only 17% of Indonesian population are connecting with Internet compared to 40% of global population are connecting Internet (ITU Data). The minimum user of Internet is due to lack of existing Internet access. Furthermore, almost half of Indonesian population, which are living in rural area (World Bank Data), is difficult to get data access in concert/events (highly dense area).

One of the biggest problems is highest cost and long deployment time terrestrial infrastructure. Thus, using Helion as balloon to lift up the telecommunication devices for better coverage, which shared via Wi-Fi in large areas could be a best offer. The benefits are relatively lower cost system and faster deploying time; highly potential to compensate the performance of space-based (satellite) and terrestrial infrastructure (cable, BTS, and fiber optic); the system is able to share internet Wi-Fi connection in large area. Furthermore, Helion could also be used for mapping in some areas, such as agricultural areas, marine areas, know the state border and violators, and knowing beforehand the potential for natural disasters.

Helion is Internet providers for Business-to-Business (B2B) with the target market of companies and government who intend to communicate in rural and remote area and also needs mapping agricultural areas, marine areas, and natural disasters potential. The positioning of Helion is the first Wi-Fi balloon startup in Indonesia, which offer application and connectivity through Helion balloon, which could connect people in rural and remote areas, help fill coverage gaps, and bring people back online after disasters.

Based on culture, the target market of hellion is lives in Indonesia, which have a specialty in gas and other natural resources, which located in remote area or rural area. The companies have a demand for a connection to strengthen their ability to work. Google’s Project Loon plans to introduce a fleet of high-altitude balloons to the stratosphere, from where they will beam down internet signals to remote areas. It has chosen Indonesia as one of its test sites.

In one of their recent test flights, the balloon was raised to an altitude of 80 meters and was able to deliver a Wi-Fi signal to a 300-meter radius on the ground. Raising the electronics above ground, Hagorly the CEO of Insitek Company says, delivers a stronger signal than terrestrial Wi-Fi because there are fewer physical obstructions. The system works best outdoors, in a flat environment. A balloon can stay up for about a week before it needs a refill – the helium it contains slowly seeps out. Raising and lowering the balloon is simple, so it doesn’t take much manpower to maintain it and the electronics attached.

Business Issues

The cost remains an issue, however: the 3x3x3-meter polyethylene skin – the team uses standard industry balloons that are manufactured locally – swallows about US$380 worth of helium per filling. “It’s cheaper than building a Telco tower,” Hagorly maintains. “There are many costs to maintaining the tower. We just pull down the balloon. A tower needs electricity. In rural areas it’s quite hard to deploy towers.” He also admits the setup needs a strategy to prevent theft.

Unlike Project Loon, which seeks to eventually cover large geographical areas with hundreds of balloons released into the stratosphere, Helion sees itself as a quick, local, and targeted solution.

A possible scenario for deployment could be along borders of national parks, the team explains. Helion balloons can also be fitted with remote sensing equipment, like fire sensors or cameras, which help monitor activities in the area. Large outdoor events, like open air concerts, are another possible use case.

Insitek has 6 people that are the original team member, while 5 others are research partner and advisors. Each people have their own responsibilities that require them to be expert in that particular field.

Based on the CEO of Insitek explanation, these are the problem that Insitek has to overcome:

1. Mitigate the possible issues especially the cost of the helium uses for Helion to deploy
2. Making sure the uses of the helium is efficient
3. Preventing losses from the deploying the Helion by the operator
4. The issue about prevent a theft

Theoretical Basis

According to the journal article written by Alika, Joseph, and Aibieyi (2014) there are many definition of human capital defined by experts. One of it is based on Schultz (1979) human capital involves increase investment in education and training of the individuals. Individual’s abilities can be enhanced through education and training that bring about effective change in the performance of jobs. Another definition is the words of Marimuthu, M. el tal (2009) human capital simply refer to the “processes that relate to training, education and other professional initiatives in order to increase the levels of knowledge, skills, abilities, values, and social assets of an employee which will lead to the employee’s job satisfaction and performance.”

Olomolaiye and Egbu (2005) write in their article that ‘Tacit’ means ‘hidden’, tacit knowledge is knowledge hidden from the consciousness of the knower. Tacit knowledge expresses itself in human actions in form of evaluations, attitudes, points of view, competences, experiences and skills stored so deep in the worldview of an individual that it is often taken for granted. It can be observed through action.

Explicit knowledge, on the other hand, is that knowledge that can be articulated in formal language and easily transmitted amongst individual said by Koulopoulos and Frappolo (1999). Another definition of explicit knowledge based on Koskinen et al (2003) that it implies factual statements about such matters as material properties, technical information and tool characteristics. Explicit knowledge can be compressed into a few summary symbols that can be encoded by language in written words and/or machine. By its very nature, explicit knowledge is capable of being capture and widely distributed throughout the organization.

Dubois, Rothwell, Stern, and Kemp (2004) wrote in their books that George Klemp (1980) defined a job competency as “an underlying characteristic of a person which results in effective and/or superior performance in a job”. He also noted that “competencies are characteristics that are causally related to effective or superior performance in a job”. Expanding on that definition, Spencer and Spencer (1993) described a competency as “an underlying characteristic of an individual that is causally related to criterion-referenced effective and/or superior performance in a job or situation”.

Aghaz and Tarighian (2016) wrote that Weber (1978) proposes bureaucracy is the most fundamental structure transforming societies from an underdeveloped to a developed one. Despite its deficiencies, bureaucratic structure remains to be the prerequisite for the development of public administration in developing countries said by Utaybi (1992). Beyond the previous studies mostly considering the dark side of bureaucracy, this study investigates this construct adopting a holistic view initially theorized by Adler and Borys (1996). According to them, a distinction must be made between two types of bureaucracy: enabling versus hindering. Although bureaucracy has been heavily criticized for being a dysfunctional structure, different types of bureaucracy received a considerable attention by some researchers along a spectrum, with enabling on one end and coercive on the flip side.

Analysis of Human Capital Management Inside Insitek

The analysis will be done by using Human Capital Management (HCM) to overcome the problems faced by Insitek that already mentioned earlier in Chapter 1. From the first problem to the last, authors will try to communicate solution within the boundaries of Human Capital. Each problem will be given solution and explanation.

1st problem is to mitigate the possible issues especially the cost of the helium for Helion to deploy. The main point to be noticed is that there are possible issues for the cost of helium. To mitigate the possible issues, Insitek should list all of the possibilities into reports. This step needs the understanding of managing tacit knowledge and turning it into explicit knowledge. By turning it into explicit, all of the team member can understand the issues as well. This will make it easier for Insitek to list possible issues and provide solution for the issues.

2nd problem is to make sure that the uses of helium are efficient. 3rd problem is to prevent losses from deploying Helion by the operator. Both problems need someone capable to manage the operational of Helion before and while it flights in the air. Insitek need to assign a manager that can delegate the responsibilities of these tasks. One is responsible for the preparation before Helion can be deployed. The one responsible need to take measure of the worst possible issues that might happen in the field. Another one is responsible to manage the helium used while Helion in the air is stable in efficient capacity. All of this solution requires Insitek to employ people in operational management that have competencies to do so.

Last problem is to prevent a theft. Well, Helion is a device that can works without human supervision all the time. This means that Helion is not watched and vulnerable to be stolen. The solution is Insitek needs to clarify the legal permission in the place that Helion is deployed. After making sure about the legal permission, Insitek can make a bureaucracy on how to operates and maintain Helion in that area. Only staff allowed entering the area where Helion deployed. This area only needs to be supervised by CCTV 24/7. In addition, because of the legal permission, Insitek can ask authorized security in that area to help supervised Helion occasionally. Basically creating an order on how to supervised Helion and how to operates it will prevent some stranger that might be a theft from entering Helion area without Insitek knowing.

Conclusion

Employees are the most valuable resources in a company. Individuals who do maximum performance for their part of the job will contribute towards the success of the company itself. By using Human Capital Management and understand how People in Organization works, the company can maximize their resource to the fullest.

Employee with tacit knowledge is a great asset to the company, but turning the knowledge into explicit knowledge will not be just a great asset but also a great investment for the company. Explicit knowledge can help another employee without decent knowledge to learn and train. Not only that, all the team can understand what the job for each other is about and how to support each other.

Human Capital Management is also useful for recruiting or training employee. Understanding the job specification and what competencies the job needs is the key to find the right employee for the job. To maximize the effectiveness in the job, the company has to employ the right people with the right competency for the job.

Bureaucracy can be a double edged sword. It can make a gap between the management team with the employee. But it can also be used to create order for the job and to maintain it the right shape. How the company utilize it is vital for the organization itself. To do so, the company needs to understand how People in Organization works inside their environment.