Viable alternative for cost-effective solutions

Viable alternative for cost-effective solutions

Ari A. Rachmat Contributor Jakarta

You wish to have an office of your own, but you do not have sufficient funds? Well, not to worry. By renting a serviced office available in the city, your wish is easily realized.

As the name implies, a serviced office is an office that comes complete with the related "content", be it hardware and software, such as furniture, telephone, fax, computer, and if you need them, a secretary, an office boy as well as a security guard.

In some ways like renting a room, the rental period of serviced offices (SO) is quite flexible as one can rent it just for a day or two or for years. Naturally, lower rates are applied for the longer rental periods.

That's why a serviced office has become a viable option for innovative and cost-effective solutions for specific accommodation needs.

The local SOs have emerged in answer to the need of foreign corporations to open their representative offices in Indonesia as they saw profitable business opportunities due to the decreasing value of the rupiah. Some of them established not too long ago -- in 1997, that is -- the number of companies providing serviced offices has, in comparison to similar businesses in the region, in fact enjoyed a relatively rapid growth. Some of them are purely domestic companies, while others are owned by foreign investors.

Most of the Jakarta based SO companies -- at least six of them -- have chosen the city's bustling central location popularly referred to as the "Golden Triangle" to provide their products.

CEO Suites is one that is located at both the Jakarta Stock Exchange and the Indonesian Batik Cooperatives buildings. HQ Global Workplaces has picked Wisma Ariobimo; The Executive Centre Indonesia has selected the Danamon Aetna building; Plaza Business Centre at Menara Kadin, while Jakarta Serviced Offices (JSO) have opted for Wisma 46 to market its offices.

Though fewer in number than those in Singapore, Hong Kong or major cities of developed countries, the local SOs can match the quality of services provided by their foreign counterparts.

"Just like a reputable star-rated hotel, we also assure our clients of high quality service," said Indra Sakti, manager of Jakarta Serviced Offices.

The presence of foreign owned and internationally affiliated SOs in Indonesia certainly makes the business more competitive. One of them -- established here in 1997 -- is the Executive Centre Indonesia (ECI) with its head office in Hong Kong and current networking affiliates in 12 countries.

Bearing a global brand, obviously, ECI provides international standard quality, as stated by its manager, Rosaline Mayapada, "our entire system and manpower have to conform to the standards set by our Hong Kong office". However, their rates for fully furnished and fully serviced offices -- ranging between US$650 and US$1,950 per month -- are not much higher than those offered by local players.

Though the country's economic condition has not improved much, SO businesses seems to be unaffected. Most of the offices have a high occupancy rate. For example, JSO, said Indra, still had a stable number of tenants as its 42 offices enjoy an 85 percent occupancy rate most of the time.

Likewise, Rosaline said, that her company's 36 offices have been fully booked from day one. "45 percent are occupied by the same tenants from the first days we opened business here, while the rest are also mostly our regular clients," said Rosaline.

In addition to Indra and Rosaline's optimism about the future of such business in Indonesia, the payment status of the tenants is also another positive indicator. According to Indra, despite the country's weak economy, his clients pay their rent on time. "Sometimes I wonder ... everybody is lamenting about our economic situation, but we keep getting clients and the number is on the rise plus they pay the rent regularly, which is in dollars, right on time," Indra commented half musingly.

Though not mentioning any specific figures, both Indra and Rosaline agreed that their companies' sales trend was definitely healthy.

Yadi Budhisetiawan, a business observer of Force Once marketing consultancy, attributed the success of serviced offices to the practical attitude of a number of business people who prefer this kind of hassle-free premises for their short or long- term operations.

"Apparently renting a serviced office, especially for new companies, is highly efficient as it does not require a huge investment," Yadi said, while also concurring that the business had a bright future.

Yadi suggested, however, that SO companies should be more aggressive in their marketing and promotional activities. Rather than relying merely on the current word-of-mouth strategy, they should resort to a more integrated marketing program, which could include such things as direct mailing, direct selling etc. Another vital aspect, Yadi added, was that further intensive training should be provided for the support staff involved.