2015 siloam hospitals awards write up

“We Accelerate Growth”2 0 1 5 F R O S T & S U L L I V A N

Siloam Hospitals

2015 Frost & SullivanIndonesia HopitalOf The Year

INDONESIAEXCELLENCEAWARDS2015

“We Accelerate Growth”02

2 0 1 5 I N D O N E S I A E X C E L L E N C E AWA R D S

AWA R D S . F R O S T. C O M

F R O S T & S U L L I VA N

B E S T P R A C T I C E S R E S E A R C H

Letter of Congratulations

Background and Company Performance

Industry Challenges

Visionary Innovation & Performance and Customer Impact of Siloam Hospitals

Conclusion

Signi�cance of Company of the Year

Understanding Company of the Year

Key Benchmarking Criteria

Best Practice Award Analysis for Siloam Hospitals

Decision Support Scorecard

Visionary Innovation & Performance

Customer Impact

Decision Support Matrix

The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology

Best Practices Recognition:

10 Steps to Researching, Identifying, and Recognizing Best Practices

About Frost & Sullivan

Copyright

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Table of Contents






We are proud to present you with this year’s award for Company of the Year in the Hospital industry.

Frost & Sullivan has a global team of analysts and consultants continuously researching a wide range of markets across multiple sectors and geographies. As part of this ongoing research, we identify companies that are true industry leaders, delivering best practices in growth, innovation, and leadership. These companies have a keen eye to the future, and drive innovation that meets future needs before they become commonly visible, thereby often being �rst to market with new solutions.

They focus on delivering the best products at optimal prices to maximize customer value and customer experience, and by doing so are growth leaders in their respective industries. Identifying such companies involves extensive primary and secondary research across the entire value chain of speci�c products and/or markets. Against the backdrop of this research, Frost & Sullivan is pleased to recognize Siloam Hospitals Group as the Company of the Year in the Hospital Market.

To deliver excellence worthy of the Company of the Year recognition is never an easy task, but it is one made even more dif�cult due to today’s competitive intensity, customer volatility, and economic uncertainty—not to mention the dif�culty of innovating in an environment of escalating challenges to intellectual property. Within this context, your receipt of this award signi�es an even greater accomplishment.

Moreover, we recognize that your receipt of this award is the result of many individuals (employees, customers, and investors) making daily choices to believe in the organization and contribute in a meaningful way to its future. We believe that such an achievement should be acknowledged and celebrated.

Once again, we congratulate you on your achievements and wish you great success in the future. We are here to support you on any future endeavors

David FrigstadChairmanFrost & Sullivan

Letter Of Congratulations






Indonesia’s hospital industry is one of the fastest growing in the Asia-Paci�c region, primarily driven by the private sector, with a 34% Compound Annual Growth Rate (CAGR) during 2011-2014. The industry’s growth is propelled by a growing and aging population, increasing healthcare demand, and rising income level.

However, the industry is underserved as there is a huge shortfall between the demand and supply of healthcare resources, hospitals being one of them. The country’s low number of hospital beds (284,892 beds in 2014), is unable to accommodate the demand of the fourth most populous country in the world, resulting in patients seeking treatments in other countries.

Established in 1996, Siloam Hospitals Group (Siloam) is a leader in the hospital industry in Indonesia. With only 19 years in the industry, the company has grown rapidly and currently operates the broadest private hospital network across the world's largest archipelago, with 20 hospitals in 14 cities.

To maintain its leadership position, Siloam aims to have presence in more than 25 cities, with more than 50 hospitals by 2017. Siloam also emphasizes on offering world-class care and services, equipping its hospitals with sophisticated technologies and facilities, while serving all income levels.


Industry ChallengesIndonesia’s hospital industry is one of the fastest growing in the Asia-Paci�c region, primarily driven by the private sector, with a 34% Compound Annual Growth Rate (CAGR) during 2011-2014.






Visionary Scenarios Through Mega Trends

Realizing the growing trend of medical tourism, Siloam made a strategic acquisition of BIMC in Bali in late 2013. Bali was the location of choice for the company to initiate its footprint in medical tourism, as Bali is one of the most visited islands in Indonesia by tourists, especially Australians. There are more than 2 million Australians who go to Bali annually.

To capture the Australian market, Siloam got BIMC Nusa Dua accredited by the Australian Council of Healthcare Standards International (ACHSI) in 2014. With the accreditation from ACHSI, it is able to attract Australian tourists as it guarantees that its facilities and standard operating procedures (SOP) in clinical procedures are of the same standard and quality as those in Australia.

Customer Purchase Experience

Siloam is known for its state-of-the-art medical technologies and equipment in Indonesia. Each of its hospitals is equipped with 1.5 Tesla MRI, 128 Slice CT-Scan, 4G Ultra-sound, and Cath-Lab. The latest technology the company adopted is the Gamma Knife. The Gamma Knife is a non-invasive tool, the latest technology used in performing brain related procedures.

Siloam acquired the most advanced Gamma Knife technology, called Perfexion, which allows more ef�cient treatment without compromising patient’s comfort. It is the only company in Indonesia to offer the Gamma Knife treatment and the �rst company in South East Asia (SEA) to acquire Perfexion.

Addressing Unmet Needs

Indonesia is a country that has high birth rates and low mortality rates. The country has a high birth rate of 18.5 births per 1,000 people, and currently the aging population (ages 60 and above) accounts for only 9% of the population. But it is foreseen that this age group will reach more than 30% of the population by 2040. Siloam aims to expand its hospital network as quickly as possible across Indonesia to cater to the growing population.

The company has been expanding rapidly since 2011 through acquisitions and green�eld projects, and in 2014 alone the company opened 3 new hospitals and acquired 1 hospital. With more than 30 projects in the pipeline, the company is well on its way to achieving its goal of having more than 50 hospitals by 2017.

Implementation Best Practices Patients’ safety and quality of care are the most important factors in the hospital industry as they involve patients’ wellbeing and lives. Siloam raised the standards for hospitals by getting accreditation not only from local bodies but also from international organizations.

Siloam Hospital Lippo Village is the �rst hospital in Indonesia to be accredited by the Joint Commission International (JCI) in 2007, and it got re-accredited 2 times, in 2011 and 2014. Its Bali International Medical Center (BIMC) Nusa Dua is the �rst hospital in Indonesia to be accredited by the Australian Council Healthcare Standards International (ACHSI) in 2014.

Visionary Innovationand Performance andCustomer Impact







Conclusion

Siloam is the clear leader in the hospital industry in Indonesia. Operating the largest private hospital network with the latest technologies and excellent quality of care, the company has built a reputable name in the hospital industry in the country. Maintaining its leadership position while offering stiff competition to new entrants, Siloam’s business model has been an excellent example for other industry participants, thus being replicated by other hospital groups. With its strong overall performance, Siloam Hospitals Group has earned Frost & Sullivan’s 2015 Company of the Year award.

Financial Performance

Siloam’s growth strategy and implementation excellence is portrayed in its �nancial growth. The company ended �scal year 2014 with a strong double digit growth. Its year-on-year revenue grew by 33% to USD281 million, while its EBITDA grew by 56% to USD39 million. This outstanding growth is driven by its new hospitals with new and revamped infrastructures and facilities, and are thus becoming pro�table sooner than expected.

Blue Ocean Strategy

Through the recent national healthcare reform, the Indonesian government is encouraging public-private partnerships (PPP) to serve the growing healthcare needs in the country. Siloam was the �rst hospital to establish a hospital based on the PPP model.

Rumah Sakit Umum Siloam (RSUS) is intended for the low income level, and it currently has a 250 bed capacity with a target to increase to 600 beds over the next 2 years. As 2 of Siloam’s visions are “International Quality” and “Reach,” RSUS patients have access to similar technologies available in other Siloam hospitals, like MRIs, CT-Scans, sophisticated operating theatres, and many more.







Key Benchmarking Criteria

Visionary Innovation & Performance

For the Company of the Year Award, we evaluated two key factors—Visionary Innovation & Performance and Customer Impact—according to the criteria identi�ed below.

Criterion 1: Addressing Unmet NeedsCriterion 2: Visionary Scenarios Through Mega TrendsCriterion 3: Implementation Best PracticesCriterion 4: Blue Ocean StrategyCriterion 5: Financial Performance

Customer Impact

Criterion 1: Price/Performance ValueCriterion 2: Customer Purchase ExperienceCriterion 3: Customer Ownership ExperienceCriterion 4: Customer Service ExperienceCriterion 5: Brand Equity

To win the Company of the Year award (i.e., to be recognized as a leader not only in your industry, but among your non-in-dustry peers as well) requires a company to demonstrate excellence in growth, innovation, and leadership. This kind of excellence typically translates into superi-or performance in three key areas: demand generation, brand development, and competitive positioning.

These areas serve as the foundation of a company’s future success and prepare it to deliver on the two criteria that de�ne the Company of the Year Award (Visionary Innovation & Performance and Customer Impact). This concept is explored further below.

Signi�cance of Company of the Year

UnderstandingCompany of the Year

BrandEstablish a strong brand identity

Align the brand to the company’s visionBuild a reputation for innovation

Inspire customersPush the envelope

DemandAcquire competitor’s customers

Generate awarenessIncrease market penetrationBuild a larger customer base

Balance pricing with profability

Be a leader in technology developmentDeliver superior value to customersEstablish a clear value proposition

Be a leader in innovationStake out a clear market position

CompetitivePositioning

As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to custom-ers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on visionary innovation to enhance customer value and impact.






Decision Support Scorecard

Best Practice Award Analysis for Siloam Hospitals

1-3 Poor4-6 Fair

7-8 Good

9-10 Excellent

Chart 1: Performance-Based Ratings for Decision Support Matrix

Measurement of 1–10(1 = lowest; 10 = highest)

Visionary Innovation& Performance

Customer Impact

Company of The Year

50%50%Relative Weight (%)

Siloam Hospitals

Competitor 2

Competitor 3

9.0

7.0

7.0

10

8.0

7.0

WeightedRating

100%

9.5

7.5

7.0

according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below.

To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance,

which con�rms that small changes to the ratings for a speci�c criterion do not lead to a signi�cant change in the overall relative rankings of the companies.The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players as Competitor 2 and Competitor 3.

The Decision Support Scorecard is organized by Visionary Innovation & Performance and Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the de�nitions for each criteria are provided beneath the scorecard). The research team con�rms the veracity of this weighted scorecard through sensitivity analysis,

RATINGS GUIDELINES

DECISION SUPPORT SCORECARD FOR COMPANY OF THE YEAR AWARD






Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

DECISION SUPPORT MATRIX FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE)

Decision Support Matrix

Criterion 1: Addressing Unmet NeedsRequirement: Implementing a robust process to contin-uously unearth customers’ unmet or under-served needs, and creating the products or solutions to address them effectively

Criterion 2: Visionary Scenarios Through Mega TrendsRequirement: Incorporating long-range, macro-level scenarios into the innovation strategy, thereby enabling “�rst to market” growth opportunities solutions

Criterion 3: Blue Ocean StrategyRequirement: Strategic focus in creating a leadership position in a potentially “uncontested” market space, manifested by stiff barriers to entry for competitors

Criterion 4: Implementation Best PracticesRequirement: Best-in-class strategy implementation characterized by processes, tools, or activities that generate a consistent and repeatable level of success.

Criterion 5: Financial PerformanceRequirement: Strong overall business performance in terms of revenues, revenue growth, operating margin and other key �nancial metrics

Visionary Innovation& Performance

Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market

Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints

Criterion 3: Customer Ownership ExperienceRequirement: Customers are proud to own the compa-ny’s product or service, and have a positive experience throughout the life of the product or service

Customer Impact

High

HighVisionary Innovation & Performance

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SiloamHospitals

Competitor 2

Low

Low

Competitor 3






Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow under-standing of their environment, leading to errors of both omission and commission.

Successful growth strategies are founded on a thorough understanding of market, technical, economic, �nancial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-de-gree research methodology provides an evaluation platform for benchmarking industry players and for identi-fying those performing at best-in-class levels.

Research Methodology

360-degree research: seeing order in the chaos

The Intersection Between360-degree Research And Best Practices Awards

Our awards team follows a team 10-step process (illustrated below) to evaluate award candidates and assess their �t with our best practice criteria. The reputation and integrity of our awards process are based on close adherence to this process.






Best Practices Recognition: 10 Steps To Researching, Identifying,And Recognizing Best Practices

Monitor, target, and screen

Perform 360-degree research

Invite thought leadership in best practices

Initiate research director review

Assemble panel of industry experts

Conduct global industry review

Perform quality check

Assemble board of advisors

Communicate recognition

Take strategic action

Identify award recipient candidates from around the globe

Perform comprehensive, 360-degree research on all candidates in the pipeline

Perform in-depth examination of all candidates

Conduct an unbiased evaluation of all candidate pro�les

Present �ndings to an expert panel of industry thought leaders

Build consensus on award candidates’ eligibility

Develop of�cial award consideration materials

Finalize the selection of the best-practice award recipient

Inform award recipient of award recognition

Share award news with stakeholders and customers

• Conduct in-depth industry research• Identify emerging sectors• Scan multiple geographies

• Interview thought leaders and industry practitioners • Assess candidates’ �t with best-practice criteria• Rank all candidates

• Con�rm best-practice criteria• Examine eligibility of all candidates• Identify any information gaps

• Brainstorm ranking options• Invite multiple perspectives on candidates’ performance• Update candidate pro�les

• Share �ndings• Strengthen cases for candidate eligibility• Prioritize candidates

• Hold global team meeting to review all candidates• Pressure-test �t with criteria• Con�rm inclusion of all eligible candidates

• Perform �nal performance benchmarking activities• Write nominations• Perform quality review

• Present candidates to a Board of Advisors• Build consensus• Select winner

• Present award to the CEO• Inspire the organization for continued success• Celebrate the recipient’s performance

• Coordinate media outreach• Design a marketing plan• Assess award’s role in future strategic planning

Pipeline of candidates who potentially meet all best-practice criteria

Matrix positioning all candidates’ performance relative to one another

Detailed pro�les of all ranked candidates

Final prioritization of all eligible candidates and companion best-practice positioning paper

Re�ned list of prioritized award candidates

Final list of eligible award candidates, representing success stories worldwide

High-quality, accurate, and creative presentation of nominees’ successes

Decision on which company performs best against all best-practice criteria

Announcement of award and plan for how recipient can use the award to enhance the brand

Widespread awareness of recipient’s award status among investors, media personnel, and employees

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

“We Accelerate Growth”2 0 1 5 F R O S T & S U L L I V A N

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