IT woes: Pakistan’s software houses need to share
Local industries need to work together towards greater rewards, instead of compartmentalising their interests.
Despite their strength in numbers, many local industries have lost their competitive edge in core product offerings.
Let us examine one such industry: Pakistan’s IT sector.
The two biggest industry associations, PASHA (Pakistan Software Houses Association) and PSEB (Pakistan Software Export Board) represent a total of 1,800 members (400 and 1400 respectively). But these numbers do not translate into dollars when compared to other regional players. Despite the large number of PSEB members, the total size of software and IT services export from Pakistan is only slightly over a billion dollars - that is 50 times less than India’s.
Although Pakistan’s IT Industry has witnessed exponential growth in the last decade, a lag exists, which can be best addressed by carrying out a scenario analysis of the local market. According to PSEB, the annual growth rate of the local IT sector has increased 33 per cent from 2005-06 to 2009-10, employing a human resource base of approximately 110,000 with more than 15,000 IT professionals engaged in export-oriented activities. Given the essence of the industry, which runs on low costs and higher productivity, is the figure of USD1 billion justified?
Tackling weaknesses effectively
Below are a few limitations which inhibit the resource-efficient and cost-effective growth of the industry, translating into an exponential growth in industry size in dollars.
- Knowledge-base of start-ups;
- Access to a trained HR base
- Access to Venture Capital funds.
One way to tackle this is by promoting a collaborative working environment. The aim behind going collaborative would be to reduce costs and increase levels of efficiency, taking up the size of software exports from the local IT industry to its truest potential.
In other words, businesses should consider collaborating on larger projects, capitalising on each other’s strengths.
A need for examples
What is required here is a sincere move forward towards expanding horizons and thinking big. This is best done when the right combination of resources is used in a collaborative business environment to jointly handle larger projects combining one’s resource strength in a particular domain with the other’s strength in another domain.
InfoTech: One company that got it right
An exemplary local institution that is trying to bring such a culture to Pakistan is InfoTech. It is a leading systems integration and outsourcing services provider, based out of Pakistan, with a client portfolio ranging from the largest banks in Pakistan to capital markets in Africa.
InfoTech offers technology solutions to an all-sector economy, including the banking/financial sector, telecommunications, government, manufacturing, and retail/distribution businesses. Other than infrastructure solutions, InfoTech also provides outsourcing solutions and technology consultancy. In order to deliver larger projects internationally, InfoTech has collaborated with many local and regional companies that complement its strengths.
Naseer Akhtar, CEO of InfoTech, says:
If we do not get into the habit of collaborating and delivering quality internationally, Pakistan will never be considered a serious contender in the global market. We need to change our much destroyed image and have to make the global markets respect us for the potential that we possess.
All set for the bigger picture
So what exactly am I suggesting? Any weakness can be tackled effectively with a broader vision and a drive to turn weaknesses into windows of opportunity. This is possible through synergising and collaborating.
This is not to insinuate or discourage projects being handled single-handedly, but to stimulate a thought process towards creating more opportunities in the global market, where competition is fierce and experience is key. This atmosphere makes it very difficult for single, smaller companies to service large projects.
With various example setters in the international arena, InfoTech is a local winner, which has been working collaboratively with its colleagues in the local industry to deliver valuable projects, locally as well as globally.
Greasing the wheels
Simply put, there are a few cultural traits that need to be collectively addressed, in order to move to the next step of working together in a shared environment that requires sharing of resources.
Generally speaking, these include:
- A trust deficit;
- A hesitancy to make the first move;
- The lack of a legal framework to enforce compliance with rights and obligations stated under a contractual agreement;
- A corrupt and lethargic attitude.
With the bigger picture in mind, it is safe to assume that compartmentalized approaches can no longer guarantee success in the long run.