Pak IT firms deals with Indian counterparts
KARACHI – Pakistan’s IT industry has joined hands with its Indian counterparts as almost a dozen Pakistani software houses have entered into business deals with its neighbouring firms.
It all began during the last three months – thanks to a U-turn in the diplomatic ties between the nuclear-armed rivals after five decades of bitter rancour.
Some 12 software houses of the country have either entered into business partnership agreements with Indian companies or plan to operate from the neighbouring country following the visit of a strong delegation of Pakistan Software Houses Association (comprising fourteen IT firms) to India last February.
The infant software industry of the country hopes that the co-operation would get a huge boost in the days to come.
“There are several companies who have struck deals with Indian companies. Each one has a different nature of agreement – some have business partnership agreement and some intend to operate from India,” said Jehan Ara, President Pakistan Software Houses Association.
“Our companies were looking for such ties for long and at last it has happened. It’s better late than never,” she said.
Ms Ara said that the interaction between the Pakistani and Indian IT companies was initiated after a PASHA delegation comprising 14 IT companies (mostly involved in software exports) visited India in February this year to attend the NASSCOM (National Association of Software and Service Companies) Annual Conference.
“I hope the co-operation between the two countries would continue but it does demand peace in the region,” she observed.
India has emerged as an IT business hub of the region in a decade and turned into a popular destination for Western outsourcing contracts.
India’s software exports, based on strong English language skills and cheaper wages, grossed $9.5 billion last year and are expected to grow at least 26 per cent in the current fiscal.
Pakistan’s software industry, which exported around $125 million software last year, foresees good opportunities for the local companies in the thriving outsourcing business in India.
“India is far ahead from our companies as far as business and technical expertise are concerned and we endorse that,” said Abdul Ghaffar Memon, Chief Executive of Kalsoft, which recently entered into business partnership agreement with India’s Indus Soft.
“No doubt the world is focusing on India for outsourcing business but due to the growing demand they also look for alternates and this has lifted our hopes,” he added.
He sounded confident and said that Pakistan had enough potential and IT expertise even to offer India and to substantiate his claim he cited details of the company’s agreement with India’s Indus Soft.
“Take an example of our company. We have signed the deal, under which we would offer professional training to Indus Soft in certain projects and definitely share business,” Memon added.
Apart from business agreements a few software houses plan to operate from India, which has proved itself to be a centre of Western outsourcing business, and grab some share from India’s over $12 billion IT industry business.
“We have not formed partnership but have established a facility at Bangalore. NetSol Technology India will initially be used for technical resources required in our different projects,” said Salim Ghauri, head of Netsol, one of the biggest and richest software houses of the country.
“India has bigger and diversified resource pool than Pakistan. During the last three months we saw very positive response from our customers since Vajpayee visit to Islamabad,” he added. He does not agree that the Indian IT industry has much to offer to Pakistan in terms of business but believes that the local companies can benefit from cheaper training available across the border compared to the cost of sending the professionals to the United States and Europe.
“I do not believe we will get any business from Indian companies, but software houses can benefit from cheaper training available in India as compared to the cost of sending our technician to the US and Europe,” Ghauri said.
He suggested that the local companies could form alliances with Indian companies to offer their facilities and sometime better infrastructure in Lahore, Karachi and Islamabad.
However authorities are confident that the improving ties between the arch rivals would witness healthy business deals.
“Definitely, there is plenty of room for Pakistani companies to gain technical expertise and even business deals from India,” said Dr. Amir Mateen, MD Pakistan Software Export Board.
“And as the companies from both sides are interacting, I think they would be able to develop understanding and business in each other countries,” he added.
Currently, India attracts over $12 billion Western outsourcing business through its call centres. According to an estimate the world’s IT industry business is projected to touch $58 billion mark by 2018.
The authorities say that the recent co-operation between Indian and Pakistani IT industry is a result of the companies’ self-initiatives.
The PSEB claims that it has not pushed the local firms to join hands with the Indians but supports such efforts and development.
“There is no effort at the government’s organization level. Its all their (software houses) own efforts and it has returned good results. We really appreciate this,” Dr. Mateen said.
The government established the PSEB in 1995 as an independent body to bring to the world’s attention the new information age of the country.
According to the PSEB 39 per cent of IT students in Pakistan have at least 2 years of practical experience and now the first Virtual University aims to educate thousands of students in more than 200 cities across the country.
The country’s software industry term the co-operation with India in the IT field as the need of the hour.
“India has its reputation in the international market for its IT and telecommunication related services,” said Amir Abbas Ashary, CEO of DataNet Pakistan Private Limited, which is going to have venture with Indian company as its technical adviser as the company specializes in data processing of US health care industry.
“As a matter of fact, Pakistan also has the potential and resources to provide such services’ with quality and for competitive prices but still lack in getting sufficient share in international market,” he added.
He suggested that by working together and entering into joint ventures, business partnership deals and having wider pool of resources, India and Pakistan could collectively capture the greater portion of the market.
He said Manhattan Data Inc, DataNet’s US-based marketing firm plan to have a joint venture with the Indian company MDI-DataNet to start a BPO shop in Kerela India.
“The company will have its service centre in Trivandrum Techno Park. It’s expected to be in operation in July 2004. The company will start with a capacity of 50 operators, which could be easily and rapidly expandable,” Ashary elaborated.
The Indian Silicon Bangalore has companies like Nasdaq-listed Infosys Technologies Limited and New York-listed Wipro Limited, which are among leading gainers from outsourcing by the US Fortune 500 giants.
Call centres share around 60 per cent of country’s total outsourcing business.
The call centre is defined as a unit that has adequate telecom facilities, trained manpower and access to database providing information to customers.
The advancement in telecom technology has made it possible that the person handling a call could be anywhere provided that communication and interaction is properly handled.
The call centres work on toll free number concept but for some premium services like technical consultation the caller has to pay calling charges.
But the country’s software houses still lack financing facilities from the government side, which is a major hurdle in their effort to compete with other countries.
“The only element that our software houses lack, is financing. The government should initiate projects just to facilitate software industry,” said PASHA President, Jehan Ara.
She urged the finance and IT ministries to design form such policies that would benefit the software industry.
The software development business entered into the country with a bang in mid 90s but couldn’t last long.
Source: The News
Date:5/19/2004
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