Pakistan’s IT exports set to witness tremendous growth


Pakistan’s information technology (IT) industry is set to post a robust growth in the coming years, as global economies have started recovering from the shocks of recession.”Global economic recession had a negative impact on the growth of Pakistan’s IT firms. But we were not as badly affected as IT industries of other parts of the world. We have created our space globally, and the world now looks at us as one of the viable options,” said the Managing Director of Pakistan’s oldest and largest software house, Systems Limited, Ashraf Kapadia while talking to Business Recorder.

He said that according to some official reports, the country has over 1200 IT firms catering to diversified needs of local and foreign clients. According to State Bank of Pakistan’s report, total export of software and IT-enabled services stood at $204 million in 2009-10. Industry believes that the country’s exports of software and IT-enabled services are close to $1 billion annually.

Pakistan Software Houses Association has estimated that if the current growth rate continues, Pakistan’s IT industry will exceed $11 billion within the next 5 years. The country has enough potential and manpower to create a way for its IT exports globally, said Ashraf who is also Chairman of Pakistan Software Houses Association (P@SHA).

He said, “I think if the present growth rates continue, we will significantly increase the IT related exports from Pakistan. We need to plan and prepare ourselves to meet the challenges of growth”.

Kapadia said that with the signs of recovery at global level, “we are hopeful that corporations and businesses would once again focus on upgradation of their IT skills and business processes through IT advancements”. Pakistan has a bright chance to compete globally for the up-coming opportunities. Local IT industry has a lot of potential and also has several reasons to record better growth than its counterparts in Asia and world-wide. The availability of cheap human resource and exemption of taxes on IT exports are the major advantages enjoyed by local IT firms that make them further competitive in international scenario, he added.

About his company he said “We are the pioneers of bringing IT revolution in Pakistan. Systems Limited was established in 1977 as the first software house and computer services bureau of Pakistan. During last 33 years, Systems Limited has remained on the centre stage of information technology, providing effective computing strategies and solutions to private and government organisations and is currently playing a major role in some of the largest IT projects in the country.

Internationally, the company operates as Visionet Systems Inc, and has established itself as a key player in critical areas of focus in the United States, providing services and products to a growing list of corporate clients that features several names from the “Fortune 500” he added.

Systems Limited specialises in delivering customised software solutions, embracing the entire software development life cycle. The company even goes beyond deployment by providing IT consultancy, software re-engineering, maintenance & support and business process outsourcing services. Its competencies cover a wide range of enabling technologies and relate the personnel at the company to the skills that they offer and the roles that they carry out. Systems Limited has a diverse technology expertise base, highly proficient in Microsoft, Java, Oracle and IBM technologies.

“We have been growing significantly and consistently over the last 5 years and today have a staff of almost 1,500 highly trained professionals compared to only a few hundred some time ago. Our fiscal year just ended on December 31 and we have recorded annual group revenues of over 1.5 billion rupees,” he said.

“The impressive growth and profitability is attributed to satisfied clients, greater employee commitment and stronger demand of our globally acclaimed products and services in the domestic as well as international market. We are hopeful to maintain the same growth and profitability trends in 2011 and the new decade, “he said.

“Almost 80 percent of our revenues are from exports of IT services to USA. In USA we operate as Visionet Systems, Inc. Visionet has a staff of 70 highly skilled professionals located all over the United States. They interface with clients and manage the offshore resources located in Pakistan to deliver a seamless service for US projects. In the US, we have carved ourselves a niche as Top Provider of services to the mortgage banking and apparel industries.”

Talking about the challenges he said that the phenomenal growth experienced by the IT industry over the last few years has put significant pressures on the availability of high quality human resource required by the IT industry. While the recent economic downturn has alleviated the pressures to some extent, “we need to continue our focus on enhancing the quality and quantity of the human resources, otherwise, when the turnaround comes, we will again be constrained and will not be able to capitalise on the opportunity when it arises”.

In terms of infrastructure, facilities like suitable office space, uninterrupted power supply, and fast reliable data communications are critical to the growth of the IT industry, both in terms of local projects as well as export projects. Unfortunately, these infrastructure facilities are woefully inadequate, and there are no visible plans to address these issues, he added.

He said: “It’s true that only a few IT companies are listed on the stock exchange. I personally think that other Pakistani companies should also consider the option of going public and get themselves listed on the stock exchange through IPO. We at Systems Limited are of the view that we should consider this option and have our firm listed on the stock exchange at an appropriate time.”

“In terms of exports, by far the major market is US, especially if you take a company like Systems Ltd, almost 100 percent our export is to the US. If you take most of the other companies they will have a very large majority, probably 70-80 percent, as US market. Although recently past three years or so the African market is growing and a lot of Pakistani companies are now working in the African market. In terms of Pakistan, if you look at the domestic industry, it’s the standard, banking is by far the largest then you have telecoms as major user”.

About the issues being faced by IT companies on intellectual property rights (IPR), Ashraf said that IPR issues are mostly faced by companies which are offering their products in mass market such as Windows and MS Words etc. A company like Systems Limited does not have many challenges to protect IPRs “because we are not into consumer-level products, meaning that we do not sell products like word processor or any such product which are used by millions of end user. Instead, we are mainly into corporate solutions which are licensed and installed at very large organisations. Large organisations and corporate sector do respect our intellectual property rights. Secondly, our products require a lot of customisation and installation efforts. So, it’s not that ‘I give you a CD and you go home & install it’. There is a whole team of people who come and install it, configure it, and then train the employees.

Talking about the indigenous IT products and software, Ashraf said that it requires lot of R&D to develop products like word, excel, etc. There’s a lot of effort and investment that goes in and that can only be recovered from licensing. So, obviously, if Microsoft is investing in developing new software it has the right to earn licensing revenue from the whole world. “If we talk about a small company in Pakistan to invest in product development for mass level, it will not be able to generate the revenue that it invested in the product development. Although people keep talking about making our own products such as word processor and operating system but I believe it’s a waste of effort now. What we should be focusing on is developing something for our own local market which nobody else is developing or making. For example, if you talk about Urdu or Sindhi, let us invest on making the fonts and making the rendering on the screen & on the printer & leave word processing to the word processor company or Microsoft or Lotus and others.”

Ashraf said that Pakistan’s IT companies are doing a lot of high quality work and it would be totally wrong to say that the work being done in Pakistan is of low level. The kind of work being done in Pakistan is very good; a lot of companies are doing very high level work. “For example, if you look at gaming, there are a few companies in Pakistan that are doing leading edge work. Systems Limited has a product called VisiRelease, which is used for mortgage industry only in the US; that is 12 percent of the total US market in terms release processing which is a huge share of the market in the US”.