Technology

Value, the name of the game in software industry - SEA Chairman

by Gamini Warushamana

With a well focused strategy for the development of the IT/BPO industry of Sri Lanka (launched last week), the chairman of the Software Exporters Association (SEA) Mano Sekaram said that to achieve the $ 1 billion export target by 2012, the industry needs only 25,000 IT professionals.

Sekaram who is also the CEO of the Eurocenter DDC, a leading Sri Lankan software company that is well established in the European market said that India is not the model for the Sri Lankan software industry to follow.

Here are excerpts from the interview.

Today, we have a $250 m IT/BPO export industry and our vision is to reach the $ 1 billion mark by 2012. Now the industry has a strategy that all stakeholders agree upon. The problem now is achieving the targets.

Firstly we should realise the market trend. Outsourcing is a non reversible mega trend. It is similar to offshoring of manufacturing industries in the US and Japan. It is similar to what happened in the car industry.

Good notion

It is a good notion and according to the theory the knowledge worker has arisen and today goods and services can be produced anywhere in the world. Nobody can reverse the trend in this service industry.

When we search a model to develop the Software industry in Sri Lanka, the Indian model is always pointed out. If you take India, the country produces 400,000 graduates annually and over one million people are engaged in the industry. We must be realistic as we will never produce such a large number of IT professionals. India plays a volume game. It is very clear that we can't be India. Therefore, we have to decide on a model that can be applied to the size of our economy and the number of knowledge workers we can produce.

We have two successful models to follow, Ireland and Israel. Both are small economies and highly successful in this knowledge industry. If we consider Ireland, the population is four million. But the country's software export is as much as India.

The secret is they have built their industries to go for higher values. For instance, the average export revenue from one knowledge worker per year in India is $20,000 - $30,000. In Ireland it is $ 100,000-200,000 per employee per year. In Israel it is around $165,000. Our strategy is also to go up in the value chain.

According to calculations, if we can achieve $40,000 export revenue from an employee per year, we need only 25,000 knowledge workers to achieve the $ 1 billion target. Already we have around 10,000 employees in the industry.

The number of engineering and IT graduates coming out from state and private universities is not enough to meet this demand. However, the quality of the graduates coming out from our state universities is very high, because they are the brilliant spirit filtered from around 17,000 who passed the GCE Advanced Level Examination.

We should build on the capacity quality-wise and not quantity. To play the game in value we need high quality professionals.

Quality standard

The next important aspect is the quality of our products and service. We have to develop a unique quality standard similar to the Japanese 5S quality standard as well as encourage our software companies to achieve international quality standards.

Today we have two standards - the ISO 9000 and CMMI from the Software Engineers' Institute of USA. Our target is certifying 50% of Sri Lankan companies with either of this criteria.

The other important factor is marketing Sri Lanka as a quality software producing country. This is essential for the industry and Sri Lanka should be known in corporate board rooms as a software exporter as well and not only for good tea and tourism.

Even today top world businesses are running on our cords. The world's top airlines, hospitals and mobile companies are among them. But nobody knows about this because software is not a tangible product with brand tags. If we only promote what Sri Lankan software companies have already done that would be an advantage for the industry and the country.

Sekaram said that some proposals of the proposed strategy have already been implemented while others are being implemented. For instance, 14 companies have already obtained quality certificates. ICTA assisted in this endeavour.

In terms of promotion we participated in the Outsource World exhibition held in UK. We have organised match-making programs to link small companies with markets. We also have programs with the Export Development Board (EDB).

Strategy

In implementing this strategy, the biggest constraint is funding. We get funds from ICTA but it is not sufficient.

The media should play a big role in promoting the IT/BPO industry in Sri Lanka. If we meet the targets as we have planned, this industry will be a big revenue earner in the country.

The message should go to the people, the students and the parents to get ready to enter into the industry. This industry is not restricted to the elite. At present the top positions in the leading IT/BPO companies are held by graduates from rural areas. In the Eurocenter DDC, 85% of the employees are from the outskirts.

The names of our industry should be disseminated. Today all our IT/BPO companies are world-class companies.

We are strong in the US and European markets. We secure these jobs by competing with European and US companies.

Similarly, we should promote Sri Lankan software locally. The local market is very small unlike India which has a huge domestic market. This domestic market is a good testing field for incumbent companies, he said.

Brilliance in IT/BPO industry

Sri Lanka honoured the most outstanding IT professionals and IT/BPO entrepreneurs for the first time in history.

The awards night was organised parallel to the first national IT/BPO summit held last week and the national strategy for the development of the IT/BPO industry was also unveiled at the summit.

The Information and Communication Technology Agency (ICTA) organised the summit and awards ceremony. The awards presented were; young IT professional awards (3), most outstanding entrepreneur award and most outstanding CEO award.

The Young IT professional awards were presented to three brilliant persons selected from among many who submitted applications. The independent expert group who evaluated the applications were unanimous in that the selected awardees were the best and the brightest among the applicants.

According to the panel they had the potential to make a substantial contribution to the industry.

The young ICT professional awards winners were Associate Team Lead at Virtusa (Pvt) Ltd Anuki Gunawardene, Assistant Manager, Business Process Excellence and Transformation, WNS Global Services Sri Lanka, Dumidu Ranaweera and CEO, Zeelabs (Pvt) Ltd. Zulfer Hassen.

The most outstanding entrepreneur award was received by the CEO of Microimage (Pvt) Ltd Harsha Purasinghe. The award recognised a young entrepreneur in the IT-BPO sector, who started in a small way, took business risks and successfully exploited market opportunities, to grow into the medium or large scale industry that he leads today.

ICTA said that the industry and the country need more pioneers of this nature.

Chairman and CEO, of Virtusa Corporation Kris Canekeratne received the most outstanding CEO award.

The most outstanding CEO award recognised the entrepreneur who had made a significant contribution to the industry, during the past year, besides leading his own company, to greater heights.

GW

Dilemma faced by Research Institutes

by Dr. A. Nugawela, Director, Rubber Research Institute, Sri Lanka

The article in the Sunday Observer of September 2, under the heading "Research institutes should open doors to technologists" and highlighting the views expressed by Mevan Pieris, the President of the Institute of Chemistry Ceylon on Research Institutes of the country needs serious and urgent attention of all concerned.

Research and Development is the driving force of the development of a country. All industries in the world are faced with stiff competition today and it is the Research and Development capabilities that will determine the performance and their survival.

Therefore under any circumstances it is mandatory that the Research Institutes cater to the needs of the relevant industry. Generally all Research Institutes in the country face a rapid decline in both Human and Financial resources.

Loss of Human capital is through the external and internal brain drain. At the Rubber Research Institute of Sri Lanka the Rubber Technology Departments are very badly hit due to the brain drain.

Valuable resources

Qualified and experienced Scientists and Technologists who should be at the Rubber Research Institute today, effectively and efficiently contributing to the Research and Development activities whilst guiding the new blood are now either abroad or in the country lecturing at an University or working for an industry in the private sector.

Even the qualified but less experienced Scientists and Technologists currently serving the Institute are contemplating following suit for greener pastures. They cannot be blamed but the research institutes in the country should have a system to retain these valuable resources. This trend if continued will lead to a vicious cycle.

The new blood recruited to the Institute will not have qualified and experienced scientists and technologists to guide them. Hence if the trend taking place at the Research Institutes today is not arrested the Research and Development capabilities of our National Research Institutes will deteriorate further.

Impact of lease changes

What Mevan Pieris has pointed out is the impact of lease changes taking place at the research institutes today. It may be that Research Institutes should open the doors to technologists as stated by Pieris, but what is more important is the capability of the research institutes to sustain the high quality and experienced scientists and technologists in the institute until their retirement.

In a situation like this it is very obvious that the research institutes will not be able to cater to the entire needs of the industry.

This void is felt more by the industry today since it is only through technological advancements that any industry could be viable and be competitive in the global market today in an environment of escalating costs and scarce human resources.

Anyhow the research institutes need to fulfil their obligation of supporting the industry. In the light of this situation what is the best strategy the research institutes could adopt? A concerted effort through Private-Public Partnership could be a way out.

The in-house Research and Development units of the industries should have a close link with the Research Institutions with regard to their needs and drive the Research Institutes for demand driven research.

This will improve the efficiency in which limited resources will be used. The new blood could be engaged as partners of such demand driven Research and Development programs with the guidance of more experienced scientists and technologists giving them the much needed training and exposure to groom them to be high quality technologists of the future.

The fact that research institutes lack experienced and qualified scientists and technologists is well known and widely discussed. The impact of this on the industries is also highlighted. Unfortunately attempts to analyse the causes, propose remedial measures and action to implement them are rare.

There needs to be concerted effort to this aspect as well by all concerned to ensure a sustainable system of technology development to cater to the needs of the industry.

Zone24x7 and Moratuwa varsity to develop advanced technology research

The US Ambassador to Sri Lanka Robert Blake opened Zone24x7 (Pvt) Ltd., a research lab at the University of Moratuwa in collaboration with the Department of Electronic and Telecommunication Engineering on Thursday.

The facility is a state-of-the-art lab for cutting-edge research into advanced technology that could realise more ambitious business objectives. The Lab will comprise a dedicated team of researchers from the University of Moratuwa and Zone24x7, assisted by the academic research community and renowned research organisations.

The research partnership brings together diverse participants in multidisciplinary areas, and provides extended means of interaction for Research Engineers, academia and students working in the field of advanced electronic and device technologies.

The lab will provide consistency in realising the vision and driving innovation towards the next generation technology. The main emphasis is to develop the research competencies of the students while focusing on research work that will enable future advancements.

Chief Executive Officer of Zone24x7 Llavan Fernando, said, "Bringing the technology of the US Silicon Valley will greatly benefit and help Sri Lanka. While Sri Lanka cannot compete in numbers with large countries such as India or China we can come up with ways that will revolutionise the high technology industry".

"I have very high regard for the University of Moratuwa and am very enthused about our new partnership as many UOM alumni are excelling in their careers at Zone24x7. We do not know where we are going, but we know that Zone24x7 and the University of Moratuwa will come up with something great", he said.

The University of Moratuwa is a widely recognised institute in Sri Lanka for the outstanding resource talent they produce. In the latest international rankings the University of Moratuwa was ranked first among the universities in Sri Lanka, and ranked eleventh among all the universities in the Indian region.

"The Department of Electronic and Telecommunication Engineering had pooled the best talent in engineering research and product design and what we lacked was the direct reach to the international markets. We are confident that this collaboration will enable us to achieve due international recognition for the true Sri Lankan design talent", said Head of the Department Kithsiri Samarasinghe, .

"The tremendous synergy of technology and innovation has been proved over and over at these two entities and it showed us great teaming potential to contribute to the research world", said General Manager of Zone24x7 Manjula Dissanayake.

"This will be an eminent entity in the technological and academic arenas," he said. The joint lab research will enable the students and researchers involved to lead the next generation of innovation in diversified business domains.

A senior researcher and Head of the Hardware Group at Zone24x7 Sankalpa Gamwarige, said the Lab will be the home for researchers and engineers who would have the opportunity to work with the experts and world-class partnerships from well recognised technology organisations and institutes. "This will be the forefront for new ideas in research and we believe this will have a major impact on the future of the IT industry in Sri Lanka", he said.