Sri Lanka's economy booming:

'Exploit technology to accelerate growth'

By Gamini WARUSHAMANA

The perception of Sri Lankan CEOs and business managers towards IT usage is fundamentally incorrect, said CEO of Monvia USA and Latitude655 Sri Lanka, Mani Kulasooriya.

Sri Lankan companies are ready to pay more for hardware.

Their main concern is hardware when investing in technology. However, today, there is no difference in hardware, although they belong to different brands. For instance if you take two laptops that are of two different brands, you will find that there is no difference between the two.

Mani Kulasooriya

Therefore, there is no comparative advantage in choosing one over the other.

Secondly, our businesses are reliant on expensive box software such as ERP systems.

Use of box software also does not give a comparative advantage to a business. It does not differentiate between competitors because they too can use the same software.

Sri Lankan businesses show less interest in customised software which is the only option to gain comparative advantage over competitors. This has to be changed to achieve expected benefits of investment in technology, he said.

Customised software

The order is reversed in the US and Western businesses and investing in technology, they always seek the best suited customised software that has maximum comparative advantage and gives a unique business model to their organisations.

They are not impressed with hardware brand names or commonly used box software.

There are many success stories in the US of companies that have achieved tremendous gain by differentiating themselves from their competitors.

One is JP Morgan's cheque deposit solution that allows customers to deposit cheques using mobile phones.

Since it is a convenient way of cheque deposit, most US banks lost their businesses to JP Morgan.

The problem in the Sri Lankan technology industry is the lack of understanding of the nature of the Sri Lankan market. There are innovative products that mainly come from innovative leaders such as the US.

These products can be utilised here as they are, but they may not be successful because our market is small and is different.

The way forward is to learn from them and build specialised solutions that match the Sri Lankan market.

For instance small shops may not still be ready for a fully computerised inventory control system or accounting system.

Smart phones

In the US, solutions based on smart phones are becoming popular and there are a lot of products or total businesses that run on smart phone supported systems.

With high smart phone penetration in the US, the latest innovations of Silicon Valley and business models of UberCab, Airbnb and Getaround are based on internet and smart phones.

Smart phone penetration in Sri Lanka is very low. However, mobile penetration is high and these small businesses use mobile phones for business communication.

Therefore, products for inventory control systems or business transaction solutions supported by mobile phones can be built.

Products such as mobile banking have been successful in many developing countries.

Also commercial banks can use banking solutions run on smart phone devices and provide smart phone devices to the customer free of charge.

This kind of solution may differentiate the bank from its competitors and give it a comparative advantage.

This is not a difficult or complex business model. Such business models and data that is collected are beneficial for the entire country.

Internet penetration

Kulasooriya said that positive correlation shipbetween internet penetration and overall economic development is a proven fact.

In Sri Lanka internet penetration is only around 8.5 percent. To increase internet penetration the public and private sectors should invest on increasing overall bandwidth and connectivity.

There are three layers of internet users; those who have access at home, use at workplace or school and hundred percent shared internet such as internet cafes.

This third category has not grown in Sri Lanka. However, in developing countries such as Brazil and Peru where internet penetration is significantly high, this category plays a greater role.

State sector

Technology can be used to improve productivity and efficiency in the state sector.

To provide solutions for revenue generating institutions (.ticketing system to Sri Lanka Railway) We have to think of new business models.

Instead of importing costly solutions we can build custom solutions to match with our specifications.

Since the cost of such solution is the barrier to these organisations, we have to think of a revenue sharing model where part of the cost is borne by the solution provider.

The traditional tender procedure in the government sector may not help find the best solution because companies will not bid at a price below their opportunity cost and the best companies may opt out.

After the end of terrorism the Sri Lankan economy is booming and we wantto use technology to accelerate this growth.

Irish way

Kulasooriya said that the best model for the Sri Lankan software industry is the Irish model and not the traditional BPO business.

Today the total ICT workforce in the country is around 62,000.Some BPO companies in India have double the stafof Sri Lankan companies.f. We can't compete in numbers. There are opportunities for small software companies to provide high end solutions.

The talented workforce in Sri Lanka is the main advantage we have. In Latitude655 we give our staffers an opportunity to work in the US with our clients. This exposure enhances their talents and changes their attitudes.

Mani Kulasooriya is the CEO and co-founder of US based technology company Monvia and Sri Lanka based Latitude655. He is an entrepreneur and executive with more than 10 years business experience. Prior to founding

Monvia, he served as Senior Manager of Business Development at Yahoo, Associate Vice President at Citigroup eCiti, and founded

CrossFunds. He earned his B.Sc. in Engineering from Tulane and holds an MBA from Vanderbilt University.