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Lag in IT-related growth, exports

August 11, 2014

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IT empowers governments and businesses with innovative technology solutions and helps them increase their competitive advantage and return on investment. — Illustration
IT empowers governments and businesses with innovative technology solutions and helps them increase their competitive advantage and return on investment. — Illustration

Around five years back, Ghana started automating its tax revenue management system in collaboration with the World Bank. In three years, the country’s tax revenue doubled. The project was executed by a small Pakistani technology firm, InfoTech.

It was the company’s first job outside Pakistan. Ever since, it has expanded into several African, South American and Gulf countries, including the UAE, Saudi Arabia, Nigeria, Iraq and Brazil, revamping their tax systems or rolling out citizen services. Today, its export revenues have surged to $40m a year, equal to its domestic turnover, and it has its offices in the UAE, Singapore, London and Saudi Arabia.

InfoTech is an IT (information technology) systems integrator and e-infrastructure provider, and specialises in tax revenue management and power transmission/distribution system automation, as well as in emerging payment systems.

“IT empowers governments and businesses with innovative technology solutions and helps them increase their competitive advantage and return on investment,” notes Naseer Akhtar, the company’s president and CEO.


‘Automation of the power transmission and distribution system can help the government save Rs500bn by controlling line losses and power theft through real-time monitoring of distribution of electricity’


“A system integrator in IT like InfoTech means that we cover everything: planning, consulting, building and revamping the infrastructure; going into applications space, optimising business processes, selecting the right kind of technologies and putting together every piece of the puzzle to make it work for our customers.”

InfoTech was born almost 20 years ago out of another firm that Naseer had set up in 1987 — South Technology and Services — offering automation solutions for the industry. “We were solutions providers in hardware, infrastructure and networks etc at that time. We were not really characterised as a systems integrator,” Naseer told Dawn.

“I re-branded South Technology as InfoTech in 1995. But for the next decade, we struggled to transform and position ourselves into different domains, and eventually emerged as a system integrator.”

Though the company aspires to be a leader in its space and grow globally, it has expanded organically in size. In spite of employing 300 people and turning over annual sales of $80m two decades after its formation, it remains a significantly small venture when compared with many Indian firms operating in this field, and which employ thousands and turn over billions of dollars every year.

Lack of official focus on the IT services industry, shortage of trained and skilled manpower, the country’s unfavourable perception, low usage of technology by government and private firms, and the absence of laws supporting mergers and acquisitions are believed to be responsible for the stunted growth of Pakistani companies and low exports.

“Strategic growth requires an enabling environment for mergers and acquisitions. We lack such an environment. We don’t have a culture of mergers and acquisitions. Nor do we have the legal framework for that,” says Naseer. “By now, we should have had 20-30 big firms to take advantage of the development in Africa, the Middle East and elsewhere, and increase our IT services exports. You need to be a big company to compete globally and handle big orders.”

He points out that India and Pakistan entered the field of IT at the same time. “India has grown rapidly and its IT industry fetches $60bn in export revenues, compared to $2bn earned by us. It’s because India created a highly trained and educated workforce for its growing IT industry, and took strong diplomatic initiatives to bring the global IT business to the country.

“You need your government to hold your hand to grow in size and outside the country. Regrettably, it hasn’t been the case in Pakistan, and our companies remain small and have to compete hard to win contracts in the global markets, as we neither have enough trained manpower nor access to foreign markets.”

The InfoTech president underlined the significance of IT services in increasing export revenue as well as creating new jobs in the country. “The textile industry fetches export revenue of about $1,000 per worker. IT services exports, on the other hand, bring in $12,000-40,000 per person.”

Naseer points out that Pakistan is losing billions of dollars and competitiveness because of low level of technology usage both by the government and private businesses. “The government, for example, can substantially increase its tax revenues through automation of the Federal Board of Revenue, like Ghana and other countries have done.

“Similarly, automation of the power transmission and distribution system can help the government save Rs500bn by controlling line losses and power theft through real-time monitoring of distribution of electricity. In the same way, we can transfer funds in real time from one bank to another through checks, to the advantage of bank consumers,” he said.

But, he added that “we don’t have the political will or the policy focus to implement solutions to put our house in order. It is despite that that every dollar we spend on adoption of these IT solutions saves us 35-40 dollars.”

Published in Dawn, Economic & Business, Aug 11th, 2014