When Hermann Wimmer, EMEA President for Teradata Corporation came to Pakistan and met with Prime Minister Yousuf Raza Gilani last month, CIO Pakistan simply had to have a sitdown. Teradata has always invested in Pakistan’s economy in a big way and with the way things were headed for the country, it was important to get a better understanding of the situation from of one of the largest Technology setups in the country.
So with a new government in place and Pakistan going through yet another tumultuous period, what was the EMEA President’s reaction after his meeting with the Prime Minister? “It was more positive than I had expected. Even at this time, everyone in the room was talking about what needs to be done to improve the business environment. You know, every country, every organization goes through its set of challenges. Pakistan is not unique in that manner.” But the country does seem to be going through its set of new-lows: an inflated dollar, a seemingly crippling economy and an unstable government. Can any of this possibly be good?
“The present situation isn’t an ideal one but your country does have a lot of positive to offer – and these are all things that have been talked about. Large population, a smart population, strong English skills and we’ve seen some great analytical skills. All of these factors coupled with the fact that it makes economic sense to do business in Pakistan, will always work in your favor.” So the inflated dollar doesn’t affect your business? Don’t customers know you have your support structure in Pakistan and that the change in the economy will impact your business?
“The change happened just a few weeks ago so I don’t know what the long term impact will be but there will be some change. In terms of our consulting, since we charge in local currency, I suspect there will be no impact, but for the technology, it will have an impact. Having said that, I also honestly believe that though companies may reduce their buying by 10-15%, the way the growth moves, we will overcome any shortfall of deficit this creates.” It’s no secret that Pakistan has reached a critical point in terms of its technology integration across all verticals. With the boom in the telecom sector to eGovernment projects, the focus on developing customer relations and keeping the market the center of a deployed service, is already experiencing accelerated growth. And the growing demand for customer-centric solutions for the enterprise directly correlates to the speed at which the local markets will grow.
Or will it?
“I believe the biggest strength of any knowledge economy is its people. To give you an example, over the past 5 years, we have trained hundreds of people who now work for the customer side. We’ve made investments in developing the people but the fact that they are still part of the knowledge-based economy and driving business, makes a difference.” Perhaps the biggest problem that companies face is the lack of awareness as to what technology can do for their business, that is, the justification of the return on their investment. The question, “is it really worth it” is perhaps asked countless times before considering to look towards the technology. “If companies have the benefit of the wisdom and experience of the people that have worked with us, they will be able to appreciate the benefit IT can bring to the table. But yes, companies do need to invest on continuous training and exposure to tools such as Business Intelligence. If the Business and IT people speak languages that complement each other, the benefit to the business will be tremendous.”
What about the exposure? At times it seems that large organizations, especially multinationals, conduct business with their head in the ground. Perhaps unaware of what global trends are or, more importantly, what glocal trends are and how solutions could be implemented in their business models. “One of the key challenges we have is that of business alignment. We bring the right knowledge to our customers and make sure it is aligned with their business objectives. As a business intelligence company, we work with customers and prospects to explain to them how they can gain more customers, lose fewer customers and grow faster. This is a daily task for our consultants and we’ve always received high receptiveness from people in Pakistan.”
That sounds positive considering companies, especially the local ones, undergo a great deal of criticism in their inability to plan and be proactive because they are unsure how fast or slow their customer base will grow. Because of the lack of planning, they are unable to align their technology infrastructure expansion with the business growth. So let’s take a deadline we know about – the Basel-II compliance, which all banks have to meet by 2010. Do they know how Teradata’s solutions might be different than anything else available in the market?
“It’s interesting you ask that because just today, I met with several banks and there is a high visibility on Basel-II and generally on Risk Management. This is good because it shows that they are inline with what international standards are and they know what technology or solutions need to be deployed to achieve the end result. I believe that the level of knowledge and awareness amongst the institutions is higher than most people give them credit for. I have had the opportunity to interact with a lot of Pakistani professionals who have worked abroad and returned to the country and with their skills, they also bring the exposure that let’s say, financial institutions can rely on. Their return becomes slightly easier because they have this kind of a knowledge ecosystem to come back to.”
“But to answer your question, can the level of awareness be higher? Of course. But the knowledge and awareness is certainly not very low. And there is a high potential for this economy to grow because of the large youth population you have in the country at the customer side. With that kind of a young workforce, companies have the propensity to learn very fast.”
Today’s age of data management, if the right information cannot be generated from the data that sits in warehouses, a company can risk losing its position in the market. What are some trends that perhaps companies in Pakistan should be looking at in terms of data management? “Well, a key trend we see in the market that customers in the past had a lot of different databases for each of their different data categories. One for customer service, one for risk, another one for finance, and each of these databases held different data. Everyone in effect, works in isolation of one another. Today the trend is to develop one enterprise database. Run a query from every department against the same database so there is consistency and accountability in the results. Not only does this reduce costs in the long run, it also ensures that there is greater potential for mining the relevant information and generating more effective business from it, and also helps to get the return on the investment of the solution, much faster.”
Technology leapfrogs and more often than not, in addition to a limiting mindset the only hindrance in its way, is a low level of infrastructure. You can develop all the solutions you want and not get any benefit if its not exploited to its full potential. “The key infrastructure you need for high level database technology, is people. Trained human resource, something that Pakistan has a great abundance of. The physical infrastructure is something that will eventually catch up but even that is an ongoing process. Pakistan’s infrastructure may not be at the same level as a lot of European countries, but you are definitely headed in that direction.”
Hermann points out something else which is interesting. Teradata invests a lot of resources in working with the academia to bring trends and know-how to them rather than wait for students until they graduate and are already part of the workforce. “This has helped in generating a more aware HR to enter the industry. More companies that create these bridges will benefit the entire sector to a greater extent. If you want to compete with the global markets, you have to invest in training the HR. Our Global Consulting Organizations use a lot of people from Pakistan on global projects. This automatically increases the knowledge share that we have to offer. These same professionals get work experience on projects of global standards, and they bring their experiences back to the local market. Think of it as recycling the knowledge through different people and multiplying it manifold.”
Bringing back the knowledge and experience to work with the local brands at a time when the local market is perhaps more mature adds to the advantage that this system provides. “And the market is already showing signs of maturity. For example, Barclays establishes offices in Pakistan and this becomes a significant trend maker for the entire country. I believe that Barclays will drive the market in the right direction. It’s all about trends and Barclays presence in the country shows the world that there is a market here, which is great news.” Contrary to local opinion, Pakistan is viewed as an attractive investment market. “If they didn’t view it that way, they wouldn’t be here.” And according to Hermann, there will be more international brands and institutions that will be opening up offices here.
Alright. What about the business that Teradata has been able to generate from Pakistan?“The last 4-5 years Pakistan had permanently a higher growth than our worldwide numbers. EMEA had a 24% percent growth in the first half of 2008. In our organization, Pakistan is categorized under EMEA and it had done significantly higher than the entire EMEA. So we see significant growth in your country in terms of our business.”
You seem to have become the bearer of great news, Hermann! So your business interests are doing well and you invest back into the people of Pakistan. What other spaces would you say could yield high results for the knowledge economy that we have? “Software Development is an opportunity. In fact, anything that has to do with manufacturing and engineering. There is a very high potential for high skilled people with strong English knowledge. A lot of industries can take advantage of these skills and compete at the global level.”
How about manufacturing? Pakistan is primarily an agro-based economy. Does technology really have a role to play there? “Industrialization and automation is strongly linked with labor costs. Obviously since your labor costs are low, automation level is not as high. But if you look to your home market, with 160 million people, definitely more car manufacturers will show up in the next 5 years. The market here is so big and more manufacturing-oriented companies will set up business here over time. That’s the trend I see.”
Where do you see Pakistan headed in the next few years? “For the 6-12 months, an economy that is a bit challenging. But this is an ongoing global phenomenon. If you bring more stability in your country, this will be the base for many more international companies to set up base here. Stability and education will remain the two things that if developed over a long period of time, will help Pakistan to realize its potential.”
