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Attaining CMMI Level 5 is not the only merit of NetSol. The company has a clear and prudent policy of staying away
from markets plagued by rampant competition. Even the otherwise lucrative and burgeoning telecom market did not
impress NetSol as a business case. Instead, NetSol carved its own niche in the leasing industry and came out an
undisputed winner. Having firmly established NetSol in Asia Pacific, China, Australia and Japan, Salim Ghauri is
spearheading the company in to Europe with glacial cool and killer instinct. Salim Ghauri, Chairman and CEO NetSol,
shares his views with TelecomPlus Published Jul 2008
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TelecomPlus: How do you rate the state of IT in Pakistan?
Salim Ghauri: The year 2007 was not easy for the overall business activity in Pakistan. Since the IT industry of Pakistan does not depend much on
the local businesses, it did not suffer much. The large and small IT companies continued their business though the growth was not what we wanted to
see. The global demand for IT services kept coming. Companies with products did better than companies with services. NetSol has multiplied its
revenues in the past three years mostly because of the global recognition of its product, the LeaseSoft. Today, the IT industry as a whole has matured
and companies are in a position to sustain in difficult times. We were all hopeful that after the elections the local environs will improve and contribute to
the growth of the economy and IT industry. Unfortunately, we are still seeing difficult times on the domestic front.
In India it was the local demand and automation of public sector which put the IT industry on firm footing and primed it to meet the
global demand. Why the reverse is true in Pakistan where by and large, the IT companies have to get recognition abroad to be noticed
back home?
This factor has been the main reason why our IT industry took so long to take off. Unfortunately, Pakistan has not started to automate yet. The day we
see automation happening in Pakistan, the IT industry will get a shot in the arm. The present government seems to be strongly aware of the
importance of automation and we are hopeful that automation will take priority. The Indian IT companies reaped the advantages the local environment
offered. The private sector of India also went for automation which helped the IT industry there. Our private sector still seems unaware of the
importance and benefits of using technology. These days, no country or business can progress and prosper without technology in this growingly
complex and competitive world. I hope that in the year 2008-09, the situation will improve and both public and private sector organizations will see the
benefits of adopting technology. With that happening, the IT industry will flourish.
If the IT companies of Pakistan can compete in the global market because of their competence, quality and competitiveness, why can
they not provide solutions for the local economy?
It is not just the IT industry that has suffered for the lack of automation in the public sector. The government itself has suffered hugely. Look at the
wheat crisis for instance. It is the lack of using technology to maintain and interpret data that this crisis degenerated to such an extent. We exported
wheat misreading the deficit as surplus, all due to antiquated methods of evaluating such sensitive matters. Naturally, we had to import it at much
higher cost. There are very intelligent programs that can analyze data and also make predictions with a very high degree of accuracy on the basis of
data accumulated over the past years. Had we been accustomed of using technology, we would have known well before time that we actually needed
to import wheat. At least we would not have exported wheat and worsened the crisis. So it is not that we need automation to boost our IT industry. We
need automation for the smooth functioning of the state apparatus in a cost effective manner so as to avoid messing up the numbers, making wrong
and uninformed decisions and suffering the political backlash. We need automation for good governance. Using only a calculator to do our numbers
while such excellent IT tools are available for analyzing data and making predictions is analogous to living in the proverbial Stone Age. Same goes for
automation in the private sector. Many businesses are not even aware what they are losing by shying away from technology.
What role has NetSol played in shaping the IT landscape?
For the last 12 years, NetSol has been at the forefront of creating standards and establishing at global level that Pakistan has the potential to excel.
We are the first Pakistani company to attain CMMI Level 5. Apart from a NetSol achievement, it is also a service to the country that you have made
Pakistan visible on the IT radar of the world. With one Level 5 company and many other companies at various CMM levels, Pakistan is more visible on
the World IT map now. The reason NetSol grew tremendously during the last 3 years is mostly due to its CMMI Level 5 status. When we go to seek
business, the clients take us seriously and, being assured of quality before hand, they are very comfortable in dealing with us because now they can
talk business straight away rather than being nervous at the quality of work. It is easy for them to give business to us because they are dealing with a
CMM Level 5 company.
Secondly, NetSol is now a global company. It is the first Pakistani company to be listed at NASDAQ. We are also the first Pakistani company listed in
the Dubai International Finance Exchange. Introducing Pakistan in the international market as a technology country is also a service to the country.
We have 850 highly qualified and very high quality professionals in our Lahore Karachi and Islamabad offices. We are looking forward to hiring many
more people. These are some of the points we can quote as NetSol services to the country.
Why is NetSol absent from the otherwise very dynamic and high growth cell phone market of Pakistan?
NetSol is very careful in picking and choosing its products for development. We want to develop products which are not in the mainstream. When cell
phone came to Pakistan, there were already many successful IT solutions available for the telecom industry. There were so many tools available for
the telecom market with so much competition that we did not feel like venturing in to that area. Our success has come from the niche market.
LeaseSoft was a product for lease and finance area, not for banking. The banking sector is brimming with so many high quality products that cover all
its needs. But when we came with LeaseSoft, there was a huge vacuum for the product and suddenly we took the global market. We stayed away from
the telecom market intentionally. But definitely, we would keep looking at new telecom technologies to give what they would need tomorrow. But not at
today’s technology. Almost every aspect of the existing telecom technologies have been covered by the global IT market.
What edge do you have over your competitors?
NetSol is past its formative period. We have established customer base. We have established product. Have a very mature and trained resource pool
and we are financially very strong. It is now easier for NetSol to grow and capture new markets. Like they say, it is the hardest to earn your first million.
But once you have done that, it is easier to earn the next million because now you have money and the experience to invest it prudently. We are very
satisfied with our growth and comfortable with the market. Just two weeks ago we won a major contract in Europe. Our first sale in Europe. That’s a
major win for a Pakistani company and a Pakistani product. We did very well in Asia Pacific, China, Australia and Japan. Now we are in Europe. And
this is just the beginning. Owing to our set up in Pakistan, we can run our business relatively cheaply which gives us an edge over our western
competitors. Our quality is also much better because none of our competitors in that space have CMM level 5. That’s why we keep winning business
again and again.
Why there are so few Pakistani IT companies that have attained such global and domestic acclaim?
Multiple reasons. To succeed in Pakistan the entrepreneurs must realize that they have to depend upon their own ability to succeed. If depending on
public sector support is crucial for your business, then you already are a failure in the making. It is important that when you are starting a business in
Pakistan, it is not in your plan to depend on Pakistani businesses, or the public sector or the Pakistani government. Any help you get is a bonus. We
got lots of help from the Federal Government during the last three years. But that was not crucial to our business. It came as a bonus. We were not
depending on it.
Another reason is the lack of corporate culture. Most of our entrepreneurs like to keep the ownership for themselves. They would prefer staying small
as against growing through partnerships and sharing equity. That must change. If you want to own a small company, fine. But if you want to build an
organization, an institution with thousands of people working, then you have to bring in partners. It could be bankers, investors, whatever. And of
course you have to give away equity. You own a small part but of a very large organization.
Another factor is that the owners want to be themselves at all the key positions. The owner is the CEO, the CFO the CTO, etc. But to grow, you have
to bring in specialists in each area and give them power of decision. Look at various businesses in Pakistan. They are being run by one or two
individuals. And these individuals are every thing. No wonder you end up being the least innovative and most unimaginative company. When you don’t
let other professionals in, you are actually shutting out new ideas, fresh approach, lateral thinking and inspiration. NetSol always brought in the
specialists. That’s why we have multiple sources of success, innovation and inspiration.
What is the human resource situation in Pakistan?
The human resource front is under tremendous pressure. We are not producing enough 4-year degree engineers. The young students don’t look at
IT as a promising opportunity any more because of the past crises, bubble burst and lack of opportunities. It is like agricultural produce. One year you
produce so much potatoes that the price comes crashing down and the growers are not even able to recover the cost. The next year, the majority of
growers turn to other crops and suddenly there is this great dearth of potatoes. Because of the previous bad experience, the majority of students go
for other disciplines like MBA, Telecom, etc with very few going for IT. This has been happening for several years and its impact is coming now. We will
have serious shortage of 4-years IT engineers in the coming years. We have to find different ways to combat this shortage and we cannot rely just on
of 4-year grads.
How is NetSol tackling this issue?
Last year, NetSol started its own NetSol Technology institute. Our focus is to create a stream of software technicians, which we already did and have a
batch of 15 technicians. It is a one year aggressive, 10-hours a day training. We take in F.Sc and B.Sc students and train them as technicians, not as
software engineers. There was a pilot program of 15 technicians. We hired them all. That’s our test case. We believe they will be good because they
underwent very rigorous training. After that we will train lots of people.
Who are your major clients?
With the Grace of God, we have a very big and impressive list. We have Mercedes Benz Finance, Toyota Leasing, BMW Finance, Fiat Leasing, Nissan
Finance, Yamaha, etc. And we have all these customers in multiple countries. Not just one customer in one country.
Do you see the impact of e-governance initiative in the life of a common man?
Not yet. The initiative is big. But a lot more needs to be done. I hope it is done. But so far what has been done has not produced any tangible impact.
As I said, primarily it is in the favor of the public sector to automate. We see so many problems in our country because of lack of automation. Lack of
transparency in the state functioning produces distrust and lack of faith in the state actions and intentions. It renders even the most sincere efforts
questionable.
Has the arrival of optic fiber networks in private sector improved the situation?
Oh yeas. There has been lots of improvement. We have not seen any problem with the bandwidth or the speed of it. Our clients have stopped
complaining. That’s a very good sign. In that area we have done very well. Very good quality, touch wood, and it is also a lot more economical. We are
using a very fat pipe.
Want to add something?
I think the federal and provincial governments should realize the importance of automation and let the IT industry help accelerate the growth of the
economy and the society. It is a service industry and with relatively little investment we can hire many people. For the last many years, the funds
allocated for integrating IT with state processes have been lapsing. We hope that does not happen and the present government would give
automation and e-governance a chance to improve the lives of our people and the image of the government in the eyes of the public.
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