By Syed M. Aslam
Aug 21 - Aug 27, 2000

Kewan Qadre Khawaja is the co-chief executive officer and founder of Techlogix. He completed his Masters in Information Systems from the Massachusetts Institute of Technology (MIT). He has worked at Cambridge Technology Group as well as a Research Associate at MIT. He manages Techlogix's development office in Lahore and has led the development and engineering of the eTransformation engagements. He also developed an Oracle Financial practice and led the System Integration engineering efforts prior to that. Kewan is primarily responsible for organically growing the Techlogix engineering team three-fold in the past three years to put the company in the leading position today. PAGE talked to him. The following are the excerpts of the interview.

PAGE: When was Techlogix established and what are its specialty?

Kewan: Founded in 1996, by MIT graduates, Techlogix is a fast-growing eBusiness services company focused on the development of innovative technical solutions. Techlogix has front-end offices in Boston and Silicon Valley and a development center in Lahore, Pakistan.

Techlogix has a total strength of 70. With a team of 5 PhDs and 6 MS engineers constituting its middle and upper management, Techlogix has intellectual depth and excellent project management capabilities. We utilize strong academic and cultural ties in attracting top talent. Seven (7) of our senior staff members are from MIT and Caltech.

We feel that our sustained growth in eBusiness Services will be delivered by concentrating on the click-and-mortar businesses. The core viability of many of these firms is not at risk and hence they are the source of more stable, long-term relationships. This focus also leverages Techlogix's expertise in system integration.

Our eSolutions have been adopted by several medium- to large-sized corporations including automobile manufacturers, financial institutions, government organizations, suppliers and merchandisers, technology firms and Internet startups.

PAGE: What have been your major achievements?

Kewan: Techlogix is on track for a combined turnover of its US and Pakistan operations of about US$ 3 million in calendar year 2000. Out of this revenue, about US$ 1 million will come into Pakistan as registered exports.

A key Techlogix differentiator is a demonstrated ability to conceptualize and deliver innovative technical solutions. Some of these include:

  • The first integration of biometrics identification and public key infrastructure (PKI) technologies

  • The first web based multilingual email solution

  • The first visual catalog design tool designed for the Web and print

  • A server-side Java based thin client architecture for devices in financial services

  • A vision-based entity recognition system for "smart" airbags

PAGE: What's needed to usher a real IT revolution in Pakistan.

Kewan: During the last ten years, the IT industry in Pakistan has grown in fits and starts but still has come a long way. It seems that the nation is finally convinced that the growth of traditional industries might be essential but will not be able to catapult Pakistan into the league of developed countries. IT provides an opportunity for greater value addition at lower investment levels — just the recipe that Pakistan needs.

So how do we do it? My take on this is that gung-ho optimism (and I practice a lot of it myself) is necessary but not sufficient for a profound IT revolution in Pakistan. The opportunity deserves a deeper analysis which somehow is escaping many well-intentioned people in the private and public sectors. For example, there is a lot of talk of venture capital funds that will change the entire landscape of the industry like Aladdin's lamp. Hardly anybody I have met in Pakistani financial sector understands how sophisticated the venture capital practitioners in Silicon Valley are. Before we pump in large sums of money in venture capital, our financial industry has to ask certain fundamental questions: Do they have technology savvy analysts on board ? Do the existing company laws allow the flexibility in making equity deals that go on in the Valley ? Are they familiar with the types of terms sheets that VCs offer to technology companies to protect the investors' interests ? Does "Non-Disclosure" mean anything at all in Pakistan ?

The new IT policy that is waiting its final approval from the Cabinet is a well thought out document and reflects the interests of all stake-holders in the IT industry. This is not like the frivolous document that was produced in the previous government's tenure. I believe that even if 25% of the things mentioned in the IT policy do happen eventually, these will be great catalysts for radical progress. It is especially heartening to note that the bulk of the funds allocated by the government to be spent on IT this year will go to the development of human resources. Excellent. Full steam ahead !

On the government's role in the development of this industry, I do believe that the government should act as a policy-maker and a facilitator. It should not fall into the trap of going too far in trying to conjure up businesses from thin air. In Silicon Valley, the US government's presence is non-existent. Entrepreneurs transact deals freely, in an exciting manner, and full of their own convictions. I have only noticed two activities that have had impacts on this industry in the US. When people start borrowing from banks to invest in risky stocks on NASDAQ, Alan Greenspan raises interest rates to cool down this tendency. And to protect the rights of consumers from monopolistic tendencies the Justice department initiates investigations such as the controversial one carried out in Microsoft's case. Other than this, the Clinton administration has basically just been nodding its head in approval at the cataclysmic rise in the American hi-tech industry. A few months ago, when Riz Khan of CNN during his Q&A session asked rediff.com's CEO about the role that the Indian government should play in the blossoming of the Indian industry, I was greatly tickled by the gentleman's comment: "Indian government should try to stay out of our way".

PAGE: What's required to boost software exports from Pakistan?

Kewan: Intelligently invested venture capital, export re-finance facilities from the banking sector with software export contracts as acceptable collateral rather than traditional collaterable assets such as land, lots of high caliber human resources, and low-cost international telecommunication bandwidth. On the industry's side, there is a necessity to significantly improve its software development processes. This can be achieved by at least achieving the ISO certification if not the more rigorous Capability Maturity Model (CMM) set of certifications.

PAGE: What do you feel about the availability of qualified IT professionals in the country?

Kewan: Quality IT professionals are very scarce in Pakistan especially at the Project Management level. Hiring and more importantly retaining talented work force is going to be progressively difficult. No matter how exciting local software export companies might be, they cannot compete with the glamour and attraction of working, for example, in the Silicon Valley. With the German market also opening up in a big way for off-shore software engineers, it is going to be a tough challenge to grow software companies in an organized and consistent manner. Furthermore, while the surge of interest in the local industry is fuelling a welcome inflow of investment in this sector, a lot of people who do not fully understand the mechanics of running a technology company are also jumping in the fray. For the next few years, we will witness the phenomenon of "too much money chasing too few people" resulting in a dramatic rise in the cost structure of technology companies. Companies that will not be able to remunerate their work force at the market level will be wiped out or severely hampered in growing to sizes where economies of scale can set in to offset the rise in cost levels.

PAGE: Are you satisfied with the quality of IT education in the country and are we producing enough qualified IT professionals to meet the demand?

Kewan: While the mushroom growth of IT institutions in Pakistan is refreshing, the quality of instruction leaves much to be desired. There is a tremendous shortage of experienced faculty at the college and university level. To give you an idea of the desperate situation, consider that there are only a dozen or so respected computer science professors in five top universities of Punjab that give Bachelor's degrees in Computer Science. How can we build a billion dollar industry with these numbers?

In Lahore alone, the top five software companies intend to hire around 400 graduating software engineers in the next 18 months. That is nearly 50% of the fresh computer science graduates from accredited universities from the entire country. And our own experience is that one out of every four graduates from these institutions is of the requisite caliber to get a job offer from our company. So do we compromise our quality and lower our standards of admission into Techlogix. Nope, in my opinion, that would be a recipe for disaster further down in our evolution.

I believe that there is light at the end of the tunnel. Finally, the present government wants to move the IT sector in a big way. The Minister of Science and Technology — Professor Ata-ur-Rehman — intends to spend nearly Rs. 3 billion on IT education in the coming year. It is most heartening to know that the ministry is allocating a sizable fund to engage professors from foreign countries to come and teach in Pakistan. And since the intention is to remunerate these precious people at international rates, we can be assured that good professors will be coming rather than those who cannot get jobs in their own countries. I also believe that the youth of this country will rise up to meet this challenge. For the first time in the history of Pakistan, there is an industry where there are more jobs than qualified people available to fill them. Youngsters who want to improve the economic conditions of their families are becoming increasingly aware of this opportunity and we are seeing a trend of students shifting from traditional faculties of medicine, engineering, and civil services to the IT industry.

PAGE: Are you satisfied with the quality of telecommunication infrastructure in the country, particularly with reference to role of state-owned PTCL, quality of Internet service and tariff?

Kewan: In general, PTCL is an organization that is a monopoly and that fact itself is harming the growth of the telecommunications industry far more than the benefits it seemingly offers. The profits it yields to the government (which are often trumpeted at the highest levels) are actually quite meager if viewed in the context of the overall profit-generation capacity of a nation as large as ours were the industry thriving with competition generated among multiple players.

Having said that, I must admit that PTCL's support to the IT sector has significantly improved during the last couple of years and especially since PTCL has come under the umbrella of the Ministry of Science and Technology. One of the first steps after this change was a celebrated announcement by the minister — Prof. Ata-ur-Rahman — of the reduction in the internet tariff by as much as 53%. Further tariff reductions are expected in the near future and this should further alleviate our industry's grievances against PTCL.

PAGE: Do you have plans to go public in near future?

Kewan: No. At the moment, we are sufficiently well financed to double or triple our revenues in the next one-year. Our focus right now is to aggressively enhance our marketing and sales presence in the US and Europe. Contrary to popular sentiment of going public in the near term prevailing in the local software industry, we do not want to rush to the market. We certainly intend to go public in the next 2-3 years but we want to do it in style much like the IPOs of several Indian companies who timed going public to perfection. I believe that going public comes naturally to a solid company and is an exciting phase in its evolution. It should not just be viewed as a means to make personal worth liquid.