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
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
A key Techlogix differentiator is a demonstrated ability to
conceptualize and deliver innovative technical solutions. Some of these include:
PAGE: What's needed to usher a real IT revolution in
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
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
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
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.