Interview: Khurram H.Kalia, President & CEO KalSoft

 Senior Correspondent

July 02 - July 08, 2007

KalSoft is an IT Solutions Provider formed 8 years ago under the wing of Kalia Group of Companies, a leading business group in Pakistan. It has subsidiaries based in the U.A.E., Oman, and Lahore, and operates in Africa, Kingdom of Saudi Arabia, United Kingdom and the United States through its partners. KalSoft has achieved an ISO 9001:2000 certification and is the first SEI-CMMI Maturity Level 3 appraised IT company of Pakistan. KalSoft has worldwide corporatare clientele in various sectors: Automobile, Textile, Oil and Gas, Educational, Media, Telecommunication, Financial and Government.

PAGE had the opportunity to meet Mr. Khurram H. Kalia, the President and the CEO of KalSoft and talked about the state of the IT industry in Pakistan.

PAGE: Please tell us a little about KalSoft and where from the idea of establishing KalSoft originated?

KHK: KalSoft is basically the brain child of the Chairman of the Kalia Group, Mr. Hanif S. Kalia. He saw the vision almost two decades ago that the Information Technology can play a very vital role in the development and progress of the country. KalSoft was established with the primary goal of a solution and service provider to the entire world, to provide state of the art solutions basically tailored for business needs and specific needs of the customers.

KalSoft has specific focus areas in Technology Solutions spanning KalSoft Business Solutions, Enterprise Development, Enterprise Services and Learning Solutions. As a Premier Microsoft Gold Certified Partner, KalSoft is committed in delivering state-of-the-art solutions based on Microsoft technologies. KalSoft has teams for six competencies of Microsoft: Advanced Infrastructure Solutions, Business Process and Integration, Custom Development Solutions, Information Worker Productivity Solution, Mobility Solutions and Learning Solutions. Microsoft Competencies define the areas of specialization based on technical depth and business expertise on Microsoft technology, and KalSoft has qualified for these six competencies demonstrating expertise through customer references, maintaining Microsoft employee certifications and developing product portfolio based on Microsoft technologies.

KalSoft is uniquely positioned as one of the few companies in the Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions which is capable of providing an entire suite of services and have the implementation capability for converging technologies. KalSoft is fully committed in educating clients of the new market developments and providing them with solutions with optimal total cost of ownership and have a higher return on investment with the embrace of these technological innovations.

PAGE: What is the current state of the IT industry and what is its potential ?

KHK: The potential is much bigger. Primarily, Pakistan is an agricultural country and the industrialization process did not happen to Pakistan in its entirety. From the professional services perspectives, especially with regard to IT, we have very talented human resources, not in the right quantity at this point in time, but we have a strong HR base which can be trained and can be used in all the facets of the IT industry. We can harness this potential and channel this talent into the IT industry. Built on that talent, we can also benefit the economy and earn valuable foreign exchange. We have a huge potential but obviously we need very specific strategic thinking. A lot has been said, part of it has been done also but not in a proper strategic function otherwise we would be much a head of what we are today.

PAGE: Why is our software development not in par with India while we produce more than 5,000 IT graduates every year?

KHK: We need to make right comparisons. India is twenty years ahead of us in the IT industry, secondly they have a much larger group, thirdly the education set up of India has always been good as they have much more refined graduates especially in the field of mathematics which is the basis of computer sciences. As such they are able to convert all these math graduates into computer sciences graduates. They have many advantages. In terms of quality, there is a much direct comparison between Pakistan and India. There is no reason to believe that Pakistan is in anyway less than India or from any other country in the world. People around the world believe that Pakistani IT graduates are really very good. But how could we compete in quantum? I personally believe that Pakistan should focus more on IP and solutions because in those areas we can do a lot more. If we build software which will become successful globally then people can earn more on the services side and that will also benefit the economy.

PAGE: How can IT solutions help our industries? Which industries currently most benefit from IT?

KHK: There are multiple facets to this question. First is the awareness and maturity of the industry to comprehend as to what IT can do for them. In a globally competitive arena, there is no way that they can survive without using IT applications. Sooner or later, they will realize this. From the last four or five years, this awareness has been increasing phenomenally, even in the SME sector and in the textile sector, they have realized that the modern technology and solutions are necessary in order to compete globally. This basically means that the global market for IT companies like KalSoft and others have also improved. This is a good sign because if you have a global market and presence then you can build your expertise in a way to compete globally and earn valuable foreign exchange and export earning.

Secondly, there is still a lot that needs to be done. This awareness needs to go a longer way. It's not just about having a very small financial application or a basic financial application, there is a lot more IT can do for our businesses. It's no longer a matter of luxury; it's a matter of survival, of necessity. That kind of awareness needs to be systematically inculcated in our industrialists. The third part is the very unfortunate issue of piracy. People tend to prefer a ninety rupee pirated CD instead of buying real software and this issue needs to be worked upon. Piracy should be ruled out after which we can entertain intellectual property rights.

PAGE: What are the major obstacles in running this industry?

KHK: There are many, I think primarily we are lacking in strong strategic planning. This is not to take away from the effort we have put in so far but an overall strategy is lacking in what we are trying to achieve. The second obstacle that I have faced is the challenge of the IT human resources. On one hand, we are producing around 5000 graduates and we have a very talented resource pool to harness, and on the other hand, we don't have trained and groomed staff to fit in the system. There is a huge gap in between these two. The third obstacle that is denting the IT industry is the geo political situation. We have a very negative image internationally and because of that we have lost many of our clients. Finally, we don't have a proper infrastructure; we don't have proper electricity to run software houses. Larger companies such as ours may afford to have a complete generation of electricity but what about the rest. In any IT economy, the small software houses play a very vital role and how are they going to survive without having a proper infrastructure?

PAGE: You have just mentioned about the gap between the graduates and the trained staff needed for the industry, how do you think this gap can be bridged?

KHK: All the four players need to play their role. The IT industry, being the biggest beneficiary, needs to tell the universities about what is needed and they should also look at the syllabi of the universities. Secondly, the universities should approach the IT companies and work out their syllabi with them. The third and the fourth players are the media and the government. They have to ensure that the syllabi and courses in the universities confirm to the needs and requirements of the industry and to the international standards. A lot of negative thinking has been developed in the aftermath of 9/11 scenario about the IT industry but I would like to say that there is a huge demand which is forecasted to grow at a phenomenal pace. That has to brought in front with the help of media and the perception needs to be changed now.

PAGE: We have heard about the financing trouble that this industry is facing, how severe is this situation?

KHK: There is a type of a-typical scenario for our financial institutions. Even if you are exporting software, nothing physical or tangible is exported. It may get exported on a CD or may be sold on a bandwidth so that is not something which is physically present and physically exported. That brings a lot of different opinions on the laws. Financial issues like letter of credit opening could be an easy task for commodity export but not same in the case of intangible items. KalSoft also built a case on the reduced rate financing and now the problem is solved. There are also talks on Capital Venture Funds for which a task force is also designed from the Prime Minister side but nothing actually materialized. However the task force is still working, so things are moving in the right direction.

PAGE: What is our Software Export total volume? What is the potential for exports?

KHK: There are varying figures but there is one figure which is very concrete and this is the export remittances that are received by the State Bank of Pakistan. That is the only figure which is substantiated to actual transactions. The total Export and total size of the IT industry can not be judged by only exports which can be realized. Apart from exports we can also judge our size by the help of the infrastructure growth with the help of our IT professionals' world wide. What is happening in the rest of the world is that such professionals are considered as IT export or IT revenue. We are also enhancing our marketing and sales through the participation of those professionals working outside the country.

PAGE: What major plans are in progress with PASHA and NASSCOM?

KHK: The idea that is always there at the Pakistan Software Houses Association PASHA forum is to look at and learn from the success story of NASSCOM. To collaborate with them and to also work on the possibilities of outsourcing our talent to India as India is also facing HR problem. This collaboration on the level of trade association will bring positive learning and revenue and this is always good for any business or industry.

PAGE: What incentives are our government giving to this industry and what are the desirable incentives with which the pace of development can be made much faster?

KHK: From the software export point of view, there is a fifteen years tax holiday, that if you are exporting software, you are exempted from paying taxes. Last year, the GST was promulgated on hardware that has increased the cost of operation for a software houses and for any other company that wants to buy any software. That is a very negative act for the whole of the IT industry. For a nascent industry like ours, there should be no surcharge and it should be a tax free industry so to progress on a faster pace without any hindrances. There are many incentives that can be initiated to earn more foreign exchange. This budget did not consider our recommendations but hopefully the next budget will. We on our part will keep working and submitting our recommendation from the PASHA forum.

PAGE: How many software companies are working in Pakistan?

KHK: The active companies are about 200-300 but the registered companies are around 500-600.

PAGE: Do the software companies also work towards the education growth by contributing in education?

KHK: Some of them may be but it's not a regular practice. We have a KalSoft Academy which is a commercial organization but as part of our contribution towards education and we have another organization called The Co-Ordination Group. The primary objective of the group is to provide and promote IT education. We are running more than hundred institutes on a subsidized, no cost no profit basis with the help of the NGOs. On our part we are trying our best.

PAGE: What are the specific targets of KalSoft?

KHK: We want to make KalSoft a successful Pakistani Multinational Company. We are also present in the Middle East, Europe, Africa and America through our partners. We want to make it a model and we want to make sure that the other aspiring software houses can believe that the success can be possible through sheer hard work, proper planning and proper execution.

PAGE: Any message to the youth?

KHK: I would like to say to the youth that if you are at all interested and you have an aptitude for computer sciences then don't be under the impression that there is not much room in the IT industry. I would also say that the government should give more importance to the IT industry as it is contributing both directly and indirectly to the economy.