Salim Ghauri, President NetSol Technologies

CIO Pakistan recently had the pleasure of talking to Salim Ghauri, President of NetSol Technologies in Pakistan. The conversation shed some light on the day to day challenges that a CEO of a high profile company faces, and how challenging it really is to be at the top.

NetSol was founded 13 years ago and is a worldwide provider of global business services and enterprise application solutions. Since its inception in 1995, NetSol has used its BestShoring practices and highly experienced resources in analysis, development, quality assurance, and implementation to deliver high-quality, cost-effective solutions.

Specialized by industry, Netsol’s product and service offerings include credit and finance portfolio management systems, hospital/healthcare information management systems (HIMS), SAP consulting and services, custom development, systems integration, and technical services for the global Financial, Healthcare, Insurance, Energy, and Technology markets. NetSol’s commitment to quality is demonstrated by its achievement of the ISO 9001, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a distinction shared by fewer than 100 companies worldwide.
“Being a CEO is challenging no matter which country you are in or which industry you belong to,” Salim says with a smile. As a CEO, one must consistently respond to the high expectations that people have. “It’s true. People tend to have very high expectations of the chief executives; people believe that chief executives have all the answers,” he says. “CEO’s are perceived to be reliable, trustworthy and have the ability to resolve any problem,” he goes on.

But surely being part of the IT industry is a challenge in itself, especially when the country is going through turbulent economic and political times; and it’s not just the external challenges that the CEO would have to deal with: “The IT industry ends up being something of a bigger challenge because the people that we deal with on a regular basis, are essentially part of a very intellectual community,” says Salim. “People management is tough as it is, but ensuring the satisfaction of smart individuals becomes even tougher.”

The CEO has to be very careful about the resources he puts in place, and how those resources are put to work. “If I look at my own job, I am constantly concerned with how to ensure satisfaction and retention of the smart people that I have, and how to also ensure that we get better and smarter people into the organization,” Salim elaborates.

HR management may indeed be the biggest challenge facing CEOs today, but the earlier mentioned environmental and external instability is also something that needs to be consistently navigated around. “We are faced with something of a changing world and it is amazing to see how everything’s changed in just a few months,” says Salim. “Financial shake ups are taking place all over the world and the result is severe global tension. On top of all that, you have geo political issues involving us. Everything coupled together creates an environment where a CEO in Pakistan has to be very quick on his feet,” Salim shakes his head. It becomes a must for the chief executive to be strategic and tactical at times like this, putting more focus in flexibility in order to be able to come up with solutions and ensure leadership in an uncertain time.

Interestingly, Salim does not agree with the popular-with-a-few notion that Pakistan has not really faced the financial crunch that the global industry is facing.

“Its not entirely true, because you see although the Pakistan banking and financial institutions have not seen the worst of the credit crunch, we work with global clients and customers who have been effected by the global depression,” Salim points out. “We face the difficulty in convincing them to spend their money, and they have less financial ability and are more cautious.”

Salim cites clients who have been convinced with the software and its effectiveness, with all the planning and delivery timelines; but who still insist on having a little more time to think. “It’s just gotten tough as everyone thinks about spending money now or waiting for a bit,” Salim says. It’s this unfortunate climate that makes it all the more vital for the CEO to come up with innovative ways of convincing customers to buy products and services. “CEO’s who have this ability to change and come up with new ideas, strategies to convince customers to buy will be definitely very successful in 2009,” predicts Salim. The key take away remains the desire to utilize and identify opportunities in order to get through this time. Not exercising any precaution will be a sure recipe for disaster.

It is important to win the confidence of the buyer’s market is important. “This helps them to realize that the bounce back rate of companies working within that infrastructure.” Salim gives an example of how savvy clients can actually by go through uncertain situations successfully. “A very good example of what I am talking about, occurred in 1997. We were signing a contract with a customer in Thailand for a one year development project. While we were negotiating the terms, the market in Thailand crashed,” recalls Salim. The client was in the automobile industry and faced a decline in sales but he still went ahead and signed the contract. “We were curious as to why he was still so sure of going through with the deal with all that was happening around him so we asked him. He responded by saying what made him so confident was that by the time the market came back up again, his investment would have paid off in making his organization more prepared, providing him an edge in his value proposition.’ As it turned out, he was pretty savvy and things turned out as he had predicted.

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Salim believes that in times of slow business, it’s vital to review the systems and processes of a company. “All companies, big and small need to look towards reengineering and reworking their processes to improve efficiency,” he says. By improving systems at a time of downturn, the investments pay off when the economy revives. Organizations should be using the slow time to take a critical look at their processes and ensure that they are scalable to serve the markets when they open up. Criteria and demands will have continued to increase despite the lag in the global transaction trend so preparedness has to be put into place.

The Big 13 at NetSol
“NetSol has matured over the years. I’d say in the 13 years of our operations, we have been very adventurous and been through some interesting times.” Speaking from experience, Salim talks about how this recession is different than the past recessions that have taken place. “Impact. The early recessions were limited to the countries themselves whereas because of the natural of global businesses, this recession is global.”

So if companies don’t want to spend, how does a company like NetSol continue to generate revenue? “The product and services we sell meet the demands of our customers. Not only do we demonstrate our products to our customers, we also invest in creating the awareness involving how our products need to be used. This is how we market our portfolio.” There is so much clutter and competition in getting the buyer’s attention, you have to do something extraordinary to not only attract the potential customer, but also retain him once he has converted. “Currently the problem with people is spending money and so forth. We have to be very tactful about putting the right purchase option in front of them especially in terms of technology.”

NetSol, despite its age, is also feeling the effects of the global cash crunch. “we have also have seen some difficult times in the past few months and I suspect things will remain sluggish for the rest of this year. But because we have an established track record, we will continue to meet the demands of our customers.”

NetSol has also faced some serious problems in the past several months in making the operating expenses more efficient, but according to the President of NetSol, things will look back up again in a few months. “There are certain elements that we can control and others that we cannot. If you can plan out your operational expenses and remain cost effective in the use of all your resources, you should be okay. Over the last 3 years, we have seen heavy shift in services, technology and telecommunications. We have also seen a shift in the way companies function.”

Another DotCom Crash for IT Companies?
Because of shrinking markets, the sustainability of companies is impacted. Smaller IT and ITeS companies, especially in markets such as Pakistan which have no track record of venture capital or financial support, many consider this recession to be a DotCot Crash of 2009. Is that how this veteran professional sees the situation? “No, the financial crisis is completely different from the DotCom crash in early 2000. That crash took place because of the raised expectations from technology. The businesses initially put in billions of dollars in the technology sector and employed thousands of people. The large companies made the heavy investments and when they pulled out, the whole technology market crashed.”

If anything, Salim thinks that the small businesses will have a better chance of surviving. According to him, there is potential for more work now than before, which actually means the size of the market (what we call, the “pie”) is getting larger. “the IT industry in Pakistan has never seen anything like this before. There is a need for globalization, outsourcing, offshoring and all those other buzzwords. There is more work now than before.” And that’s why the CEO has to know how to pitch to a client, work with him, make his terms flexible and close the deal. “It is also important to realize that the buying and selling mechanics have also changed. Companies won’t have as much success selling as they will if consumers realize the importance and buy.” Push versus pull mechanism.

Product Versus Service
This has been an ongoing debate. Product development is something that Pakistan is very good at rather than the services industry because other nations have already excelled at that by being extra cost effective. “I think the better thing for Pakistan to do right now is focus on product developments and the financial sector. For NetSol, it has been almost 10 years and we are still maturing in the technological product development sector.”

At this point, NetSol relies on customer referrals to increase their business.

“All across Pakistan, you’ll see people investing heavily in the services sector but the global recession is creating a lot of hindrance in that area. If we keep dabbling in services, we will not have time to have our products mature. That’s the roadmap I think we need to be focusing on. In my experience of 20 years, I have seen people buy products and establish relationships with companies who are in it for the long haul. Once you sell the product or solution, according to Salim, you will generate more repeat business than if you were offering them only services. “By 2011, the IT industry of Pakistan should moving onto the next phase of maturity. In line with that, Pakistani CEOs will also grow.”

How about the image issue? “The beauty of IT industry is that you develop something today, which will be of use tomorrow. The industry of Pakistan still needs 13-14 years of complete maturity. It is not about the packaging or the image, rather about the application and what benefits it provides to the consumers.” As most people would agree, if it makes business sense, it will sell.

“Engineers and the workforce in Pakistan is very smart. Extremely sharp. Why should we compete with China or India when we have the requisite talent to boom our product portfolio?

If there is one thing that the world knows about Salim Ghauri, it is his faith and admiration of the young generation. “We can do anything we put our minds to. It’s only a matter of time. Given the right ecosystem and enabling environment, they can accomplish everything.”

When you talk about technology, says Salim, it is all about an intellectually complex group of people who implement solutions to resolve problems. “In the coming 5 years, the image of Pakistan will improve. It has to. I don’t think if you have a strong quality product, that the image of the country will impact the sale. Once again, it is all about the confidence the customer has in your product. You represent the market.” Salim has no doubt that Pakistan will be a critical player on the global IT map.

Salim reminisces about the 1990s when a massive brain drain wave was created when doctors and engineers were leaving Pakistan in search of better opportunities. “Professionals went out to Australia and North America. If we create the right environment, there will be an era of technologists arising right here from within Pakistan who will be able to change the landscape as we know it. It is already happening in pockets and as senior professionals, we must continue to invest in these youngsters.” After all, they are the future of Pakistan and we have the opportunity to help strengthen that future.

For more details about the company, please visit www.netsoltek.com