“Right now,” begins Nasir Khan, the CEO and CIO of PRAL, “the responsibility I have is automating the business processes of the Federal Board of Revenue, so it has a wide ranging impact. For example, if we can implement e-filing for Income Tax, Sales Tax or Customs, that in itself is a huge qualitative change in the government.

More than anything, the actions created by my company creates a proliferation of technology in general, forcing tax payers and others to measure up to the opportunity and standard.” Raising the bar way up high so that the people who are going to use the technology will also be the ones driving its growth. That’s the plan. And you know what? It works!

In 1994, the Central Board of Revenue established Pakistan Revenue Automation Limited (PRAL) as private limited company to perform the functions of system design and development, implementation support and maintenance procurement and maintenance of hardware, bulk document processing, generation of reports and running ad-hoc queries, MIS compilation and support for CBR. Over the course of several consultant reports, many pain points were identified in the tax collection process, which was one of the reasons why the revenue collected was dwindling. In an effort to enable tax payers to be able to file their taxes in a more efficient manner, PRAL was commissioned with a long term project to eradicate the challenges in filing tax returns.

That’s when, amongst other projects, electronic filing of tax returns was made mandatory by CBR.

According to a press release issued on the CBR website in the first week of May 2009, the Federal Board of Revenue’s tax collection exceeded Rs.898.6 billion by April 2009, a 17.7% increase over the corresponding period in the last year. While the reason for this bullish movement can be attributed to a number of elements in the market, the fact that access to the CBR was faster, more transparent and 100% accountable.

Nasir Khan is part the group of people who were involved in IT in Pakistan since its onset. Having a background in the private sector, Nasir had a strong grasp on exactly how to match technology to make a business process more efficient. When he began working with PRAL, he was able to align technology solutions and bring about a greater change because of the reinforced background. He has his feet firmly planted on the ground when he is looking for automation solutions that drive change.

He has spent almost 20 years in the private sector whilst only 2 in the public sector. “In all my time, I have witnessed three economic downturns. The first was in the mid 1990’s, when we were virtually driven out of the domestic market.

Things would have become even tougher if we hadn’t started serving the export market at that time.” The second crisis Nasir talks about is when the Dot Com bubble burst.“We had to re-align our business yet again.” To be able to survive the long haul, companies have to be able to make the necessary adjustment, otherwise someone else who can, will.

The same goes for institutions and countries. “Every downturn is an opportunity, but only for those who are smart and willing and able to rough it out. Before you start winning, you have to have the ability to take the beating.” Nasir then gives a hearty laugh and quotes Freddy Truman who said ‘let’s find out how tough he is before we find out how good he is.’

Right now, government funds have been stopped. In the short term, there will be a downturn. The industry has to focus on projects that are funded by the World Bank and other organizations, because the funds will be available there, providing someone can get a handle on how to make the procurement process more efficient. But for the organizations who might not want to take that approach, there are opportunities for them to keep themselves afloat.

“Defense, for example, is a huge area of opportunity. If companies could make investments in those areas in the shape of value added services, that would be a tremendous win.” But, he continues, since that sector may not be so open or developed to deal with the industry, getting into that circle might take a while.

“A lot of companies who see the tough times want to move away from Pakistan and focus on markets abroad. Having said that, I do earnestly think that if there are organizations who have the staying power to sustain themselves while focusing on the domestic market, will thrive more business because they will have the experience, track record and physical ability to serve opportunities such as the Defense sector, that nobody else from abroad is going to be able to take advantage of.” When referring to the staying power, Nasir explains that simply because so much can impact your business for purely irrational reasons, you need to have enough sustainability and drive to continue despite the risk. And like any other market, where there is high risk, there is usually high return.

Challenge to Change
Nasir explains that Pakistan cannot follow the same model as India does because we simply don’t have the numbers.

“We don’t enjoy the same brand they do  in that we cannot be in the low end industry and work on the strength of numbers. We have to be a little more focused on import substitution and specialized projects, in which we don’t face

competition and in areas where people are not willing to come to the country.” And speaking about India, well, considering that the country is almost 8 times our size, there are simply more people who can be trained and employed to creating a solution than most other countries. “When I used to work on projects in the US as part of Systems Ltd, that was what my experience was. Let’s say we pitch for a project and are competing with an Indian firm. We’ll both bring a few of our best people. But we’ll run out of our ‘best’ after the 6th or 7th, while the Indian company will keep pulling them out of the hat. They compete very well in the numbers game, and there is just no shortcut to winning that challenge.” Of course – it will take natural time for the skills to evolve and disseminate.

When you are in a sales effort, he says, you want to take all business that comes your way. “Strategically, not all those leads may be good for the company because some might just be a waste of time, not reflecting on your core expertise. You have to educate your management to have the courage to say no, which is difficult.” When you survive, he says, you try and survive according to a strategy.

But PRAL has huge investments coming into its projects so talking about good strategy and sensible business selection is somewhat like giving a lot of great advice from atop a mountain, isn’t it? “The reason money continues to come in is because we prove the returns. We bring a huge saving to the country.

Hypothetically speaking, if we are spending $5 million on PRAL, it’s because the Government of Pakistan is saving $50 million in import subsidy, so it makes sense.”

Identify projects that have a genuine return on investments. Identify the projects correctly, secondly, you streamline the procurement process so that it is accomplished in a reasonable amount of time and finally, you have a handle on reaching closure. “One of the biggest problems in Government is the closure in a project. The project may be implemented on schedule, but the sign off cannot happen until people begin to use it. This ‘clause’ can skew projects out of their timelines because of the quality of the untrained people who are intended to use the system. So that is a challenge.”

But then thing about our country is, we are not doing as well in the export market as we should be. And this lag is being caused by reasons beyond the control of the industry. “We have to manage our costs and aim for projects, products or solutions which have a multiplier effect. In this kind of a market, if you are in for the numbers games, you are not going to do terribly well.” The multiplier effect is about creating a stir which will give a natural boost to supporting functions and companies within the ecosystem. The buying trends, as expressed by a number of CIOs and vendors in the Round Table sessions that CIO Pakistan has hosted, are on a low. Low trends means a change in the buying behavior, hence you will need to change the way you approach your sales and ensure that your company is having more interaction points with your client than before.

The Art of the Possible
“To me, Information Technology is the art of the possible. You have to have a feel for what is achievable, and adopt an incremental approach. Everything you do has to conform to a long term strategy. For example, I took responsibility of PRAL in 2006. Our first achievement was there in 8 months when we launched the portal. That was, however, only one piece of the entire project.” The normal gestation time for a technology project is at least 2 years, but when you’re looking for justification and progress, then you have to create targets on a timeline that you can meet.

“If your first achievement takes 2 years, you will probably be out of a job by that time!” The way PRAL was able to move quickly based on its initial success was because of one key element. “After we put up the portal, the government didn’t have to do anything – it was the tax payers whose behavior we were going to have to change. And because they were quick to make the change, the project then adhered to a private sector workflow.” PRAL stipulated that everyone had to e-file and it was done.

“Systems must be robust and technically cutting edge, but be very sure that the business processes you are taking on, are manageable. The real challenge is to write the right programs. That’s why you need to have the right people in your organizations, systems designers and systems analysts – people who can think and can design an entire system rather than just a bunch of code. HR is a big challenge in ensuring that you have the right solution for the right problem.”

Interoperability in Expertise
Leading an organization such as PRAL requires nothing short of multiple domain expertise and a terrific amount of patience. “Your knowledge cannot be piecemeal, because in a situation like this, the challenge is not the technology or the integration – those things will work. But if you are unaware of how every function contributes to the ultimate project, you will not be able to succeed. The challenge is how you manage a transient situation where there is one legacy system which is not quite right, and a brand new system and they co-exist from the functional perspective – there will be duplication and gaps which exist. The real skill is making a brand new system work while the rest of the systems are not quite in place as yet.”

Whether in tough times where there are severe holds on the budget, or during times of economic boom, the technology will always eventually work. The challenge comes when you have to ensure that not only is your technology aligned to match the direction of your vision, but everyone else you interact with, are also on the same page. “When you talk about how to get the industry grow, this is how it is going to happen.”

As far as PRAL is concerned, the work is ongoing. “It has to be. The institution of the Government is tremendous to get through but it is only a matter of time before the return is realized. Once that happens, the belief that the proliferation of technology will be so immense, that downtime or not, the impact will be experienced by everyone.”

For more details about PRAL, please visit www.pral.com.pk

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