Computer Systems Advisers (M) Bhd (CSA) will focus on end-to-end information technology (IT) outsourcing business to offset the 10% drop in sales turnover on its systems integration (SI) business, said its managing director Chuah Tai Eu.
The drop, based on a 9-month cumulative period from April to December 2002, was due to delays in corporate IT spending and deferred projects.
The outlook for the future quarters remains challenging. In terms of business focus, the spotlight will continue to be on strategic initiatives such as outsourcing to ensure that it bears fruit quickly. The group's investment in outsourcing has taken longer than anticipated to produce returns. As such, this is a priority for the management, he said after being awarded the Cisco Silver Partner Certification in Petaling Jaya yesterday.
He sees the outsourcing business catching up, as it has started to bring in substantial revenue. Outsourcing business contributed less than 5% to its profit from April to December last year. For the same period, CSA's revenue mix is made up of 76% from SI, 1% from IT outsourcing and 23% from services.
Computer Sciences Corp, the parent company of CSA, recently secured a 4-year outsourcing deal estimated to be worth RM52mil from US-based DuPont to provide end-to-end support for end-user computing, midrange and helpdesk services over 15 countries across the Asia Pacific. This should lead to some outsourcing business for CSA.
CSA is also tipped to close a local outsourcing deal by the middle of the year. The customer is expected to make a decision by then, he said.
The International Data Corp has projected an increase in network equipment purchases this year, driven partly by widespread broadband adoption and data network growth.
This is against the backdrop of a lower global IT spending growth, which is forecast to fall to 2.3% from 3.7%, due to the concerns about global economic weakness and uncertainty, he added.
Managing director of Cisco Johnson Khoo,said he would continue to evaluate its partner certification programme. We will keep looking at potentially strong partners who are genuine and interested to grow the business, he said. Cisco has 3 silver and 4 gold partners.
The Cisco partnership programme allows selected IT companies to carry Cisco products in the market. For the cumulative 9-month period (April to December 2002), CSA's revenue and pre-tax profit fell 7.1% and 20.7% to RM220.5mil and RM15.1mil respectively from the corresponding period in 2001.
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