IT industry mood turns optimistic

  • Business
  • Wednesday, 17 Dec 2003

Today’s CEO Outlook features the CEOs in the IT industry. 

They are Voon Seng Chuan of IBM Malaysia, V.R. Srivatsan of Oracle Corp Malaysia, Cheam Tat-Inn of Sun Microsystems Malaysia, and Lalit Kumar Gupta of Unisys Malaysia. 

The past few years have been difficult for the IT industry worldwide, which had been faced with excess capacity and consumers postponing their investment/reinvestment decisions. But things are looking up once again, as evidenced by the surge in the prices of technology stocks around the world, including those on the KLSE, during the past six months. 

IT players are also heartened by the Malaysian government’s commitment to develop the local IT industry, as reflected in the development of the Multimedia Super Corridor, initially, followed up by incentives in the budgets of the past few years, particularly the Budget 2004. 

And the effort is paying off, as seen in the many global giants having opted for Malaysia in setting up regional hubs not only in information technology, but also in financial services, oil and gas, logistics, and even seismic data processing, among others. 

Also, the global IT giants are increasingly tapping local talent in implementation and services as well as in software development and design. 

LALIT KUMAR GUPTA Country manager Unisys Malaysia 

Challenges and prospects for Malaysia's economy in 2004? 

The outlook for the global economy seems much brighter. However the key focus, issues and challenges remain the same. Malaysia has adopted an innovative approach to the challenges of globalisation and technological advancements that are pervading economies the world over. 

While continuing to recognise the importance of foreign direct investment, Malaysia has focused on strengthening the country’s resilience from within. The country has achieved a lot in its efforts to become more competitive in the global economy through Multimedia Super Corridor (MSC) initiatives and successful march towards the k-economy. There is still a long way to go. 

Driven by a vision at the top, Malaysia has created a strong foundation to be successful. We are excited about the prospects of continuing partnerships between Unisys and our clients, including the Malaysian government, to help them achieve their vision and objectives. Unisys will continue to bring its global expertise and experience to help our local partners and clients. 

Prospects for your sector/industry next year? 

The momentum in the information and communications technology (ICT) industry is expected to continue. We expect opportunities in areas that address specific issues relating to customer service, enhanced security expectation, and improved efficiency with cost cuts. 

We believe ICT spending will be focused on: 

  • Specific initiatives in IT outsourcing, business process management, and privatisation of specific government functions; 

  • Investments in building infrastructure and in making Malaysia a preferred destination for shared services centres; 

  • Web-enabling of more and more government applications to allow for multiple channels of access for citizens driving customer service and efficiency while lowering the cost of delivery; and 

  • To make flagship initiatives more productive and their value more realisable by building the required infrastructure and more integration across flagship applications.  

    Focus of your company/group in 2004? 

    Unisys' overall value proposition lies in our ability to provide end-to-end business solutions to our clients in our target market sectors, which include financial, public sector, telecommunications and transport. Our success with outward clearing BPO (business process outsourcing) for Maybank and successful implementation of MyKad flagship project as the main systems integrator are a few examples of Unisys delivering its commitment to help clients meet their objectives. 

    BPO is our fastest growing business unit. BPO and systems integration of complex state-of-the-art solution implementation in the public sector and financial industry would be our focus in 2004. 

    Do you expect your company/group to do better or worse in 2004, compared with 2003? Why? 

    We believe that Unisys is well positioned to address the key challenges facing our customers. Clients are now looking for solutions providers as opposed to technology providers – somebody who can understand the client’s business problems and help them be more efficient and effective. 

    They want to see the linkage between their business vision/objectives and their IT infrastructure. They want to see the cost savings and return on investment from all their IT investment decisions. This is precisely our sweet spot. 

    Our deep domain expertise, our ability to provide end-to-end solutions and our proven capability in the areas of systems integration and business process outsourcing in our targeted industry segments have allowed us to build long-term partnerships with our clients. We feel pretty confident and we are looking forward to an exciting and successful 2004. 

    What do you think should be the new Prime Minister's priorities for the country and the industry you are in? 

    In Datuk Seri Abdullah Ahmad Badawi, we have a committed visionary who can take charge of a strong legacy left behind by Tun Mahathir Mohamad. Malaysia launched the MSC initiative in 1996 as part of a major strategy to accelerate Malaysia’s entry into the information age while gearing itself for attaining the status of a fully developed nation. 

    The success of the MSC initiative depends on the ability of local companies to work collaboratively with companies like Unisys to make use of the global expertise to develop the local capability to move Malaysia successfully into a k-economy. 

    Malaysia has a long history of administrative modernisation in its public service to enhance the efficiency and effectiveness of the government’s administrative machinery. It needs to continue to make prudent use of ICT to improve the efficiency and effectiveness of government agencies and the private sector. 

    VOON SENG CHUAN Managing director IBM Malaysia  

    Challenges and prospects for Malaysia's economy in 2004? 

    With globalisation, business transactions are now 24 x 7 year round and present tremendous opportunities. Thus, local companies should seek ways to transform in order to get ahead of competition. 

    They must boldly re-engineer work processes and invest in technology to be leaner, agile and responsive to market changes, customer preferences, and to provide employees, suppliers and partners with information necessary to do the job better, faster and cheaper. 

    Businesses are experiencing these challenges, and will face them with greater intensity in 2004. The New Agenda for doing business, which IBM calls the 'on demand' era, has arrived. 

    The positive economic growth of China and India is an opportunity for local companies to levera ge on. Malaysia is poised to benefit from the growth of these two awakening economies. In view of this upswing, we must find ways and means to ride on their progress and growth. 

    Prospects for your sector/industry next year? 

    The information and communications technology (ICT) provisions in Budget 2004, with more funds for technopreneurs and cheaper Internet access, will definitely bode well for the industry next year. 

    Thus, I believe that prospects for the IT industry in 2004 are good. In fact, the IT industry (8% growth according to International Data Corp) is anticipated to grow faster than the national gross domestic product (GDP) – 5% growth according to Morgan Stanley Dean Witter. I am optimistic about the long-term growth of the IT industry in Malaysia because there is no other way – local companies need to innovate, and to innovate, it is all about making IT a transformation factor within their business models for greater operational efficiency and eventual cost-saving productivity.  

    Focus of your company/group next year? 

    Customer satisfaction continues to be our primary focus. We will strive to maintain and improve our competitive edge by bringing to our customers advanced technology and business knowledge to help them integrate technology into the fabric of their operations. 

    Another area of focus will be to continue to grow our business through greater promotion of: 

  • E-business on demand. Today, it is a business imperative for end-to-end integration so that products, services and decisions are available on demand. IBM is well-positioned to take customers on the on-demand journey with our suite of on-demand products and services, and information technology expertise; 

  • SMIs. IBM strives to contribute to our government's objective of preparing SMIs for the challenges and opportunities arising from trade liberalisation, globalisation and advances in ICT; 

  • Business transformation outsourcing. Companies continue to look toward IBM to help integrate cutting-edge industry knowledge and business acumen with the latest technologies and a more comprehensive management approach; and 

  • Open computing. Open computing, or specifically Linux, plays a key role in the on-demand world, offering flexibility and choice as well as a cross-vendor ecosystem. IBM is committed to promoting and facilitating the adoption of open computing among developers and users to realise its full value. 

    The third area of focus is the development of our people. IBM continues to be committed to attracting, retaining and motivating the best talents, and creating a climate where they can thrive and contribute to the business, and the country. 

    Do you expect your company/group to do better or worse in 2004, compared with 2003. Why? 

    We expect our company to grow. This is based on the view that the country's GDP is anticipated to improve, and that the IT industry will move in tandem with Malaysia's economic growth. 

    Also, with the formation of IBM Business Consulting Services following the integration of PwCC into IBM, we now have the full suite of offerings (end-to-end consulting capability, deep industry expertise, and breadth of IT solutions) that redefine both the consulting and IT industry, creating a powerful value proposition to our customers. 

    Companies are now beginning to transform themselves to meet market demands – to be more responsive, flexible, focused and resilient. This would avail IBM with opportunities to grow our business. 

    What do you think should be the new Prime Minister's priorities for the country and the industry you are in? 

    The key areas that the Prime Minister should continue to focus on are people development and continued political stability to create a conducive environment for the growth of Malaysia as an ideal location for the setting up of regional hubs. Malaysia is growing to be an attractive option as the regional hub for shared services because of the availability of a pool of highly trained and skilled talent, as well as the strong socio-political climate in the country. We should continue to capitalise on this. 

    It will also be in our nation's best interest to continue to promote open computing with greater drive for open standards which will enable government departments to achieve enterprise-wide data integration across multiple agencies and channels, enabling them to deliver seamless 24 x 7 access to government transactions, develop the life sciences sector in view of the abundant natural resources we have in the country, establish a national computing grid for more active and intensive research and development works to be carried out, as well as a continued emphasis on the provision of a strong and stable bandwidth infrastructure. 

    CHEAM TAT-INN Managing director Sun Microsystems Malaysia  

    Challenges and prospects for Malaysia's economy in 2004? 

    The key challenge is in building a sustainable long-term economic growth. While there are many strategies, some with short-term results and some long term, in my opinion the three key strategies that will build a sustainable economic growth are: 

  • Strengthen contribution of the domestic sector. More often than not when we talk about this point the general conclusion is to spur domestic demand. While that is important, we must start thinking about local 'intellectual property' and focus on developing quality products; 

  • Higher value creation through collaboration either regionally or with multinationals. The concept here is to jointly develop products and services that will address the needs of developing economies; and 

  • Develop more finished goods from our rich base of commodities i.e. petroleum, gas, and palm oil, among others. Therefore, industries like petrochemicals and biotechnology, among others, should be given emphasis. 

    Prospects for your sector/industry next year? 

    Malaysia’s information and communications technology (ICT) sector is poised to grow further next year. In my opinion, there are three contributing factors to this growth. 

    At a macro level, the Malaysian government’s commitment to transform the country into a global multimedia hub through the Multimedia Super Corridor initiative is likely to spur IT spending by the government and draw foreign investments in this area. 

    Naturally, a more positive economic outlook will create a higher level of confidence for companies to increase their spending on IT. 

    At a micro level, structural changes in terms of where future IT investments will focus on will provide the impetus for growth in new areas. 

    Over the past few years, rapid development in the IT industry has introduced complexities to many organisations' IT infrastructure. As a result, many large organisations are facing a spiralling effect on their total costs of ownership. We are beginning to see a trend where organisations are taking a pro-active approach to reduce their complexities and costs. We should see growth in areas like mainframe downsizing, servers consolidation, and outsourcing. 

    Second, as the Internet becomes more prevalent, the ability to web-enable services at Internet speed becomes the new competitive advantage. And third, mobile data is set to be the new paradigm. With this comes a growth in new devices and applications. 

    Focus of your company/group in 2004? 

    Sun Malaysia is focused on executing our core strategies that will address the needs of our customers, namely, reduce the cost and complexities of today’s IT, speed services to market and unleash mobility with security. With our partners we are bringing innovative total solutions to help our customers realise sustained business advantage.  

    We plan to continue our industry leadership in the market segments that we serve and expand our position in new markets. Sun remains the worldwide leader in the Unix server market in both units and revenue, according to Gartner Dataquest second quarter 2003 Worldwide Server Database report. 

    Do you expect your company/group to do better or worse in 2004, compared with 2003? 

    Next year’s rosy outlook will see many technology companies, including Sun, benefiting from it. Sun is confident of creating more value for our customers and will continue to introduce new products and services in line with the demand. It’s about delivering on innovation that translates into customer value. 

    An example of this is the Java Desktop System (JDS), which was introduced in September this year. The Java Desktop System runs on any personal computer and is a low-cost and highly secure alternative to traditional desktop environment. The Java Desktop System includes our award winning StarOffice 7.0 productivity suite and familiar solutions for e-mail, Web browsing, etc.., and offers a 70% to 80% lower acquisition cost, and 25% lower total cost of ownership. 

    What do you think should be the new Prime Minister's priorities for the country and the industry you are in? 

    For the the Country: 

    1. Adopt a balanced approach towards economic management, i.e. enhance social development while pursuing rapid economic growth; 

    2. Maintain the country’s internal peace and stability; and 

    3. Maintain positive bilateral ties with countries around the world. 

    For the ICT Industry: 

    1. Building the digital generation to further enhance ICT literacy, appreciation and adoption among young Malaysians both in urban and rural areas. It's not only about educating and equipping them with ICT knowledge, but creating a mindset that enables the pursuit of ICT as a business venture; 

    2. Strengthening the technopreneur development programme to spawn more home-grown software developers, creating a rich pool of intellectual capital that thrives on local invention, and creating a good base of knowledge workers; and 

    3. Investing and committing resources to nurture future growth industries such as biotechnology. 

    V.R. SRIVATSAN Managing director Oracle Corp Malaysia 

    Challenges and prospects for Malaysia's economy in 2004? 

    While the positive economic outlook should be stimulating and good for the business climate, I would expect business to remain competitive. The challenge will be to stay on top and be ahead of the competition. Businesses, therefore, can be expected to be increasingly looking at cost efficiency and operational effectiveness, which can be achieved by leveraging on technology. 

    Given this scenario, this will be a good opportunity to make further inroads into the transition to a knowledge-based economy. Technology can be leveraged to be an essential tool for knowledge development and knowledge management to further boost the development of a k-economy. 

    Prospects for your sector/industry next year? 

    The increasing need to leverage on technology for businesses to remain competitive and also the transition to k-economy, augurs well for the information and communications technology (ICT) industry. 

    Organisations, both large and small, will be looking into greater depth of involvement in conducting their businesses electronically to gain further competitive edge. This would involve tapping on the latest in technology. Organisations can be expected to consider IT spending as one of the top agendas for doing business in 2004. 

    The Budget 2004 has provided a financial boost to small- and medium-scale enterprises (SMEs) through corporate tax adjustments. While SMEs will have additional funds to funnel tax savings into IT spending, such investment decisions will be very much influenced by return on investments. 

    Businesses can be expected to focus on better and quicker returns on investments and lowering the cost of doing business. Essentially, businesses will want to do more, know more and spend less to achieve critical business control and decision-making quickly and cost effectively. 

    Focus of your company/group in 2004? 

    The various favourable factors to influence increased IT spending will create tremendous opportunities for Oracle. Oracle has a broad range of technology and solutions that provides an integrated platform for businesses to develop and deploy their business processes. 

    We have a new product line, Oracle 10g, that can help organisations manage their IT resources more efficiently and in the process, drive IT costs lower. Organisations will be able to implement utility computing and optimise usage of their IT infrastructure, thus increasing their productivity and return on IT investments tremendously. 

    With the advantage of a complete and integrated architecture, organisations will have what they require – a software architecture that provides high availability, and facilitates intense, real-time processing. Oracle 10g infrastructure provides high performance, scalability, reliability, security and privacy features at the lowest cost. 

    In addition, Oracle will focus on lending a helping hand to SMEs with offerings such as Oracle E-Business Suite Special Edition and Oracle Database Standard Edition One, designed specifically for SMEs. 

    This makes Oracle’s enterprise solutions very affordable for SMEs, with features designed specifically for their needs such as easy, rapid implementation, simplified management and lower total cost of ownership. Besides these features, these offerings also allow SMEs to start small and grow as their needs grow. 

    Do you expect your company/group to do better or worse in 2004, compared with 2003? 

    This year turned out to be a reasonable one for Oracle Malaysia where we recorded a satisfactory performance. With customer-centricity as one of our top priorities, we were successful in retaining customers that we have and in winning over new customers. In addition, we built closer relationship with our business partners through interactions and exchange of knowledge. 

    We expect this to continue into 2004. The brighter economic outlook and business prospects point to 2004 being a better year. I see 2004 to be an exciting and eventful year.  

    Is China an important factor in the management of your operations? 

    China is a significant market for Oracle. With a large customer base and organisation infrastructure to support the China market, Oracle has the ability to provide support for our Malaysian customers with expansion plans in China. Businesses with China operations will be able to find seamless support for their investments in Oracle technology. 

    We have set up two China Development Centres, one in Shenzhen and the other in Beijing. They are research and development centres in China to enable us to work more closely with local partners to develop solutions on Oracle’s latest technology to address the unique needs of companies in China. 

    What do you think should be the new Prime Minister's priorities for the country and the industry you are in? 

    The Prime Minister has demonstrated his concern for the public sector to deliver better citizen-centric services as well as the need for the organisational effectiveness of the government machinery. His concern and priorities signal the need for the government to fast track its e-government transformation. It is inevitable that one of the ways of achieving this is to leverage on the vast potential of Web services and Internet-based technology. 

    Oracle has vast experience in working with governments throughout the world in various stages of e-government transformation. In a move to deepen its involvement in e-government, the first Oracle-HP e-Governance Centre of Excellence in the world was officially launched in New Delhi, India, in July 2003. 

    Oracle has seen how Internet-based technology has been leveraged for the public sector to provide better services and offer additional services previously not available, at a lower cost. 

    Technology can change the entire fabric of citizen services delivery and we look forward to seeing the Prime Minister continue to drive the e-government transformation. This will be a giant step towards the development of a knowledge-based economy in Malaysia. 

    Views from banking CEOs: Dr Rozali Mohamed Ali of Bumiputra-Commerce Bank Bhd (BCB), Zarir J. Cama of HSBC Bank Malaysia Bhd, and Shayne Nelson of Standard Chartered Bank Malaysia Bhd.  

    Views from the big boys in the consumer electronics industry: Jiro Tomotani of Panasonic (M) Sdn Bhd, Rajah Kumar of Philips (M) Sdn Bhd, and Kazuo Suyama of Sony (M) Sdn Bhd

    Views from CEOs of port operators: Tan Sri G. Gnanalingam of Westport Malaysia, Basheer Hassan Abdul Kader of Northport (M) Bhd, Datuk Mohd Sidik Shaik Osman of Pelabuhan Tanjong Pelepas, and Datuk Ahmad Ibnihajar of Penang Port Sdn Bhd.

    Views from scions of prominent families: Datuk Nazir Razak of CIMB, Datuk Lee Oi Han of Kuala Lumpur Kepong Bhd (KLK) and Carl Bek-Nielsen of United Plantations Bhd.

    Views from property CEOs: Tan Sri Mustapha Kamal of MK Land Bhd, Datuk Seri Liew Kee Sin of S.P. Setia Bhd and Datuk Jeffrey Ng of Asia Pacific.

    Views from banking CEOs: Tan Sri Teh Hong Piow, chairman of Public Bank Bhd, Datuk Amirsham A. Aziz, president and CEO of Maybank group, and Piyush Gupta, head of Citigroup in Malaysia.





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