Software Park's European initiative
By: SASIWIMON BOONRUANG
Published: 11/03/2009 at 12:00 AM
Eight local firms that represent the best of Thai software brands are heading for the European market with the support of a partnership between Software Park Thailand and the Dutch Centre for the Promotion of Imports from Developing Countries (CBI).
The first eight Thai software houses to provide their products in the European market.
The first eight Thai software houses to provide their products in the European market.
According to Software Park Thailand director Suwipa Wanasathop, Software Park has a strategy to enter the European market this year in partnership with the CBI, an independent organisation under the Foreign Ministry of the Netherlands that contributes to the equitable economic development of selected developing countries by providing export marketing and management support to their SME exporters with the purpose of increasing exports to Europe.
Based on their partnership, the supporting programme, called the CBI IT Outsourcing Export Coaching Programme, will run for four years, from 2008 to 2012. CBI will help software companies in Thailand prepare for marketing their products in Europe by providing knowledge transfer in terms of marketing techniques and laws and marketing activities so that they can formulate strategies and be competitive with the software produced and sold in European countries.
Suwipa noted that "Go to Market" was a part of Software Park's strategy of strengthening local software firms in terms of their marketing strategies.
Citing Gartner, she noted that Thailand was ranked in the Top 30 newcomers for outsourcing due to its quality and government support. Today there were 24 CMMI-certified companies in Thailand, an increase from six last year.
"By the end this year, there will be around 40 companies, and this will lead Thailand becoming No. 2 in Southeast Asia," she said.
The director noted that there were around 50,000 Thai software developers, but the export value of software was very limited, just 4.5 billion baht, even though there was a huge opportunity in the global software market.
The value of the outsourcing market in Europe in 2007 was around 207 million, and it was expected to grow to 231.2 million in 2009, the director said, adding that the high growth sectors included outsourcing, logistics, the supply chain and CRM, which were the areas that Thai companies were good at.
"We invited around 40 companies to join the programme, then there were 14 firms that the CBI has visited and run workshops with, and finally they selected eight companies," she said. The eight software firms that have passed the "audition" are Mfec, SSC Solution, AISoft, Teamwork,Promptnow, ThaiQuest, Suvitech and Ice Solution.
All eight companies recently have undergone training - called the CBI ITO Outsourcing 2008-2012 programme - in the Netherlands, together with software companies from Sri Lanka, Pakistan, Columbia, Armenia, Vietnam, the Philippines and Bangladesh.
Mfec vice-president of strategic business Shimmy Thomas noted that information intelligence for telecom, financial and banking were the specialised areas that Mfec would pursue in the European market. Most of the European companies had focused on the top-end of the pyramid market, while such areas as data cleansing, data consolidation, reporting and monitoring were a big opportunity for Mfec and other outsourcing companies.
"The European market is a new territory, though we have never experienced this market, Mfec has 650 employees, which is quite sizeable for the export market," he said.
Mfec is targeting Germany and UK, Thomas said, noting that this is because of their market sizes for IT outsourcing and that both spoke English, while other European countries did not.
He noted that commitment and promptness of delivery were the key factors in dealing with businesses in the EU market. "This's the culture that we have to learn," the vice-president said.
Mfec is the only Thai company that is USFCPA (United States Foreign Corrupt Practice Act)-certified, he said, noting that ethics matter and this was a point that the company has acknowledged about the EU market.
Thomas expected that the company would be involved in two projects by 2010.
"Every 1 per cent of investment should generate a return of 10," he said.
Suvitech COO Ravi Bhatia, a provider of business solutions, systems integration and consulting services in the telecom and finance sectors, noted that Europe was a huge market. Thailand could not compete with India or China in terms of size of software development teams for outsourcing. "We thus have to select one product or one service that we are good at and have the capability to do and then study which customers to target in Europe."
With some 100 employees, Ravi noted that the company has invested some six to 10 million baht improving its structure and increasing its sales team to cover the EU. The Netherlands and Germany are its two main target markets.
"We should turn the present financial crisis into an opportunity because companies in the EU aim to keep reducing costs, however they are still working, so we can serve them with outsourcing, or software as a service," the COO said.
Suvitech aimed to have revenues around 1 million within three or four years. The company has also exported to Singapore, Taiwan and Malaysia.
According to Ice Solution CEO Danupol Siamwalla, the company has restructured its marketing team to make it specific to the EU market. "We are at the stage of planning and preparation, and will enter the market at the beginning of next year," he said, noting that the solutions that Ice Solution would offer in the EU market include sales force automation, web application development and modern trade management.
The modern trade management application, is a solution for the modern trading company, which Ice Solution is targeting at cosmetics companies.
"The programme covers product structure, product category, distribution channel, distribution methods, planning and other details," Danupol said, disclosing that the company viewed France as a target because it was a major base of cosmetics firms and lots of marketing activities had been done in France.
He added that the company has customers in this sector in Thailand and thus it would leverage its experience to other countries, together with the application of open source technology which was the core area that Ice Solution has specialised since it was set up six years ago.
"The EU is a model that strongly uses and promotes open source technology," the CEO said, noting that to enter the EU market, Thai companies had to work to EU standards.
AISoft managing director Kittikorn Kunnalekha, who specialised in online travel, noted that the company has exported products to Asia Pacific and expanding into Europe had always been in AISoft plans.
Having some 20 employees today, AISoft has overhauled its structure. "We changed our sales and marketing departments in order to be able to adopt to European culture," the managing director said.
He noted that so far the company had made its internal preparation, and the company would go to Europe by the fourth quarter of this year.
"We expect to have some three projects, each worth around 20,000 to 30,000," Kittikorn said.
SSC Solutions specialises in "green software", especially for water leakage management.
The company's Knowledge Management Unit manager Tuang-Art Chaikijkosi noted that SSC would provide knowledge and management consulting services for water leakage management in the EU market.