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Pakistan Needs New Business Model
July 5, 2011
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Pakistani entrepreneurs can take advantage of the newer technologies that are upending traditional business models and creating innovative opportunities for service providers all around the world.

People are connected – Facebook alone has over 500 million users and nearly 5 billion people around the world use mobile phones, and a quarter of the mobile users access the internet via phone.

For IT firms across the globe, pervasive digital communication provides opportunities to deliver services from anywhere to anywhere. The deployment model is changing rapidly making it easier to deploy – virtualisation and cloud computing allow innovative vendors to develop, test and deliver solutions from anywhere in the world.

Co-creation, co-delivery, and cloud-based services also neutralise the “origin” and emphasise the value of services/products being offered. Communities of web participants develop, market, and support products and services from anywhere in the world. Majority of the leading American and European companies creates value through web communities and leading contributors can be from any part of the world.

Nothing stops a Pakistani origin firm to recruit talent from anywhere in the world and deliver niche services that are not dependent on geography. Ever growing quantities of knowledge workers across verticals has opened the doors to collaborative projects. It is absolutely possible for a knowledge worker to sit in his/her home office in New Delhi and work for a New England company.

Can you make this happen in Karachi at a reasonable cost?

Knowledge workers typically are paid more than others, so increasing their productivity is critical. The productivity of a knowledge worker comes from interactive technologies combined with complementary investments in process innovations and training. It maybe difficult (but not impossible) for a Pakistani individual to become part of the global knowledge workforce, but a services firm based in Pakistan can easily recruit workforce from around the world to deliver value to its customers anywhere in the world.

Besides, co-creation and collaboration of another technology that can help boost revenues for Pakistani entrepreneurs is cloud computing. Companies want to purchase IT assets on pay-per-use basis and to account for them as cost of operation, rather than undertake large capital investments. Now that cloud computing has matured and is being considered by pretty much all the companies, a Pakistani services firm can create services which have been sold as products traditionally and resell them as cloud-based services.

What can neutralise “origin” better than “cloud?”

Software as a service (SaaS), which enables organisations to access services, is growing at a 17 percent annual rate. But this is not only limited to software – several key computing capabilities are being delivered as a service, including infrastructure, platform, applications, and content. Pakistani vendors can compete, with innovation and new business models, to match the needs of different customers.
Nearly 5 billion mobile users and an equally impressive adoption of internet technology is an ample proof that it is a global phenomenon. But the intensity of its usage is particularly impressive in emerging markets. We know from experience (and also research) that innovation becomes rampant when technology is combined with extreme market conditions, such as customer demand for very low price points, poor infrastructure, hard-to-access suppliers, and low cost curves for talent.

Shouldn’t innovation be coming from Pakistan?

A report prepared by BearingPoint, a leading consulting firm for Pakistan Software Board in 2005 had recommended, among others, that Pakistan should approach established relations with IT services vendors (from elsewhere) as a vehicle towards profitability. Many IT firms from Pakistan have tried this approach of sub-contracting. I believe this strategy is rather myopic. Pakistani firms who have the wherewithal to compete in the global marketplace should establish their own brand by consistently delivering value at a price point that makes hard for anyone to compete.

If brand “Pakistan” is a burden, shouldn’t entrepreneurs adopt the global brand?

There are several textile manufacturers that relocated their operations to other countries for optimising profits. IT services companies don’t have to deny employment to local professionals as long as they are able to have a blended workforce.

I believe the best strategy will be to keep the sales and design/architecture teams closer to the opportunity and placing the front-line project/engagement management at multiple low cost destinations. Pakistani resources can do the heavy lifting. Once enough wins are under the belt – the country of origin becomes irrelevant. Remember – there are no “made in” labels affixed to services.
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This article was published in The News on July 4th, 2011. http://jang.com.pk/thenews/jul2011-weekly/moneymatters-04-07-2011/mm_p13.htm

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Ibrahim Sajid Malick

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There is 1 comment

  • wadood says:

    This Small article is very knowledgble, it describe the structure of pakistani organisation and Suggest a very deep insite toward innovation

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