More graduates needed to drive IT sector

Published: 30/04/2010 at 12:00 AM (Bangkok Post)
Newspaper section: Business

MFEC Public Co Ltd was established in early 1997, concentrating on network computing for large enterprises. With its customer-focused strategy, MFEC has grown rapidly and was recognised as one of the 500 fastest-growing companies in Asia-Pacific by Deloitte Technology in 2006. Founder and president Siriwat Vongjarukorn was named ''Executive of the Year 2008'' in the ICT industry, and has been an IT adviser to several government bodies including SIPA, Software Park, and the Board of Investment. In the interview below, Mr Siriwat discusses the company's strategy and outlook.

Siriwat: Govt needs to better support IT
BUSINESS:
Please explain MFEC's business model.
MFEC provides computer and information technology consulting services to industry and government. Our services include network communications, systems and storage, information security, database and middleware service, business information management (data quality management, integration, data warehouse, business intelligence), identity management, content management, and mobile game content, platform, and commercial applications. MFEC is very focused on our customers and their business needs to ensure that the solutions that we provide will help them expand their business to the next level.
The biggest difference between ourselves and most IT companies in Thailand is that we emphasise on the supply-side of the industry coming with innovations and solutions for clients to generate demand in the future versus focusing purely on the demand side.
What industries are MFEC's customers?
Here at MFEC we choose the type of customers that we will work with. Our customers are normally among the leaders in their industry and we provide services to the telecommunications, financial, energy, utility, education, manufacturing and other sectors. We have to fully understand what their long-term business plan is, the nature of their business and their competitive strategy, and finally what IT solution would meet their needs for today and especially for the future. One of our customers is AIS, for example. We have been working with them for the past 12 years and we understand their business and what their requirements are _ and through the quality of our services we are able to minimise the costs of their operations and help achieve their profitability objective over time.
Given that IT is a fast-moving industry, what is MFEC looking to develop in the next few years?
There are several things that we are working on today, but I'll provide an example: data-warehousing. We have invested heavily in this and have 100 engineers focused purely on enabling businesses to understand who their customers are and what their needs are; how to know their market well; how they are performing and which area of their business can be improved; and how to capture new opportunities first, ahead of competitors. And, furthermore, we are the only company in Thailand that can do data-cleansing in Thai.
Why did MFEC decide to list on the SET?
There are more than 1,600 software houses in Thailand and only 10 to 20 that are of a reasonable size. We aim to be the No.1 IT solution house in Thailand and thus need the proper infrastructure. Today, we have 850 staff, with 60% of them IT engineers. Being public allows us access to additional sources of funding and credentials, but most importantly it gives us the ability to retain talent through the Employee Stock Option Plans.bifINDUSTRY:
Finding qualified IT professionals in Thailand can be quite challenging, how does MFEC achieve this?
This is one of the biggest problems in Thailand. Today there are maybe 50,000 to 60,000 IT professionals and each year there are approximately 10,000 new graduates, of which only 2,000 are qualified. Unless and until the quality of education in Thailand improves, this industry cannot grow using Thai professionals alone. There has to be consistent and integrated government policy improvements to support the industry, and there has to be investments in R&D, and this should be among the country's top priorities.
Our HR policy is to hire the top-talent graduates from Thai universities. So, yes, we have a higher average cost, but this allows us to be very strong in solution delivery and services. Eventually, we will expand to China to expand our pool of IT engineers.
How would you compare the IT industry in Thailand with India?
The industry infrastructure in Thailand needs far greater development. As I explained earlier, finding enough qualified IT professionals or graduates here is tough. If you have a look at recruitment in India, they can fill a stadium with people who are applying for jobs for some of the large companies like Wipro, Tata and Infosys. What is also interesting is that IT in Thailand is one of the few sectors that have not been dominated by any major local groups. It is extremely fragmented. Consequently, this gives global players such as IBM, Cisco, and HP the opportunity to create a strong foothold in the Thai market.
MISCELLANEOUS:
What do you feel are the biggest risks facing your business today?
The lack of _ or insufficient number of _ qualified IT professionals/graduates. We need another 1,000 people to grow our business to a critical mass. Politics is also a factor as it slows down expansion of our clients' business. Look at the telecommunications industry, 3G has been postponed yet again and Thailand is now one of the few countries in Asia that does not have 3G capability. The window of opportunity is closing each and every time things like this happen.
Where do you see MFEC in five years from now?
In five years from now MFEC will be a regional player, expanding our staff from 850 people today to 2,000 to 3,000 people. We are not short-term focused. We continuously invest each year 20-30 million baht to expand our business, our skill sets and our solutions, so that with the right infrastructure we can move to the next level.
The Executive Q&A Series is presented by ShareInvestor, Asia's leading financial internet media & technology company, and the largest investor relations network in the region with more than 400 listed clients. The interview is conducted by Pon Van Compernolle, managing partner of GVC Capital, an investment advisory firm focused on small-mid caps in Thailand. For more information, e-mail pon@gvc-capital.com or howard@shareinvestor.com or visit www.ThaiListedCompany.com