Building up Sri Lanka for foreign investment

Thursday, 15 August 2013 00:00 -     - {{hitsCtrl.values.hits}}

  •  Innovation agency Volume praises Lankan workforce but wants processes fast tracked to set up business
Sri Lanka’s post-war development and booming IT/BPO industry have attracted several companies to commence operations here, and while they have reaped benefits from the rapidly developing infrastructure and talent and skill sets available amongst the workforce, they still face a multitude of issues, including spools of bureaucratic red tape to navigate their way through. UK-based digital and technology agency Volume, after a successful two-year trial period in Sri Lanka, has officially launched its first venture outside the UK in the country, setting up a state-of-the-art office at the World Trade Centre with plans to invest over a million pounds in the country within the next three years. Volume Chief Technology Officer Benoit Alvarez spoke to the Daily FT about its global operations with some of the biggest multinationals, revealed why Sri Lanka was chosen from many Asian countries for its first overseas operations, expanded on the work conducted so far in the country and future plans, and outlined several areas in which the country could improve upon in order to draw more foreign investment in the future. Following are excerpts from the interview: By Cassandra Mascarenhas Q: Why was Sri Lanka chosen as the destination for your first overseas office? A: When we looked into establishing an office in Asia, we looked at several countries – India, Vietnam, China and Sri Lanka. Two came out on top: Sri Lanka and Vietnam. They came on top because of the level of education of the people in the country as well as their level of English, which is very important when you are a UK-based company, as you need great cooperation between the offices. If you take India for example, IT has become a commodity. So you come, get your project and go out, which is not what we wanted to do. We really wanted to build something for the long-term. We eliminated India and China very early on in the process. Q: Why choose Sri Lanka over Vietnam? A: It was very simple. We have always had a few Sri Lankan developers in our UK team and we have had a great experience working with them in the UK. Again, that reassured us in terms of skill sets, English and all those aspects. Also, and very importantly for me on top of the skills, was their level of commitment, the work ethic. The Sri Lankan developers’ work ethic in the UK was very good, they were people you could rely on and you could trust them to bring you something good, that the job would be done. You don’t have to be behind them and because of those good experiences, we went for Sri Lanka. At the time, I had a Sri Lankan guy on my team who I had worked with for five years and I asked him to be the director of the office in Sri Lanka. He said he would love to go back to his country and he is someone I trust and I know very well. So we started the office here on a very small scale, with just four developers two years ago. It was very simple and then we grew. Once the business was reassured and we knew that this country was a good place to do business in, we decided to expand, move to this brand new office, increase the number of employees and get more projects. Q: What is your employee base like at the moment and do you plan on expanding your workforce? A: We have 15 people at the moment and we aim to have 25 to 35 people within the next two years but again, Volume is a very agile business. If we see an opportunity and that means we need to have 45 people, we will expand to that amount, it is not a problem. Q: Could you briefly describe Volume’s work in Colombo and globally? A: Globally, we work for companies like Dell, Zebra Technologies and BP – mainly multinationals. We are an innovation agency, not so much a marketing agency. Clients come to us because they have special requirements, very niche and we are very strong in marketing automation. A lot of our clients find that the marketing automation software packages that are out there do not fit the requirements of the market and they come to us for the bespoke nature of our developments. We develop things bespoke, based on a framework. This means that we develop web applications, mobile applications and interactive applications for some of the biggest brands in the world. A couple of years ago, when we decided to come into Sri Lanka, the vision was for this country to become our technology centre and for the UK team to move to research and development and innovation. We are now in the process of doing this – most of our production and the development of the finished software happen in Sri Lanka and research and development, which is needed when you are an innovation agency, is in the UK. That’s where we are now. In Sri Lanka, our employees really work on the final, polished product. They work closely with the UK team, with the business analysts and developers. We tend to bring in a lot of personnel to Sri Lanka for a few weeks in order to conduct training here because there are some areas that Sri Lanka is not as developed in as the UK. Some of these areas are user experience and mobile development, so we try to compensate for that by bringing in the skills from the UK and train our Sri Lankan employees. Q: Do you work with Sri Lankan companies or do you mostly handle your global operations from here? A: It’s mostly our global operations. We don’t tend to focus on Sri Lankan clients – this is not our aim. Our focus is on the skill sets we can find in Sri Lanka. That is why we have our operations here; it’s not about targeting the Sri Lankan market. Q: What areas do you think Sri Lanka can improve on in terms of infrastructure and skill sets? A: In terms of infrastructure, we have been in the country for almost three years and we have seen Sri Lanka improving a lot. You see there is a lot of investment – there’s a second airport, highways being built everywhere and so on, and that reassures me and the Board that Sri Lanka is the right country to be in. In terms of skill sets, it’s mainly the mobile side of it. Everything is going mobile and we do struggle to find talent in that area. We have found that the skills that some of the universities here teach their students are not futuristic; for example, developing Windows applications. It’s becoming niche, it’s not becoming mainstream. What is mainstream are web and cloud applications and distributed applications which involve mobile most of the time and this is an area we would love to see some improvement in. We carry out some lectures at some of the universities as well, to show them and the students what companies are looking for now. Q: Could you expand on your work with universities and institutions here? A: We have worked with SLIIT and the Academy of Multimedia Design and Technology amongst others. It’s very important that our company gets involved in such areas because teachers, as hard as they may try, are not always necessarily in contact with industry requirements and we feel that it is very important that we stay in contact with them. Ultimately, when I go there and I give them a lecture on mobile technology or user experience, for me, it is an investment for the long-term, because right now, it’s not going to solve any of my recruitment problems but my vision is very long-term. Q: What areas do you plan on making investments in Sri Lanka? A: There are three aspects. One is environment – making sure that our developers work in the best possible environment. We are on the 22nd floor of the World Trade Center with a lovely view and a refurbished office with the best equipment. We are investing in unified communications software so that they can have direct visual access to developers in the UK. Two, obviously is our people. What we do doesn’t require goods, it requires very good and talented people and everything revolves around them. The third aspect is partnership and acquisition of the talented businesses in Sri Lanka. Q: On the third aspect, are there any companies that you have earmarked so far? A: We are already looking at companies and conducting discussions with them. It’s very interesting because you find small companies and you would not expect this level of quality and technicality in Sri Lanka. I would expect it now because I know Sri Lanka very well now but my boss especially can get surprised, which is a good surprise! So it really is very interesting. Q: Where are your current offices based and what are your plans for expansion in the future? A: We have three offices in the UK, one in Sri Lanka and we are in discussion to open another office, maybe in Australia, Dubai and most likely, the US. The next three years will revolve mostly around expanding our business and Sri Lanka is a big part of it. If we make acquisitions in the US, for example, it will be mainly geared towards client service operations and Sri Lanka will be a part of the technology aspect of all this. We also want to build up operations here in order to serve our Asian clients. Volume is a very agile business which means that we draw a plan because that’s the only way to move forward, but we are not afraid to change our plans. Nowadays, you have to try things out, hence, why we tried out working in Sri Lanka with just four people. The investment was minimal as was the risk and we told our employees that if it didn’t work out, they would be taken back to the UK. The risk was low and then, we were very successful in Sri Lanka and I am very happy with the operations here. Q: Have you experienced any problems in conducting your business in the country? A: We are trying to offer our Sri Lankan employees a year’s work experience in the UK. It is not easy – there are visa issues, especially between the UK and Sri Lanka. This is an area I think needs to be looked at, especially if Sri Lanka wants to have more international companies setting up operations within the country – the BoI has eliminated some of the restrictions but there are still many, and the visa problem is one. However, we are trying to put an HR program in place with our head of HR in the UK, to take employees to work in the UK for a year where they can work at the innovation centre so on and come back to Sri Lanka with more skills and more learning. For the office, we are going to expand our team here, that’s part of the plan but at the moment we are really looking at developing a mobile team. This is my focus for the next six to 12 months because I’m pretty sure I can find the talent in Sri Lanka. Even though Sri Lanka is a great country in terms of resources and skills available, the Government has to do something to help SMBs establish themselves in Sri Lanka. We found out that even after spending half a million dollars on our Sri Lankan operation, the BoI is only offering us very little help and I feel that SMBs are considered to be too small. Companies like Volume that are investing in IT in Sri Lanka in the long-term, companies like ours that will employ more than 35 people soon, companies like ours that will spend $ 1 million dollars over the next three years, are important and if the BoI helps 10 to 30 companies like us, that would represent a massive gain for Sri Lanka. So we love Sri Lanka, we love the skill and the quality people we find here but we find it cumbersome at best to establish a modern business.