IT
Applications Connect to Profit
Text: Jiang Ning
Li
Fengmei is all smiles. In a year when many system integrators
went bust, she estimates that her company IT Resources will post
a 30 percent growth in revenue for 2002.
Due
to the global telecom depression and China’s protracted
telecom reform, spending by China's telecom operators on network
infrastructure in the first half of 2002 plummeted 35.7 percent,
year on year, after several years of growth. Telecom gear vendors
bore the brunt, with systems integrators right behind them sharing
the blow.
Beijing-based,
equipment manufacturer Datang saw its first-half net profit decline
by over 90 percent compared to a year earlier. Shenzhen-based
Huawei fared a little better but still had to lay off workers.
In the systems integration market, Nasdaq-listed AsiaInfo saw
many of the orders either postponed or cancelled, and also had
to cut work force.
"Unlike
AsiaInfo, which focuses on backbone construction for the operators,
we primarily provide solutions for the communication and also
cater to thenetworking needs of enterprises. That's why we are
only slightly affected." Says Li Fengmei, chief operating
officer of IT Resources (ITR), founded in 1996 and currently has
a staff of around 140.
Although
companies in certain industries, like the securities industry
in particular, heavily slashed IT spending due to industry-wide
slump, the slack was taken up by growing expenditure in other
sectors such as government and education procurement, says Li.
"Of course there are always new difficulties and complications.
But there are always opportunities out there. I'm optimistic about
that."
Notably,
one big opportunity that IT Resources has been able to exploit
is the systems integration needs of multinationals in China. "Expatriates
are accustomed to certain IT applications and systems abroad,
and they definitely will try to look for the same ones in China.
That's exactly what we can help with." Li said.
Currently
approximately 60 percent of ITR’s business comes from multinationals.
Li
believes the international scope remains the company's core strength,
allowing it to adapt modern IT solutions to China.
"In
2002 we see more positive sides of the market, more multinationals
are either coming or expanding in China." Li says. The company
has been serving big names like Volkswagen, Toyota, IBM and Viacom.
However, she also admits that the profit margin is very slim now,
a far cry from the 80-percent margins common in the industry ten
years ago.
Therefore
Li Fengmei sees it as imperative to diversify business. Early
in 2002, the company became the China general distributor for
Corning Cable Systems, selling copper and fiber optic cable products
through a nationwide network of dealers. Like many other systems
integrators, ITR is developing software to add value to its services.
In this context, partnerships with leading software producers
such as Microsoft and Citrix have been fruitful with ITR planning
to release its first NET-based eCRM system in early 2003.
"That
will be a milestone for us." Li said
Like
most companies, ITR has had to make some changes to cope with
growth in order to improve customer service. On such change has
been internal structural reform and facilitating a more personal
approach towards customers.
With
five operators now slugging it out in the telecom market, Li hopes
to bring better service at a cheaper price to further spur enterprises’
enthusiasm for IT applications. There are already rumors that
China Telecom will soon build the third fixed-line network in
northern China and that China Telecom and China Netcom will likely
be handed licenses to conduct mobile businesses. More IT spending
is therefore expected.
"We'll
work hard to make our asset scale, registered capital and growth
curve look better in 2003. But first and foremost, the employees
should benefit from the growth”. Li says. |
