Use of local software can help cut costs

THE Thailand Development Research Institute (TDRI) last week released a study suggesting that Thai businesses could reduce costs and increase their competitiveness by using Thai-developed software. 

The study was sponsored by the Software Industry Promotion Agency. The TDRI conducted the study by doing in-depth interviews with focus groups in several different industries including tourism and hotels, transport, construction, security services, and printing. The study showed that each case could save a lot of money in operating costs while increasing competitive capability, and finally increasing revenues. 

Sirivatana Interprint was one of the study's cases. It is one of the top commercial printers in Southeast Asia with a complete range of production facilities in Thailand.

Suthat Krongchon, an executive of Sirivatana Interprint, said the firm was able to double its revenue in four years after starting to use software it developed itself in 2011. 

While the annual cost of using the software is Bt7 million, the company can reduce the cost of stock and inventory management by around Bt165 million per year, while increasing annual profit by around Bt200 million.

"The most effort was put into the in-house workforce, budgets, and attempts to change our 3,000 employees' behaviour. Previously, we used imported international software for 20 years, with an investment of more than Bt20 million, but it did not address our [needs]. So we decided to develop our own software. We knew the requirements well so we could develop software to address our needs exactly," Suthat said.

The company has a better management system that can improve overall efficiency, especially the processes used at its printing houses. "Printing business is seasonal. During the fourth quarter, demand is higher than normal, and the challenge is to optimise the capacity of printing houses. With this software, executives can see through the overall working process and manage it better," Suthat said. 

Sirivatana Interprint has two printing houses to serve customers locally and overseas, especially in Europe. It aims to increase its revenue by 10 per cent from Bt2 billion in 2014 to Bt2.2 billion this year, 60 per cent of which is from the domestic market. 

The Column Bangkok, a 227-room hotel in the capital, has turned from using imported software to solutions developed by a Thai software firm named Comanche International. The hotel uses an enterprise resource planning (ERP) solution for marketing planning and offering an online booking service. The hotel has been able to increase revenue while reducing costs. 

Another case is All Thai Taxi, which has undertaken in-house software development. The company says it has been able to increase its drivers' income by Bt900 per day. It claims that All Thai Taxi's drivers earn Bt3,100 a day, compared with the industry average of Bt2,200 per day. The increase in revenue comes from the company's investment in an information-technology and software system that helps it reduce costs while increasing its capability to earn revenue. 

Asia Security Management (ASM), which provides services in several areas including airport, airline, cargo and general security, has been benefiting from the cloud-based service provided by Thai company Innova Software. ASM uses three solutions, a time and attendance system, a payroll-management system, and human-resource management, on the cloud. 

ASM also uses ERP and security-intelligence applications as well as executive and customer view applications. The company says it has been able to cut its expenses by around Bt80 million a year while making an IT investment of less than Bt7 million.

 

Thai software houses

Somboon Sukheviriya, president of Comanche International, a developer of software for hotels and serviced apartments, said the company this year targeted revenue of almost Bt100 million, up from Bt70 million in 2014, with a 70:30 ratio of income from local and overseas markets. The company has customers in 18 countries outside Thailand. 

He said the important success factor for Thai software developers was trust. To get customers to trust the company, it needs to comply with global software-development standards. He recommended the Capability Maturity Model Integration standard. CMMI is a process-improvement training and appraisal programme and service administered and marketed by Carnegie Mellon University in Pittsburgh, Pennsylvania, and is required by many US government contracts, especially in software development.

Kunchit Ningsanond, IT consultant at Innova Software, an enterprise-software developer and IT consulting firm, said Innova had expanded its business to provide software on the cloud under the "software as a service" concept for a couple of years. The move was aimed at helping the company reduce the uncertainty inherent in providing project-based software mainly to large enterprises and the government sector. 

Currently, revenue from providing software on the cloud represents only 10 per cent of Innova's total revenue, which is around Bt70 million a year. It is expected that this will rise to 50 per cent in five years.

The company has been providing software for large enterprises both in Thailand and overseas, especially in Japan, as well as for the government sector for 10 years. It found that three modules of solutions are required for organisation of every size, namely time and attendance systems, payroll-management systems, and human-resource management. So it decided to provide these three solutions on the cloud. 

The company aims to offer this model for small and medium-sized enterprises, as it is easy to start using software on the cloud with minimum cost and it can be scalable. 

Currently, Innova serves 10,000 users, with some 4,500 at ASM, and 2,000 at Ritta, a design and construction contractor. The rest work at 50 SMEs.

"There is huge potential for providing software on the cloud model. Half of our revenue is from providing project-based software for large firms and the government sector; 40 per cent from providing project-based software for overseas markets, mostly Japan; and 10 per cent from the cloud," he said. 

With the cloud model, he said the firm could expand into emerging markets, especially in Asean, in the future. Also it can reduce revenue uncertainty, since it charges customers monthly rather than a one-time charge. "We charge Bt50 per user per month for each solution, starting with the minimum of 50 users. This model can help more Thai businesses benefit," Kunchit said.