Money Compass:
The Southeast Asia region is becoming a rising star in the global space with its huge population, vibrant economy and bright future, especially with the formation of the ASEAN Community by 2015. The Information and Communications Technology (ICT) is identified as one of the important areas to enhance regional integration and create new opportunities for its economies.
As one of the leading IT services and solutions providers in Southeast Asia, Hitachi Sunway Information Systems Sdn Bhd aims to become one-stop ICT solution center not only to provide global IT services and solutions to the local and regional conglomerates in Southeast Asia markets, but also to serve the Japanese overseas companies (JOC) that are seeking the opportunity to expand their footprint in this region.
Established in April 2013, Hitachi Sunway Information Systems is a joint venture (JV) company between Hitachi Systems, Ltd. (51%) and Sunway Technology Sdn Bhd (49%) to provide IT services and solutions in Malaysia and Southeast Asia.
Cheah Kok Hoong, the Group CEO and Director, said in an interview that Hitachi Sunway has positioned itself as one-stop ICT solution center in the Malaysia and ASEAN region that serve the needs of the local conglomerates and large conglomerates in the region, but also the Japanese overseas companies (JOCs) that want to gradually increase their presence in the ASEAN region.
Why JOCS Were Chosen as One of Its Key Markets?
JOCs have become one of the very strong forces within ASEAN countries after spending so many years in this region. Yet this strong force is not fully utilised.
“There are a number of Japanese companies in ASEAN countries like Malaysia, Thailand, Indonesia, and the Philippines. But how many companies receive support from the local suppliers or vendors? Thismarket has become an untapped opportunity,” Cheah said.
From 1970s to 1990s, JOCs came to the ASEAN region but gradually shifted their presence and focus to China after the year 2000. Nevertheless, JOCs are beginning to slow down their expansion in the China market in recent years as they do not want to put all their eggs in one basket.
Thus, the JOCs are once again returning to the ASEAN region. After all, ASEAN is still very friendly to Japanese companies as compared to China or India.
Cheah explained that Hitachi Sunway was very much focussed on the ASEAN market as it provides a better opportunity, especially among the JOCs. For instance, after the Fukushima disaster, the Japanese companies that were searching for a disaster recovery data center location outside Japan would definitely consider ASEAN countries like Malaysia instead of China.
Besides, Hitachi Sunway is also capable of providing a range of comprehensive IT solutions to Japanese companies advancing into Southeast Asia. This is because Hitachi Sunway has established an extensive hub-and-spoke network within ASEAN nations with offices all around the region. This enables Hitachi Sunway to provide efficient and effective support as well as to answer customers’ rapidly increasing needs for IT services in Southeast Asia.
He also revealed that Hitachi Sunway has offices in the Klang Valley and Penang, and the Johor Bahru office is scheduled to operate within the next two months. While the Headquarters is based in Malaysia, the company also has offices in Singapore, Thailand, Indonesia, the Philippines and Vietnam.
“We want to position ourselves as an IT outsourcing solution center. We offer a sense of relief or peace of mind to the companies. Why would you want to build something that is not within your expertise nor generate any return to you? You should focus on your strengths and leverage on us to provide an IT infrastructure.”
“The Japanese companies do not necessarily need to put all their eggs in one basket. They can go to Singapore, the Philippines or other ASEAN countries to set up their offices but we can still provide support to them.”
More importantly, these Japanese companies can leverage on Hitachi Sunway’s technology partners, products and services, extensive network as well as Hitachi Japan to expand their footprint in the ASEANregion with local costs and low risk involved. This is a win-win-win situation to customers, partners, Hitachi Sunway and Hitachi Japan.
{“This year, we started to close million dollar deals as compared to hundred thousand dollar deals in the past. For example, we have managed to close a deal that was worth 5 million in applications recently. We are looking at bigger contracts and multiple year contracts that can sustain the business.”}
Three Core Business Lines
Hitachi Sunway is currently operating in three core business areas including applications, engineering solutions and infrastructure and managed services. The services and solutions range from IT infrastructure and network integration to operation and monitoring, data center operation, virtualisation and cloud-based services, Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP) sales and virtualization solutions and other areas. Currently, the engineering solutions division contributes about 55% of total revenue to the company, followed by infrastructure & managed services (25%) and applications (20%).
In terms of technology partners, Hitachi Sunway has established partnerships with leading global technology providers such as Siemens, Spring Technologies, Oracle, Netsuite, VMware, Trend Micro, NetApp, Symantec, Dell, Commvault and Citrix.
Cheah stressed that Hitachi Sunwaywas quite selective in choosing technology partners. They only choose partners who share common values and principles with the company. This is important as those do not share the company’s common values and who are merely pursuing their self-interests would not create a valuable system that Hitachi Sunway encourages.
Aimed at Double Digit Growth
Moving into the second year of partnership with Hitachi, Cheah is targetting to achieve a double digit growth between 15% and 20% on the compound annual growth basis.
For the financial year that ended in March 2013, the company registered RM 60 million in revenue across the ASEAN region. This financial year (ending March 2014), Cheah expects to achieve RM 80 million to RM 90 million in revenue. The company has set a target to record RM 123 million in revenue by FY 2015 which represents a double digit growth as mentioned.
But, how will they achieve this? Cheah revealed that, Hitachi Sunway will be expanding their existing three core business lines, be it through regional expansion or new product launches.
Besides this, the company also intends to explore cross-selling opportunities among the customers from the existing three core business lines.
Cheah will set certain KPIs for senior management to achieve. For instance, the senior vice presidents would have to achieve a certain percentage of introducing their clients to other divisions.
He foresees the bigger cross-selling opportunities to come from the infrastructure & managed services division because of the outsourcing growth and regional contracts. However, he stressed that the customer is the king. The most important things are: why do customers want to buy from Hitachi Sunway, what value can Hitachi Sunway bring to customers, and how the company can assist the customer.
Hitachi Sunway currently has more than 800 customers who come from various industries, namely Insurance & Financial Services, Automotive, Manufacturing & Distribution, and Construction & Engineering.
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