Why Transtek has 80% of the ERP market

The Information Technology industry is taking up a big slice of the gross domestic product in the US and pretty much the world. However, the Syrian market for IT-related products has for some while been weak. Despite all of this, nine years ago, father and son Mohamed and Abdulsalam Haykal started Transtek, a technology company that makes ERP (Enterprise Resource Planning ) software, specialized and integrated systems that are deployed across a company to help it manage resources and information as well as optimize for productivity and cost. I was excited when I got the chance to interview Hazem Haykal, sales and marketing director at Transtek, and ask him about the daily inner workings of this Syrian technological singularity.

You must run a very tight schedule! What’s your daily routine?

As the director for sales and marketing, I make sure that we stick to the plan set at the start of the week, as much as possible. We are a very dynamic company, and things usually come up and divert our attention. However, we always try to carry on the plan. We manage things in terms of priorities, opening new leads and closing hot ones come before other things.

I usually supervise the entire process of sales; I help the team reach the targets set by the Transtek’s management, supervise marketing campaigns and events, find new channels and attend meetings. Usually I only attend openings and closures, which means I’m there on the beginning of the sale cycle and at the end of it. In between, I just supervise, make sure the team is on the right track and in control. The rest of time I make sure we are following the vision of Transtek’s leadership and on the track to reach the target set by it.

You described Transtek as a dynamic company. Do you think the Syrian software market is growing and demand is increasing?

Well, I can never say it’s always been good. But recently it has been getting better. One problem we face is the lack of competition. Competition helps you grow the market instead of doing it at your expense as a single player. For many years, Transtek has been almost the sole provider of advanced enterprise systems in Syria. Therefore, many companies compared us with the low-end packages available in the market, and put their prices against ours. We’re happy now that giants such as Oracle, Microsoft, and get interested in our market. We are the local alternative to their products, and we there is not a local package that is on the same shelf with us. It’s not because we differ in quality, but in the market we target. The more of these companies arrive to Syria, the more the product and service would weigh in as opposed to cost-driven decision.

I have read that Transtek has 80% of the ERP market in Syria. You mentioned titans in the software business, but Transtek still controls the lion’s share of the market. Why is that?

Well, there is but the reason they haven’t succeeded so much in the Syrian software market is the special conditions in Syria: for example financial management and financial statements, taxation, payroll rules and policies, asset depreciation, cost engineering all different in Syria, with different regulations from the European or American markets. That’s why in some cases when you don’t pay attention to the special conditions you’re operating in, projects die in the middle of the process; simply because the system bought isn’t coherent with your needs and restrains. A couple of international big named in the world of ERP had 4 or 5 implementations in the Syrian market, compared to Transteks’ 24! This difference comes from the fact that our systems are not only based on international standard and best practices, but also created from the needs of Syrian companies, which gives us a competitive advantage over foreign providers.

Do you think the Syrian software industry is attractive to investors?

The Syrian IT industry has not reached its potential yet. There are no other vendors at Transtek’s size. Demand is growing by the day. New companies are being formed with the economic openness, existing companies are expanding domestically and regionally, and new standards are introduced through international companies, banks, and telecom companies. The IT spending is using larger percentages of budgets in Syrian enterprises. Rising competition is making inevitable the search for ways to cut the cost, limit the loss, and enhance margins. I’m sure that many investors see this growing trend as a good investment opportunity. In addition, Syria can be an IT and software hub for the region, and our CEO Abdulsalam Haykal has always lobbied for Syria to take this industry more seriously, and build the dynamic that will lead to creating a critical mass for it to become a major contributor to our GNP.

With the opening of the Damascus Securities Exchange recently, does Transtek has a plan to become publicly traded?

You do that to raise money mainly, and our expansion plans are internally financed so far. However, this matter is discussed every now and then, not a serious consideration so far. However, I can assure you that the management requires us to be ready enough to meet the conditions of listing straight away when such a move is deemed necessary and appropriate. However, we have received inquiries from private investors, but any investor we will consider has to meet the criteria of a “strategic partner”, someone that will be able to take Transtek to the next level using a shortcut and a less steep learning curve.

When you say Transtek is expanding, do you refer to its market coverage or product offering?

Both actually. We add a few products to our portfolio every year. We do not have an official R&D department, and we are working to have innovations systems in place at Transtek. We are very close to the market, and we ready to cater to its demand before the demand is actually there.  Currently, we’re attempting to get global certifications such as CMMI Level 3. We think we are at level 2. Also, we’re going to have our Compass ERP for pharmaceuticals and F&B GMP certified. With such internationally recognized certifications, our offering will be better received in our regional markets like Saudi Arabia and Qatar. We expect to be fully operational in both before the end of 2009. We are already in Yemen, and Algeria is on our radar screen.

As a market leader, can you give an advice to aspiring entrepreneurs in the software industry?

I’d ask them to innovate and not imitate. And once your solution is ready, don’t love your technology to the extent of killing it. There are many great innovations that are locked in the drawer because their owners wanted their innovative skills were better than their business sense. Seek partners not clients, because they will tell you where the good beef is. The market will tell you the value of what you offer. Insist as long as you believe you can change a trend, or instigate a demand, otherwise, follow the market’s heart.