Back to basics for IT services ComputerWorld, September 2004 FOR most IT services providers, 2003 was a year best forgotten. Many saw their profits significantly reduced, and had basically written off the year as a bad memory. Even IT giants like Hewlett-Packard (HP) were not spared, says Datin Lim Bee Wah, HP Services' general manager for consulting and integration. "The HP Services division won fewer major contracts and lost market share," she says, adding that the negative effects not only rever­berated throughout the IT industry but other sectors of the economy as well. 2004, on the other hand, has brought some hope. And IT services providers are keeping their fingers crossed that the remainder of the year will provide them with more opportunities to reignite or, at the very least, realign their business strategies for the future. For HP Services, Lim says that the division's focus for this year has been to look into diversifying its market reach through its local partnerships. She explains that HP Services will be leveraging its local partners' strengths to rein­force its position at the ground level. HP Services will also be looking into marketing more services such as billing, provisioning, product life cycle management and consulting to the telecommunications, financial and manufacturing sectors, adds Lim. "There was a lack of consultative services at the ground level and we intend to correct that. At the same time, we also want to improve our customer support services," she says. Peter Yong, director of Computer Systems Advisers (CSA), says that since organisations are now more cautious about how they spend their IT dollars, the onus is therefore on IT services providers to demonstrate the value that they can bring to customers. "The bottom line is that organisations only want to buy something that can produce a busi­ness result. And that's what vendors today must aim to achieve,"he says. "You'd want to let your customers know that you are there to hold their hands and make that journey together." Chee Chong Hwa, CEO of KarenSoft Technology, agrees that organisations have wised up now. And he believes that the IT services business is still sustainable if vendors are able to help organisations reduce their operational costs. "If a vendor can fulfil that simple customer requirement and help them become more. productive in business, then all is not lost just yet for IT services providers," he says. "Providing a customer service that exceeds an organisation's expectation goes a long way in ensuring that you stay in business." As 2004 comes to a close, some IT services providers are reporting an uptrend in fortunes. For CSA, Yong says that its business is slowly getting back on track. He reveals that the first two quarters of this year has produced encouraging results, and the recovery is largely due to the profits made from the outsourcing division. "The demand for outsourced services continues to grow. In the last quarter, it contributed about 15 per cent to our revenue. I expect that amount will reach 20 per cent by the end of our financial year in April 2005, " he says, adding that the most recent win for the company was a 10-year deal to manage Maybank's IT infrastructure. As for Chee, he is looking forward to 2005 Instead because he believes that next year will be the real start of the path to recovery. "While 2003 was a year to forget, 2004 has been average at best. But 1 believe next year will be more promising as we revive lost opportunities as well as explore new ones," Chee says.