Corporate Governance, Publications

The Nation: Shortage of IT Savvy Managers

16 July 2000

Editor: In 2004, Edwin Sim established Human Capital Alliance, Thailand’s  Premier Executive Search & Senior Advisory Firm. Between 1997-2003, Edwin Sim was Managing Partner of Korn Ferry Thailand.  This article was first published by the Nation in July 2000. 

As the begins to see daylight again after scratching and crawling its way through its worst-ever economic crisis, companies that are restructuring in all sectors are preparing themselves for the 21st century’s global battlefields.

Surviving companies have relied on a whole array of alternatives, which they hope will eventually allow them to thrive. Some have brought in foreign strategic needed new capital and, more importantly, have shared new technologies which will help local companies compete in the globalize 21st ’“century environment.

Other Thai companies were bought up lock, stock and barrel by major foreign multinationals. These savvy operators will undoubtedly maximize the further development of businesses that have suffered because of insufficient capital under the previous owners.

Worldwide, everyone agrees that the new millennium will centre around the further development of the Internet. Businesses which hope to thrive in this new, fast-moving environment must devise strategies which embrace the medium. Those companies which ignore the Internet and its inherent ability to cut costs and provide new and more efficient distribution channels will be left by the wayside.

Immediately after foreign companies began expanding their presence in Thailand, form opportunities arising out of the crisis, many nationalists expressed fear that these major foreign players would permanently replace Thai managers with expatriate staff and completely revolutionize Thai corporate culture.

At that time leading headhunter Edwin Sim of Korn Ferry Thailand Limited, told the Nation that most of his clients who had acquired interests in or control of local companies had expressed clear-cut long-term plans to localize their operations. ’Most of our strategic-investor clients say that Thailand is Thailand and at the end of the day, they want to localize by having Thai nationals running and operating the businesses,’ he said.

Several of Korn Ferry’s takeover clients, Sim added, had told him, from the onset of a planned acquisition that they had in place tandem localization-succession plans.

Immediately after the acquisition foreign multinationals brought in management-restructuring specialists he said, had mandates to bring the Thai operations close to or up to international standards.

They were usually given two or three years to bring the company up to standard and prepare it for a local successor. ’these managers operate in all the world’s major regions, so they know what kind of operation the company ultimately wants, ’ he said.

Today, after almost three years of transforming the business models and operating platforms, most foreign-owned or foreign-affiliated joint ventures should be at a stage where they can hand over operations to local managers.
However, the Internet revolution has quite literally upset the apple cart and forced companies in all industries to re-evaluate how they run their businesses.

Most companies hoping to thrive must now look for managers who know how to maximize a company’s core competencies in the new technologically driven Internet/e-commerce environment.

Although it began as mere whispers among top managers several years ago, business operators in all sectors, from banking to manufacturing, began to realize that the country’s education system had not been producing enough skilled top-level information-technology-savvy managers.

Early in the Development Bank of Singapore ’s takeover of Thai Danu Bank, close observers of the Thai business environment quietly noted that the bank had great difficulty finding qualified Thai IT professionals to manage its proposed enhanced IT operations. IT professionals, undoubtedly sourced through its new parent’s connections, had to be brought in from overseas.

For fear of irritating of the country’s technology academics, who have worked hard on limited budgets to train a new generation of IT professionals, most restructuring companies without access to overseas IT professionals have quietly gone about filling top-level IT management positions with whatever is available in the market. Also quietly, however, they are now expressing fears that they will not be able to keep up and compete globally.

Thailand is now paying the price for its inefficient use of education funds. In the past, during boom periods consecutive governments argued that the country could not afford more funds even to boost the minimum compulsory education levels past the ninth grade.

Today, in the middle of an unprecedented economic crisis, the government’s new proposed fiscal budget for 2000 shows that it plans to spend Bt220 billion on education. This constitutes 25.8 per cent of the total proposed budget.

Although an education budget which constitutes more than 25 per cent of a country’s total budget is more than adequate, this country’s citizens are now seriously questioning what they are getting for their money.

While our neighbors have turned out more than enough engineers and technologically skilled managers, business leaders say that our education system has failed miserably. There just are not enough IT-competent managers at all levels to drive new technologies and processes in all industries.

Today, in the laser-speed Internet world, business leaders are finally realizing that the chickens have come home to roost. They now realize that companies which cannot find competent top-level IT-savvy managers to integrate into their restructured operations will not thrive. In the new global environment no company can expect to operate at peak efficiency without top IT-savvy managers at all levels.

Thai business leaders in all sectors now accept that redirecting education funds toward developing more technologically skilled professionally is a long-term solution. However, even if the government of the day has the political will to rechannel the direction of education, business leaders are asking how in the interim they will be able to fill the gap. Without a strong corps of IT-savvy middle and top managers, this country’s companies in all business sectors have a strong chance of being relegated permanently to the minor leagues of global business.

Chulakorn Singhakowin, CEO of the Bank of Asia, which became an ABN Amro subsidiary at the beginning of the crisis, said the country’s restructuring companies were all facing the same dilemma, finding IT-savvy managers to lead them into the new millennium. He said the country had to speedily develop a short-term solution.

Proactively amending our immigration laws and recruiting engineers and IT professionals from other countries such as China and India, which annually graduate thousands of IT professionals, may be a viable short-term solution, he said, adding: ’I think that Indian and Chinese IT engineers would love to come and work in Thailand.’

Chulakorn, who is also this year’s president of the Thai Bankers’ Association, said that Thai companies in all industrial sectors now realized that the new competitive global environment mandated an immediate need for this tier of much-needed managerial talent.

Korn Ferry’s Sim added that local companies without any overseas affiliations might also need to fill the gap in the short run with imported IT-savvy middle and top-level managers. They also realize that if they want to compete globally, or even regionally, they will need managers who are experienced in handling operations and procedures in IT-centered organizations,’ he noted.

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