CashTech enters Korean market

Having built expertise in cash management for the banking space, CashTech is now planning to take its products to the Korean market. Though very few product companies in India are looking at pursuing this market, CashTech is bullish. Cutting across language barriers, the company recently struck an alliance with Kookmin Data Systems. CHITRA PADMANABHAN has the details

THE US-European software market reached near-exhaustion when the slowdown was at its peak. Business from these regions was hard to come by. This prompted Indian software companies to look elsewhere for business opportunities. For Indian firms, exploring markets in new locations called for a lot of learning in terms of language barriers, new regulations and new business practices. While Indian IT companies were familiar with business conditions in English-speaking countries, when it came to non-English speaking geographies these companies had to face acute language and cultural barriers. Experts point out that before the slowdown happened, there was no real need for Indian companies to look beyond English-speaking countries. The need arose only when companies were required to go to new markets to survive the slowdown. Even in this scenario, Indian companies preferred countries within Europe such as Germany and Spain. Gradually, they started opening up to places like Japan, Thailand, Indonesia and Korea. They put in major investments to train employees in language skills, and also began hiring language professionals.

When we look at the Korean market, it is clear that China and Japan hold a major chunk of that country’s software pie. In fact, Korea is more or less seen in the backdrop of these two markets. Located right in the middle of the two software giants, the Korean market seems impenetrable to Indian software companies. Though Korea sources most of its software requirements from adjacent countries due to language affinity, it is not a completely virgin market for Indian companies. CII says that domestic software activity in Korea is about 1.15 percent of the global market size, and is expected to increase to 1.57 percent by 2005. Moreover, with the presence of companies like IBM, EDS and Accenture, the benchmark set for Indian software is very high.

“Indian software talent is highly regarded in Korea due to standards set by top-rung companies. Any product or service company seeking to enter the Korean market is expected to meet these standards,” says Rajesh Shankaran, head, SAARC, CashTech Solutions India. CashTech recently struck an alliance with the Korea-based Kookmin Data Systems (KDS) to market its cash management solutions—CashIn, CashWeb and Transact Central—in the Korean market. “Koreans are meticulous decision-makers. They prefer to evaluate every aspect of the deal. But once they make their decisions they usually have long-term relations with their business partners,” opines Shankaran.

CashTech is a product-driven company in the banking space for cash management solutions. Its solutions enable a bank to offer corporate customers the service of collecting/making payments directly from/to its dealers. Additionally, the solution also generates details of each and every transaction and presents it to the customer in a report form, which is customised to the needs of the customer. The company’s alliance with KDS has worked out as a perfect fit since KDS is a wholly-owned subsidiary of Kookmin Bank, one of the bigger banks in Korea. By virtue of its affinity to the bank, KDS has ample domain knowledge in the banking space.

“Any product needs to be customised according to the region. For example, we are in the process of customising Transact Central in terms of technical features as well as language. Korea is essentially a bilingual country, so the user needs to be given the option of using the application in Korean or English,” says Shankaran.

As a first step, CashTech carried out a detailed study of the Korean banking scenario and found it to be a highly Internet-driven market. For instance, personal payments in Korea are rarely made with cheques, and a person’s savings account does not always offer a cheque book. Cheques are used mainly by corporates. This indicated that any application that would require cheque-orientation was not likely to be accepted by the Korean market. CashTech concluded that the solution needed to be less paper-driven, or else it was likely to fail in this market. “Our Korean customers prefer an integrated cash management application along with the company’s ERP system and the bank’s system; this can be supported with Transact Central. We are customising our solutions to suit the Korean technological scenario,” says Shankaran.

Though KDS will represent CashTech in the Korean market, CashTech has the responsibility of providing support services to its customers. “Since we hold the IPR for the product, support services can be best provided by us. Our CRM solution—right-now-web—is routed through KDS for any support request sent by the customer. At the Korean end, KDS acts as the support entity,” says Shankaran. CashTech has set up a robust infrastructure for online support services. For instance, the company does not e-mail patches or send upgrades on a CD. Instead, support services are controlled from a remote location online, as a result of which every customer has access to similar support services, irrespective of location. A homogeneous support infrastructure enables CashTech to market its products through the alliance route rather than setting up shop at every location.

CashTech’s alliance with KDS is expected to widen its product portfolio. In a bid to earn commission income, CashTech has decided to market two of KDS’ products in India. “Before deciding to market any product it is important to evaluate the relevance of the product to the target audience,” says Shankaran. With intense competition in the Indian banking space, smaller banks are required to deploy advanced technological infrastructure to offer services on par with the bigger banks. With this segment in mind, CashTech is looking to market KDS’ core banking product in India. The second product that has potential in the Indian market is a GIS (Geographic Information System)-based mobile banking solution, which is designed to provide content to the mobile phone; the content is relevant to the customer’s location.

Going forward, the company plans to tap the market through alliances as well as by building its own IPR; the choice will depend on the characteristics of specific markets.

Direct sale vs Sale through alliance

For a product-driven company, the philosophy is ‘Invest Once, Reap Many.’ Getting the pilot customer right is the key. When a company sells its own products, it has more flexibility to bring about modifications in the product in tune with the market situation. Having direct access to the market helps the company give more attention to its products from time to time. A customer is likely to have more faith in the company when it approaches him with its own products since he is assured of ready availability of support services. Selling products through alliances gives a company the opportunity to scale up rapidly. Being a product company involves constant investment in R&D—which locks up working capital. When a product company has robust support services, it is assured of constant income at the end of the year. This helps the company take important decisions with regards to investment in R&D, yearly targets, etc.

chitra@expresscomputeronline.com