What are the issues of running a small enterprise in Sri Lanka - Purely a local perspective

Starting a small enterprise in Sri Lanka is not a big problem. You can register it as a unlimited or limited liability company, with very little capital. With latest changes to the companies act now it is possible to start a company with even a single director.

This article is not about the process of registering or start up of an enterprise but about few issues you may face running the same on shorter term. This article is purely written based on my personal experience and may view differently by academics (as there are only few theories we have developed locally to suit ourselves).

The biggest issue as I see running an enterprise is managing the Human Resources. Our children from the small age are being thought to take a book based approach where more than half of them leave the standard education stream by O/L or A/L's to join the workforce without having any idea of the challenge ahead. This aggravates by the ideology of most entrepreneurs who couldn't comprehend and understand his most valuable asset the Human Resource.

Some areas that need to fix your ATTITUDE as an entrepreneur for the success

* Remember your employees have their own problems.
* This starts with transport, imaging they spend 1/3 of their work life on the road. If you can help this smoothed out they have one less problem to worry. An average of 2-3 hours being spent in traveling for most employees in urban area
* Meals, generally employees cannot afford eating out as well they find it difficult finding places closer their offices or factories and therefore try bringing meals from home. This again would require few more hours of their time.
* The result is an employee working 8 hours a day would fairly spend closer to 12 hours on achieving their work goals. This is not counting any overtime or extra work they need to do if demanded.
* Employee attitude - This is not your problem (at least until they joined your organization) but is the biggest drawback on leading a successful enterprise. Your time and money should be spent largely on this if you need to be successful in the business


Conclusion:

you need to integrate yourselves to your employees life style and see how you could make their life more comfortable (I am not discussing here salaries and other benefits which are the basics). If you can provide transport or local accommodation (specially for young workers) , meals you will notice the amount of absenteeism would largely reduced. Strong polices on attendance timing and lunch hours etc will put negative impacts on employees on unavoidable infrastructure situation.

Attitude, on work ethics, customer satisfaction, quality, interpersonal communications are the next major challenges, that you may need to pay attention. Try having informal get together s , team building trainings and some quality time understanding your employees problems. Don't read so many books on too many principles on how to create structured organizations, well structured organizations do requires substantial number of employees with specific job functions (of course you can do this when your organization become bigger). Spend as much money as possible in training your people (don't sign contracts for training them) but make sure they apply what they learn (only you can make it happen).

Spend some quality money in your finance function, nothing will run without the help of a good finance function. But remember finance function is not book keeping, it is beyond that and I would write a separate article on that later.

Finally, if it permits you need to keep your total workforce below 30. Beyond this point you need professionals in HR to take your role, which also require reorganization of your complete operation, and keep watching the 3rd Year, 5th Year and the 7th Year, these are the time frames many companies loose their focus.

Good luck!

Can IT help develop Sri Lanka

Information Technology today is a vast field spreading its roots to the nooks corners of every economic aspect of life. Having said the same presence of IT dose not necessarily make things happen, until it is being applied to the context of efficiency improvement.

IT can be used to help our economy, mainly in two directions.

1. Usage of IT for improving the internal efficiencies of our complete Eco system, including government, corporates, enterprises, industries to individuals, reducing cost of production and improving the quality
   
2. Ability of exporting the expertise in IT to other countries, commonly known as outsourcing
   

While we assumed that we can go the route TWO without having the ONE (true in some cases, such as simple BPO operations) the actual gain had been minimal on the economy. But we have jumped on the band wagon for a while and saw ourselves not being able to compete with countries like India. The very reason is being that Sri Lanka is not capable of producing large number of low level workers due to our size of population and available infrastructure. However we have been producing good quality specialists.

Specialists will emerge from practice, if we do not practice it is difficult to produce a workforce with those skills. Repetitive outsourcing jobs do not produce high skilled innovators, where encouraging small entrepreneurs to work on verticals would produce more specialists. The fortunate situation in IT industry,unlike any other industry is the initial investments are not that high and the number of people to start is also not so critical.

Recently I saw our Hon. President has appointed an Indian as his IT adviser, which that person has refused to accept for certain reasons. Hon. President, while India is very strong in IT, they are in a different business paradigm, their business model would not work for us. Further, there are enough Sri Lankan's (many who are living even abroad) who will be willing to give you advice on what is right for our tiny nation. Ask for it, you will have our heart and soul with you.

I can point few things that we should do, if we are to really use IT for our economic development.

• Apply IT for internal processes to improve efficiency
  
• Create more number of smaller IT related businesses in the country

Let us start with IT for internal use and discuss what are our burning issues as a country? my thinking it is Internal inefficiency

1. We should have a ministry for IT (any way we have so many ministries, what difference it makes having one more). Currently it is mixed with science and Technology which is much more broader to handled by one minister. Then we need to find someone who is young and enterprising who can take the lead in. (just for an example see when Dr Palitha Kohona speaks in international PR)
   
2. We should have compiled our citizen database ( we have been talking, ...... and still do). The story so far is we have made it so complicated and we invited large international companies to design it for us, where still nothing happens. Hon. President, this should be one of your accelerated programmes (like "maga neguma"), we should do it in months, not years. Also we don't need so many experts, let us do it ourselves. It cannot be a miraculous job to create a 20 million record database.
   
3. Why cant RMV(registrar of motor vehicles), Registrar of Persons, Elections commissioner and Police use a common database. They don't work together, ask if they do!!! Without this there are isolated islands of information, recollected many times without any significant proactive usage. Imagine if this information is available it can be simply be disseminated for authentication and verification of citizens and vehicles, driving licenses etc. If you drive around you will know how many times your ID number and Vehicle number is manually written down by officers, without any ability of cross referencing the information they see.(since this is a seperte topic itself, I would write an another article on this)
   
4. Once we achieve these basic infrastructure, link income tax to all the other citizen services. Don't think too complex. The more complex you think would take more time. All IT systems need to be improved over period of time, faster than you think.
   
5. Once we achieve this we need to link all the citizens and enterprises to the same system

While doing this we will develop this we would have develop enough experts whom we can sell value added services to outside world.

On the other hand development of expertise and enterprises

1. Promote local IT services companies against the rest, but ask them to be certified , dont use tender conditions such as last year revenue which will disqualify all local bidders (instead of revenue measure the capabilities) - if tender processes are not correct- change those.
2. Promote smaller IT companies more - take their taxes off - Trust me they will bring foreign exchange when they are up and running
   
3. Create more environment for research, tell the problems you have and asked people to come up with solutions - Don't publish tender documents prepared by people who has no knowledge to write specifications - if rules need to change - change those!
4. Provide the infrastructure - not the capital - Innovative IT projects do not need large sums of capital, but innovative thinking and proper infrastructure to survive.

I have tried summarizing in a nut shell what we should do, specifically as the first step of improving the security of our country the base platforms should be fully IT driven.

Butterflies in my Stomach

Patriots,

I am amazed by the response I got within few days of opening up our blog. Let me highlight my intentions on the Blog and explain few things that we should do together.

• What are the opportunities available for us to take the country to economic prosperity (What we are good at).
• What is missing in the equation
• Help each other in filling the missing parts of the equation.

But what I don't expect is,

• Government machinery will come and Help, unless we could show some significant changes.

Why I believe we can do it,

• Because there is a large expatriate community who are knowledgeable, economically better but without being able to help
• There are good entrepreneurs living in Sri Lanka with something missing in equation

Why I think Government cannot help at this stage,

• Government has bigger problems to solve (at least they think)
• Government cannot address verticals easily. But we can be only successful by working on verticals (like many European countries)
  
• System has not produced enough Think Tanks -(Politics :-))

What are the pitfalls when we get together and drive this,

• Remember what is missing in most cases for entrepreneur expansion (5- 25 people companies doing specialized projects - like luxury boats, or special crop etc) is the Capital and Marketing
• So even if we connect the capital with entrepreneur who will grantee the investment (traditionally I have seen our people have less financial management skills and end up cheating the investors)
• Benefits for taking the risk is = patriotism only (moreover less)

What can we do?

• We should take the risk people who live here and people who live outside and also should take the lead to fill the missing gaps
• Encourage government to participate on this process to learn the dynamics and help secure the environment.
• Find new opportunities
  
• Help in Marketing ( we are too bad at this )

So the list can go on!!

I think the first thing we could do is

• Identify some industry verticals
• Collect expertise
  
• Create a blog
  
• Bring in possible missing parts of the equation
• create an echo system so that vertical will survive - bringing in gov to keep transparency and investment security
  

Here goes my two cents, so patriots, can you please add your two cents to this as well.

Jayawewa!!