SARS is now top of mind, tip of the tongue and all other parts of our being. We do not even want to do our standard beso-beso with each other for fear of catching it. Business trips and vacations have been cancelled. It seems everyone stayed in Manila instead of the normal Holy Week exodus. As in all fogs of hysteria, there are investment opportunities. Videoconferencing will probably now take off as its compelling reason has been established. Medical products’ companies like Johnson and Johnson and 3M are likely beneficiaries of the mad scramble for gloves and surgical masks. Alcohol and Alcogel manufacturers may do well also. (Then again, I’m not so sure about the consumable alcohol bottlers.) Obviously, airlines and hotels would be hard-hit as they suffer single-digit occupancy.
The FUD of Iraq’s weapons of mass destruction was the main driver for the US and the coalition of the willing to attack Saddam and his cohorts. Unfortunately, until today, the proof is wanting and my liberal friends have branded me a neo-conservative Republican. Then again, I will always support a preemptive strike as the rest of the other dictators are watching where George W draws the line in the sand.
Most IT salesmen were trained (for that matter, most insurance salesmen) to create FUD in their clients. The salesman will always remind and cajole the MIS (Management Information System) director that no one was ever fired by buying the branded one. I used to work for a company that did exactly that. Our MIS director had no backbone and bought the branded option for accounting software.
In typical fashion, the branded software company predicted correctly that this middle manager at a US company would be so focused on CYA (covering your a–) activities that good decisions could not be made. This former employer paid $1 million for the Asia license and spent $4 million in consultancy cost to implement it. Rumor has it that we spent $20 million for that software worldwide.
After this decision was made, they brought me in to assist. Unfortunately, I was too late to make any changes to the decision. People laughed at my approach to the solution. I suggested to them that if we used several Quickbooks implementations we could replicate what they wanted to do for about $500,000 only (a 90 percent discount), all inclusive of training and implementation cost. I was lucky; I had senior management support to prove my theory. I believe my experiment worked but it was too late.
My Two Cents: In these times of high anxiety, Reinhold Neibuhr’s Serenity Prayer is quite apt… God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference…
My 2nd Two Cents: Of course, if you are facing an audit or a Senate hearing for that matter. Rudyard Kipling’s IF is a more appropriate prayer… If you can keep your head when all about you are losing theirs and blaming it on you…
I am very encouraged that the Philippine government has rightly targeted the small and medium enterprises as the vehicle for growth. The Sulong program is an excellent attempt to kick-start this economy. It provides for lower than market rates, simplified filing process and adjusted credit criteria.
I have looked into the Sulong program and how it applies to our IT business. Unfortunately, there are some adjustments to the program that need to happen.
One, the Sulong program, as in most lending programs, requires physical collateral as in real estate. In most IT companies, our most important assets are our intellectual property (IP), and our people, both of which are hard to put a security interest on.
Second, most IT companies will export their services but clients for these export services are not members of FOBAP (Foreign Buyers Association of the Philippines) since they are not purchasers of physical goods.
Third, most IT companies do not use letters of credit. Typical bank transactions use these letters of credit as collateral to lend against. In our business, clients who want their systems delivered on time pay.
IT companies need working capital. Most of their cost is in their people, their most important assets, who walk out the door at the end of each day.
My Two Cents: SB Corp and BOI, keep up the good work!