THE imminent implementation of the Goods and Services Tax (GST) in Malaysia in April next year, will see iContro Software Sdn Bhd’s revenue grow by 200 per cent from new clients signing up for the company’s Enterprise Resource Planning (ERP) solution, said its chief executive officer Frank Lee.
“And this is to make their systems GST compliant,” he said, adding that the figure quoted above is a “conservative” one.
He declined to reveal the financial figures of the privately held company.
Despite the euphoria, he acknowledges that only the software companies that have been consistent and have a proven track record will reap the profits from the country’s GST move, which should see the Sales and Service Tax — which contributes RM16 billion to the government coffers annually, according to Lee — abolished in April next year.
Lee said iContro has recorded an increased adoption of G5 ERP, the firm’s latest enterprise solution.
What’s impressive is that customers in Malaysia, who previously used solutions from the world’s top five ERP makers, have now switched to the homegrown G5.
“I am very proud of the fact that iContro’s ERP solutions, which are 100 per cent made-in-Malaysia, have successfully replaced solutions from the world’s top five providers.
“Last year was an exciting year for iContro as we deployed G5 in 20 companies and it has stood up to test in the market,” said Lee.
“We have conquered the process-based paint manufacturers in the country today and these companies use iContro as their default ERP — simply because it works extremely well to support all the complexities in their niche operations, and is much more affordable compared with other international ERP brands in the market. Our solution is up to 30 per cent cheaper than rival products from Western information technology giants,” he added.
Companies like Kossan Rubber Industries Bhd (manufacturer of industrial rubber and disposable latex products), DGL International (Malaysia) Sdn Bhd, Boustead Sissons Paints Sdn Bhd, and Daman-sara Realty Bhd are among iContro’s big clients.
“The main problem with ERP has always been customisation. Most western ERP solutions are meant for discrete-based industries and are not meant for process-based manufacturing. Malaysia is largely driven by agri-based and natural resource-based industries,” he explained.
Lee pointed out that discrete manufacturing, i.e. electronics, cars, etc, usually involve assembly of products while process-based manufacturing industries, e.g. petrol, are formula-based.
G5, he claimed, caters to both discrete and process-based industries, which are the composition of the Malaysian economy.
Industrial areas with foreign direct investments mostly manufacture products that are discrete-based industry while the rest of the economy is substantially process-based.
Lee noted that there is now increased interest from players in the building materials, oil and gas as well as property sectors for iContro’s ERP solution.
The main reason is that iContro has made a dent in the Malaysian market and G5 was developed with the Asian way of doing business in mind.
“For example, in a sales order in the west, credit limit will be sufficient. But our ERP’s sales order comes with standard 12 reasons or ways to subject control mechanism onto the sales order before an approval for the sales order is generated.
“There are also features for group-of-companies’ credit limit; checking for overdue payments; total credit allowed to individual salesmen; and also checking minor things like payment terms,” Lee explained.
G5 has total 1,800 reports built into it.
“We have developed a massive solution to minimise customisation. And the G5 has the capacity to generate 56 types of collection reports,” he said.
Lee is justifiably proud of G5 as it has become his company’s flagship product. The hard work, along with the investments ploughed into research and development, have paid off handsomely.
The G5 received the TUV (Technical Inspection Association) certification from Germany in June 2012.
With a strong product in hand, the company is now looking at regional and international expansion in partnership with the IBM (International Business Machines).
In the second half of this year, iContro will expand into the Indonesian market, followed immediately by expansion into other Association of Southeast Asian markets.
Once G5’s multilingual capability is expanded, iContro rather ambitiously wants to enter the Japan and South Korean markets by the end of the year.
Lee said his company has spent two years researching the language options for the Japanese and South Korean editions and this should be ready by year-end.