Source: www.nowpublic.com                       Date: 02 August, 2010

A Mongolian information technology company founded by a woman has shown a way to thrive in the country’s often-chaotic economic environment. With the global economic crisis moving into its third year, Intec’s strategies to survive and thrive offer lessons for other IT start-ups in the South. While the global economy’s prospects are still uncertain, on the positive side, many believe the best place to be is in emerging economies like Mongolia, with some foreseeing healthy growth for the next 20 to 30 years. Mongolia’s information technology entrepreneurs are looking to prove this is the case. The country has made great strides in improving e-government – jumping from 82nd place to 53rd in the UN e-government survey 2010 (http://www2.unpan.org/egovkb/global_reports/10report.htm) – and is now aiming to become an Asian software and IT services outsourcing powerhouse.

Sandwiched between Russia and fast-growing China, Mongolia grapples with the combination of a large territory, a small population, and limited transport infrastructure connecting it to its neighbors. Despite its infrastructure obstacles, Mongolia has been able to develop a lively information technology sector, often with the assistance of the United Nations. Information technology consulting and services company Intec (www.itconsulting.mn), founded in 2004, has been able to thrive through the global economy’s ups and downs by identifying an under-serviced niche as a consulting, research and training company. Intec now has five full-time staff and works with a broad network of Mongolian and international consultants.

As is often the case with new businesses, Intec initially found that many doors were closed to start-up enterprises. “The major challenges which I faced were to make people understand about the consulting services,” said Intec’s founder, Ms. Ariunaa Lkhagvasuren. “The consulting services concept was new to Mongolia and Mongolians at that time and not many organizations were willing to work with consulting services. The international and donor organizations were keen to work with consulting services companies; however, they were requiring companies to have a list of successfully implemented projects, which was difficult for a new starter like Intec. For example, registering with the ADB consulting services database required companies to be operational for at least three years. So, we got registered with ADB consulting services database only in 2008. Meanwhile, personal connections and communication skills helped to find jobs and opportunities for Intec.”

“It has been quite challenging. We have franchised the Indian Aptech WorldWide Training center (http://www.aptech-worldwide.com) in Mongolia – may be one of the few franchising businesses in Mongolia. Currently that center is now a separate entity/company and it has over 20 plus faculty staff and over 300 students. Looking at the ICT market, there were quite a number of internet service providers, mobile phone operators, a few companies started developing software applications, and services etc. However, there were only two to three consulting companies in the ICT sector which to my knowledge at that time were providing consulting services, and still there was a room for Intec.”

Intec then focused on three areas: consulting services, training and skills, and research. Intec found they were pioneering a new concept in Mongolia. Intec’s first contract was a job with the University of Milwaukee-Wisconsin in the United States to organize a three week course for American students to learn about the digital divide in Mongolia. But the global economic crisis hit Mongolia hard in 2009.

“It was challenging to survive and continue working the same way,” Ms. Lkhagvasuren said.

“There were few ICT-related jobs in Mongolia at that time, and one of our major clients left Mongolia and we had to find other clients in the market. One of the ways of approaching this was that we were not asking for fees, instead we would have a barter agreement – we will deliver them services and they will provide some services for us. For the company itself, we needed to find ways of financing and covering costs for renting of premises, paying salaries for staff on time, paying taxes and other expenses.”

The environment in Mongolia is being helped by the Information and Communications Technology and Post Authority (ICTPA) of Mongolia (http://www.ictpa.gov.mn), which has been driving forward an e-Mongolia master plan. With 16 objectives, it ambitiously seeks to place Mongolia in the top five of Asian IT nations, competing with South Korea, Singapore, Japan and China.

Ms. Lkhagvasuren believes Mongolia has many competitive advantages. “Mongolia is known for a high-literacy rate and math-oriented training and education, and ICT specialists are targeting to become a software outsourcing country for other countries. Another advantage of Mongolians is that they can easily learn other languages: we are fluent in Russian, English, Japanese, Korean, German and we believe that with these two major advantages, we will be able to do a good job with outsourcing of software development.”

While men still dominate the ICT sector in Mongolia, Ms. Lkhagvasuren has not found being a woman a disadvantage. “In Mongolia, as gender specialists say, there is a reverse gender situation. Women are educated, well-recognized and well-respected. There were situations, when I was the only women participant in the meeting with about 20 men. But I never felt somewhat discriminated or mis-treated and I think that’s the overall situation towards gender in Mongolia.”

Intec’s success working with Aptech WorldWide Training’s franchising contract brought many advantages for a start-up. “It’s a faster way to do things, and you don’t have to re-invent the wheel.” As a Mongolian company, Intec has found it best to play to its local strengths. “National companies have knowledge, expertise and experience of local situations, know players and understand about legal, regulatory matters. Partnership or cooperation is one of the means of playing alongside big global players.”