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SCS banks on trusted services for growth

The Singapore-based IT service provider eyes the lucrative business process outsourcing market, and plans to use its digital imaging subsidiary as a springboard for growth.

SINGAPORE--He may be only 42 days into his role as CEO of Singapore Computer Systems (SCS), but Tan Tong Hai has already singled out the provision of trusted services as the way to turn the company's fortunes around.

Presenting the IT service provider's new strategic directions for the first time to the press this week, the 17-year-old IT veteran announced he is seeking to beef up revenues by focusing on providing trusted services. Tan described this market segment as encompassing the whole gamut of digital information protection, business process optimization, business intelligence, and business transactions.

He revealed that SCS' document imaging and e-document safekeeping services subsidiary TrustedHub, will play a critical role in helping the company cross-sell business process outsourcing (BPO) activities such as business continuity, security management, content management and consultancy.

SCS holds a majority 54 percent stake in TrustedHub, with Temasek Holdings and Singapore Technologies Electronics owning the rest.

But newly-appointed Tan has a gargantuan task ahead of him in turning the company fortunes around. For the second quarter of 2005, ended Jun 30, the company announced a net loss of S$33 million (US$19.6 million), or a 24.9 percent drop from the same quarter a year ago.

"We want the recurring revenue base--maintenance is where the money is. Even if people view it as 'dirty work', I say, we will do the dirty work."
--Tan Tong Hai
CEO, Singapore Computer Systems

Tan is realistic in his assessment of the company's situation. "By the full year, we'll still be in a loss position, but our top priority will be to minimize that loss," he said.

There is much potential in the trusted services market as many companies are struggling to digitize their paper documents and thereafter, manage the digital information, he said, singling out Singapore-based insurer NTUC Income, as a case study. SCS was NTUC Income's partner in its paperless processing implementation.

For now, SCS will be looking toward companies with high volumes of paper documents to digitize. "I want to go after the banks and telcos--any companies with application forms," said Tan.

"All the EMCs and Hitachis of the world (are going to) love us…All these electronic scanning (activities) are going to translate into hardware sales," he quipped.

In fact, research firm IDC has predicted that the Asia-Pacific BPO services market will generate revenues of US$12 billion by 2009, up from US$5.4 billion in 2004.

Tan hopes that with more "success stories" forged in Singapore, SCS will be able to take its trusted services business beyond the island shores, to countries such as Indonesia, Malaysia, and Thailand.

He is unfazed by the competition from Indian outsourcing companies, citing high-profile cases of customer data privacy breaches within some of these firms. This is where TrustedHub, which is an Evidence Act-compliant and ISO-certified company, comes in, he said.

Meanwhile, another of SCS' new goals is to seek out more maintenance work. In instances where the likes of IBM and Accenture win tenders as prime service providers, SCS will be more than willing to take up the secondary maintenance contracts.

"We want the recurring revenue base--maintenance is where the money is. Even if people view it as 'dirty work', I say, we will do the dirty work," Tan said.