SOFTWARE HOUSE PROJECT

SUBMITTED TO:
MR. FAROOQ JAMAL

SUBMITTED BY:
AMEER ABDULLAH KHAN 06-NTU-063
SHOAIB IQBAL 06-NTU-095
TAHA BIN YAHYA 06-NTU-095
TABLE OF CONTENTS
The Rough Idea_____________________________________________________________________________________________11
Objectives__________________________________________________________________________________________________11
Market Analysis_____________________________________________________________________________________________12
Estimated Size of IT Industry___________________________________________________________________________________________12
Software & Services Sector with 61% Growth for 2008 – 09__________________________________________________________________12
Employment of Professionals by 41% Growth_____________________________________________________________________________12
Segmentation_______________________________________________________________________________________________________14
We are____________________________________________________________________________________________________________ 16
We target__________________________________________________________________________________________________________17
Where We are______________________________________________________________________________________________________18
Demographic Segmentation___________________________________________________________________________________________19
Psychographic Segmentation__________________________________________________________________________________________19
80/20 Principle______________________________________________________________________________________________________19

Philosophies________________________________________________________________________________________________20
Product Philosophy__________________________________________________________________________________________________20
Marketing Philosophy________________________________________________________________________________________________20
Societal Philosophy__________________________________________________________________________________________________20
 Quality Standards & Assurance_________________________________________________________________________________________21
Product Philosophy____________________________________________________________________________________________________________21
Post Sale Customer Care________________________________________________________________________________________________________21
Customer Care_______________________________________________________________________________________________________________ 21
Relationship & Core Concept____________________________________________________________________________________________________21

Market Research Analysis_____________________________________________________________________________________21

Environment Analysis________________________________________________________________________________________22
Company__________________________________________________________________________________________________________ 22
Competition________________________________________________________________________________________________________22
Customers_________________________________________________________________________________________________________ 22

Macro-Environment__________________________________________________________________________________________22
Demographic & Economic_____________________________________________________________________________________________22
Technological_______________________________________________________________________________________________________23

Marketing Mix______________________________________________________________________________________________23
Product Classification________________________________________________________________________________________________23
Product Mix Modification_____________________________________________________________________________________________23

Brand_____________________________________________________________________________________________________24
Name_____________________________________________________________________________________________________________ 24
Logo______________________________________________________________________________________________________________ 24
Slogan_____________________________________________________________________________________________________________24
Brand Effectiveness__________________________________________________________________________________________________24
Product Branding____________________________________________________________________________________________________24

SWOT Analysis______________________________________________________________________________________________24
 Strengths__________________________________________________________________________________________________________ 24
Weakness__________________________________________________________________________________________________________25
Opportunities_______________________________________________________________________________________________________25
Threats____________________________________________________________________________________________________________25

Buyers_____________________________________________________________________________________________________25
Actual_____________________________________________________________________________________________________________25
Potential___________________________________________________________________________________________________________25

Level of Marketing___________________________________________________________________________________________25
Entrepreneurial_____________________________________________________________________________________________________25

Product Classification________________________________________________________________________________________25
Industry @ a glance__________________________________________________________________________________________26
Software/BPO______________________________________________________________________________________________________ 26

WHY PAKISTAN_____________________________________________________________________________________________28
Well Connected!____________________________________________________________________________________________________ 28
The New Frontier in Low-Cost and High Quality Project Development:_________________________________________________________29
Join Pakistan_______________________________________________________________________________________________________ 29
Putting the Capital in Human Capital______________________________________________________________________________________________29

Wealth of Affordable Human Capital:___________________________________________________________________________________29

Opportunities Abound:_______________________________________________________________________________________________30
A Dynamic and Vibrant Economy:______________________________________________________________________________________30
The World Is Doing Business With Pakistan:______________________________________________________________________________30

PAKISTAN__________________________________________________________________________________________________31
PAKISTAN: KEY METRICS & INDICATORS_________________________________________________________________________31
THE INDUSTRY TODAY________________________________________________________________________________________33
EMERGING TRENDS IN THE INDUSTRY___________________________________________________________________________33
IT Policy of Pakistan:_________________________________________________________________________________________________34
Human Resource Development:________________________________________________________________________________________35
Infrastructure Development:__________________________________________________________________________________________35
Software Industry Development:_______________________________________________________________________________________36
Hardware Industry Development:______________________________________________________________________________________36
Internet Policy:______________________________________________________________________________________________________36
Government Incentives:______________________________________________________________________________________________36
Tax and Regulatory Incentives:_________________________________________________________________________________________37
A superior Telecom Infrastructure:______________________________________________________________________________________37
Powering IT Growth through Pro-active Telecom policy:____________________________________________________________________37
Islamabad- The New Software Capital of the World:________________________________________________________________________38
Software Technology Parks:___________________________________________________________________________________________38
Low Operating Costs:_________________________________________________________________________________________________38
IT Promotion and Awareness:__________________________________________________________________________________________39
IT Usage:___________________________________________________________________________________________________________39
Legislation:_________________________________________________________________________________________________________39
Regulations:________________________________________________________________________________________________________39

Main Idea__________________________________________________________________________________________________40
 Prospecting Projects_________________________________________________________________________________________________41
Supporting Fresh Graduates, Students & Free Lancers:________________________________________________________________________________41
Data Base for Institutions_______________________________________________________________________________________________________41

Technical Analysis:___________________________________________________________________________________________41
Labor______________________________________________________________________________________________________________41
The pros:____________________________________________________________________________________________________________________ 41

Location and Size:___________________________________________________________________________________________________42

Machineries and technology___________________________________________________________________________________________42
Software House capacity:_____________________________________________________________________________________________42
Input Constraints____________________________________________________________________________________________________42
Methodologies______________________________________________________________________________________________________42
Projects in Controlled Environments____________________________________________________________________________________42
Software House Sequence_____________________________________________________________________________________________43

Financial Analysis___________________________________________________________________________________________44
Cost of Project______________________________________________________________________________________________________44
Means of Financing__________________________________________________________________________________________________44
Projections_________________________________________________________________________________________________________44
Financial Projections:__________________________________________________________________________________________________________ 44

Bibliography:_______________________________________________________________________________________________46
Let us start in a way to express gratitude to Allah (saw) Who blesses the mankind with an immeasurable power of intellect
and perception.

The well-organized team work is much appreciable and we are also really thankful to all those who put their congenial
cooperation and efforts for the compilation of this directory.

There were many names but we prefer to choose one name whose guidance and moral support has never left us alone
throughout our life at NTU. He is always there as our mentor and a source of motivation for us, a sincere, humble and true
thanks to Anna, MBA(LUMS).

We would close our words of acknowledgement with great thank and gratitude to all those names are beauty to this project.
Thanks to all those who played their role in the best way.
The Rough Idea
We will provide software to companies and especially industry.
We can provide these on custom demands but our specialty is
Accounting and business software.
Office and human resource management systems.
Textile software.
METASH is the software house which is concentrating on
Pakistani projects specially to participate in development of
Pakistan thus enhancing IT value and strength in country.
Market Analysis
The Pakistani IT & ITES industry today has an impressive
story to tell. Much like the successful startup that one would
have not heard of a few years ago but is all of a sudden the talk
of the town. The Pakistan IT and ITES industry has started to
appear on the radar of firms like Gartner and IDC and in
Objectives
Serving the industry.
Bringing more value to investments.
Provide exposure at international levels.
Provide solutions to run business according to the local
requirements.
Lowering our dependency on international companies.
reports by AT Kearny and the World Bank. It is a transformed
industry growing exponentially and creating a stir.
Estimated Size of IT Industry
From its nascent beginnings in the late 1980s, the industry has
successfully arrived to a point where its value proposition has
been validated over and over again. The largest members are
grossing 15-25 million dollars in revenues, and receiving 100
million dollar valuations. Most tech companies are growing in
excess of 30% a year annually. The industry as a whole is
doing over 2 billion dollars a year in revenue, up from less than
a billion dollars a few years ago.
Software & Services Sector with 61% Growth for
2008 – 09
About half of this growth is coming from foreign, software and
high end services projects. IBM, Cisco and Microsoft are
expanding Pakistan operations aggressively while several
startups are now backed by VCs such as e-Planet Ventures,
Motorola, and Adobe.

Employment of Professionals by 41% Growth

Sectors and countries have achieved in 15-20 years, Pakistan’s
technology scene is poised to achieve in less than a decade.

Putting it all together, the Pakistani Technology industry is

very different from what it was in the early 1990’s. From 4
founding companies in 1994, PASHA’s current membership
exceeds 1082 apart from 60 foreign software companies. From
4,619 full-time employees in 2004, current employment is at
110,000 (15,000 attached directly to software export) and
rising with a total direct investment of more than 8.2 billion US
dollars.

The number of QA Professionals has doubled in the last 3

years and 20% of those employed in the sector are foreign
qualified. There are almost 20,000 professionals being
produced every year. Fast becoming a hub of high performance
business, the questions now asked are if growth this year will
be 28% or 50%, if there will be enough skilled HR to staff
demand, if there will be enough office space available next
year.
Segmentation

High-Investment

Big-Scale

Quality & Standards

Conscious
 Businesses &
Industry

IT & Agri-
Textiles Chemical Others
Telecom Based
We are

Business

Service
Industry

Customer
FOcused
We target

Human Resource Management

Accounting & Banking

Finance

Management

Customized
Where We are

Demographic Segmentation management is interested in this to follow international

business methods.
A sia
As discussed earlier, we will industry which have high
Asia
investment and are big-scale i.e. they have a large no. of staff
80/20 Principle
& workers, inventory level and input/output. This is because
the smaller firms do not have enough finance to and also they This is to every bit true about software industry in Pakistan.
do not have the major need of automation of the processes. 80% of industry is not in the state to change the long-going
Pakistan
Pakistan
While the big firms are in High need to smoothen and fasten process they are already following or at least they are reluctant
to do so or at least they are reluctant to do so.
the process by freeing the staff from handling and managerial
duties. Only 20% of the industry & business is considering this. They
are willing and investing in the automation of the industry and
Psychographic Segmentation
Pun jab
Punjab
Pakistan is stepping into the Global Table (previously called
the business process. But this is good as this is resulting in
higher profit rates for them which is not only enforcing them to
Global Village). The companies are entering the international invest more but also urging others to follow up.
market. To survive and compete with others, they are in high
need of standardizing their processes, focus on quality, and
Faisalab ad
Faisalabad
increase their efficiency by effectively considering and
focusing the production process.

Also the generation which is currently controlling the industry

D -G ro un d
D-Ground
is literate in business mostly from globally recognized business
institutes. They are hiring people which are specialized in the
management and marketing process. These people require
specialized softwares to do this efficiently. Also the top
Philosophies Marketing Philosophy
We will sell our products by marketing. We will achieve this by
building close relationship with the industry and employers.
We will do this by seminars, visits and expos.

Quality
Marketing
Relationship Free Lancers We will also do the proper advertising online. We chose the
Features Advertisement Fresh Graduates online media just to enforce image of our segment.

Societal Philosophy
We will hire free lancers, this will help us in having the latest
Product Societial
and innovative features at lower cost and will also enhance
our image.

One other focus will be to hire fresh graduates. This will help
We will follow the three marketing management Philosophies
us ensuring the use of latest technology. But this will enhance
as follows:
the image of our company as we will support and attract hem
Product Philosophy by certification and experience certificates. This will also help
Mainly we will follow the Product philosophy i.e. we will focus us as they will take our name to companies and industry,
on the features and quality of the products. We will introduce which permanently hire them.
the latest concepts and technologies in IT industry and follow
the modern business trends and methodologies. We will
achieve this by hiring Free Lancers with innovative ideas and
fresh-graduates with adequate knowledge of modern
technologies.
 Relationship & Core Concept
Society
Society
(Human
(Human We will keep a close relationship with the customer. This will
Welfare)
Welfare)
help us make us recognize and gain attention in industry
resulting in indirect marketing. This will also help us in getting
close to customer thus recognizing their needs and providing
appropriate solutions.
Societal
Marketing
Industry
Consumers
Consumers Company
Company
As discussed, we will keep in contact with the industry. This
(Want
(Want
Satisfaction
Satisfaction
(Prices)
(Prices)
will be achieved be arranging seminars and making visits to
industry. We will also book good locations during industrial
and IT Expos.

Quality Standards & Assurance Employers

Product Philosophy
As discussed earlier, this will be our main target. We will
always focus on it and by no mean, compromise on it.
Post Sale Customer Care
We will empower our customers by giving them all minor
updates free of all cost. This gets them the access to all updates
having a version change in decimal i.e. from X.0 to X.9.
Customer Care
We will also provide them full access to our Marketing and
Technical Departments. We will be available all the time and
will provide in-time help & support due to local availability.
As our main targets are free-lancers and fresh graduates, we
will have to take enormous steps to get with them. We will
have to arrange seminars in different universities of Pakistan.
Also we will have to run our Ads on social websites and those
attracting the youth.
Market Research Analysis
We will have to do market research on large scale as the
industry and It world is changing every moment in Pakistan. It
will be achieved by our Relationship strategy. As taking it to
step further we will develop questionnaires and will get them
filled from the industry. It will have following sections.

Total Investment
Inventory Level & Godowns
 Human Resources i.e. workforce
Departments
Customers Customers
Software needs & Demands Industry and related businesses will be targeted. In Pakistan
Currently Using Softwares will be focused as they are in high need of this and are ready to
accept it with some exceptional cases but due to the
globalization, they are being faced to accept it as soon as
Environment Analysis possible.

Company
METASH is a customer focused, society-based software house
set to fulfill the needs of the industry in Pakistan. It will
develop the softwares needed in Pakistan. It will use the
enthusiasm found in the next generation. We will allot the
projects to them and they will be managed by professionals.
We will support them with money and others.
Competition
There is not so much competition in Pakistan. But there is high
competition being faced due to industrial software companies.
They are big giants having good repute and a large amount of
resources.
In Pakistan only two companies are registered with P@SHA
for software development.
Business Beam Pvt. Ltd
http://www.businessbeam.com
NC Inc.
http://www.ncinc.com.pk
Macro-Environment
Demographic & Economic
Industry working on large scale will be targeted. They are
ready to and mostly using the industrial softwares and thus it
will be easy to attract them but the only problem that will be
faced is loyalty. It is very high in software industry. If a
company changes its software, it requires training on high
scale, so they prefer to stick to already ones they are using.
On the other side, companies that are stepping into
globalization and are expanding are easy targets but they are
very much conscious about the investment and it can be a big
hurdle in targeting them.
Companies that are small and are having lesser investment
cannot be targeted as they do not have enough resources to
target these.
Technological Product Classification
It is a great opportunity as the technological factor is very less
in Pakistani industry. They are not very advanced. Also the
software houses in Pakistan are not very advanced and mostly
do not target the needs of industry on general basis. Their focus s ty
is just to produce customized software house.
ou a li
The companies in Pakistan have a high need of industrial
softwares and they demand is increasing day by day. en eci
oG Sp
Marketing Mix
Our product mix will have different product lines but we will
m
provide only one product in each line. This is to avoid Ho
cannibalization. Also this will help customer as we will provide
all his need in one package and he can choose the features
Homogenous products means that we will provide same
according to his requirements.
product for each category / segment. This will ease customers
HRM in choosing the product and us by focusing on features instead
(Minerva- Brochure Attached) of grouping features in different packages.
Accounting & Banking
Our softwares will not fit into general needs and will be
Finance
specializes according to the industrial needs.
Management
Customized
Product Mix Modification
We will have to modify out product on regular basis to fulfill
the industry needs. Our modification will be only feature based
i.e. we will always introduce new features in the softwares but
we will make sure that we never compromise on quality.
Brand Product Branding
Name All the products will have individual brand name. it results in
We will work under the name of METASH. following benefits:

Earn higher profits

Logo
Less pressure to mark down prices
We can drop or introduce any product anytime.
It represents that we hold and support you by and fulfilling all We will make sure that all product brand names represent
your needs. the core philosophy of the company as “MINERVA by
METASH” does.
Slogan
Your One Stop Multi Solution Provider
SWOT Analysis
Website Strengths
http://www.metash.com.pk/ Fresh talent & New concepts
Due to fresh graduates
Brand Effectiveness Modern Technology
Our Brand Name is a short form of
Free-Lancers
Management, Engineering, Technical & Automation Software Cost effective
House Production in Pakistan
Local availability
It represents all fields we are in. 24/7 Customer Service
It represents our multi-directionality.
On-time Help & support
It follows the modern trend in naming.
Free Updates
It is an attention catching word.
All minor Versions
It is easy to remember and pronounce.
Comprehensive
The logo is simple & easy to remember and comes to mind
often especially the colors play an important role as the One Product for all needs of a specific segment
most common colors are used. Legal Liabilities
 New industry in Pakistan so very less legal liabilities Threats
Government Support Big giants
To support this industry, Government is providing There are large competitors
enormous support International Software houses
Banking & Insurance Support
All insurance companies and Banks require the usage
of Insurance Policies & Loan Sanction. Buyers
Actual
Weakness Industry in Pakistan
Unconsciousness
Industry is not conscious about these softwares. Potential
Reluctance Customer Related Businesses
The industry is not ready to accept
Low trust in Local Sector
Level of Marketing
Industrialists are not ready to invest in local industry
New name & Loyalties
Entrepreneurial
i.e. we will do personal marketing by relationship, references
Industrialists are loyal to software companies and are
and seminars etc. These type of products usually are not sold
not ready to change
by formal ads. Also we do not ads to reach everyone as we are
Opportunities related to a segment only.
Modernization
Industries which are modernizing Product Classification
Economic Factor Our products are business focused.
Customization
We provide customized software to fulfill industrial
needs
Industry @ a glance
Software/BPO
WHY PAKISTAN
Pakistan is the gateway to Central Asia, the Gulf, and Far East.
Rapid urbanization has resulted in the workforce of our country
being education in various specialized concerns, and proficient
in Urdu, English, and many other languages spoken worldwide.
Our country is one of the fastest growing economies of the
world. Today Pakistan has 160 million consumers with an ever
growing middle class. Foreign investment has risen sharply.
Liberalization, de-regulation, Privatization, and facilitation are
the foremost cornerstones of the Current investment policies.
Well Connected!
Over 15 million internet users by September 2006 with
7.2% penetration
130 ISP licenses have been issued connecting 1900+ cities
and towns
3500+ internet cafés are in operation
300 Billion Rupees spent on internet and communication
services in the last two years
Over 50 Million cell phone users in the country
Almost 50 national and international airlines serving
millions of passengers annually
5 international and 20 domestic airports
Over 250,000 kilometers road network country-wide
Over 52 Million passengers using country wide railway
network per annum.
Located at the foot of Himalayas off the depths of the Arabian
Sea, Pakistan is centrally located at meeting point of East and
West. While its Northern Areas offer routes - both
geographical and political - into the uncharted economies of
Central Asia and the fast growing economic giant - China, its
southern shores offer unencumbered traffic to and from
Australia, South Asia, the Far East, Middle East, Europe and
Africa.
With a new road planned to China and unrestricted access to
Central Asian States, Pakistan offers a viable base for
expansion in to emerging markets. Securely located in one of
the world's most commercially and politically strategic areas,
Pakistan today offers a gateway into any and every conceivable
medium. As the country grows by leaps and bounds, we invite
you to grow by gigabytes, megahertz and terabytes!
The New Frontier in Low-Cost and High Quality
Project Development:
Completely customizable outsourcing models… On hand
highly trained resources… 
Send your work in the evening; get it the next day… When
people the world over are enjoying the benefits of working
with Pakistan. Why don’t you benefit from cost and time
saving in a hassle free environment?
Join Pakistan
Putting the Capital in Human Capital
Pakistan's Government is cognizant of the value of its labor
pool, and even more conscious of the importance of value-
added skills information. With Pakistan’s entry into the digital
age, Pakistan’s population growth is being outdone by its
massive investment in human capital.
Within the past two years, the Government of Pakistan has:
Committed almost Rest. 1.5 billion to the development
of human capital.
Distributed nearly Rs. 1.1 billion to over 45 human
capital projects.
Set up facilities that will impart training in a host of
value-added skills and services to over 30,000 students
Areas of Training:
Systems Integration (Such As Microsoft, Cisco)
Business Applications (Such As Oracle)
Networking (Such As Linux)
Web Design and Development
Quality Assurance and Testing Tools
.Net, Flash, PHP and Many Others
Established a fund that caters annually to over 4,000
graduate and post-graduate students, specializing in
Information Technology
Begun the process of training the entire spectrum of
government servants in the use of Information
Technology, as specific to their area of work/expertise.
Wealth of Affordable Human Capital:
Pakistan's population, one of the youngest in the world has
consistently provided the country with its greatest wealth - a
steady stream of skilled labor.
The demographic profile of the country ensures that it will be
supplied with a continued and growing labor pool.
In Particular:
33% of Pakistan's total labor force of 41.2 million workers
is composed of urban labor.
Over 43% of Pakistan’s population is below 15 years of age
The skilled urban labor force of Pakistan is over 15 million,
strong and growing.
Opportunities Abound:
There are clear and obvious advantages of doing business in
Pakistan. Low costs, a wealth of trained professionals and a
government actively engaged in creating a facilitative and
enabling environment.
Areas for Which Pakistan Should Be Considered:
Customized Software Development
Enterprise Application Development and Maintenance
Offshore Call Centers
Offshore Back End Support and Services
Transcription Services
Business Process Improvement
Systems Integration
Product Development
Performance Testing
Outsourcing and Quality Assurance
A Dynamic and Vibrant Economy: PAKISTAN
Since attaining freedom in 1947, sustained economic growth Pakistan has a well-developed communications infrastructure,
has been a hallmark of Pakistan's Economy. The country has and a high degree of computer literacy, coupled with
never experienced negative growth. Indeed, the new innovations in software development. Its improved service
millennium has only served to whet the economy's appetite for delivery mechanisms, and a growing appreciation of
growth. Countless consumer goods, financial, insurance and international quality standards, serve to emphasize Pakistan's
technology firms have set up shop in Pakistan. Now more than suitability as a destination of choice for global companies
ever before, Pakistan offers a low cost, high quality seeking to offshore their business activities.
Information Technology Frontier
Pakistan offers state-of-the-art technology and
The World Is Doing Business With Pakistan: infrastructure for establishing a world-class ICT setup. 
Leading edge firms are doing business with Pakistan, some of Its telecom infrastructure is 100% digital, and provides a
which are listed below: robust backbone for providing mission-critical services,
Citibank such as call centers, ISPs, software houses, voice and video
Nortel conferences.   
Cisco Systems The fiber optic infrastructure, initially lay during the early
ABN-AMRO 1990s, now accounts for well over 85% of the backbone
Merrill Lynch that supports international and national data exchange.
HSBC
More than 40 Pakistani cities are currently interconnected
Siemens
Intel through fiber optic exchanges, and there are nearly 2950
Motorola digital exchanges.
Ericsson Tele-density is steadily increasing, and the Wireless Local
Microsoft Loop (WLL) sector is now open to private sector
Oracle investment. Broadband licenses are open to ISPs since
Compaq 2004.
Unilever
Pakistan offers the most competitive bandwidth charges in
Procter and Gamble
British Petroleum the whole Asia Pacific region. A dedicated E1 circuit is
Shell currently available at the cost of US$ 2000 only. Pakistan is
 using 1700 MB of bandwidth for Internet traffic, which is
2.42 times greater than the bandwidth used in 2005.
Pakistan provides strong protection for foreign investors,
ranking 19th worldwide on protecting investors, according to
the World Bank report Doing Business In South Asia 2008.
PAKISTAN: KEY METRICS & INDICATORS
In 2007, Gartner released a report titled, “Analysis of Pakistan
as an Offshore Service Location” which placed the country in
the First Category destinations and also acknowledged
Pakistan’s labour costs to be 30% lower than India’s, with
Telecom costs the lowest of any outsourcing destination.
The same year a World Bank report on ease of doing business
ranked Pakistan at number 2 in South Asia and at number 74
globally in a group of 159 countries.
Besides telecom and lower costs for highly skilled HR, there
are some key competitive advantages that Pakistan enjoys
which has put it on the fast track as an upcoming global
destination for technology product and services.
To its global clientele, the industry offers a vast and growing
skilled English speaking population, an impressive HR
development program, a conducive policy environment, 100
percent ownership of equity and repatriation of the foreign
investors’ profits as well as tax exemption on these investments
and exported software until 2016. The cost of setting up and
doing a business is relatively low, lower than China and India.
The country is also investing heavily in creating human
resource to meet the needs of the future and has one of the
world’s most ambitious programs to invest in higher education.
(30,000 private sector university graduates, 150,000 total
university graduates a year).
From a macroeconomic perspective, the country has shown
solid fundamentals in the last five years with strong GDP
growth averaging more than 6% per annum. The Karachi Stock
Exchange with more than 600 listed securities and an active
trading history boasts the lowest listing costs in the region.
Attracted by the country’s strong economic sectors and
demographic fundamentals, a number of multinationals,
venture capitalists and angel investors have been attracted to
the country. A multinational angels network with roots in
Boston and Karachi has been launched and a number of
venture funded cross border transactions realized.
Direct foreign investment is booming. Companies like Etisalat
– the state-owned Telecom provider of the UAE and one of the
leading brands in the Middle East, acquired a majority stake in
the country’s largest telecom provider, PTCL for $2.6 billion in
2007. Other companies entering or expanding in Pakistan
include Orascom of Egypt, OmanTel, Telenor of Norway,
Cisco, Dell and China Telecom, Bank Nomura, Barclays,
Standard Chartered Bank, IBM, Oracle, SAP, HP, Microsoft,
NCR and Terrada.
THE INDUSTRY TODAY
In 2006, the 85 companies surveyed for this study recorded a
global revenue impact of $716 million. That figure grew to
about $909 million in 2007 – a growth rate of over 15%. This
puts the estimated overall global revenue impact of the entire
industry at well over $1 billion mark.
In 2006-2007, these 85 companies also recorded domestic
revenues of $269 million. This was a 39% increase from $193
million in 2006, showing an even stronger demand for IT
products and services locally.
This increase points to an important, fast growing trend. As
domestic customers demand for higher quality software and
services increases, several companies that previously focused
on foreign-only clientele now look to addressing these needs
and treat this opportunity as a significant revenue source.
In terms of products and service offerings, as many as 68% of
companies describe themselves as IT-services companies,
about 40% as IT consulting companies, and around 27% as
business process outsourcing companies.
EMERGING TRENDS IN THE INDUSTRY
As the industry evolves, market forces and customer demands
have shown similar patterns emerge amongst players. Expect
these trends to enforce over the next year as the shift to the
domestic market gathers pace as customers in Pakistan demand
a greater number of services ranging from Software, BPO,
ERPs and Data centers.
Trend # 1
Driven by domestic demand for IT product and services, the
mix of domestic and export revenues have grown from 40:60%
in 2004-5 to 52:48% in 2007.
Trend # 2
A number of companies have jumped into the Systems
Integration business using well-established platforms to deliver
client value. These companies are well funded, have drawn
back Pakistanis from abroad, and built up strong infrastructures
and expertise in key enterprise areas such as ERP, BI, Storage,
Networks and Hardware, and are comparable to the IBMs and
Accentures of the world. They compete regularly against
multinational SI firms for some of the largest domestic
contracts each year. With domestic customers demanding
standard enterprise solutions instead of the “let’s build our own
ERP” approach, these companies are revving up for even
greater demand of their services.
Trend # 3
The importance of domain expertise, intellectual property and
idea content in new start-ups has increased. A number of
innovative, product based and web 2.0 start-ups is on the rise.
Supported by senior entrepreneurs, mentors, angel investors
and Barcamp style events such as P@SHA’s Startup Insiders,
more graduates are looking for funding and launching start-ups
as opposed to joining the workforce as employees. The MIT
sponsored MITCEF business acceleration plan, TiE, and TAN
(Technology Angels Network) have also helped in taking
startups to the next level.
Trend # 4
The industry’s love affair with India-obsessed low cost all-
purpose custom software house business model is over. Led by
TRG, Techlogix, Sofizar, Pixsense and NetSol, the industry has
begun using innovative business models to build ‘unfair’
advantage, high end skills and products for foreign clientele.
Trend # 5
While there are certainly some individual success stories in the
low cost voice business arena, the industry has to a large extent
moved away from the volume driven low-margin voice-based
business into functional BPO which is higher value. The
domestic market is also fueling BPO grown especially in the
areas of Help Desk, Call center operations for banks and telcos
as well as utility companies.
IT Policy of Pakistan:
Information Technology (IT) has assumed unprecedented
importance in the Global Economic Arena. In Pakistan, the
present government is according a very high priority to this
sector. One of the prerequisites for ensuring sustained growth
of the Industry, maybe the Economy, is the provision of a
definite framework consisting of Policy, Legislative, Financial,
and Operational Guidelines, which can provide a stable
umbrella for growth.
Thus, the Government, as the main facilitator, enabler, and
promoter of the IT Sector, has evolved an effective National IT
Policy and Action Plan that clearly caters to the needs of
nurturing the Industry and is responsive to the dynamic forces
of change that can affect its future growth. The Private Sector
is being brought into the mainstream as the main driver for
growth. The guiding theme for the Policy is that 'The
Government shall be the facilitator and enabler to encourage
the Private Sector to drive the development in IT and
Telecommunications'. This one single element has galvanized
the entire Pakistani IT Community to participate
wholeheartedly in the process and over 200 Professionals
mainly from the Private Sector participated in various
dialogues and eleven working groups meetings over the last
four months to devise a comprehensive Policy and Action Plan
Document.
The vision of the policy is to harness the potential of
Information Technology as a key contributor to the
development of Pakistan and the broad-based involvement of
the key stakeholders is a must for its sustainable development.
Core IT Policy Strategies have been proposed under several
focus areas and some of the lead recommendations in each area
are as follows:
Human Resource Development:
Human Resource (HR) development is imperative for the local
IT Industry to position the country as an important player in the
international IT Market. Under the Hr Action Plan, a large pool
of academically as well as technically skilled IT manpower
would be developed to meet the local and export needs. The
policy accordingly envisages the establishment of four new IT
Universities, Virtual IT University, National Testing and
Accreditation Services and Educational Intranet, strengthening
of existing IT Institutes and hiring of faculty from abroad. A
major portion of the funds under the IT action plan would be
dedicated towards hr development initiatives.
Infrastructure Development:
The local IT Industry requires a world class enabling
infrastructure. An exercise for deployment of this infrastructure
would be undertaken and a series of IT Parks and Incubators
across the country would be established. These parks will be
equipped with modern facilities and matchless incentives, to
provide a one-stop shop for prospective investors in the IT
Industry. Telecom infrastructure would be modernized to carry
broadband access in the backbone and local loops. Other steps
include the establishment of IT boards in Provinces (except
Punjab where it exists already), increasing tele density and the
introduction of new technologies such as Wireless Local Loop
for data and cable internet.
Software Industry Development:
Software development is a high growth industry and forms a
major segment of the vast IT market and will continue to do so
in the future. Integrated efforts to develop software industry
with focus on exports (in addition to the local market) would
be undertaken. this would include encouragement of local
software houses to participate in government projects, local
content development, Urdu and regional language software
development, promotion of software exports through
establishment of international marketing network, special
bandwidth rates for software exporters, encouraging joint
ventures, hiring of international consultants for global business
development and fiscal and regulatory incentives for software
exporters through the state bank of Pakistan.
Hardware Industry Development:
The Policy recommendations in the area of hardware industry
development do not seek to initiate aggressive competition
with the developed countries. Rather, they focus on developing
the areas that are within Pakistan’s reach, in terms of
technology and resources and in which the country could have
a competitive advantage. Major recommendations include the
waiver of duties and taxes on the hardware, incentives to
reduce the cost of raw material and inputs, encourage and fund
research and development in the universities and engineering
colleges through faculty chairs, matching grants and focused
joint projects.
Internet Policy:
The internet is likely to continue to revolutionize the way
people communicate and access information. The basic
principles adopted for the Internet growth in the country would
be to encourage competition, avoidance of un-necessary
regulations, provision of low cost, reliable and broadband
Internet access, universal internet access in the areas connected
with the telecom network, free internet access for public sector
universities and support for the development of national
internet content.
Government Incentives:
The government has invested in various fiscal and non-fiscal
incentives to nurture, develop, and promote the use of IT in
organizations, to increase their efficiency and productivity. The
strategies focus on promotion of venture capital industry
through incentives, recognition of software development as a
priority industry for financing by the banks and DFIs, creation
of investment friendly environment, building investors'
confidence and changes in rules to allow the technology
companies to be listed on stock exchanges of Pakistan.
Tax and Regulatory Incentives:
The government of Pakistan guarantee to facilitate profitability,
and efficiency for investors in information technology every
step of the way.
15 year corporate tax exemption for information
technology companies.
100% repatriation of profits allowed to IT sector
companies.
100% foreign equity allowed in IT sector.
0% custom duties and tariffs on import of all IT related
equipment.
7 year tax holiday for venture capital funds.
0% income tax liability for software development firms.
0% sales tax liability on sales of computer software and
hardware.
A superior Telecom Infrastructure:
Pakistan's telecom is among the world's widest covering and
most sophisticated. Fiber optic infrastructure, initially laid in
the early 1990s, now accounts for well over 85% of the
backbone that supports international and national exchange of
data.
The government has proactively worked with the national
telecom giant, PTCL, to reduce rates, improve access, and
increase the level of quality that is delivered. Voice-over-IP
and other related auxiliary services are being integrated into the
core of the telecom industry.
Perhaps most importantly, the telecom sector is to be fully de-
regulated in January 2003.
Powering IT Growth through Pro-active Telecom
policy:
Bandwidth costs reduced, from $60,000 to $6,000 a month
for E1 circuits.
 Rapid response delivery mechanism in place-leased lines
delivered in 8 weeks or earlier.
Internet access expansion from 29 cities in August 2000 to
over 1000 cities and towns by December 2003.
Activation of 155 Mbits IP connectivity.
De-regulation of internet delivery on cable TV full
permission granted.
DSL deployment in local loop for broadband internet
access.
Introduction of calling party pays (CPP) regime to boost
wireless telecom resulting in explosive growth.
License processing time period for telecom services
reduced to 7 days.
Enhancement of infrastructure for IT/ISPs (PRIs and
Digital Cross Connect).
Islamabad- The New Software Capital of the
World:
Islamabad, the capital, described by foreign journalists as the
virtual Shangri-La of world capitals. Ranked among the best
cities of Asia, by Asia week Magazine.
Offering unlimited supplies of low-cost labor, bandwidth, real
estate, and most significantly, Pakistan's first Software
Technology Park.
Software Technology Parks:
The jewels in Pakistan's IT profile crown, software technology
parks were initiated to provide a haven of highly sophisticated,
technologically robust, low cost centers of excellence in
software development. Due to high demand, the initial phase of
the establishment software technology parks has been followed
up with detailed plans for new facilities.
Pakistan's software technology parks offer one-stop, one-
window solutions to the logistical and functional requirements
for setting up an IT business in the country.
Low Operating Costs:
Commercial real estate: less than US$ 1 per sq foot, in the
tech-enabled, highly sophisticated software technology
parks.
Included in this rent, air-conditioning, security, power
generation services.
Residential real estate: 3-bedroom houses/apartments in the
upscale localities of urban Pakistan, average under US$
300 a month.
Internet bandwidth: US$ 6000 per month for 2Mbit
connections.
Cellular phone charges: unlimited incoming, outgoing calls
under US$ 0.10 a minute.
Electricity charges: commercial rates under US$ 0.10 per
kilowatt-hour.
Average salaries for IT professionals under US$ 6000 per
annum.
Average salaries for clerical staff under US$ 2000 per
annum.
And the most important reason why you should do business in
Pakistan is also the simplest one. It costs less, far less, to do
business here, than anywhere else.
IT Promotion and Awareness:
A massive IT promotion and awareness campaign would be
undertaken. The national strategy includes provision of
continued support and funds by the Export Promotion Bureau
(EPB) for the participation in world IT/ computer trade fairs,
exchange of delegations, posting of IT specialists in embassies
and consulates, promotion of IT use by the head of the
government, ministers, and all other key figures who can
influence public opinion at all public and private forums,
declaration of the next fiscal year as 'IT Year' and organization
of special events during the current year including national and
international exhibitions.
IT Usage:
To embark on an aggressive program to improve efficiency and
provide quality services to the citizens of Pakistan, IT would be
inducted at all levels of government. Key projects thus
launched would include Government Online, Electronic
Governance Project and E-Commerce Network.
Legislation:
To provide protection and enhance the confidence of users,
providers, and facilitators of information services, legislation
based on the recommendations of the working group
comprising IT and legal experts would be framed. Action in the
areas of Digital Signature Act, Intellectual Property &
Copyright Act and the Consumer Protection Act, has been
started. The government should seek legislative approval of
changes to statutes that will encourage electronic commerce
and revise statutes that mandate a paper-based or manual
process.
Regulations:
A regulatory framework is essential to avoid violating policy
goals and direction. It would be ensured that excessive
regulations do not stifle industry investment and growth. In
devising a useful regulatory framework, the focus would be on
creating a fair, equitable and competitive environment, based
on the principles of free market and open access.
The IT Action Plan is an integral part of the IT policy. The
Action Plan provides a framework for implementation of the IT
Policy which includes priority areas, specific projects that can
be conceptualized, formulated, assessed, prioritized and
implemented. The implementation of the Action Plan is very
much dependent on the funding provision for the IT &
telecommunications division and the mechanism from project
approval to funds release so that projects could be implemented
in a timely fashion to achieve the desirable results in the
shortest span of time. A separate mechanism for expeditious
project appraisal by experts' committees, approval and funding
under National Scientific and Technological Research and
Development Management Fund has been developed and
would be submitted separately to the cabinet for approval.
The main allocation of funds has been foreseen for training, re-
training, human resource development and provisioning of
enabling infrastructure. There are a host of other incentives,
which could be done at low or no cost, which include changes
in governmental processes, legislation, administrative
elements, incentives and rules. Some of these have already
been submitted to the relevant quarters for approval whereas
others are in the pipeline. A system of monitoring, surveying
and compiling statistics on the extent and growth of the IT
sector will also be devised to provide reliable data for planning
and evaluation purposes and to set up performance indicators.
The IT Action Plan will be implemented according to its well-
defined phased targets and objectives. To ensure that the plan
meets its objectives consistently and that suitable midcourse
corrections can be incorporated in a timely manner, a
mechanism will be set up involving the government, private
sector, academia and other national representatives to
coordinate and implement the policy and plan elements and
provide strategic supervision over the longer term. The IT
Policy and Action Plan being a dynamic document, would be
subjected to formal review under this mechanism every six
months, with more area-specific monitoring carried out on a
monthly basis.
Departments
Direct
Out sourcing
Projects
Prospecting Projects
Supporting Fresh Graduates, Students & Free Lancers:
Our main focus will be on hiring fresh university graduates
teamed with students and leaded by professionals. In return
they can be provided with pays, certificates and training
seminars. This will help us capturing the fresh ideas as well as
boost the talent. We will also launch Free Lancing Projects
which will offer us best at lowest cost.
Data Base for Institutions
Basically concentrating on the projects and solutions for
institutions like Educational, Medical and Business Growing
Institutes.

Main Idea
Our main idea is to open a software house in Faisalabad. We
will have mainly two departments.
Technical Analysis:
Labor
A professional software house normally consists of at least
three dedicated sub-teams:
business analysts who define the business needs of the
market
software designers/programmers who creates the technical
specification and next do coding
software testers who are responsible for the whole process
of quality management
The pros:
each person has full knowledge and innovative ideas about
the full production cycle
people are doing various tasks what makes especially
young people excited about their work
there is a very good possibility to manage the work load
especially in crisis situations like "all hands on pump"
Location and Size:
Our software house will be situated in main D-Ground,
Faisalabad. Size of our software house would be approximately
2 acre.
Machineries and technology
We need to install high quality machinery. For this purpose we
will import our computers from Dell, as they also provide
installation and after-sale Professional Technical Help &
Service.
Software House capacity:
We will arrange 24-hours open at our software house and
employees will have morning and night shifts. So we can
increase the production capacity of our software house and
ultimately more people will get employment. Basically, Due to
students and free-lancers, who work from home, the whole
process will be carried out online.
Input Constraints
Biggest constraint is load shedding. For this purpose we will
have to arrange laptops and UPS for in-house staff. For others,
as they work from home, we need not any featuring. This
might increase our cost but not too much as we will not have
that much in-house staff.
Methodologies
Software house may use a number of various methodologies to
produce the code. These can include:
the waterfall model, including project management
methodologies like PRINCE2 or PMBoK
agile software development, such as Extreme Programming
and SCRUM
There are also some methodologies which combine both,
such as the spiral model, RUP or MSF.
Projects in Controlled Environments
We will mainly follow PRINCE2. (Projects in Controlled
Environments)

Software House Sequence

The sequential working of our Software house with the team
and procedures of IT is given in pictorial form:
 Projections
Financial Projections:
Three years projected profit and loss and balance sheet are
made to show an estimate of S.A.S in coming years.

Financial Analysis
Cost of Project
The estimated cost of project is Rs.30 Million according to
proposal research and market study.

Means of Financing
Partner’s Equity:

Mr. Farooque Jamal will invest Rs. 30 Million.

 Bibliography:
Resources from where the primary research work is done

www.pasha.org.pk
Start-Up Expense
Expense Heads Amount in Rs Equipments
Legal 50,000 Stationery 500,000
License 25,000 Telephone
Marketing 100,000 Research 300,000
Furniture 500,000 Development 700,000
Fixtures 200,000 =Total =1,000,000
Computers Rent Advances and Rent 1,000,000
Hardware Cars (Suzuki Liana) 4 x 1,230,000
Laptop 10 x 69,900 Van (Suzuki APV) 1,710,000
Printer 2 x 49,900 Cell (Nokia E72) 3 x 34,000
Projector 1 x 81,490 Other expenses 5,000,000
Networking 1 x 32,990 Total Start-Up Expense 21,794,565
Broadband (PTCL EVO) 10 x 1,000 Website-1 year (2000 + 4000)
-TOTAL = 923,280 Employees [(50,000 x 5) + (15,000 x 3)]
Softwares (5 + 3)- 6 months x6
10 x 17,490 Required cash in hand 8,000,4435
MS Windows
10 x 1,700 TOTAL 30,000,000
Antivirus suite
10 x 27,890
MS Office
5 x 89,832 IT professional of NADRA and Plexus (Pvt) Limited
Corel Suite
5 x 211,421
Adobe Compendium www.wikipedia.com
5 x 334,602
AutoCAD
10 x 211,421
MSDN Quotations
= 5,764,285
Others Laptop
bit.ly/DI1464
Printer
bit.ly/HPM1522
Projector
 bit.ly/AP1266
Networking
bit.ly/BLKNN1
PTCL EVO
Ptcl.com.pk
MS Windows 7
bit.ly/MSWIN7
AntiVirus Suite
bit.ly/escanASS
MS Office 2007
bit.ly/MSOf07
Corel Suite
bit.ly/corelP
Adobe Compendium
bit.ly/AdobeP
AutoCad
bit.ly/AAC2010
MSDN
bit.ly/MSDN08
Location
bit.ly/OFFDGF
Suzuki AVP
bit.ly/SAPVPP
Suzuki Liana
bit.ly/SLIANA
Nokia E72
bit.ly/NE72PP
Web hosting
www.webhostingpakistan.net`