Local Software Company′s Portfolio-Management programme Wins International Certification and Begins Export Run

Featured in the BUSINESS Section of The NATION Newspaper November 13, 2007 issue, written by Asina Pornwasin

Bonanza Investment is known in Thailand’s banking and financial sectors as a complete portfolio-management system and a crucial tool for business management.

Market surveys show the financial-software package is No 1, with a 40-per-cent share of the Thai market. And the awards and accolades it has won over the past four years may lead people outside of the banking and financial industries to the mistaken belief that it is an international software suite.

Instead, Bonanza Investment is the core product of a Thai software house called Wealth Management Limited (WML), whose owner, Somkiat Chinthammit, spent more than 10 years working for global financial firm CitiBank.

It was not easy for Somkiat to leave a high managerial position with an international firm to sharp up a local company, particularly when it was in the software business. But Somkiat, 48, was following a dream.

“All the time I worked with CitiBank, I dreamed of becoming a business owner. Then, one day I read an interview with an old  man in a home for elderly people. What the old man said about his past faults and the dreams he had never followed struck me directly. I immediately stopped my hesitation and decided to follow my dream, instead of spending my life as a white-collar worker,” Somkiat recalls.

He says his working experience had allowed him to see the best practices of financial firms, and he knew their requirements. So he decided to open his own small business to develop local software to serve both local and international banking and finance firms.

“Why software? Because we believed software was the business of the future; it was the sunrise business in the IT industry,” he says.

In December 1995, Somkiat left his job as head of CitiBank Private Bank’s Investment Advisory Unit and set up WML with a registered capital of Bt1 million, in warehouse space covering just 10 square metres. The company had five employees who were experts in the financial and technological aspects of the job ahead, and Somkiat’s experience and connections in the financial sector counted as a sound investment     in the new venture.

He set out to develop the company upon the principle that, on a professional level, it would develop and provide nothing short of the best. The first five years were spent in researching and developing the company’s core software product: Bonanza Investment.

He managed the company carefully, with little spending during the first couple of years. Then in 1998, the year after the financial crisis, WML was awarded a big project by the Government Saving Bank, to provide treasury and asset-management systems worth BT 34 million.

“This project fed the company for a couple years and helped us to concentrate on the research and development of Bonanza Investment. The product was finally completed and introduced to the market in 2000,” Somkiat says.

Bonanza Investment supports a wide range of decision tools to strengthen decision-making and investment performance. Investors can simulate portfolios and check the limits via a compliance system. The system can help fund managers, dealers, compliance officers and back-office operators to manage investment portfolios more efficiently, systematically and smoothly.

Along with the development of the company’s core product, Somkiat also hired experts in software development standard to establish the best practices of software improvement. In 2004, the company achieved Capability Maturity Model (CMM) level two, an international recognition of a software company’s maturity. WML was the seventh Thai company to achieve the certification. It is currently in the process of applying for a more recent certification, Capability Maturity Model Integration level five, and expects to achieve the new level.

“WML is the only local player in this market,” Somkiat says. “We compete with global financial software suite, but we are still the market leader in Thailand.”

He says the key to success for local software company is not to compete using the product itself, but to compete using the business process it employs. He always keeps in mind that the best software is not always that with the most accurate computation. Rather, software equipped with better business processes will break down the resistance of prospective customer.

“We have a detailed understanding of the business processes of large enterprises and we know they have a lot of controls. We design our software according to the business processes of large firms, and once large companies find that our software comes with good business processes, they don’t hesitate to buy it,” Somkiat says.

As soon as WML attracted a group of large customer, it became easier to attract other large firms as well as expanding to small companies en masse.

These days, many global financial firms use Bonanza Investment, including CitiBank, Gitigroup, Standard Chartered Bank, Thai Military Bank, Siam Commercial Bank, Deutsche Bank, AIG, UOB Radanasin Bank, Bank Thai, Bank of Ayudhya, Seamico Securities, GE Capital, Asset Plus, SME Bank and Thai Life Insurance.

A tough challenge for the local software company has been building up customer’ acceptance. Somkiat says that if prospective customers don’t trust the company’s people, then let them trust the software.

“We believe in our strength. We can compete with global software because we used to be customers and we know the weaknesses of global software.

“Financial systems in Thailand have particular identifications, such as accounting systems and investment management, that are not the same as any other system in the world. We saw the opportunity and believed in the potential of our market,” Somkiat says.

WML claims Bonanza Investment currently has a 44 per-cent share of the Thai Market. The software manages investments in Thailand with a collective value of about Bt1.5 trillion. The company’s revenue increased at an average rate of 22 per cent per year between 2002 and 2005.

Last year, WML began exporting to nearby countries such as China and Indonesia. It is gearing up to enter Vietnam this year.

“We are focusing on the Asia-Pacific market and within the next three years we hope half of our revenue will come from the local market and half from exports,” Somkiat says.

Last year’s revenue was Bt70 million, all of which came from the local market. This year, WML expects Bt100 million in revenue, about Bt10 million of which will come from export markets.

The company maintains is focus on research and development, along with market expansion. Its research and development budget is around 30 per cent of total revenue.

WML’s achievements include a lengthy list of awards. In 2000, it was named Local Hero Software House by International Data in the US. Last year, the Bonanza software “family” won the Thailand Information and Telecommunications Technology Awards (Ticta 2006). In 2005, Bonanza Investment won Ticta and Bonanza @Risk was the runner-up. Bonanza Investment was also the runner-up for Ticta 2004.

Bonanza Investment also won the IT Princess Awards 2005 – the highest award for a software company in Thailand. The nationwide competition takes 17 months of evaluation by 75 judges over three rounds of judging.

WML has been appointed as a class-A consulting company by the Finance Ministry and received Board of Investment support up to 2016.

The years of careful management and research and development have created a Thai company whose products are internationally recognized as the best by a demanding profession. Its successful expansion into global markets seems assured.