Most companies venturing into China have to set aside large chunks of cash to pay for establishment costs. But Hong Kong-based professional information technology services provider, Automated Systems (ASL), is doing it the easy way. It is reducing upfront costs by expanding at the same rate as its customers.
“Our strategy is to follow the customer,” said Edward Lau, chief financial officer and executive director of ASL, who admits that expanding across the border to China is not a simple task.
“We evolve with our customers and follow them to wherever they may go, providing the services they need for their agendas. There are many Hong Kong-based companies that are expanding aggressively into China and we follow them,” he said. In this way ASL believes it isn’t “going somewhere new” but rather evolving with its clients.
ASL is a veteran in the information technology business with an operating history stretching back more than 37 years, and Lau has been with the company for 14 of them. Originally a provider of hardware for its customers, a maturing information technology industry has seen tightening revenue margins from hardware sales. Leveraging on its experience, the company made a transition into providing services and solutions with its workforce of more than 1,000 trained professionals.
Lau joined the company a year before the handover of Hong Kong sovereignty. “I was here for one year before the company listed [in 1997], and I was initially responsible for organising the project,” Lau said. Over the years, he has witnessed ASL’s transition into a leading information technology service provider in Hong Kong. “Demands change as time ticks on. With our history, knowledge and footprint in Hong Kong we can be flexible and are able to stay close to the market. We are constantly alert and always try to precede the market and our customers and be prepared when business opportunities arise,” Lau explained.
The company is in the early stages of overseas expansion strategy; 90% of business revenue is still generated in Hong Kong. To facilitate this, Lau streamlines ASL’s treasury operations through a single bank and is preparing to implement an electronic banking system, also provided by the same bank.
Lau reckons that using a single bank is the best strategy when first entering a new market. “At such an early stage of development in the overseas market, it is in our interests to work with a single bank. The level of risk depends on the stage of development; it is very difficult to have several banks to serve different needs. Of course, for the daily routine needs such as payments and receipts, we work with local banks. The international banks say they are local, but they can never be as local as the local banks.”
Lau is also in the process of setting up treasury hubs in Bangkok, Guangzhou, Macau and Taipei. “If we have a centralised system, we will be able to allocate resources based on real-time needs. There is less chance that we will have resources sitting there being idle waiting for the business opportunity to come,” he said.
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