Q&A Ivan Bartolo - CEO of 6PM
The Report Company: You operate in both the UK and Malta. How do the two countries compare as places to do business?
Ivan Bartolo: In Malta there is a more pragmatic approach and you are brought up in a very competitive environment. There is a Maltese saying: for every bone there are 100 dogs. Now we say for every bone there are 1,000 dogs, because things are getting tougher.
If you want to be a successful businessman in Malta there are a few things you need to get right. One is your repeat business strategy, because with a marketplace of 400,000 consumers and 50,000 companies if you don’t have a good repeat business strategy you’ll be dead before you even start working. To do that you have to have very good customer service, ethics, pricing, quality; that is engrained on the island.
In Malta the opportunities are smaller than in the UK, but then again in the UK it could take you a year to sell into a hospital whereas in Malta it will take you two months.
Malta is going through the process of maturing. Before, if you came to Malta and you found a pothole, or an old orange bus with a lot of smoke coming from the back, or your luggage took time to come on the conveyor belt, that was part of our culture; it was part of going from a European mindset into a holiday destination where you can relax and just have fun. Malta is no longer that place. We’ve moved on. We have to recalibrate.
TRC: How well positioned is Malta to compete on the international ICT market?
IB: We’ve got people in Malta that know how to programme Java and .Net. Big deal. India has millions of them and they’re cheaper.
My worry is how I win business. I cannot win business in the UK by saying I am geographically better positioned than India or by saying my English is far clearer. And I cannot even tell them because Malta was a British colony and we understand the culture, because so was India. The reality is I go there, I put my hands in my own pockets and I say to my prospective customer: we will give you our resources for the first two months at no cost to you. We are going to invest in this relationship.
We need to become smarter in the way we do things, because there are [other] countries that are coming up fast. There is huge scope for Malta, but there is a huge need for recalibration and a huge scope to rethink.
TRC: What difference has joining the EU made to Malta’s economy and its competitiveness?
IB: The business proposition we had in 2003 [before joining the EU] was fantastic. Then we voted in 2004 to join Europe. I agreed and if a referendum had to be done every week, I would vote yes every week.
But the reality is when you are entering into such a change, you cannot sit back and live in a fantasy that the change is not going to have a big impact on you. Now we’ve joined a union and in that union you have to play ball.
Malta joined the union and it was the best decision ever. Malta has received a lot of funding, it has advanced a lot. But Malta did not understand that same advancement was going to take away something from it, which it had pre-union, and that is competitiveness. Malta can still be competitive, but you cannot compete if your educational system keeps producing skills that grow on trees all over the world, things like Java and .Net.
TRC: How can Malta be competitive in the future?
IB: There are ways. Geography has helped us, history has helped us, our ethos has helped us. We’re not a threat to anyone.
Malta should become a European hub for China and India. The biggest problems India has [when dealing with Europe] are the time zone, clarity of English-speaking and the stigma that, whether they like it or not, exists in the UK.
The reality is that IT projects fail because of people and the lack of communication, lack of ownership, lack of requirements definition and so on. If I am offshoring to India, yes I am saving money because it is cost effective, but am I delivering on time, ahead of my competition? Is the quality what I want? I’m not saying people in India don’t know how to programme. The problem is that the lack of communication and geographic constraints create those issues.
Malta should stop delivering .Net and Java developers. Malta should go into the factories and find the supervisors who are looking at processes, because those people could become good business analysts and process engineers. Send them to the UK, get them to collect the information and it will be them then dealing with the Indian firms on your behalf.
The British will accept the Maltese, no problem. CIOs [chief information officers] in the UK should be thinking that they have all these issues with their offshore contract in India and there is this country called Malta that can take all these issues away.
TRC: What are your international ambitions beyond the UK and Malta?
IB: Our two areas are health and we are very strong in what is called agile/agility. Agile is the way you go about developing business solutions – how you reduce time to market, how you make sure you deliver on time to budget, how you make sure you derive the business benefits, how you make sure you gain ownership, gain commitment. So we’ve got a vertical offering, which is health, and we’ve got a horizontal one.
We’ve sold in Canada, America, Scandinavia, Australia, Tripoli. I would say we are one of the more international IT companies in Malta. People do not really like to get out of their comfort zone.
TRC: In your most recent set of financial results your revenues and profits were down in 2010. How are you faring this year?
IB: This year it’s better. Last year, the reason we went through that whole trauma had nothing to do with the global economy; it was to do with elections in the UK.
Up to 2009, the UK would have accounted for 90% of our business. Last year we did a lot of work in Malta because that was part of our survival formula.
In 2008, when the UK was already hit by the global financial crisis, we still made a profit. In 2009 we improved on 2008. In 2010 it was a completely different story. The election was announced in February, it took place in May and the government started functioning around October. So in effect we had 10 months without orders. Orders have picked up since then. They’re not the same [as before], but it’s picking up.
I’m looking at 2010 as one of my best years because it was a wake-up call. You get very comfortable making money.
This year the company did a rights issue, which was very successful and oversubscribed. Then we acquired one business [IT infrastructure firm Compunet Group] and we’re in the process of acquiring three other local companies. The reason is we need to diversify [although] not outside the ICT arena.