DrukSmart generates around Nu 60mn since inception

DrukSmart generates around Nu 60mn since inception

The company is focused on building the skills of Bhutanese engineers in order to export software to the global market

In 2017, Pema Tshering and his overseas partner Avinash Sanap started a company with an initial investment of about Nu 0.5 million (mn). Few years on and the COVID 19 pandemic hit the world leading to economic recessions all over the world. However, it didn’t affect Pema and Avinash, for they were into a business, which in many ways flourished during the pandemic as it was required. Named DrukSmart, in the last five years, the firm has generated about Nu 60 mn.

“Our focus, when we started in 2017 was mainly on applications, although the servers, software and hardware FDI IT company were there when it came to applications, the dependency was on the international company; therefore we started with the vision to dive into applications,” Pema Tshering says, adding that Bhutan holds a lot of skilled manpower that is yet to be exposed to the world.

The company believes in creating a “Smart, Beautiful Experience for its customers”

The company has exported 65% of its services, with just 35% of its services provided to local needs.  The government’s requirement is to maintain the ratio of 80:20; where 80% of a company’s service is to be exported and 20 % to be provided locally.

According to Pema, the firm is “pretty much moving in that direction.” And if the achievements of the company are to be considered, it will not take long for the firm to reach the 80:20 threshold.

However, according to the founder, some hurdles and challenges hinder the company’s further progress.

“One of the problems is the inconvenience of financial services in the country. For instance, Avinash partner and chairman of the company has his banking accounts linked to his work permit, which is only valid for one year. As he has to constantly travel internationally for business, timely renewal of his permit has always been an issue, leading to malfunctioning of his banking accounts,” Pema said.

He also highlighted that as DrukSmart has to regularly hire international consultants for export businesses, getting their payments processed through Bhutan has always been an issue, as they won’t get a work permit and so a bank account in Bhutan.

“We have not been able to send many Bhutanese consultants internationally because of the limitations on releasing the payments. An individual is limited to only USD 3000 in a year which is not sufficient for those travelling to international locations for project implementation,” he said.

He also mentioned that FDIs in the countries are eligible for fiscal incentives.

However, he said that they have processed for some fiscal incentives with figures of export business and local employment provided by DrukSmart. “We are recently informed that there are no such incentives available as the Fiscal Incentives (FI) 2017 was repelled,” he added.

 Meanwhile, the services that are provided include Enterprise Applications (SAP/ Open source ERPS), Data Services (Migration, Transformation, Governance, Analytics), Management consulting & Business Process Re-engineering, Building future-ready Technology roadmaps, Implementing solutions in Systems & Applications space, Collaborated Partner’s Product/services, (Health, Education, Emerging Technology,) and Manpower augmentation, apart from other trainings.

Another striking feature of the company is its focus on SAP (System Analysis Program development), which is an ERP System practiced and used by MNCs across the globe, while many other IT FDI companies in Bhutan focus on other applications.

“Going forward, we are also planning to venture into machine language, artificial intelligence, and similar other avenues,” said Pema Tshering.

Since the company was established, it has managed more than 56 projects, including both local and foreign ones. The majority of the company’s project is based in the middle east.

 “It’s a strategic approach of DrukSmart to choose the middle east as the oil market is expected to gradually go down, with renewables and IT is picking up in the middle east and as their infrastructure is still growing, especially in terms of the SAP ERP system, we saw it as an opportunity,” Pema said.

Meanwhile, Pema Tshering owns 51% shares of the company, with his partner Avinash Sanap owning 49%.

Talking to Business Bhutan, Avinash Sanap said, “The government was in favor of the proposal; it’s only that whenever something new occurs, there are likely to be many questions and clarifications sought. Aside from these issues, everything proceeded smoothly.”

Another striking feature of the company is that while many IT FDI companies in Bhutan focus on other applications such as web development and others, Druksmart has mainly started SAP (system analysis program development).

“Going forward, we are also planning to venture into machine language, artificial intelligence, and such,” Pema Tshering said.               

 Additionally, the company has also signed strategic alliances with DataCore in India, to explore and deliver projects to international clients in middle east regions.

Tshering Pelden from Thimphu