Entrepreneurs are famous for their spin. Whenever in the limelight they present awe-inspiring visions and tales of resilience in the face of adversity. Microimage founder and Chief Executive Harsha Purasinghe is no exception. However, in Purasinghe’s case, it’s not all fluff either. “I can’t believe we came this far. We had to pivot so many times,” he reflects about the first two decades in business. By standards for technology companies, Microimage is an old firm. It started a quarter-century ago in 1995, and since founding has been led by Purasinghe. Tech companies don’t scale quickly and sometimes disappear as fast as they arrived. Microimage surviving so long was due to an ability to reinvent itself several times during those first two decades.
“Although we’ve won awards for our work, we have been a lifestyle company,” reflects Purasinghe about how the founding team approached business in the past. During the first couple of decades, Microimage built several products including a Sinhala language font for desktop computers, followed by a local language SMS system, and after the 2004 Indian ocean Tsunami struck it devolped a mobile phone-based disaster warning system, and a radio broadcast automation system now extensively used in Sri Lanka followed by a video broadcast automation software. More recently it launched a human resource automating software.
Few companies will have the stamina to pivot from one product to another over two decades as Microimage has done. Some of Microimage’s early mobile products are now obsolete. Others, like broadcast automation, are no longer a reflection of the future, as streaming gathers market share from radio, television and cable broadcasting. For Microimage there are two reasons for the multiple pivots, one outside its control and the other is its own choosing. The first is the transformation in the technology landscape in the two decades to 2015. In that time the internet went from a research network to something people use every day. Companies and individuals now store and process data on the cloud, instead of on-premise servers. And people access the internet mostly on smartphones, a device that didn’t exist two decades ago.
When it was founded 25 years ago, and later incorporated as Microimage, the internet was only just becoming accessible to people, mobile phones didn’t fit snugly in a pocket and 500MB of pre-installed memory in a personal computer was somewhat excessive. Microimage’s products during the first two decades fell into one of three categories; mobile technology, radio broadcasting automation, and human resources function automation software for companies. As more advanced phones and later smartphones became common, Microimage’s first generation of products became obsolete, but by this time its broadcast automation and HR software had replaced those revenue streams. The second reason for so many pivots is Purasinghe building products he thought were interesting, instead of picking one that can be scaled.
That mindset was challenged in 2013 when the keynote speaker at a global conference Purasinghe was attending prophesied a digital tsunami that’s arriving with the convergence of cloud, mobile, social and data analytics. Platforms like Uber and Airbnb were already disrupting industries and it was becoming apparent these technologies were going to alter the landscape. “I challenged the team that we can’t build just another product, what we really needed to build was a platform for the future,” he says about the resolve to bring more commercial sense to decision making. Of its several products, the digital HR system was one they identified as scalable. But they had to build a completely new product because the one they had was deployed in servers often at client premises in Sri Lanka and with a handful of customers in the Maldives and Malaysia, and a single client in Pakistan. In 2015, three years after Purasinghe’s epiphany about platforms being the future, Microimage unveiled MiHCM, a cloud-based digital HR platform, accessible by employers and employees from anywhere including on mobile phones. A company will pay for a licence for every employee on its payroll, much like it will for Office 365 or Google Workspace. Managers can then administer HR centrally.
Five years after launching, MiHCM is deployed in several hundred companies in 18 Asian countries with over 100,000 employees using the system which is radically different from the one that the company previously offered.
Launching a product to the world
ONE: HYPER-LOCALISE THE PRODUCT
Purasinghe’s first tip for taking a product globally is to have an appreciation for the local conditions in which it’s going to be used. “We have hyper localised the product to suit the respective market compared to our competition,” he says. In Southeast Asian markets like Malaysia, Indonesia, Myanmar, Cambodia and Thailand, the company changes the product to account for local conditions, language, and critically, the legal and regulatory structure.
In any market, it’s up against two types of competitors; a local champion (a homegrown product), and global competitors which include SAP’s Success Factors, Oracle and Workday. Purasinghe says global products haven’t localised to a granular level as they have and that is one of the company’s big advantages. “Not only from a user experience and user interface point-of-view, but also a human resources point of view. You have to localise everything from your payroll to your employment policies.”
I challenged the team that we can’t build just another product, what we really needed to build was a platform for the future
Before the Corona pandemic lockdown, MiHCM won contracts to deploy at the Malaysian stock exchange and a large financial institution in Malaysia. In Cambodia, against global players, the largest financial institution and second-largest conglomerate in that country chose the product. “We project ourselves as an Asian technology company which knows the region better than others according to Purasinghe.” HR systems in the past automated operational processes like payroll and attendance but companies now expect their technology to deliver much more. MiHCM bolts on other functions like performance management, analytics and ultimately a bunch of tools to deliver an engaging employee experience.
Since the software is cloud-based, it has a single code base. As a result, from its Colombo office, Microimage Holdings’ employees can upgrade MiHCM without visiting customers and can rewrite code to customise languages, and include customer requirements and account for legal changes unique to each market. With the older server-based HR product, Microimage had hundreds of code bases to manage as the software was deployed on servers belonging to each client and customised individually.
“Once the platform is reconfigured to a country, we move in to acquire new customers and build the business,” Purasinghe explains.
TWO: WHILE OFFERING VALUE, BE PRICE COMPETITIVE
The company endured a cashflow hit when it commenced marketing the new cloud system. Earlier clients made a one-off payment for the Microimage HR system installed in their servers and paid an annual service charge for maintenance. The new system, MiHCM is a monthly subscription, or what’s known in the industry as SaaS (software as a service). Purasinghe recalls the challenges to minimise the crash and burn, after the launch in 2015.
MiHCM had several advantages against global competitors. Besides the company’s ability to customise the product to suit the market, the product also didn’t include features their competitors offered but are overkill for Southeast Asian companies. MiHCM offered the right mix of features and customisation. However, Purasinghe says the functionality similar to global products that customers need ‘at a very competitive price’ offers them an edge. Annual group revenue is now approaching 3 million dollars. Before the success, the belief had to come.
Purasinghe says success is about a mindset. “I had to challenge our engineer that we can do this, build a product as good as one coming from silicon valley. Now they are on steroids, they’ve broken that mindset limitation. I can’t stop them even if I wanted to.”
THREE: WORK WITH PARTNERS OVERSEAS
To market the product, Microimage partners local vendors who take a share of the monthly subscription income as a reward for sales and maintaining customer relationships. Purasinghe explains the partnerships also extend to consultants for the required domain input in those territories to localise the product. Of late, Microimage itself has started hiring people in some of the 18 markets where it offers the product For several years it’s Southeast Asian sales operations have been lead by its unit in Kuala Lumpur, Malaysia. “We have our staff in Malaysia, and we just started hiring in Indonesia and soon we will be hiring in Thailand and Myanmar too. Its own offices in foreign markets provide sales and technical support.
Southeast Asia has an annual GDP close to $10 trillion and is only surpassed by China for the size of the labour force and GDP. Together with the South Asian market, excluding India, Microimage says the labour force its product can target is approximately half a billion people.
GLOBAL AMBITION
“All this was possible because of the way we architectured the product in the first place. We built this as a platform which we can plugin and localise for any country quickly. It would not have been possible had this not been designed as a SaaS product.” Purasinghe now evangelises the need for Sri Lanka to create more product companies that can go global. “It’s because Sri Lanka is a small country. Of course, we have fantastic engineering talent. But we don’t have enough people to scale IT services like, for instance, India.”
“The other thing is the value realisation is very high for a product company.” Microimage wants to enter a market at a time. “We eventually want to compete in developed markets with the best in the world, but for now, we will focus on the Asia Pacific region until we see similar opportunities in the Middle East, Africa and Europe.”