How software start-up Deyatech eyed an opportunity to help corporate China secure electronic documents - and share them in the event of an epidemic shutting China down

----By Mark Godfrey

It's every company's nightmare - the employee you let go erases valuable company information or files. Given the high rate of employee turn-over in China, it happens a quite a lot here, says Da Li, whose Beijing-based company Deyatech offers software that protects company documents while allowing employees to share access over Internet-based tools. "Many of our clients have had experiences with employees erasing their entire computer information before leaving," says Da, who founded the firm in 2004 with sister Yanning.

Lost or stolen information means money and market share. Seeing that an increasingly sophisticated Chinese corporate world was starting to worry more about securely managing and sharing electronic documents, Deyatech bought the rights to HOLA, a cutting-edge software system designed in the US and developed in India. New economy watchwords like outsourcing and transparency mean Chinese companies have to get modern about managing documents, says Da. "We saw a vacuum in terms of the system tools designed to help firms do this in China."

Although collaboration software has been around for a while in other guises, the market is not mature, according to Yanning. "A lot of the systems out there are variations from Management Information Systems (MIS) or Office Automation (OA). Even instant messenger tools can be classified as collaboration software. Our focus is on information management using collaboration tools. We are the only system based in China that is designed around real collaboration concepts."

After fine-tuning the software with the original developers, the brother-sister duo gradually moved the R&D centre from India to China and launched the localized system of HOLA in September 2004. Deyatech is selling because it's plugging a need, says Da. "When it comes to software and technology, you have to offer something that is unique from what other technologies are offering in the market. We have that."

In case of emergency

Geared towards SMEs, the software costs a fraction of larger systems like Lotus Notes, which typically costs up to US$500,000 to install in major organizations. Customers so far include law firms, consultancies and design companies. "Documents are their lifeblood," says Yanning. "It's their intellectual properties and their creative work. So client and project confidentiality is very important for them."

Among firms targeted in the company's sales drive are companies with multiple locations and outsourced suppliers, consultants. The brother and sister team ploughed their own personal investment into the venture and today employ 14 fulltime staff at the company's Beijing offices. With a Bachelor of Commerce from the University of Alberta in Canada, Da Li adds management skills to sister Yanning's technology experience. Trained in biochemistry and engineering, an involvement in several successful IT start-ups gave Yanning, 32, a good nose for the Chinese IT market. A self-confessed dunce with technology, Da reckons his two-thumb approach to gadgets is good for the company. "If I'm convinced that a particular tool or function is good and it is worthwhile for a company to have, then going out to the customers will be easier."

An upcoming launch of the latest version of HOLA may be in good timing. If the fears are confirmed and the world is gripped by a bird flu epidemic, firms will have to connect employees electronically. Collaborative software systems are available but firms should act today, says Da. "All systems take time for users to adapt. The actual chance of an outbreak might be low. However, the chance of employees being advised to stay home, as happened during SARS, is higher. A company needs to be prepared to deal with this disruption before the situation arrives."

Perhaps with an eye to a bird flu-like scenario, domestic and foreign firms have been buying HOLA in equal number. Chinese companies are even more conscious of confidentiality and protection of secrets than multinational counterparts, reckons Da. "Keeping sensitive documents from people and tracking of who has read documents are important to them. I think they are more sensitive to both of these than their multinational counterparts. Multinationals are generally more open with information flow internally. They spend more time and money on hardware security and backup systems to prevent information loss."

Some Chinese firms hold on to information too tightly - and it's holding them back. "This becomes problematic when they have to increase efficiency and customer service to compete internationally." Rather, Chinese companies must spend more time and money on document security, suggests Da. "They often keep everything in paper filing cabinets. Electronic documents are stored all over the place, on desktops, laptops and USB discs. Or there might be rudimentary file servers with little security."

Whereas in the beginning it was easier to sell to foreign companies, Chinese firms are catching on, says Yanning. The SARS epidemic in 2003, after all, lent a sense of urgency to corporate China's need to be able to collaborate and work effectively away from the office. Many firms relied on email to continue with work. "But a robust software system that allowed collaboration between off-site teams was not available in the SME Chinese market in 2003," says Yanning. "Most companies in China are not that much farther ahead now than three years ago. You would be surprised how many companies are still only running a shared file server as their document management system and using email to pass around attachments."

Working flexibility

Still, cash-conscious SMEs are often slow to see software like HOLA as anything other than a luxury. The firm is not just selling a system but also selling a concept of management, says Da. "We are trying to marry what the market wants with some concepts of effective management." Allowing staff to collaborate easily and securely on projects saves time and money, he adds. "Companies with lots of projects but not enough staff to do them get excited when the system can help improve business processes, like protecting proprietary information from being stolen or lost and allowing teams in separate cities to work together seamlessly."

Deyatech's system will give people more flexibility on how and where they work, but Deyatech, like other firms, keeps an office - and doesn't see itself or other Chinese businesses expecting staff to work from the kitchen table. "But I think the need will increase where they do have the option of staying home and not losing too much on productivity," suggests Da.

Productivity can hold even during epidemics like bird flu - and in less dramatic circumstances. Proof in point, Yanning will use Deyatech software to liaise with the company office when she goes on maternity leave shortly. "It is more than just working from home. People will need to be more and more mobile. People travel, expats go back to headquarters in Europe and the US."

Aside from cost, hesitation usually comes from change in user habits. "There is always resistance when people need to do things differently. But in our experience, after a period of time of adjustment, people become more productive than before. To have the willpower to push through the initial adjustment period will depend on the leadership of the company and how much perceived gain there is with a new system."

Fitting for a firm selling software to help other businesses manage themselves better, Deyatech outsources all non-core business work. "We want to stay lean in the first two years to build a strong foundation," says Da. Being bilingual and immersed in both Western culture and Chinese culture has also helped give the firm an edge. "We are trying to bring forward a system with concepts that were first used in the West into China. In this process, you have to be able to be able to think like and understand the different cultures."

A Western eye for customer service and cutting-edge technology will help the firm fulfill an ambition to be the number-one document management collaboration company in China, Da is betting. A sign that things are moving in the right direction, Deyatech recently hired new R&D and customer services staff. "We are at the front of the pack on technology and we are working hard to maintain that position."