It all began with a crash by David Tan, Star, 12/10/2002

The Star Newspaper, Saturday, October 12, 2002

KARENSOFT Technology Bhd, enroute to a listing on the Kuala Lumpur Stock Exchange Malaysian Exchange of Securities Dealing and Automated Quotation (Mesdaq) next month, might not have come about had it not been for a three-month-old computer that crashed. Executive chairman and chief executive officer Chee Chong Hwa, who had no formal training in systems programming and became acquainted with the world of information technology only at a later stage, had in 1988, bought a computer to help in his then company’s work. Penang-based CH Chee & Associates (CHCA), offered services in bookkeeping, audit, corporate secretarial work, and taxation.

Chee trimming the plants in the office“Although the computer had a three-year warranty, it crashed within three months,” Chee recalls. “The technician sent in for support spent a few hours reading the manual before he could fix the problem. “As I was used to self-study during my accountancy days, I picked up the manual and started to read. Before long, I had taught myself how to operate the PC and discovered to my delight that I had an aptitude in computing. “I even learnt how to write DOS menus and developed a Lotus 123 macro template to prepare and print audited accounts and tax computations for my customers. I was fascinated with the computer and spent so much time with it that my friends used to tease me about it.”

According to Chee, when the Copyright Act came into force in 1988, he took up a dealership in a locally-developed accounting software to continue doing computer-based bookkeeping for the company’s growing number of clients. “We actually sold a few copies of the local accounting software and that’s when customers started to call for technical support. Being a non-programmer then, I called the dealer for support,” he remembers. “But after a while, I was forced to track down the developer. He told me that his software was written in Clipper, then the best programming tool for the DOS platform. “I then visited an old friend, Andrew Choong, who explained to me that to write a Clipper software, one must write source codes, compile the source codes into object codes and then link them to an executable file. Honestly, I had no clue as to what he was talking about. “That was when I went to town and bought all the reading materials I could find on Clipper programming. I was simply fascinated and within a short while, I could solve my customer’s technical problems.

By the way, Andrew always complained that he spends a lot of money on programming while I actually make money from programming,” he says Chee says with the programming skills acquired in 1988, he developed the Karensoft Fixed Assets Register (FAR) software in 1989. “FAR was released to a Taiwanese company, and it is still using the product till today,” Chee proudly says. According to him, the name Karensoft was chosen as a brand name to reflects the following values: K - Killer A - Applications, which are R - Robust E - Elegant (user-friendly but powerful) N - Network-ready (Internet, extranet and intranet).

Karensoft has come a long way since. In 1996, Chee developed the Karensoft MRP2 (Manufacturing Resources Planning 2) software for DOS, which was awarded pioneer status by the Malaysian Industrial Development Authority, Ministry of International Trade and Industry, and Ministry of Finance. Chee says: “In 1999, the Karensoft MRP2 for DOS was written for Windows under the name Enterprise Resources Planning (ERP) 2000. “Our latest product is Karensoft ERP2, which comprises e-biz solution for sales distribution, materials requirement planning, logistics management, planning and production, financial accounting and fixed assets, human resources information, and customer relationship management,” he adds. Presently, Karensoft has shareholders’ funds of RM 6.6 million as compared to it’s share capital of RM 3.9 million as at June 30 2002.

Chee's favourite past time is bowling. 'I started bowling in 1984 and I am a past vice-president of the Penang Tenpin Bowling Association'

It owes its impending public listing to an angel investor and MSC Venture Corp Sdn Bhd (MSCVC), a subsidiary of the government-owned Multimedia Development Corp. It was the source of funding from the angel investor and MSCVC that enabled Karensoft to apply successfully for a listing on the Mesdaq, says Chee. “I had wanted to take Karensoft to listing on the Mesdaq in 1997,” he says. “At that time, I had even drafted a five-year plan to meet the listing requirements. But because our paid-up capital was too small, our merchant bankers advised us not to waste our time.” Chee then mortgaged all his landed residential properties to raise funds for Karensoft. “The capital injected into Karensoft, however, was still not sufficient,” recalls Chee. “In 1999 I managed to rope in a total of RM1.2 million in investments from a Penang-based banker, who had earlier expressed interest in investing in Karensoft. “In 2001, MSCVC took note of the fact that Karensoft was one of the finalists for the Asia-Pacific MSC IT Awards. “Its chief executive officer, Sarina Karim, then approached us with an interest to invest in Karensoft. “We, of course, seized the opportunity and said yes,” Chee says, adding that MSCVC poured RM2.3 million into Karensoft.

The funding from the angel investor and MSCVC enabled Chee to establish, in April 2000, the KarenSoft Institute of Technology which was set up to train users, trainers, and business partners known as Certified KarenSoft Solutions Providers (CKSPs). CKSPs are either systems integrators or mid-sized accounting firms. They have to be certified in KarenSoft products before they are allowed to market, sell, and implement KarenSoft enterprise resources planning software. Karensoft presently has 12 CKSPs, mainly located in areas where there are no Karensoft regional offices, such as Kedah, Perak, Kelantan, Malacca, the Federal Territory, Selangor, Johor and Sabah.

Chee says the funding also gave Karensoft the opportunity to participate in occasions such as SMI Malaysia’s One-stop Solutions Event, take part in the MSC-Multimedia Expo 2001/02, and go for aggressive national advertisement to promote Karensoft products. “The strategies, implemented as a result of the capital injections, had a significant effect on Karensoft’s performance for 2001. “Despite the slowdown in the electrical and electronic products trade last year, we still managed to increase our turnover by more than 50 per cent over that achieved in 2000,” Chee says, adding that the turnover for 2001 was RM2 million, compared with RM1.3 million in 2000.

He credits Karensoft chief operating officer Khoo Ping Ping with playing a key part in the success of the company. “She is primarily responsible for the high customer retention rate of more than 90 per cent,” he adds. Khoo, a pioneer staff of the company, is responsible for the day-to-day operations, which include managing human resources, software support, and customer relationship.

Chee says Karensoft will focus on medium- and large-scale enterprises that have a budget of between RM100, 000 and RM1 million for upgrading their information technology infrastructure. “Many companies are realising that with the Asean Free Trade Area around the corner, the only way for them to lower their cost of production is if they equip themselves with enterprise resources planning software,” he adds.

“As a leading software solutions provider in the country, our market share is expected to increase due to the awareness of the importance of enterprise resources planning software.” Chee says the RM150 million e-manufacturing grant introduced in Budget 2002 has also spurred small- and medium-size enterprises to purchase enterprise resources planning software. “Following the implementation of the 2002 budget, we received a substantial number of orders for our software from medium- and large-scale companies wishing to make use of the e-manufacturing grant.”

Surfing the internet during his leisure timeKarensoft’s enterprise resources planning software costs between RM100, 000 and RM500,000. “We provide after sales services on training and use of the software,” adds Chee. Married, with four daughters, Chee’s favourite past time is bowling. “I started bowling in 1984 and I am a past vice-president of the Penang Tenpin Bowling Association in 1997 and 1998. “I even have a bowling web page, How To Bowl A Perfect Game, set up in 1996 at www.jaring.my/cch/people/cch/wh03000.htm,” he says. By DAVID TAN