This is a quote from a founder we interviewed, who had to scale down his business because he had difficulties managing the complexities of a big business.

Based on Biruwa’s past experience mentoring entrepreneurs, many IT company founders have ample technical skill and expertise, however, they face numerous challenges due to lack of adequate management background and experience while scaling up their business. We have seen promising ideas not materializing or startups closing down due to management issues.

The objective of the research is to understand the challenges faced by businesses as they grow, how they respond to those challenges and gaps in their management practice that is impeding their current operations and future growth. We hope that the findings of the research will help new entrepreneurs prepare as they build their business.

The research consists of two different parts. In the first part Biruwa is collecting information through semi structured interviews with the founders and executive managers of IT companies. The second part is a structured questionnaire that will be sent out to the employees of the companies that take part in the research, to understand their perception on the current management practices of their respective companies. Through this method, Biruwa is hoping to get an unbiased insight on the management practices of different companies.

As of now, Biruwa has interviewed 15 companies and is planning to include 5-10 more companies in the research. The sample size consists of businesses operating in the IT sector. Therefore, companies involved in software development, e-commerce, data analysis, IT outsourcing, web design, IT security, e-Payment or digital marketing are the main focus of the research. The sample size includes companies ranging from young companies with small teams of about 10-15 employees and about 2-3 years of experience to big IT companies with over 200 employees and more than 10 years of experience.

From our interviews so far, we have observed a range of challenges pertaining to the company’s human resources, finances, strategic planning, marketing and overall administration. The most prominent issues faced by most IT companies is high employee turnover. In one hand there is a high demand of skilled human resource and the other hand there is an increasing trend of students opting to study abroad. This is resulting in a massive skill shortage in the market. However, some companies emphasized that it was not only the challenge of finding the right skills but it was the challenge of finding people with both the right skills and the right attitude.

Hiring the right kind of people with the right attitude is the key to Leapfrog’s company culture. The VP mentioned that he sees no point in hiring someone with a great coding skill set but who cannot work with the team.

Additionally, the competitive nature of these companies results in high poaching activities where employees from one company get hired by another competing firm. This has been a common issue discussed by most companies. Would a non-competing agreement between firms prevent companies from soliciting each other’s employees or would this be detrimental to an employee’s personal career growth and prospects of getting higher pay? It is open to debate.

The competitiveness and lack of collaboration between companies is not only seen in terms of human resource management but companies are also reluctant in sharing information, experiences and learnings that might be of value to new entrepreneurs entering the IT industry in Nepal. However, creating a culture of collaboration can be very helpful for all the companies to learn from each other’s experience and not repeat the same mistakes.

From this research, we are attempting to bridge this knowledge gap and encourage a knowledge sharing community. This can be useful for not only new IT sector businesses seeking to enter the market but also for established companies to adopt new practices that can improve their business and their overall working culture.

If you own an IT business and are willing to share your experience with the challenges you have faced and how you overcame them, please contact us at info@biruwa.net/014414414 and help us with our research.