KBQuest, a software outsourcing solution provider, was founded by a group of IT professionals in the United States in 2000. The company has a unique business structure: headquartered in Los Angeles, with a software developer centre in Shanghai and consultancy support located in Hong Kong. It services multinationals that require a personalised service and are looking for an alternative to Indian software outsource providers so they can spread their risk and increase their supplier choice. With the support of InvestHK, KBQuest recently expanded its Hong Kong office to service an increasing number of Hong Kong and Asian clients that require IT consultancy.

BUSINESS MODEL

KBQuest’s Hong Kong team is responsible for understanding and translating the client’s requirements into a detailed technical specification, including testing and quality assurance and writing the project plan which is all then translated into Chinese for the Shanghai development centre. Once the Shanghai centre, which numbers 800 staff, develops the software, the Hong Kong team carries out further testing and verification before deploying it to the client. The Hong Kong team is also responsible for research and development, studying and testing new technologies and developing new reusable software frameworks to maintain the company’s competitive edge.

HONG KONG VALUE

“We used to do development programming which is the lowest tier of IT work, but we are moving up the value chain as our clients now also look to us for IT consultation service. This has resulted in our profit margins increasing between 30-40%, thus supporting the rapid expansion of the Hong Kong team from 7 to 20 staff,” said Eric Moy, Managing Director of KBQuest. “We did once investigate whether we could shift the Hong Kong work to Shanghai to further reduce costs, but there were sound business reasons why this would not work. Even with training, our Shanghai staff could not undertake the system requirements directly. This is because it requires in-depth understanding of the business process and our Mainland colleagues’ exposure to Western business is relatively limited. Also it’s more difficult for them to travel which our clients often require at short notice,” Moy says.

Moy goes on to explain that the value the Hong Kong office provides to the business is not only as a bridge to mainland China but it is also a profit centre. “Hong Kong is small and compact and there are a lot of great companies and multinational corporations located in Hong Kong, and it is easier to get to speak to the decision makers here than in the US. This makes it much more cost effective to market our brand. For example, we won our clients Wal-Mart, Citibank and Philips in Hong Kong.” As Hong Kong has such a cosmopolitan business environment, it’s also a great place to cost effectively carry out research and development and test business solutions.

HONG KONG HAS LOTS OF CHOICES

Eric Moy was one of the KBQuest founding team members and has lived in the US and Canada before re-locating to Hong Kong. He said “There’s a perception that Hong Kong is expensive, but the answer is yes and no. It is expensive if you choose to live in Central, but there are lots of affordable places in Hong Kong that are close to all the usual amenities and work districts. Yes, Hong Kong is more expensive than China, but in comparison to Europe, US, Japan and Australia, I think Hong Kong is much cheaper — just compare the taxi prices.” Although Hong Kong is very packed, Moy feels there are lots of quiet places too. He has found a house in Sha Tin which is very similar to his home in Toronto. Moy also likes the cosmopolitan nature of the city with a great choice of cuisines and all the shopping your could want. Hong Kong is also convenient and almost crime free.

Moy believes that KBQuest exemplifies the reasons why companies should invest in Hong Kong as part of their international business operations. Although KBQuest is relatively small in the software outsourcing industry, it has successfully carved a profitable niche market as well as winning numerous industry awards from Microsoft, Adobe, Macromedia MAX, APICTA and the Hong Kong Productivity Council, which helps the company continue to grow its business.

www.KBQuest.com