How NEC is transforming its business

Step into most airports and you will likely come across an NEC system used by immigration officers or automated kiosks to verify your identity or capture your fingerprint. These and other public safety systems continue to be the cornerstone of NEC’s business in Asia-Pacific, contributing a significant portion to its revenue in the region.

As its technology is used to support essential services, the company has been resilient to cuts in IT spending during the pandemic, recording “low double-digit” growth over the past two years, according to Teh Chong Mien, managing director of NEC Singapore.

Teh said the company continues to enjoy a lead over other suppliers of public safety systems, thanks to its hardware pedigree and innovation chops, including a centre of excellence for public safety and biometrics technology in Singapore.

At the peak of the pandemic, NEC systems that combine biometrics with thermal sensors developed out of Singapore were deployed at Hawaii’s airports to screen passengers for fever.

“The real advantage when we do a public safety solution is the biometrics product itself,” he said. “We remain number one in many areas, whether it is facial, iris or fingerprint recognition, and we continue to invest in R&D.”

Even with its market position, NEC, which started in Japan as Nippon Electric Company in 1899 to manufacture and sell telephones and switches, is not resting on its laurels.

In recent years, the company has diversified into other areas, going into an electronic know-your-customer (KYC) project with a large Philippine bank and offering consulting services to help organisations such as Resorts World Sentosa, an integrated resort operator in Singapore, to improve visitor experiences.

“How do we develop super apps and reach out to visitors before they land in Singapore and still connect with them after the visit? That’s the kind of user journey we worked through with the client to see how they can capture the imagination of their customers.”

Then there are the deep tech capabilities like quantum computing that few companies possess. While NEC’s quantum knowhow is being developed out of its mothership in Japan, Teh said the company will look at how it can bring some of that “top notch technology” to other parts of the world.

“If you look at what’s going to disrupt the market and shape the future, quantum is one area you can’t underestimate,” Teh said, adding that the intellectual property that NEC has developed in quantum computing will also help to futureproof its business as biometrics technology becomes commoditised over time.

In some cases, NEC is not building new capabilities from scratch. In 2018, it bought Denmark’s KMD, an e-government specialist that was involved in the country’s digital government initiatives. Some two years later, it acquired Avaloq, a Swiss financial software company, to gain not only a digital finance software portfolio, but also domain knowledge in financial services.

Another area that NEC is planning to make a bigger push into is sustainability. Amid the Greenwashing that has been going on of late, the company wants to keep things real.

“We’re developing an application that will take care of all the electric vehicle charging stations, so a lot of things we do will be very much application and software driven,” he said. “We will start small, scale fast, and we are still in the exploration stage with different clients in transportation and utilities.”

In Singapore, NEC also has a mid-term plan to support Singapore’s smart nation journey. These include NEC Labs Singapore, an applied research lab with a mix of talents such as solution architects and system engineers to develop AI applications.

Teh said it is also working with local universities to recruit young talent and is planning to launch a corporate venture that will have the “freedom and space” to take emerging technologies to market.

Underpinning the transformation that NEC is undertaking is a roadmap that details areas where it needs to transform faster than others while being mindful of its employees’ aspirations.

“We are very mindful of what to transform, and what we can sustain and enhance,” Teh said. “While financial performance has to be there, it’s not deterministic and that defines us as a company. We believe, first of all, in communicating with our colleagues to understand where they are in their careers, and structure and design jobs to suit their lifestyle.”