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Press Room, 25. September 2011

Romsys increases by 80% and leads NFG in pole position on the region

During 2007 and 2008, Romsys activity was marked by the entry into New Frontier Group and, subsequently, by the appointment of Horatiu Berdila in CEO position. The combination proved successful, and today, Romsys turned into a modern company, flexible enough to win market share at the expense of main competitors and powerful enough to record a turnover increase by up to 80% in the last two years.

Market Watch:  Your arrival as CEO Romsys coincided somehow with the company’s entry into New Frontier Group. What were the main changes undergone by Romsys in these years?

Horatiu Berdila: Traditionally, Romsys was as one of the top five IT&C companies that delivered high quality projects and this was one of the reasons why I accepted to by appointed as CEO. However, the company didn’t excel in terms of commercial relations. Therefore, the first measure taken was to improve trade relations with partners. Restructuring the company took 2 years, but it was done gradually, without sudden movements, mainly by changing internal processes and opening to the market. Today, Romsys is no longer a heavy and large machine that moved slowly, and the internal changes we have operated in these last years have brought flexibility and openness to the company. We started working with new partners, in order to approach new technologies. On the other hand, we changed the approach at employee level, and applied common group structures, such as performance indicators and performance management, and all this proved functional. Applying these common structures is carried out more than 80% in the whole group, and this is the necessary step before IPO.

After this good evolution, which are your managerial objectives?

Romsys results in the last two years are good in comparison with market development, but I report to Romsys values recorded in the past, when, in 2004-2005, the company ranked second in IT top companies. My managerial objectives are to maintain the economic performance indicators, to constant develop the skills of the company and its partnerships and to maintain a high level of flexibility. As a personal goal, I am concerned to return to the market position held by Romsys in 2004-2005, because I always report to this period of time and I think that this is the advantage of a company with relevant history.

What was Romsys main benefit from being member in New Frontier Holding?

Romsys motivation for entering in New Frontier Holding is represented by the market limitations as growth opportunities. It is difficult to grow organically without having a large portfolio and a sufficient large market, you need references, certifications, team with great experience etc. At group level a much richer experience is creates and this is useful for all member companies. An obvious advantage is sharing references and specialists. It is very important in convincing a customer that you have good references in similar fields of activity and on relatively nearby markets. References value exceeds local markets and there are group companies that use intensively Romsys references, especially for convincing customers with international presence. The main message is that if name like E.ON, Distrigaz South, ApaNova etc. agreed to work with a Romanian integrator; this means that it has delivered quality projects. Similarly, we have consultants operating in three different countries, through companies in the group. Constantly, we are trying to migrate skills from one country to another, and to replicate the portfolio. It is not easy because each group company has its own strategy and objectives, but it is infinitely easier than bringing these skills from completely foreign companies.

Official figures show an 80% increase in turnover for the last two years, despite the negative development of the local IT market. How you supported this good development?

Increases in 2010, both as income and as profitability, relied on large extend, on attracting new customers, because we won market share from less visible bankrupt competing companies. I do not mean the legal sense of the word, but from my point of view, in bankrupt companies registers even those that reduce the number of employees from 150 to 20. It is obvious that such provider has some problems and that is keeping only the necessary staff to ensure maintenance for the existing portfolio. Because some of our competitors have experienced such restructuring, for Romsys, with similar skills and certifications, was easy to take clients, project, etc. It was a win-win situation that sustained our positive evolutions.

However, we cannot say that last year’s results were based only on new customers, but we managed to do very well what in specialist terms is called farming. We increased the opportunities for existing customers, primarily on utility and banking verticals.  For example, many customers in the financial sector have oriented to retail, an activity highly dependent on IT and communications, for which we have provided different solutions. In addition, we have targeted also sales of new technologies form leading vendors. I refer mainly to Exadata and Exalogic products from Oracle. Our customers are running heavy systems, with large databases, and Romania is still a large market, and even if these technologies are very expensive at this moment, for sustaining critical processes and applications these are the ideal solutions. These technologies are also recommended for public institutions that are intensive computing power consumers.

Is Romsys getting close to Oracle?

Currently, beyond the traditional SAP business, where we have the largest team of consultants and some of the biggest projects on local market, we apply the real concept of an integrator. An integrator does not focus solely on 1 or 2 products, but is investing in multiple technologies, from critical infrastructure to business applications, in order to be more competitive than other companies to manage a complex project. The integrator’s advantage is represented by these multiple capabilities, low margins and the ability to meet a wide range of customer requirements. Therefore, in 2008, we started closing up with Oracle, and in recent years the relationship tends to have the same intensity such as the relationship with SAP, which developed in a much longer period, in 17 or 18 years. We gained skills and qualifications, we became Gold Partner and especially we generated together important projects. This is indeed a performance from my point of view.

You remembered Exadata and Exalogic, Oracle’s latest technologies available only through top partners. What other competitive advantages are making Romsys offer more attractive?

As the number of integrator operating in Top 100 companies is relatively small, there is always the strategic question “how we differentiate?”. Each player creates its own competitive advantage in a strategic area, and Romsys decided to develop some niche skills on business applications. We distinguish ourselves by a team of Subjects Matter Experts (SME) professionals, which not necessarily know IT, but the client’s internal processes, and which can shape and offer business advice applicable with IT technologies. By this approach, we do not wish to “kill’ our customers with new technologies which they do not understand, but to offer support in achieving and improving economic indicators. We provide business consultancy and information technology for almost a year now, and it proves to be an inspired solution. We do not compete with the big names in consultancy since these companies operate at a macroeconomic level. On the contrary, together, we develop collaborative partnerships.

Cloud computing is another technology/concept that IT industry promotes it heavily. You see this concept applicable for Top 100 companies?

The answer is difficult and depends on the context. However, for such companies, in addition to costs, safety will always be first. From this point of view, even if this technology provides flexibility and reduces costs, cloud computing will not provide the necessary security requirements demanded by some industries.

What is your opinion on local market development in the following months? Do you have an estimate for 2012?

In the first half it was a positive trend. Romsys, acting mainly in Top 100 companies in Romania, though frail, you can feel the economic growth, even though people will probably feel it next year. There are progresses in agriculture; exports had an upward trend which will lead to a good future semester. I do not think we will register big jumps, so we need to be mild optimistic.

Therefore, the forecast for the end of 2011 is relatively simple, but very much into account with the economic situation in the region. If the economic evolution will be normal, Romania will achieve a GDP increase of 1.5-2% and Romsys will close the year with a 10% increase, according to initial estimates. All this depends on the political and economic development in the European Union. We are also ready for a less favorable scenarios and I think that we are among the companies that have understood the message from the first crisis wave. Any other forecast for 2012 is hazardous.

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