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CBW, p.38 / All systems go

Systems integrators are changing their approach in response to today’s economic reality. While the demand for their services continues unabated, a narrower focus on cost threatens uniformity at the expense of individual consultants’ skills.

The current economic crisis has altered the landscape for systems integrators. On the one hand the volume of work has increased and jobs are available. However, with businesses concentrating on cost rather than growth, skills are being pushed aside. At the same time, the pressure to create small complex components is making the role of systems integrators all the more vital.

“The recession opened up new doors for system integrators,” said Radim Hradílek, CEO of Logica Czech Republic.“International companies that are large and stable that have remained flexible will be in a better position to engage in new opportunities,” he added.Other businessmanagers share similar views.

New programs are emerging, such as software as a service (SaaS) and network as a service (Naas). According toMarko Bystriansky,managing director of Emeldi Software Services, such budding initiatives are finding many receptive customers during these tough economic times.

However, these new programs combined with software standardization initiatives should theoretically diminish the role of a systemintegrator. If all goes well with the software standardization initiatives all systems and modules should be put together in a “plug and play” fashion. “Well, the reality is that there is still a lot of ‘plug and pray,’” Bystriansky said, referring to the widelyknown problems of getting plug and play to work effectively. Nevertheless, the general opinion is that these software initiatives will still open up new opportunities in systems integration, with a heavy emphasis on business.

So far so good

“Ironically, the volume of work has increased this year. However, with the rise of the slowdown, there is mounting pressure from our customers on the rates and costs of projects,” Bystriansky said. The workflow has increased for other companies as well.

“Since the dot-com crash in 2002, we havemore than doubled our pretax income and free cash flow, and more than tripled our earnings per share,” said Aleš Bartůněk, general manager at IBM Česká republika. The first quarter of 2009 has also been successful for the firm. According to Bartůněk, business has flourished thanks to their long termstrategies. They have separated from the commodity business and shifted focus into software and services. In addition, the firm is concentrating on cost and expensemanagement, Bartůněk added. Other companies have also made changes of strategic focus in order to increase their work supply.

A similar shift in focus is taking place across the industry. “In our Central and Eastern Europe region, we are doing very well,” Logica’s Hradílek said. The company adopted an effective new strategy last year that focused on public administration and utilities. “We have succeeded with quite a few customer wins so we are not going to be short on work, at least for this year,” he added. The fact that the company has remained flexible and has international backing has also helped. “We are able to agree on prices and scope of work with customers, or create local alliances that are necessary to win some orders,” Hradílek noted.

During any economic downturn, businesses and companies will inevitably pay more attention to their costs as opposed to growth. According toHradílek, this can result in situations where specific consultants and their skills are not properly taken into account. “Instead, anonymous consultants of a particular type are required, making way for efforts to increasingly commoditize our business,” Hradílek said.

“I don’t think this is the right way to go, as the clients following this approach end up paying more for their solution than if they had hired more expensive but betterskilled consultants. This is a problem that needs to be addressed now,” he added. According to Hradílek, Logica is a highly decentralized company, thus they do not have tomaintain a huge work force and pay high overhead costs like many of their competitors. This enables them to be cheaper while maintaining high quality.

Increased pressure

As technological advancements continue, doors continue to open for systems integrators. The obsession to create the smallest component carrying the maximum functions is at its highest. “Customers these days have less and less time to keep up with technological advancements; they need to concentrate more and more on their core business,” Bystriansky said.

As the pressure to integrate complex and disparate systems has grown, the value of the systems integrator has increased. “Systems integration is an essential part of the infrastructure dynamics taking place in response to today’s business climate,” Bartůněk said. For Bartůněk, an underlying design of flexible, secure and seamlesslymanaged infrastructure will help clients integrate, interconnect and grow their business.

Whether or not the technology involved is the most vital aspect is open to disagreement. “I don’t think it is about the technology, but about the good management of the specific project,” said Jan Přerovský, CEO of Asseco Czech Republic. According to Prerovsky, the firm provides quick solutions not only to their clients, but to their clients’ customers as well. They do this in a range of sectors including information technology operation, communication and data analysis. “We are not dependent on any sector,” Přerovský said. However, Přerovský indicated that Asseco is particularly interested in the public sector given the number of e-government projects currently in the works.

Author: Jaishree Kalia