I flew to Belarus recently to be at the launch event of the new IBA Group campus on June 8th. The new campus includes a large new office building housing over 900 team members, a data center, a fitness center, parking, and accommodation.
Of course, travelling from Brazil to Belarus is a long way to go just for a party, but there were some special guests at this event including Sergei Levteev, IBA Group Chairman, Sergei Nalivaiko, Minister of Taxes and Duties for the Republic of Belarus, Cesare Baroni, Vice President for Transformation and Operations, Systems & Supply Chain at IBM, and Valery Tsepkalo, Hi-Tech Park Director.
The IBA Group leaders and VIP guests all participated in a ribbon-cutting ceremony at the entrance of the new campus, which was also captured by a drone buzzing over the head of the crowd. When Sergei Levteev lifted up a symbolic key to the building over 300 balloons soared into the sky.
The new campus comprises these different areas:
1. A 6-storey building with around 900 workplaces equipped with the latest engineering and telecommunication infrastructure
2. A fitness center with a gym, a large game room, fitness rooms, and a table tennis room
3. A data center built in accordance with modern international standards of reliability and performance and using modern energy-saving technologies of operating energy-intensive equipment. The heat generated by computer technologies of the data center is recovered and used to heat the fitness center
4. Three-level parking lot for 400 cars.
The fitness center was impressive, with several basketball courts and facilities for 5-a-side football as well as other games such as pool and table tennis. All modern offices are now finding it essential to offer these spaces where tired techies can escape from their code for a while.
The office was modern and featured elegant transparent elevators that allow passengers to watch the horizon as they ascend to the top floor. It’s also possible to access the roof, where artificial grass creates another area for relaxation.
What I found most impressive on the tour of the new facilities though was the data center. I haven’t been to a data center for some time because most companies I know now outsource this requirement. However this is exactly what IBA Group is offering to their clients, a secure data center facility.
The data center had two completely separate power supplies from different substations on the power grid and they charged up two separate battery units. This allows the mains power to be used even if one section of the city grid fails and if there is a complete failure of the grid then the significant battery power storage allows the entire campus to keep on running for many hours – so the servers can be shut down in a controlled way if there is no chance of the mains power returning.
In most older data centers I have visited, the entire room is cooled, but in the IBA Group’s new data center every rack has fridge-style cooling in addition to the room being cooled. This kept the room impressively cool, even with a large party of guests opening and closing doors. Huge pipes pumped coolant around the facility with the excess heat being transferred to the fitness center.
The launch event was both entertaining and informative. I have worked with IBA Group for several years now, but I was impressed to see that their abilities and scale keep on improving. This campus has only just opened and they already have another that will accommodate another 1,000 people being planned and ready to be launched as quickly as that one can be constructed.
I’m grateful that IBA Group allowed me to attend their launch event. It gave an incredible insight into the ambition of this company. Congratulations for this new campus launch and I wish them all the best for the new launch – when the campus that is still being planned is ready to launch then I’d love to return to see how much further the company has travelled.
by IBA Group for IBA Group
Posted on May 19, 2016
It’s great to see that the Shared Services and Outsourcing Network (SSON) is now celebrating ten years of activity in Eastern Europe. SSON has long been a source of useful research and information on outsourcing and over the past decade their research has formed a useful body of knowledge on nearshoring in Europe.
To celebrate the tenth year of activity there will be a conference in Hungary in October featuring over 65 speakers all focused on the opportunities available within the European nearshoring environment.
Typically with these regional-focused conferences there is a competitive element to the talks, where one region will compete with another to describe how they have more graduates each year, or more skilled IT personnel. This approach is rather tired and ignores the wider benefits of working across many European countries as a whole so it’s great to see that the SSON conference is looking at the big picture for nearshoring in Europe and how it affects different industries, such as finance and HR.
I was particularly interested to see that there is also a focus on how the millennial demographic is changing business in Europe today. This is something I have often spoken about in recent years. The millennials (those born from 1980-2000) have a very different attitude to work and technology because most of them grew up in a post-Internet era – they have only ever known a connected society so they are different as both employees and customers.
Many of the people in this age group are now in managerial positions and are determining where their company should invest. It is therefore extremely important for companies aiming to work with other companies B2B to understand this changing dynamic.
It’s great to see that the SSON understands this change in the outsourcing client and supplier relationship and in particular how this can affect European nearshoring. I look forward to hearing more from the event in October.
by IBA Group for IBA Group
Posted on May 4, 2016
ZDNet published a recent focus on Eastern European technology outsourcing because the recently published AT Kearney 2016 Global Services Location Index suggests that 5 of the top 20 countries of the world for IT services are now inside Eastern Europe.
The top three countries globally are India, China, and Malaysia, but Eastern European countries doing well in the report include Poland, Bulgaria, Romania, Russia, and Latvia. Prague also stands out as one of the cities in Eastern Europe singled out for praise.
There are a couple of very interesting features in this report. First is that the countries and cities mentioned are clearly competing on what they can offer to clients. The focus is on cost-effectiveness and proximity to customers, so these regions are far more worried about how they can add value than offer a low price service.
Second is the awareness from many of these regions that nearshoring may not be enough to sustain a long-term IT industry. There is a clear focus in countries such as Poland, Romania, and Bulgaria that they need to build a complete start-up infrastructure if they are to create long-term success.
This approach acknowledges that new IT companies need to be nurtured and many delivery mechanisms today – such as the app store – bypass the traditional way that IT companies have operated. IT companies can often become product companies rather than just offering a pure IT service.
It’s exciting to see the European technology marketplace maturing and to see that Eastern Europe is doing so well even when compared to global competition.
I have often written here about the potential for Big Data to fundamentally change the way that many companies do business. It cuts across industries and is not just a single strategy, it can change the way that existing companies perform and create opportunities for new market entrants.
This cross-industry application of Big Data is where I think there is the most potential for it to become a game-changer. IT experts rarely got to delve so deep into their industry of choice in the past; they focused on the technology and systems that assisted a company.
Now, with Big Data analysis helping doctors to diagnose patients and helping bankers to fight fraud there is a much greater connection between the industrial application of technology and the technology itself. The technology teams need to really understand the business they are working in.
But this is where the peril also can be found. As companies depend more and more on huge data resources and the ability to intelligently analyse this data we are entering a world where data has an enormous value.
Just look at the Panama Papers data leak. A huge amount of secret customer data from the law firm Mossack Fonseca was leaked by a secret source to journalists and it appears to show many wealthy and powerful people using companies in Panama to hide their wealth – and therefore avoid taxes.
Of course, it could be argued that it’s a good thing that this data was leaked. All those powerful people should pay their tax correctly rather than hiding their money, but imagine Facebook was hacked and every online conversation was leaked, or Google and every private gmail message were posted online? Imagine if another law firm were hacked and details of every divorce settlement they have handled were posted openly online?
It’s almost impossible for most customers to now avoid giving out their personal information when dealing with companies and the data is being collected into enormous databases profiling purchases, preferences, and behaviour. Companies in all industries are now wedded to the possibilities presented by the use of this data, but so few are acknowledging that if they ever lost control of the data it could be an existential threat for their business.
Big Data certainly has benefits, but it’s time for companies to acknowledge that with these big data sets come big responsibilities. The companies that fail to protect their customers will not survive.
Science fiction authors have long predicted a world in which intelligent robots take over the world. Classic authors such as Isaac Asimov even created ways in which humans should interact with robots, predicting that there will eventually be a problem defining the difference between a human and robot. After all, if a robot can learn, is self-aware, and grows in intelligence and human empathy as it ages then how can you define it as “not alive”?
This has created our fear of robots. They are fine if they are just performing repetitive tasks on a car assembly line, but if they can learn and improve then one day they might be better than humans.
But we are not close to that time yet. Anyone who has used the Apple Siri device knows that it can be extremely useful if you ask a question like: “where is the nearest Italian restaurant?” but ask it to define the meaning of life and it will be lost.
However, Robotic Process Automation (RPA) is becoming a real thing in the Business Process Outsourcing area of services. RPA allows the concept of robots to be applied to services – so it may often just be a piece of software rather than a physical robot, but if it performs a specific service then it gets the robot name.
A good example in contact centres. A vast number of calls to contact centres are repetitive and don’t require a human. For example if you are calling your bank to change address or you just need a balance on your account or you are asking your telephone company to recharge your account with some extra data. Basic interactions like these can be diverted to software systems that understand the voice of the customer and react as a normal agent would, except it’s the robot system performing actions, not a real live agent.
What is interesting though is that some companies with a large volume of interactions – like telcos – are finding that they can allow the system to learn. The robot can be given basic instructions, but can learn from every customer interaction, so the robot learns how to fix problems it was not originally programmed to fix and it can identify trends and patterns in the customer enquiries.
The fear for many humans working in areas such as contact centres is that these robots will entirely replace them, but as this Chicago Inno article shows, the robots are actually supporting the human jobs. Humans are performing more valued-added tasks that require insight and an ability to analyse the data being created. The robots can remove much of the repetitive work and can do it faster.
RPA is going to be the next step for Big Data. How can companies learn from all the information they have and then create processes that can intelligently interact with their customers?
It’s still at the early stages. Some companies are using RPA to improve their customer experience, but the likelihood of RPA learning how to run the company and replacing the humans is remote at present.
However, they are getting better. Just imagine where we might be in a decade from now? Eventually we might need to start reading Asimov once again so we can figure out how to integrate the robots into society!
by IBA Group for IBA Group
Posted on March 28, 2016
The Centre for Economics and Business Research (CEBR) recently published new research exploring the size of the Internet of Things (IoT) and Big Data markets in the UK economy with predictions running from 2015 to 2020. These two technologies are expected to add £322 billion to the British economy during this period and although the research is focused only on the UK it can be safely assumed that the effect will be similar in other developed European markets making the effect of these two technologies enormous.
In the UK, the scale of this effect is worth 2.7% of the national GDP and is therefore not just of interest to technology firms, and companies that require technology solutions, these technologies are literally going to change the economy in regions where they are deployed. The opportunities are increasing on a daily basis.
The research indicates that telecoms firms are already strongly adopting both Big Data and IoT solutions, but other industries are catching up and expressing a strong interest in how these technologies can help. Retail banking is expected to overtake telecoms soon for Big Data analytics and it’s no surprise because this is an industry that is being shaken to the core.
The big advantage of improving the use of data analytics is that companies can get to know their customer behaviour better. This means they can adjust their offer to the customer and personalise the service received, all leading to improved revenue and happier customers.
In a business like banking, new start-ups are finding that they can pick a small part of the business, like remittances or lending, and focus on that one service. If they can launch an app offering the service and it is cheaper and better than a traditional bank then they can start growing their market share.
The banks cannot stop this happening, but they can start adjusting their own customer experience so that their existing customers do not desert them for rivals. To make this happen needs information about customer behaviour and that’s where Big Data fits into the story. Knowing your customer needs better insights and technology tools like Big Data analytics and the IoT are what will help you to design how your business is going to work after 2020.
by IBA Group for IBA Group
Posted on March 14, 2016
The analyst firm Gartner recently published their latest evaluation on offshore outsourcing for the EMEA region in 2016. The report paints a positive picture of nearshoring within Europe with labour rates substantially lower than most western European countries.
Gartner found that the Eastern European countries can also compete on their geographic and time zone proximity to other nations within Europe, and on the availability of language skills beyond just English. Countries such as Poland, Czech Republic, Hungary, Romania, and Bulgaria also offer political and economic stability through EU membership and close cultural affinity with Western Europe and the U.S.
What is interesting for companies such as IBA Group is that Gartner did explore the options further east. When commenting on countries such as Russia, Belarus, and Egypt the report says: “[these countries] offer lower labour rates, but entail higher risks concerning legal maturity, intellectual property protection, security and ease of doing business.”
Belarus scores well on several measures that Gartner mention in their analysis, particularly the high level of government support for business and the low local labour cost. The Belarus government has invested in education to create a workforce skilled in IT – it has been growing at 35% per year since 2006. Some of the government incentives include a 0% corporate tax rate and a flat 9% income tax rate – for companies using the Hi-Tech Park Initiatives.
Gartner cites the Payscale index and suggests that a software developer in Belarus earned $14,000 to $16,000 per year based on data from last year. The labour inflation in Belarus is 5% per year and employee attrition/turnover rates are also around 5% per year – both figures are relatively low compared to other European countries.
Most IT activity in Belarus is focused on Minsk, but other locations are rapidly growing and also featuring technology parks, such as in Gomel, Grodno, Brest, Vitebsk, and Mogilev.
The Eastern European nearshoring is well known already, but it’s exciting to see that companies such as Gartner are now seriously covering locations such as Belarus. For more information on Gartner and to request a copy of the nearshoring report click here.
The writing’s on the wall: robots are coming. The latest report issued by the U.S. Council of Economic Advisers shows that if you earn between 20$ and 40$ an hour, there’s a 31% chance you’ll be replaced by a robot in the near future. If you earn less than 20$ an hour, the probability is as high as 83%.
Robotic Process Automation (RPA) is unstoppable. But is it time to start packing and looking for a new job? The abovementioned report states that throughout the years in the past, many workers had been replaced by technological innovations, but this had led them to find jobs with higher salaries, consume more, create a number of new workplaces. This pattern might be applicable to the situation in the future.
Automation is not a completely new trend. The first robots made their way to the United States in 1961, and since then they’ve been increasing productivity and making people’s work easier. Right now, a lot of IT processes are performed by algorithms.
Robots can be both complements and substitutes, and cooperation between robots and humans allows for discoveries that neither can achieve on their own. RPA in biology and medicine is believed to have tremendous potential. RPA in IT provides opportunity to pass all routine work to robots and let humans do the work that require creativity and imagination. Thus, the situation is not as black-and-white as it may seem.
Those employees who find themselves in the ‘risk group’ require additional training to be able to quickly and smoothly move to new jobs. New generations of workers are already aware of the importance of RPA and other emerging technologies, and they are more likely to be adapted for the upcoming tech revolution.
It’s still unclear whether the pace at which the innovation happens will leave a lot of people unemployed in the next year or two, or it will happen gradually to give people time to regroup and retrain. But being aware of the trend might be the best solution at the moment.
by IBA Group for IBA Group
Posted on February 25, 2016
Big Data is one of those buzzwords everyone is talking about, but as I have been saying for some time now, most companies are performing some kind of data analysis on their customers or suppliers and have been doing so for years without ever calling it Big Data.
There does come a time when the data being analysed is so huge and fast changing that specific Big Data tools are required, but the reality is that many organisations are already performing some kind of data analysis that could be termed Big Data – without them even realising it.
A new study from Dresdner Advisory Services backs up my observations. When asked specifically if they use Big Data, just 17% of companies responded yes on this survey. 47% said that it might be used in future. However, 59% of the respondents also claimed that Big Data is “critically important” to their business. Something is wrong?
The survey shows that the definition of Big Data is perhaps one of the problems here. Most companies don’t have petabytes of data to analyse and they therefore are performing data analysis, but not thinking of it as Big Data analysis. If the manager doesn’t think of the problem as big enough then they don’t use the term Big Data.
However there are many areas of industry where this is about to change, largely driven by technologies such as mobile and the Internet of Things. Think of an example such as a retailer needing to create the same customer experience for an in-store customer, as that same customer would receive online.
These problems require data. They also need it to be analysed fast. While a customer is in-store and tracked using their mobile device, decisions can be taken about whether to give the customer a discount code based on their profile. During payment, recommendations for other products can be made based on sales history.
All these processes are easy to imagine, some retailers are getting this sophisticated now, but to make it happen it needs the IT system to be joined-up with data that can be analysed in real-time – allowing the system to take decisions itself.
Another easy to imagine examine is with automobiles. Cars are increasingly connected to the Internet via smart phones and wi-fi. They will increasingly diagnose problems and communicate with the manufacturer without the driver being aware that the car is fixing itself. The amount of data captured and exchanged for this to work is enormous, yet in most cases the customer is entirely unaware of the processes taking place.
So how big is big might still be a question for many, but I think that we are on the cusp of an explosion in data use – analysing this much information will certainly be a part of the bigger picture for Big Data.
by IBA Group for IBA Group
Posted on February 10, 2016
The debate over nearshoring and more remote offshore outsourcing has rumbled on for years in Europe. The debate over voice contact centres was fairly conclusively resolved a while back, with it becoming clear that most clients prefer their contact centre to be closer to home, but the broader IT and IT services market has still embraced all kinds of outsourced model.
However in all the outsourcing predictions for 2016 I have seen the resurgence of the European offshoring model several times. For example, a recent report by the analyst Global Remote Services says:
“Nearshoring will continue to gain momentum in Eastern Europe – nearshoring is fast becoming an option which is seen as being more skill specific for businesses with a mixture of complex, high-end projects as they realise the value in keeping outsourced work close to where the business generally is. Nearshoring in Eastern Europe will continue to grow as it becomes attractive and competitive to the UK market, and also much ‘nearer-to-final-customer’ and ‘easier-to-manage’ versus far-shoring.”
We all know the typical arguments when comparing Eastern Europe to a more remote location, such as India, but I think it’s important than advisors are now focusing heavily on skills availability.
Outsourcing has long been considered a “lift and drop” business strategy, which is how it got the reputation for being all about saving cash. Let’s take a process, lift it out of the business and drop it completely into a supplier and get the same work done for less. That’s the old approach, but times have changed.
The boundary of organisations has become more blurred, particularly when expert skills are needed. Organisations are hired to provide those skills, but they work in the office of the client, with the client team. The client and supplier merge together to create a solution today, rather than the client firing an entire department and dropping those processes offshore.
Outsourcing has become a more mature business strategy and with a greater value placed today on skills and partnership, it’s no surprise that nearshoring is returning to the boardroom agenda.