Novensys in Mass Media

In the second quarter Novensys starts the regional expansion

23.03.2008

In July 2007, Novensys announced a top growth of 137%. A fabulous number that would make an outside observer quite reflective. Who would naturally ask himself: „What comes next? Where can they grow any further?" The answer doesn't need to be searched very far, it is quite simple and Cezar Golumbeanu, Managing Partner Novensys, provides it himself: it's time to expand on foreign markets.

You announced in July 2007 „the best results in the company's history so far". Is this statement still standing? In 2007, we recorded a consistent increase in turnover, from 7,8 mil. euro in 2006 to 11,8 mil. euro, meaning 51%! I am certain that in 2008 we're going to record the same growth, if not greater. For this year we estimate a turnover between 18 and 20 mil. euro. It's quite an ambitious forecast, but our target is even more ambitious - to achieve 30 mil. euro in Romania!

The expectation horizon is 2010,2011? No, it's 2009! It is a challenge for us, but we think this objective is as realistic as possible.  Given the fact that we have already been contacted by two investment funds to sell part of our shares, and also by two large, foreign enterprises, which wanted an active presence in Romania by purchasing Novensys.  We analyzed the proposals and came to the conclusion that instead of selling shares or exiting the business, it would be far more interesting to take the company to the „First League", where top integrators from the local market act, such as IBM and S&T.

More and more IT companies think about going public. Will Novensys take such a step? One of the main reasons of going public, whether we talk about Romania or other countries, is to attract funds. We don't need to do that, for now.  The development strategy we can up with and which - I have to admit - is quite ambitious, is achievable with our own strengths.  Of course, I'm not able to make predictions for what is going to happen in 7-8 years from now on.

Once you've entered the „First League", will you reconsider the selling decision? No, because we aim for another ambitious goal - regional presence, referring to the entrance on Central and East European markets. This is only the first step in the long-term strategy of Novensys. The second one is to continue our expansion, but in another direction than the common one - to the left instead of the right, to the West instead of East. For the time being, Ukraine, Russia and even Republic Moldova are very attractive markets for many companies. We think the Western markets to be interesting.  Especially because we have outsourcing contracts and our products sell well in those regions. So, why wouldn't we go and sell the products ourselves?!

But still, when are you planning to take the first step toward expansion? We are going to start the regional expansion in the second quarter of 2008 and make the first steps on the above mentioned markets. We hope to be able to announce the first results by the end of this year.

Will Bulgaria be a priority for you as it is for some Romanian IT companies? Bulgaria is the least attractive county in the region for us. We are interested more in Poland, Hungary, The Czech Republic, Slovakia and probably Croatia. Frankly, Republic Moldova is far more attractive to me than Bulgaria. Of course, we're not going to avoid this country, but we will probably enter the market through a purchase and not by opening a branch office.

You mentioned some countries with fierce competition and where IT investments are considerably larger than in Romania. How do you plan to approach these new markets? With niche solutions, dedicated to certain business areas. This is one of our trumps. Novensys positioned itself as integrator on the Romanian market, where we face - as I said before - important competitors like IBM and S&T, which we try not to copy, but to compete with our own, niche solutions. We manage to cover several functional areas, because we possess a wide software and hardware portfolio and also because of the know-how we acquired in large projects for big customers. Our integrator skills evolved as a consequence of market requests, coming from our customers. We own a lot of niche solutions and a lot of customers asked us to incorporate these tools in one integrated, coherent informational system that allows efficient management. This was the drive for development in the ERP area and thus the concept we now promote on the market - „Novensys for Management" - came to life, which offers an assembly of solutions meant to cover as many functional areas as possible.

What are the advantages provided by this approach? Many large and very large companies, subsidiaries of multinational companies, complain about being swung between integrators, which restrict their skills area, when a problem shows up, abdicating from their responsibility. In this context, our offer - based on the principle of complementarity and integration of „best in class" solutions - is becoming and competitive. Due to the fact that we provide solutions from large, well-known companies, the customer is certain to have permanent back-up, support and  that the implemented solution wont' suddenly disappear from the market. The customer has all the advantages - there is only one unit that ensures support, maintenance, anything agreed through SLAs. At this point we have the business experience to cover this offer and our customer portfolio proves it entirely.

What were the main business lines that sustained the growth in 2007? All the business lines we developed recorded solid increases. But two areas recorded an exceptional growth - the middle-enterprise ERP area, like the Axapta application from Microsoft, where we closed two important contracts and the Warehouse Management Systems (WMS) area, where we extended our portfolio with new partnerships and included enterprise class solutions for completion of our offer.  We are going to keep extending are portfolio , specially because - according to a survey we are conducting together with a research company - we are market leaders in the WMS area. In the field of mobility equipment I assume we have a 65-70% market share.  And since I've mentioned the term „leader", there is another area where we aim for the pole position - CRM, but this is a subject we would like to talk about later sometime.

You promote more and more the image of Novensys as integrator. Are you giving up the image of equipment supplier? I am going to respond again having the turnover in mind, which was represented 30% by services. The largest percent of the turnover - 50% - comes from sales of equipment and consumables, a sector that widely contributes t the company's turnover. The equipment support the niche solutions, which allows us to subsequently extend the implementation made at a certain customer.  For example, the ERP applications, an area where we developed solid skills in the last years - we are number one Microsoft partner in Romania in the first semester, with the largest Dynamics implementations and the largest Microsoft Dynamics AX project, we are Oracle partners - a few niche solutions are pushed forward. Some of these are Warehouse Management Systems and the mobility solutions, where we are leaders in supplying equipment and others. The complementarity of our skills and solution portfolio is an obvious competitive advantage.