Flexibility is the key. Rapid changes in the IT industry

Date: 6.11.2023

Interviewees: Michał Wasielewski, Szymon Włochowicz and Piotr Baradziej

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Economic slowdown and digitalization

Michał Wasielewski: It is estimated that by 2029 the demand for software development services will rise by 22% yet in the media the coverage is still about crisis in the IT industry. Where does duality comes from? How does distillation look right now? And how do you see the future?

Szymon Włochowicz: Well, that is a very interesting question. I think there is actually no discrepancy between those two states, because first of all we are living in the times that the digitalization of economy, digitization of companies it's still ongoing. So the demand for services, for new technologies, for new solutions that would enable them enterprises to work in a more digital more efficient way. We’ll grow and the digitization, it's the revolution that cannot be stopped. So the estimation that the demands will it services for IT be growing it's perfectly valid and it will happen. On the another side, we need to look at the broader economy, and what is going on in the world global economy. In the past few years there were several events that have caused a lot of disturbance in the in the global economy. First of all the covid epidemy, than the war in Ukraine and right now we are in a very unstable economic times and looking at the macroeconomic terms of global economy. There are many indications that the economy is slowing down, that the growth we were used to for the past years it's not happening right now. So it should be no surprise that also in the it industry, the growth that were so much used to especially during pandemic, it's not happening right now. So I would not be talking about the crisis. I will be talking that the IT industry is the part of global economy that currently is undergoing times of great uncertainty and the IT industry has stopped growing by the insane numbers that was growing before. Yes, of course, there are a lot of information about the companies that are slowing down, some of them are also laying of people. There is a huge debating in the US about big tech companies. However, what is often omitted in this information is that, the comparison of the current state of, for example, employment of those companies with the state before the pandemic. Because if you compare it, you would see that what's going on currently it's only, I won't even call it, a minor change compared to this huge growth that was in the pandemic times. Of course we need to be very aware of the global situation, and we need to look for the risks, and it’s like nothing at all is happening. But as I say, both of the statements that you mentioned are correct. The demand is growing, but the development of IT services, IT companies, in not as fast, as humongous as we were used to especially during the last two years.

The long-term impact of the pandemic on IT

Piotr Baradziej: This covid situation that Szymon mentioned, and he mentioned at the beginning that the covid pandemic contributed to the fact that the number of services and the business requirements decreased, but in the same time, few sentence later, he mentioned that pandemic contributed to growth of IT services. And this is interesting fact because at the very beginning, for first six months, businesses across the globe were panicking, because they were simply not sure what to do and how this pandemic will impact their money in cash flow and revenue flows. But after six months, just after six months, they were able to adapt, so they adapted rapidly, and the demand went back or even went higher on the ranks. So I think that, this is the same, so I perceived that as a temporary hiccup at the market and in a few months or maybe half a year, I expect this would go back to normal or even increase.

Customers demand flexibility

Michał Wasielewski: So both of you mentioned to that we live with very uncertain times and what in those times of uncertainty clients expect from you from IT companies?

Szymon Włochowicz:Well there is one very obvious answer. That very obvious answer is that if the times are a bit troubling, and if there is uncertainty in the economy, the customers expect flexibility, and the response to uncertainty is flexibility. So if you are not certain about what will be going on in the next few weeks, few months, few years, then we need to be more flexible in order to adapt. And the customers come to us and say: “yes, please, dear Hicron, be more flexible. We need to adapt the current economic situation”. However this flexibility has also a second, more darker side, exactly because of those things that we mentioned previously, of what is going on in the global economy and about the general economic situation. Each and every flexibility that is added, is actually imposing risks, but this time not on our customers but on us.

Piotr Baradziej: Correct.

Other current customer expectations: strategic planning, communication

Szymon Włochowicz: There is something that we as a leaders and a managers should look after. So we need to think of how we can improve our strategic planning or adapt our strategic planning to resourcing and be able to even more precisely forecast and orchestrate our bench management and the policy of recruiting people from the market and from where we are recruiting people from the market. So this is exactly, fortunately and unfortunately, this is really hard to say whether this is bad or good. This is the fact that we need to accept that the flexibility comes with a great risk, that companies that delivering services need to accept and adapt to circumstances. I would add to flexibility maybe one or two more things, so I think the saying in English that "no news is a good news" has changed in IT. That was the expectation 10, maybe 15 years back. And now customers expect being in touch, in contact. Not only for bad, of course, there is a demand, and they expectations to manage that situation is high. However, they also expect to be in touch for good. To see the human being in the other side of the phone or anywhere and be able to simply… to build the relation from the scratch and to show that we do really matter and we do really care about his business, but also about him and simply be in touch. So I think that is the second that I would like to highlight here.

Other current customer expectations: professionalism

Piotr Baradziej: I would add on top of it, the third one. Again, being in uncertain times, not knowing exactly what the future will come, trying to be prepared for the future for our customers means that they require from as professionalism. Because we need to be professional, we need to come to the customers with knowledge and experience that would allow us, in collaboration with customer, to very quickly achieve the required results. So there is a need and huge focus on our side to bring this professionalism to the table whenever we talk with our customers, whenever we engage in new activities, to focus that at the end result shall be the business benefit for our customers. Our role is to use our knowledge, skills, experience to enable our customers to reach those business goals.

Szymon Włochowicz: And I think in that in that aspect, you need to have courage as a vendor, as a service delivery partner to be able to tell that this is not a good direction for client so to be able to challenge client and not to say “yes” for everything but also say “no” too, when we think that the direction he’s willing to go, he has chosen, is simply not the right direction for his business. We do value his perspective, and we understand that he has the best knowledge about his business, but from tech perspective, we are the advisors, and we are professionals that probably know a bit better than clients about the situations and stuff.

How to implement flexibility?

Michał Wasielewski: So you mentioned the pillars that are the essence of successful cooperation with the client, and what are those flexible options you are talking about when it comes to the comparison?

Szymon Włochowicz: You mean, how we are implementing the flexibility?

Michał Wasielewski: Yes, yes...

Szymon Włochowicz: That actually very much differs from the customers situation, but basically, for what we are seeing right now, the general trend is that the customers want and actually need to see the business results earlier than previously. So the projects are becoming shorter, and shorter, and the demand for the concrete result of the project, that would actually achieved the business goals... This pointing time should be as close to the starting date of the project as possible, and in order to achieve that, we can implement a lot of means. First of all we can, of course use the professionalism that I have mentioned, then we can use the special processes of project management, of product management. We can, as Piotr has mentioned, advise the customer what is the best way to achieve those business goals. We can, of course bring the best possible people, because actually we are the company who's the main asset are the people that we have. We can bring the best people to the table and to address those needs of the customers. So I would say we respond to these needs by providing the way to achieved business goals faster.

Piotr Baradziej: And I think, that I might have mention it already- flexibility for bench management. So the fact that the planning from the marketing and lead generation campaigns need to be strictly connected with sales team, need to be strictly connected with delivery in order to estimate and forecast based on probability, and for the lead to convert, and based on that to assess and recruit that many people, to hire that many people, that will be appropriate percentage-wise to hire, to deliver value for clients on time, or with short delay. I think this is the other aspect that we might cover this flexibility, that for clients is now very crucial.

Cooperation between the SAP part and the Hicron Software House

Michał Wasielewski: Hicron is SAP partner, Hicron Software House is about software development. How can you two working together, answer those challenges that clients are facing? Do you have any ongoing projects together?

Piotr Baradziej: I think looking at Hicron as a digital transformation partner, we solve problems for our clients, and technology kicks in at the very last steps of our vision architect process. So we are architects in solution, listening to client carefully, identifying all the gaps that he might have, identifying all the pains and gains that he might get from the cooperation with us. Based on that, we are trying to optimize the best possible solution, which is not necessarily a software and application at the very end. But if it turns out to be the software, then we are taking the most appropriately item to simply bring value for our clients. And I think this is not about the technology, of course, we are a technological company, but this is about understanding, listening and bringing the value, and solving the problems for clients. And whether this is SAP, whether this is the bespoke software development, whatever is better for our clients - we simply choose that solution.

Szymon Włochowicz: Hicron as a company has two main service lines, business lines. This is the SAP and the digital part of the company, and as Piotr mentioned, when we come to the customer, when we talk with the customer, we look at what can be achieved, and the technology is likely the last thing to be chosen. I mean, first of all we need to talk with the customer about the challenges. We need to talk about the results, and then we will decide on how we will achieve them. However, being the company that under one roof has two services lines means that we can actually use the experiences and use the knowledge of both part to provide the customer with the best possible solution. I can give you the example from a few years back. Currently, SAP has produced a very nice user interfaces for the products, but there were times, not so far ago, that the user interface for the SAP was, let's say less than perfect. And at that time, we were using very often the knowledge of the digital part of the company to produce a customized user interfaces for SAP that sometimes even the most proficient users of SAP have not recognized as SAP. Because we might using the most, at the time, the newest, most advanced UI technology, and we were able to combine that. So we were able to take the technological knowledge of the digital part of the company and integrate with the SAP. And the another way round - many technological software companies on the market, they focus very much on technology. SAP and ERP systems they require the knowledge of business processes. So we are able to take the deep knowledge, deep understanding of the business processes, that we have in the ERP business line of our company and to talk with the customers that are interested in the digital world, using or showing the profound understanding of how their business works, what are the business processes, what are the steps, what are the master data behind those processes, and so on. So we can combine both of those two parts of the company to provide the best possible service to our costumer.

Piotr Baradziej: - Exactly, I think the same. So the combination of the two - SAP and the digital world, is something that gives us an advantage on the market, and gives us an advantage because of the fact that you might implement SAP for many different client's problems and to solve client’s problems. However, the demand is growing, the number of different businesses and verticals is growing so rapidly that there will be an area, a digital area, that SAP is not able to cover. This is where software house kicks in, and bringing solutions for the clients.

Michał Wasielewski: I’m happy to had this talk with you, and I really hope that those trouble times will pass and we will have another years of prosperity and peace. It is the key, as you said, to work together and to be flexible, right? So thank you for your time. And see you next time. Thank you.