Consistent Expansion of SMB Markets in Eastern Europe

November 24, 2004 by admin

The emerging growth potential on the Eastern European markets for itelligence, an internationally active full service provider in the SAP world, is considerable. The SAP-focused IT company is represented at 33 locations in 15 countries across the world including, Russia, Poland, the Ukraine, Hungary, the Czech Republic, Slovakia, and Slovenia in Central and Eastern Europe. “itelligence has been active in Eastern Europe for a long time,” says Christian Motovsky, Regional Director for Central and Eastern Europe (CEE) at itelligence. For around three years, the Bielefeld IT company has been intensifying its SMB-focused involvement in the various Eastern European markets due to the fact that the SAP market for SMBs is growing in importance in all Eastern European countries, he explains.

Investing expertise, expanding market share

The reasons are clear. First, globalization means that Eastern European SMBs need to invest in new company solutions if they want to remain competitive. And second, Motovsky describes the coverage of large companies with SAP solutions in markets like the Czech Republic, Slovakia, Hungary, or Poland as “very high”, which necessarily means a stronger focus on the SMB markets in those countries. Further, German SMBs who already deploy a mySAP All-in-One solution from itelligence are opening branches or production locations in Eastern Europe. Depending on their size and requirements, these may be connected to head office either via a mySAP All-in-One solution or SAP Business One. itelligence has a head start due to its comprehensive project experience with SAP industry-specific solutions for SMBs, and also because it is a local SAP partner in many countries. “For this reason, the industry-specific knowledge that we have acquired as a leading SAP service provider at international level also bears fruit in Eastern Europe,” Motovsky explains.
A further point is important for success cultural and social idiosyncrasies and differences in Eastern European countries must always be factored into the equation. According to Motovsky, historical reasons require particular sensitivity in Poland, the Czech Republic, and Slovakia. Status symbols, such as company headquarters, make of company car etc., play an important part in Russian companies. As a rule, Russian customers like to gather detailed information about a future service provider before doing business. “Our long experience in these markets has equipped us with the requisite socio-cultural skills to win over new customers there,” the itelligence manager stresses.

Flexible strategies for different markets

According to a study of Eastern Europe by the European Information Technology Observatory (EITO), there are considerable fluctuations in growth rates and expenditure on IT between countries. “This is partly a consequence of population numbers. Poland and the countries of the former Soviet Union, such as Russia, the Ukraine, and Kazakstan, are some of the countries where we are anticipating the highest growth rates in the SAP SMB business,” explains Christian Motovsky. Although the SAP market in all of the Eastern European countries is very important for itelligence, the individual regions need to be evaluated differently in terms of their respective growth volumes, he continues. The Bielefeld-based IT service provider deploys different strategies for the sale of SAP solutions in different Central and Eastern European countries. In Poland, for instance, itelligence specifically targets the trade sector and the construction industry; in Russia, the trade sector; in the Czech Republic and Hungary, suppliers and the mechanical engineering sector; and in Slovenia, the production industry.
The classical German interpretation of the concept of SMBs cannot be superimposed on the target markets in Eastern Europe. Companies that would be regarded as typical SMBs in Germany are classed as large enterprises in Eastern Europe and need to be treated as such. According to Motovsky, it is also difficult to access relevant and meaningful information about potential customers in this area. Company information agencies, comparable to German organizations such as Hoppenstedt or creditreform, only exist in the new EU countries, but not in the countries of the former Soviet Union, he explains. Therefore, a network of personal contacts and good relationships is needed. “This takes time, but that’s where our years of experience in Eastern Europe pay off.”

Continually refining sales strategies

The IT service provider takes SAP-qualified and established industry solutions and adapts them to the SMB markets of specific countries, such as the Czech Republic, Poland, Hungary, Russia, or Slovenia. The solutions are then checked and certified for country-specific conformity in a simplified process by the respective SAP regional units. “itelligence is thus able to market industry solutions that are tailored precisely to that specific market, and this considerably reduces coverage waste,” Motovsky explains. Continuous market monitoring and analysis enables the Bielefeld-based SAP SMB partner to continually refine its sales strategies in the individual markets. Motovsky uses Hungary as an example, this being the only CEE country where itelligence actively markets SAP Business One. The reason: “Market analyses have shown that Hungarian SMBs invest less in their IT systems than SMBs in other Eastern European countries.”
Whenever necessary, the SAP business partner develops country-specific industry solutions in conjunction with local IT companies. In Poland, itelligence and a Polish consultancy firm developed it.construction as a solution for the construction industry which maps all statutory building regulations and standards. As a result, the company was able to acquire several notable Polish companies as customers.

Well positioned with additional services

The demand for industry solutions is high in Poland and the former Soviet republics in particular, as suitable solutions from local companies in these countries are in very short supply. “The SAP solutions fill this gap. They both comply with local legal provisions and also reflect our comprehensive industry-specific expertise,” Motovsky explains.
itelligence is anticipating high rates of growth in both the service and software sectors, particularly in Poland and Russia. The SAP Business Partner therefore also operates its own data center in the Polish town of Poznan. From here, the IT service provider can provide additional hosting and outsourcing services to the entire Central and Eastern European market, including the countries of the former Soviet Union. “We are well positioned for the future in the Eastern European countries,” Motovsky sums up, “because we have many years’ experience in these markets, as an SAP SMB partner we have the required industry-specific knowledge, and we also work closely with the SAP regional units.”

Further information:

http://www.itelligencegroup.com/

Dr. Andreas Schaffry

Dr. Andreas Schaffry

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