The Group's IT Services segment provides IT services to large and medium-sized Russian and CIS customers and government agencies. It designs and implements IT solutions for clients which serve to increase the efficiency and transparency of their business.
IT Services Segment - Strategy
The Group's strategy for the IT Services segment is to enhance its leading position in the IT services market in Russia by increasing its market share both organically and non-organically. The main elements of the strategy of the Group’s IT Services division to achieve this are:
Retain leading market share in the core IBS IT Services segment of business applications
Business solutions are the backbone of IBS IT Services segment and the Group intends to maintain and further grow its leading market share in this segment. The Group intends to significantly add value as a reseller of its vendors through provision of additional services for installation, maintenance and support for their products. ERP solutions will remain the focal point for the Group due to the weight of this segment in our overall business as well as its profitability and growth prospects.
Enhance market position in consulting and outsourcing
IBS IT Services aims to increase its share of high-margin consulting as well as fast growing outsourcing as most non-standard and tailor made customer solutions. In particular, outsourcing in Russia is expected to follow the pattern of a rapid growth experienced by the OECD economies and IBS IT Services intends to establish an important position in this small, but highly perspective market segment with stable revenue streams.
Increase business from existing clients
IBS IT Services works with a wide range of clients and the size of projects it undertakes varies significantly from client to client. Management believes that there are significant opportunities to grow revenue and profitability of existing clients by meeting more of their IT services requirements in the future.
Target sectors with fast growing demand for IT services
IBS IT Services will continue identifying sectors where it expects significant growth in demand for IT services. As new sectors are identified, IBS IT Services will ensure that awareness of its experience, products and services is high amongst the key decision makers in those sectors and businesses. IBS IT Services currently expects the power and utilities, chemical / petrochemical and machinery industries to experience high growth in demand for IT services and is currently targeting these industries.
Provide more industry specific IT solutions
IBS IT Services will continue to use its client industry expertise to reinforce its competitive position. Historically, demand from industries has been generic and most IT solutions have not been industry specific and have been adapted for a cross-sector use through extensive customisation. Currently, there is a shift towards offering IT solutions which are industry or sector specific. Whilst they may require further customisation, these products are supplied by vendors already customised for use in a particular industry, for example an ERP system designed for a manufacturing business. These industry and sector specific solutions provide IBS IT Services with an opportunity to use its sector expertise to target new and existing clients within the industry or sector.
Improve profitability by expanding outside Moscow
Operating costs in Moscow are high compared to costs in the Russian regions and other CIS countries.
The Group has already established regional resource centres in Perm, Saint Petersburg and Minsk and plans to further expand them as the business grows. Using these regional resource centers allows IBS IT Services to broaden its talent pool, do the same work at a cheaper cost, thus improving margins.
Improve the recruitment, retention and utilisation of professional staff
As the demand for professional staff is high, IBS IT Services has a number of strategies to improve the recruitment and retention of professionals and to ensure that its professionals are as efficiently utilised as possible. The overall aims are to decrease professional staff cost, office cost, lower attrition ratio and ensure IBS IT Services retains a critical mass of well trained, experienced professional staff to help gain greater market share.
Grow in Russia and the CIS through acquisitions
The Russian IT services market remains fragmented and no company on the Russian market according to IDC had a share greater than 7% in 2009. The Group believes that factors like a broad vertical expertise and a critical mass of professional staff to be able to execute large and sophisticated projects are an important competitive advantage to any market participant in winning new business.
The Group aims to achieve further critical mass, economies of scale, cost savings, improved negotiating position with industry vendors and a wider product and service portfolio, among other through carefully selected acquisitions.
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IT Services Segment - Competitive Difference
The Group believes its key companies are well positioned to capitalise on the expected market growth in the markets in which it operates because of the competitive advantages set out below.
Strong brand names in the Russian market
IBS IT Services company, representing IT Services business segment, possesses very strong brand in the Russian IT market and enjoys wide customer recognition. Management believes that customers associate the IBS IT Services’ brands with high quality standards and a commitment to customer service.
Professional and experienced management team
The IBS IT Services management team has significant experience in the projects that the Group undertakes, including IT consulting, IT services, software development and distribution. Many of the key managers of the IBS IT Services, in particular Sergey Matsotsky, have been involved in various IT projects of the Group for over ten years and have in-depth experience in the markets in which the Group operates.
To learn more about IBS IT Services management please visit: http://www.en.ibs.ru/content/eng/rubr41/rubr-419.asp
Established track record with blue chip clients and public institutions
The IBS IT Services clients include some of the leading Russian companies such as Gazprom, Lukoil, Sberbank and many others. The Group also has ongoing client relationships with several key Russian federal, municipal and regional government agencies, including the Central Bank of Russia, the Ministry of Finance, the Ministry of Labour, the Pension Fund and the Moscow City government.
To learn more about IBS IT Services customers please visit http://www.en.ibs.ru/content/eng/rubr40/rubr-407.asp
“One-stop shop” capabilities for the IT needs of largest Russian businesses
IBS IT Services is able to provide its customers with comprehensive and integrated IT solutions and is able to take the full responsibility for project execution. By offering a wide range of IT products, IT services, software development and management consulting, the company can be a “one-stop shop” for the IT needs of Russian businesses. This integrated approach enables IBS IT Services to take advantage of key growth areas in enterprise solutions, particularly those that appeal to blue chip clients, such as IT services for data integration, data warehousing and the implementation of enterprise application software such as ERP.
To learn more about IBS IT Services solutions please visit http://www.en.ibs.ru/content/eng/rubr40/rubr-401.asp
Strong expertise in the implementation of complex projects
IBS IT Services has developed strong expertise in providing its clients with customised scalable solutions, managing and controlling the development process of the projects undertaken, as well as managing the risks associated with timely and adequate implementation of projects in the Russian market. IBS IT Services applies rigorous quality management standards and procedures during the implementation of such complex projects to deliver the best possible solutions to clients within the project’s parameters.
All of the Group companies adhere to the highest quality standards, including vendor certification of professionals and internal quality systems. Some of the Group’s quality systems are certified according to international quality standards. The Group is confident that its ability to demonstrate commitment to quality is becoming an increasingly important source of competitive advantage in relation to obtaining contracts for high profile projects.
Highly skilled workforce
IBS IT Services has a highly-skilled and trained workforce. The company has very strong recruitment programs which allow it to attract highly-qualified technology specialists in Russia and the CIS region, and also invests in the ongoing training of its development personnel.
To learn more about IBS IT Services team please visit: http://www.en.ibs.ru/content/eng/rubr41/rubr-419.asp
Strategic partnership with worldwide high-tech leaders
IBS IT Services has strategic relationships with major global high-technology vendors such as Cisco, Dell, Hewlett-Packard, IBM, Microsoft, Oracle and SAP. The company works closely with the key technicians and engineers of its strategic partners in implementing and providing related IT services in respect of vendors’ products. Having a base of high-quality, high-technology partners gives the company exposure to the latest technologies, which it is able to promote to procure new business.
To learn more about IBS IT Services partnership please visit http://www.en.ibs.ru/content/eng/rubr41/rubr-417.asp
Financial strength and access to capital
The Group’s financial position is sustainable and its cash resources, operating cash flows and borrowing capacity should provide adequate resources to fund its ongoing operating requirements and provide a solid basis for future growth. The Group believes that its size, its credit history and the transparency of its business and financial affairs gives it an advantage over many of its Russian competitors in obtaining necessary financing on time and at competitive rates.