A big company, like ours, needs new markets for its development

In this interview given to Bitport, CEO Tibor Rékasi, manager of T-Systems Hungary since last autumn, sums up the experiences of the first year and explains why the Bubi project was late.

Bitport: You took over the management of T-Systems Hungary last autumn. What major challenges did you face during the first year?

Tibor Rékasi: Basically, we carried on with the strategy that had previously been decided, as there were tasks left to be completed in relation to the companies’ merger started two years ago. The two most important assignments we had to accomplish last year included the transformation of the sales area  and anchoring the concept of “transformation partnership” within and outside the company.

Transformation of sales organisation meant that dealers were classified into industry sectors and more focussed specialised knowledge bases were set up in relation to the individual sectors. Although the company has numerous technological competences, in our opinion, today it makes more sense to structure a sales organisation according to the customers’ industry sectors. To perform this task, we sought specialists primarily with experience in the specific industries rather than in technology.

Bitport: Among the predecessor companies you managed IQSYS, a heavily technical company that had a lot of development activities.In what way is management different in this company than it was in the other?

T. R.: Already at IQSYS I was of the opinion that sooner or later the technological focus must be abandoned without losing our knowledge. IQSYS also had several strong competences, mainly with focus on financial institutions and transport, and they were good foundations to build on. In the framework of T-Systems Hungary, they were improved and added telecommunication and infrastructure competences.

Of course, the two companies have completely different dimensions. IQSYS was a company employing a few hundred people, while T-Systems is 1500-1700 strong. In terms of management, it is obviously completely different to manage a company that is so much bigger, as it has at least one more decision-making level.

In IQSYS customer relations were far more direct: the lion’s share of the revenues were generated in cooperation with 80 large customers, while T-Systems Hungary has 500 major clients that contribute to the predominant part of its revenue. In the latter case, a heavier emphasis needs to be put on the various means of communication within the company, an on marketing outside the company, than it was the case with IQSYS. At IQSYS I could afford personally visiting each of at least half the 80 customers once a year, while in the case of T-Systems Hungary, I can call on no more than fifty.

Bitport: What was the greatest challenge and the greatest achievement during the first year?What are the benefits and difficulties of creating a huge company with thousands of employees by merger of several smaller businesses?

T. R.: Perhaps the greatest challenge was the appropriate management of the situation that evolved in the wake of a rapid growth and the former culture of the integrated organisations. Concerning the benefits and drawbacks of a large corporation, the equilibrium must be found between the flexibility and streamlined operation characteristic of small businesses and the complexity of large ones. There are still a lot to do in this respect. In my opinion the most outstanding achievement is the partnership agreement between the Hungarian government and Magyar Telekom, as T-Systems will have a major role in its implementation.

Bitport: How much will T-Systems Hungary benefit from the latter?

T. R.: Specific assignments have already been given in relation to the agreement, but is it still too early to name them and give details of the progress made so far. It is no secret that the agreement has a part pointing towards the digital future, including the broadband network as a constituent, and Magyar Telekom is a partner in this task. T-Systems Hungary, in turn, will be involved in the supply of the digital content required for contacts between the government and the citizens, and in the creation of solutions related to digital cities.

Bitport: A year ago a new concept was introduced by T-Systems Hungary to the Hungarian business sector, the so-called transformation partnership.Has this concept stood the test?

T. R.: I think overall, the approach of seeking ICT solutions suitable for the improvement of and support to our clients’ operation in close cooperation and consultation with the customers already works well. Obviously, certain areas are ahead of others in progress. Typically, such are transport and healthcare.

In healthcare, for example, financial management used to be in the main focus, however, the relevant institutions did not have the appropriate solutions and equipment to meet this requirement, while both the National Health Fund and the maintainer increased their expectations related to accounting.  Nowadays, the appropriate tools are already given. The next step to be made is to ensure that patients feel customers instead of victims during hospital care. There are still a lot to be done in this field, a lot of money is required, and the appropriate attitude is indispensable. At this point the customer relationship systems may be put into action, and primarily telecommunication companies have invested a lot into such systems to learn as much as possible about their subscribers.

Bitport: Last year T-Systems Hungary was awarded a knowledge centre opportunity: Deutsche Telekom (DT) and T-Systems International decided to establish the regional e-Medicine or telemedicine competence centre within T-Systems Hungary.How far has this project progressed?

T. R.: The centre has been set up and we participate in numerous projects abroad, both for T-Systems International and for DT. At the moment, fifteen people work in the business knowledge centre, but if required, this headcount may increase in the future.

Bitport: Speaking about the region, external market expansion is an important part of the strategy. The plan is to increase this segment’s share in the company’s revenues from the current one-digit to at least 20 percent.What projects did you have abroad in the year behind us?What new projects do you expect in the next few months?

T. R.: During the past year we changed the team. Currently Róbert Bukits, a former HP staff member, is in charge. We are still far away from the 20 percent. This objective will be achievable if the markets in and outside the DT Group can appear in a ratio of fifty percent. We have already established positions and have obtained references in both.

Currently, the revenues earned from businesses done abroad fluctuate between 3-5 percent. Basically, we focus on the region, and we are especially active in the Balkan. We have made a great leap forward in Bulgaria, for instance, where we have joined both transport and healthcare projects. Bulgaria is just starting to receive the EU funds Hungary received two or three years ago. In Romania we cooperate with Romtelecom in the transport business, and we have submitted proposals jointly with T-Systems International and DT in South Africa and Saudi Arabia. We are moving into these directions basically through T-Systems International.

International presence, by the way, is not intended to replace something else. This is a big company in Hungary, and new markets are needed for development. This is because in our own internal market development is far more expensive.

Bitport: In what other areas does T-Systems Hungary intend to expand?

T. R.: In every industry where we can see any specialised company worth purchasing. There are three or four candidate companies that seem to be suitable, but negotiations are not in the phase that would allow me to give more details. It is, however, important to highlight that we do want to extend the industrial competence, we intend to expand in the international market, and we are looking for companies that have already gained a footing on the markets that are important for us.

We prefer to buy large corporations, but trading houses are out of question. We are rather seeking specialised companies with revenues exceeding HUF 10 billion. Unfortunately, in Hungary there are only a few companies of this size, this is why we are looking for investment opportunities abroad.

Bitport: Following a government decision, in the spring the government’s mobile subscriptions were carried over from T-Systems Hungary to Vodafone. How did this affect the company and what businesses can make up for the loss?

T. R.: Our company is big enough to let such things go unnoticed, this area contributed less than one percent to our annual revenues. We do not really need to find business to make up for this loss, as we will exceed the targets this year. Half of our revenues are raised from different projects.

Bitport: And government orders make a considerable part of them.According to the summaries, in the past year T-Systems Hungary was one of the most successful beneficiaries of public procurement tenders.To what extent did you need to adjust the internal organisation to the relevant requirements?

T. R.: Public administration has always been in the company group’s focus of attention, and so the organisation did not need much refashioning along this line. The team engaged in public administration has been changed, but basically we were able to rely on our own resources.

Bitport: There were, however, one or two government projects which were considerably delayed relative to the plans.What are the lessons of the Bubi project that suffered the longest delay?

T. R.: We are constantly seeking projects in which we can contribute to the transformation of something, and this, of course, carries risks. Thus we assumed risks with MOL Bubi, as we did not select a ready-made solution. The basis of systems like the one used by Bubi has already been implemented at numerous places in Europe, but in Hungary the customer expected a far more complex and better system than any other. And finally we successfully implemented such a system.

Bitport:In light of the facts, do you still consider it a good decision to implement a one-off solution?

T. R.: Viewing from a purely financial perspective, in other words, the fact that we paid penalty because of the delay, it was not a particularly good decision. All in all, however, it was a good one, because ultimately we built a considerably better system, and over the long term, this may be a spectacular reference for the company. Just to mention, in addition to Hungary, the projects implemented in London and in Poland using ready-made solutions were also delayed.

Bitport: What was the reason for the delay?

T. R.: Delay was due primarily to the challenges arising from the unique character of the system, namely the software problems related to the application and bike control for which there was no off-the-shelf solution available. The most spectacular example is that in the neighbouring countries bicycles are not equipped with on-board computers, while in the Hungarian system this also required solution. And this was exactly the element that required far longer time to develop than originally scheduled.

Tibor Rékasi joined Magyar Telekom Group in September 2008 as managing director of IQSYS Zrt, a subsidiary in Corporate Services, where in addition to company management, he also attended to the tasks of a sales director. Since December 2010 he also managed T-Systems Hungary on a temporary basis. He was appointed as chief executive officer of the company in September 2013, following merger of the company group.


Source: bitport.hu
For the original Hungarian version of the interview, please visit bitport.hu

Tibor Rékasi

Tibor RékasiHe joined Magyar Telekom Group in September 2008 as managing director of IQSYS Zrt, a subsidiary in Corporate Services, where in addition to company management, he also attended to the tasks of a sales director. Since December 2010 he also managed T-Systems Hungary on a temporary basis. He was appointed as chief executive officer of the company in September 2013, following merger of the company group.

Partnership in transformation

T-Systems Hungary announced the partnership in transformation strategyat the beginning of last year. In response to our question about his ideas of the practical implementation of such a partnership, Tibor Rékasi said the following: “In the framework of partnership in transformation, the customers are visited by staff members I would call advisors rather than technological specialists. 
The idea came from our observation of the work of global IT consultant companies, which do not follow every project from start to end. Nevertheless, we must remember that our objective is not consultancy. The reason why we give advice is to enable us to actually implement the particular project.Thus, partnership in transformation is not merely about advising the customer to choose between a one-off and an out-of-the-box solution. 
We can join any project already at an early stage, and can also assist the client in the selection of the tender invitations it should participate in order to bring its project to success. We can also help them identify the supplier from whom the buyer should purchase the devices and tools required for the project.”

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