We are building a digital world: this is how our everyday life will change

“In the financial sector, the fallout of the economic crisis has long been cleared away, and the IT industry in general can speed up again, after its temporary slowdown, drawing on the momentum generated by the new budgetary cycle of the EU. As to the construction industry, complex digitalization projects can start in the area of structural architecture and Governmental projects that may give a boost to the IT market. In the meantime, the fact that Hungarian IT professionals are offered attractive jobs by employers abroad poses a problem, but it has not happened yet that a project was not implemented due to lack of available experts,” said T-Systems Hungary’s CEO, Tibor Rékasi, in an interview with Portfolio.

Portfolio: How can an IT company respond to the challenge that digitalization completely transforms business processes?

Tibor Rékasi: The word digitalization covers a very wide range of concepts. It includes the shift of broadcasting in Hungary to a digital platform, which also offered business opportunities that we have exploited in recent years. It also includes the process by which Magyar Telekom and Deutsche Telekom transforms their total network into a digital one, as a result of which old analogue lines and PBXs will slowly disappear. It will, of course, take a long time, as analogue lines are used by services like alarm systems, faxes and anything that calls for a simple set of signals transmitted between exchange and client. These are not so spectacular components of digitalization, but still require a lot of work. At the same time, digitalization involves the transformation of our complete work environment, too. Everything will be integrated with everything else. rekasi_tibor_sajto_3_k.jpg

“We work hard, for example, on the concept of smart buildings. We are getting ready for the period when the construction industry gains new momentum in Hungary, too, and not only roads, but buildings will also be built. Investors and the Government are preparing numerous investments in Hungary that involve digital buildings or community spaces.”

The aforementioned is perhaps best exemplified by the digital city, smart city concept, which is about the digitalization of places and services within cities. The first step toward this goal is to provide proper network coverage in the cities, which is a joint objective of the Government and Magyar Telekom Group, but the residents of the cities will only become aware of digitalization, when the bandwidth become available and services are launched that they can use. The development may manifest at public places in the form of information poles or open-air free WiFi service.

Digitalization affects every facet of our work, and our transformation partnership strategy is exactly about that. I believe more emphasis will be put on how technology can be translated into business benefits.

P.: The strategic partnership shift took place at T-Systems Hungary last year. How much is it reflected by last year’s figures? Did the company’s revenue mix change?

T. R.: There are an increasing number of projects through which we can contribute to core business by digitalization or other technological developments, which leads to major projects that are not only about delivering and installing equipment based on a hardware list reconciled in advance or developing software specified beforehand, but also about how new technologies can be integrated into services or how new services can be built on new technologies. We will soon see specific services like that. We already have such products on the insurance and banking markets, and numerous developments are ongoing along the same lines in transportation and healthcare.

P.: Close to 7 years have passed since the start of the financial crisis. Does this magical number signify the end of the problematic era, and will thus IT investments in the banking sector start or you do not expect that yet?

T. R.: It have exactly been the structural and transformation projects that helped us stop the decrease of our revenues from the banking sector in the last one or two years, so the proverbial seven years had ended for us earlier. However, the full consolidation of the sector is still ongoing. Several players have decided to withdraw from our market or at least have made announcements to that effect, but the really significant financial institutions that hold definitive stakes at the Hungarian residential market, I believe, are stable and are here to stay.

P.: Expansion abroad was one of your goals even last year. How much have you achieved that goal and what are your relevant plans for this year?

T. R.: The progress we have made compared to the time elapsed is good, and I think our goals remain to be realistic: we would like to increase our revenues from abroad from the existing 3-5 per cent to around 10 per cent. We build on the EU-funded projects that we completed or lined up the necessary competences for in Hungary. For example, in Bulgaria, where EU funds are also accessible, we are involved in transportation and healthcare projects, we cooperate with Romtelecom in Romania, and we have made several bids in Africa, too. Now, everyone focuses on the Arabic countries, which are very active in adopting new technologies, have visions and line up the necessary resources for anything they want to implement without regard to how much it costs. They are sensitive to the value for money ratio of projects, but never give up investments for the sole reason that they may be expensive.

P.: The new European budgetary cycle has started. How much momentum is generated by that for the IT sector?

T. R.: We definitely expect a boost on the market, at least compared to its present status, as we are now in transition between two cycles, when programs are being finalized.

„I expect that by the end of the year we can conclude contracts for projects already financed from funds of the new cycle.”

We expect a lot from the new cycle. We believe that our investments made in the recent years in the context of digitalization will come really handy when we implement similar projects financed from EU funds.

P.: T-Systems Hungary is quite successful when bidding at public procurement tenders, too. How much do you rely upon those revenues? Can you count on them as revenues guaranteed for an extended period of time?

R. T.: More than 30 per cent of our total revenue comes from state administration or sectors controlled by the state. It might obviously change somewhat or decrease with the start of a new cycle, when one cycle is concluded and the new one is being launched, but we do not expect to see any dramatic changes. In the last few years, we have managed to transform our portfolio and revenue mix in a way that we have more and more products and solutions that generate revenue or save costs, and I believe the demand for such products will not only fail to decrease, but would rather increase.

P.: There is a lot of talk about brain drain, i.e. the phenomenon that highly qualified professionals get attractive offers from abroad. How great a problem does that pose in the IT sector?

T. R.: The fact that Hungarian technology experts are offered jobs abroad is a problem on one hand, but a benefit on the other, as it enables knowledgeable and experienced people working for our industry to find jobs. They embark upon careers that offer the option of working for a Hungarian company or abroad. We obviously find it important to have a succession pool of adequate size and quality, which is addressed by agreements like the one w rekasi_tibor_sajto_5_k.jpge have in place with the University of Pécs. We work on this issue, and being a local market player, we can do slightly more for this cause than a foreign company. A company from abroad can give a higher offer, but cannot easily establish strategic alliances here in Hungary, which means it cannot offer much in return to the Hungarian market. Still, colleagues do accept offers from companies abroad, but the real task is rather to increase the overall number of ICT experts, because there are not enough of them in Hungary or in the EU either. Foreign companies from the EU come to Hungary, because they need the expert personnel and try to get it here.

The task for us here in Hungary is rather to increase the number of students by improving education and establishing alliances of that kind on one hand, while offering realistic career paths to those students and linking university-level education to actual market demand, on the other hand. We can support this effort by our internship program, too, which student can join even when still studying at the university and then smoothly transit onto the labor market.

We do not feel that we could not find people for jobs that we need to complete. We can still see that we can pick from a large number of applicants, hire young people with good skills and qualifications, who then can become more experienced advisors or engineers. Whenever we win a major project, we hire the relevant people, on one hand, and contract subcontractors, on the other hand, who are mostly Hungarian SMBs that provide us the resources required or have partial solutions in place that can be important components of our complex solutions.

P.: What is the initial experience with the postal check terminals provided to the Hungarian Postal Services?

T. R.: Definitely positive. Though we do not have statistical data available, I am sure they are widely utilized. There are many groups of society that go to the post office for some reason or another anyway. Therefore the need for the postal service as an institution is justified for a long time. However, there are many people who see these terminals as a great opportunity, as they would never go to the post office, if it weren’t for the postal checks, which they can pay now through the terminals. The Hungarian Postal Services can very well identify the potential groups of customers that represent a different behavioral pattern than traditional patrons of the post office. Though it was not one of our developments, I’d like to mention the mobile application of the postal services, too, which I also welcomed as user.

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

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