[PPT] - South East Europe IT Industry Barometer (SEE ITIB) 2014 Regional PowerPoint Presentation

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South East Europe IT Industry Barometer (SEE ITIB) 2014 – Regional Results – Presentation

Claus Traeger - consim Consulting Skopje, Macedonia 15 – 16 April 2014

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Introduction

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Overview

South-East Europe Information Technology

Barometer (SEE ITIB) 2014

Developed for the Regional Export Plan
Support to the network of South-East European IT

associations in marketing IT services and products in international markets

Participants
Countries: Albania, Bosnia-Herzegovina, Kosovo,

Macedonia, Montenegro, Serbia

IT associations:
AL: AITA
BA: BIT Alliance
KO: STIKK
MK: MASIT
ME: Montenegrin IT Cluster
RS: ICT Network, VOICT, NiCAT
IT companies – associated or not

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First edition of the SEE ITIB 2014, with the following goals:
Gather export-oriented information to support the

Regional Export Plan

Gather statistical information from the SEE ICT sector
Data collection trough online questionnaire (QuestionPro)

with the support of local consultants for the interviews

Survey conducted in the period January – March 2014
Overall statistics:
457 started
165 completed
292 drop outs

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Average time to complete the survey: 34 minutes

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General Information

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Companies per country

Considered for the

analysis were 165 questionnaires completed by the companies

The goal of at least 20

companies per country was reached

ME had 46 answering

companies

The other five

countries had between 20 and 27 companies answering

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N=165

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Inform Company Name

Most of the

companies were

pen
Almost 60% of the

participants answered the questionnaire informing the name

f the company and

contact data

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N=165

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Ownership Structure of the Company

The absolute majority

(83%) of the companies is controlled by national capital

10% (16) of the

companies have majority of foreign

wnership
11 companies, or 7%

are branch of a foreign company and work

nly for the parent

company

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N=165

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Products and Services Supplied

The majority of the

companies offers Software and IT Services

Software products is the

second group offered

Software products,

software and IT services are easier to export

Other products informed

were: Consulting, IP products, broadband and telco services, graphic design, education, training, software testing, internet marketing

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N=165 Multiple answers possible

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Membership of ICT Associations

The associations of

Albania, Kosovo, Macedonia and Serbia, were mentioned between19 and 26 times

The association of Bosnia-

Herzegovina was mentioned by 6 companies and Montenegro by 14

But the majority (61

companies) is not member

f any association
Other associations

mentioned were: BIT, SEE Broadband Council, and IT sector in the chamber of commerce of ME

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Multiple answers possible

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Year of Foundation of the Company

Companies were

founded over the last 29 years

The companies have

an average age of 12 years

This indicates the

maturity of the companies

Oldest companies (2)

founded in 1985, and youngest this year (2014)

12 companies were

founded in 2009, and 10 in 1995 and 2001

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N=165

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Technical Profile of the Companies

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Operating Systems and Platforms

Windows was the OS most

mentioned, as expected

The next group has

Android and Linux…

… followed by Windows

Mobile and iOS

Mobile platforms were

frequently mentioned: Android, Windows Mobile, iOS

Open source platforms

were also mentioned: Linux and Unix

Real-time systems is also

present 21 times

Additionally, delphi was

mentioned

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Multiple answers possible

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Programming Languages and Development Tools

Java, JavaScript and

HTML, XML were the most informed

The following group has

.NET, PHP, C++…

… followed by PL/SQL,

Visual Basic, C

The next group

comprises: Delphi, other Script Languages, Objective C, Python

Open source technology

is available: HTML/XML, PHP, Python, (Java)

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Multiple answers possible

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Database Technologies

The most common

know-how for databases is for MS SQL Server, mSQL/ my SQL

The next group has

Access, SQL, Oracle…

… followed by ODBC,

DB2, JDBC

Some of the additional

mentions were: mangoDB, cassandra, PLSQL, PostgreSQL

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Multiple answers possible

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Company Certifications

Most of the companies

with certification have ISO

With 13 and 14

mentions are CMM/ CMMI and ITMark

Only two companies

mentioned SPICE

But the majority of the

companies have no certification at all.

Other replies were: “in

process” (twice), ECDL, HP

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Multiple answers possible

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Export-Related Questions

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Work for International Companies and Export

More than 2/3 of the

companies work with international companies in the domestic market

But only 52% export
Dealing with

international companies is important for exporting

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Multiple answers possible

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Potential of Export Markets

Some 60% of the

answering companies classified German- speaking markets (DACH) as positive

The most positively

evaluated markets are the regional markets

The worst evaluated

regions are East Asia, ME and Africa

France is not seen as

having potential

Others export markets:

Japan and Latin America

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Multiple answers possible

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Competitive Advantages

In the first position is

Quality

Followed by Price and

Technical Know-how

Relevant for exports
The next group

contains Sector know- how and Languages

Less important is

Horizontal know-how

Other(s) include

Problem-solving capability

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Multiple answers possible

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Human Languages Spoken in the Company

The most often spoken

foreign language is English  expected

In second position is

German, followed by Italian and Turkish

Italian is probably

influenced by Albania

Other Languages informed:
Participating countries:

Serbo-Croatian, Albanian, Bosnian, Macedonian

Neighbouring countries:

Bulgarian, Greek, Hungarian, Russian

EU: French, Swedish,

Dutch, Spanish, Portuguese

Arabic

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Multiple answers possible

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How the Companies Conduct Exports

The majority conducts exports

from the home country

Another important group of

companies has a distribution / local partner in the target market

The following group exports

through internet

Almost the same quantity of

companies have built joint ventures, has a subsidiary, or a representative office

57 companies do not export
Others include exports

through international project consortia, by opening a branch in Germany and through freelancer

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Multiple answers possible

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First Contact for Exports

The majority have the first

contact for export via personal contact

The second group have their

first contact by recommendation of a client and through internet / portal, followed by trade fair/ conference

Others via mailing and

business delegation/ matchmaking

Others here include:

subsidiary, EU project portal, and business partner

Here, again, more than 50

companies informed not to export

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Multiple answers possible

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Biggest Export Obstacles

The biggest obstacles are:
Finding the right business

partner

Branding
Government support
Business contact abroad
Between 30% and 40% said

that these obstacles are not a problem:

Visa
Culture & language
Technical skills and standard
Cost of exporting
Other obstacles mentioned

were:

Duration of sales cycle
Lack of skilled workforce for

mass production

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Multiple answers possible

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Statistics

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Sales distributed by market

On average 21% of the

sales of the companies were exported in 2012, and 24% in 2013

The forecast for 2014

is that almost 30% of the sales will come from exports

Today ¾ of the sales

comes from the domestic market

 Positive trend in

sales

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N=165

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Sales distributed by region

CEE is the most important export

destination, representing some ¼ of the export turnover

The share of exports to the German-

speaking countries are increasing: 13%, 15% in 2012 and 2013, and 19% forecast for 2014

Another important export destination is

North America with the same share as DACH for the last two years and 16% forecast for 2014

Other results for 2012, 2103 and

forecast for 2014:

Scandinavian countries: 6%, 8%, 6%
UK: 4%, 5%, 7%
F and BeNeLux: 10%, 19%, 7%
RoW: 4%, 5%, 6%
Overall is the participation of Western

Europe increasing: 38%, 43%, 45% from 2012 to 2014 (forecast)

RoW / Others is decreasing: 22%, 17%,

15% in the same period

Additional destinations are: Middle East,

Turkey, Russia, Nigeria

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N=165

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Sales distributed by product / services - Export

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N=165

Almost ½ of the of the

export turnover comes from software / IT services

Constant in the analysed

period: 47%

Software products

represent some 1/3 of export sales

Hardware (product and

services) are less relevant for exports, with 12% and 8% forecast for 2014

Relatively stable relation
ver the years

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Sales distributed by product / services - Domestic

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N=165

In the domestic market

also stable relations

ver the years
Largest share on

domestic sales is again software / IT services with some 36%, followed again by software products

Hardware is more

relevant in the domestic market, forecast at 21% for products and 8% for services in 2014

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Clients – Sectors/Verticals

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Considering the domestic

and foreign markets, most clients come from IT services and outsourcing, and financial services

The sectors that follow are:
Public sector
Telecommunications
Manufacturing, Distribution,

Retail

Trade, Transportation,

Logistics

Healthcare
In each case the share of

the domestic market is much higher than that of exports

N=165 Multiple answers possible

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Clients – Sectors/Verticals – Domestic Market

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In the domestic market

most companies have clients from the Financial sector

It is followed by IT services

and outsourcing, and the public sector

The next group comprises:
Telecommunications
Manufacturing, Distribution,

Retail

Healthcare
Given the weight of the

domestic market, these results are similar to results including exports

Multiple answers possible

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Clients – Sectors/Verticals – Export

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Most of the export clients

are from the IT services and outsourcing sectors – far ahead from other sectors

The following sectors are:
Financial services
Telecommunications
Trade, Transportation and

Logistics

Manufacturing, Distribution,

Retail

Technology (new)
Public sector
Similar positioning between

domestic market and export

Exception: Technology

Multiple answers possible

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Clients – Horizontals

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Multiple answers possible

Considering the

domestic market and exports in the horizontal applications, most clients come from IT Consulting

The following horizontals

are:

Web design, development
Custom development,

Outsourcing

Mobile solutions
Product Maintenance and

Support

In each case the

participation on the domestic market is higher than on exports

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Clients – Horizontals – Domestic market

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Multiple answers possible

On the domestic

market, considering the horizontals, most of the clients come from IT Consulting

The horizontals that

follow are:

Web design,

development

Product Maintenance

and Support

IT Project Management
Document Management
Mobile solutions

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Clients – Horizontals – Export

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Multiple answers possible

For export, considering

the horizontals, most of the clients come from Custom Development / Outsourcing

The horizontals that

follow are:

IT Consulting
Mobile solutions
Web design,

development

Business Process

Optimization

E-Commerce
Product Maintenance

and Support

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Forecasts

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Sales Projections

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Domestic market

30% of the companies

expects no change in sales for 2014 compared with last year

More than ½ expects increase

in sales:

24% up to +15%
20% up to +50%
8% more than +50%

Exports

23% of the companies

expects no change in export sales for 2014

40% expect increase in export

sales:

Almost 20% up to +15%
12% up to +50%
8% more than +50%

N=165

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Sales Projections

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Total

Almost 20% of the

companies expect no change in sales for 2014

More than 60% expect
verall increase in

sales:

More than 1/4 up to

+15%

20% up to +50%
14% more than +50%

 Optimistic view of the future!

N=165

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Number of Employees

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Almost 40% of the

companies expects no change in number

f employees for

2014

58% expect an

increase in workforce:

1/3 up to +10%
Almost 20% up to

+25%

5% up to +50%

 Expansion plans

N=165

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Change in Salaries

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IT Specialist

Almost 40% expect no change

in salaries for 2014 for IT Specialists

Almost 60% expect an

increase:

44% up to +10%
11% up to +25%
2% up to +50%

Non-IT Specialists (Others)

More than 60% of the

companies expect no change in salaries for this group

35% expect an increase in

their salaries:

1/4 up to +10%
5% up to +25%
4% up to +50%

N=165

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Impact of External Factors on Business

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71% expect negative

impact on business coming from National Economic Situation

More than half of the

companies expects also negative effects coming from Global Economic Situation, and 46% from Government Policy

More than 50% expect

no effect coming from Intensified Competition and from HR market

17% are optimistic

regarding Intensified Competition

N=165

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Influence of Brain Drain on Business

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There is no clear

trend of influence of brain drain on business:

52% answered that

there is an influence

f brain drain on

business

48% answered that

brain drain has no influence on their business

N=46