BUSINESS OF THE FUTURE
When we talk about the development of the IT industry in Bulgaria, good news prevails.
The sector is among the engines of the Bulgarian economy and together with outsourcing generates about 4.5 percent of this country's GDP – compared to 3.7 percent average for Europe. The employed in this field are estimated to 40,000 people, with an average salary of almost three times higher than the country average (2,700 leva per month in the IT in comparison to 1,090 leva). In Bulgaria operate more than 12,000 IT companies, specialising in more than 20 industries and fields. Among them are well known international names and local companies, both established firms with years of experience and ambitious startups. Between 2008 and 2014 the direct foreign investments in the field have increased from 103 million euros to 232 million euros.
"Bulgaria offers enormous talent, and this is the main reason so many foreign companies have opened offices here," says Angel Petrov, operations manager of the Bulgarian branch of Virtual Affairs (www.virtual-affairs.com), an international software and services company specialising in transforming digital channels for banks and insurance providers. "The software developers deliver solutions at the highest standards of quality, and programming has become a steadily growing profession. The specialists here are highly educated, communication is easy, as English is at a good level, but also the cultural differences are not that big, compared to Asia for example. For European companies it's even more interesting to position their development here, because the country is part of the EU, travel is fast, and there is small time difference, which makes Bulgaria a preferred near-shore location."
The IT companies in Bulgaria, however, experience some challenges. "All these advantages led to a lot of companies coming to Bulgaria, which resulted in an enormous demand for software engineers," explains Angel Petrov. "At the same time, Bulgaria's formal educational system is not able to provide the volume and quality needed to meet these demands. Recently it has become very difficult to find and keep the right people. In the recent years we've seen multiple attempts to mitigate this issue. There are now more and more IT academies, which offer training for anyone who wants to become a software engineer. Many companies, like ours, created their own academies or internship programmes, where we teach young people ourselves. The demand is so high, that the government has agreed to implement a new profession called 'Applied Programmer,' and the first high school students are already starting their education this year. After 5 years we will see the first graduates with this profession, and they will have enough experience and capabilities to directly join software companies. I believe these are all good steps in the right direction, so we can continue to grow Bulgaria as an important software centre in Eastern Europe," adds he.
"Before 1990, Bulgaria had excellent specialists and a very good university education. At the moment we experience a collapse of the educational programmes and a severe lack of software specialists. There are several thousands free workplaces for software engineers, programmers, administrators," says Nina Blagoeva, founder and manager of NDB Ltd. (www.ndb.bg), a company with 22 years of experience in business software solutions.
NDB works with international partners like IBM, VMware, Veeam, RedHat and Citrix, and Nina Blagoeva has a clear view of their influence on the local market: "Most of the large international vendors have been in Bulgaria for years, positioning themselves. So the market, regardless of its own dynamics, is already parcelled. The companies know their places, and have identified their priorities. Back in the 1990s, it was the norm for a company to offer all the services." The prerequisites for the continued development of the local market are here. "A growing number of companies realise the need to use systems for data analysis and that it is better to invest in software and cloud services, rather than in hardware. Communications are developing very well, and the internet connection in Bulgaria is at a world level," says Nina Blagoeva. "We expect some more investments in education in order to create specialists who will help us to achieve a good symbiosis between people and the technologies that arrive from abroad to be implemented in Bulgaria."
The lack of workforce is a problem that IT companies consistently recognise as an impediment.
"Of the usual challenges facing the Bulgarian business, which as a whole are of a macroeconomic character, I want to underline two basic challenges that for years both we and the other IT companies have been seeking a solution for. These are the limited talent market and the constantly increasing need of additional investment in the IT specialists education," says Konstantin Konov, managing director of the Bulgarian sub-division of the international company Luxoft (www.luxoft.com), working in the field of finance, automobile software, telecommunication, enterprise solutions. "Both trends are interconnected and the solutions do not depend on the efforts of a single company or of the business as a whole, but ask for professional collaboration between all participants in the process, including the state." According to Konstantin Konov, the solution is gradually taking the shape of a fulfilled reality. "There are already concrete steps in this directions and it is a matter of time for the first results to be felt," says he. "Attracting IT specialists in a company still takes place in extremely competitive environment, and we, at Luxoft, work in the direction of preserving a pleasant working environment, professional ethics and creative environment, where creativity and feedback originate growth. Our regular internal events, dedicated to charity causes as well as to entertainment, contribute for the support of this environment. We also focus on the employees' qualification, using the help of a catalogue with over 280 internal trainings not only for development of technical skills, but also for leadership, communication and management of human resources."
The good examples in the industry are an evidence that when there is a will, there is a way.
The ambitious companies in Bulgaria are not afraid of developing their own products. One of them is the firm for logistic and automobile software Predistic (www.predistic.com), whose product FIXS Win was created with the expertise of specialists from the Bulgarian academia. This is a precious example for bridging the gap between academical knowledge and practical needs in the IT field, existing in modern Bulgaria. "To an extent the gap is understandable," says Pavlina Dimitrova, managing partner at Predistic. "Information technologies develop much faster than other fields, where academical knowledge is taught. As a whole, the educational system cannot keep up with the speed, and lags behind. Good universities in Bulgaria provide good theoretical education, which is an important basis for the future professional development of students in the world of information technologies." According to her, the gap between theory and practice can be bridged with closer co-operation between the academia and the business, something that both sides are already actively working on. "When this co-operation go further, I hope it will become a standard practice that projects of the industry are commissioned to teams from the education field and are developed jointly," says Pavlina Dimitrova. "This will provide students with better idea of the modern process of software applications production. Young people are children of the digital age and can easily use the new technologies, but they lack the knowledge and the skills for the process in which technologies become the applications that help our life. The practice of internships, that is already being established, is another step in the right direction," adds she.
In spite of the challenges, the IT industry in Bulgaria has a broad horizon for development. "I think one advantage Bulgarian companies may have over companies in larger markets is that they probably aren't saddled with the same level of legacy technology and processes," says Peter Brodsky, Co-Founder and CEO of HyperScience, a US company for artificial intelligence specialising in the automation of office work (www.hyperscience.com). "As a result, it may be possible for Bulgarian companies to adapt more quickly to some of the newest developments in AI."
"Bulgaria is a growing market for call and contact centres with several foreign companies outsourcing their operations to Bulgaria," says Petr Bocek, general manager of the Bulgarian office of Puzzel (www.puzzel.com), a company for cloud-based call centre solutions. "Puzzel, like other West European organisations, is attracted by the talent pool, the excellent language skills, the culture, the technology infrastructure and the reduced operational costs. Bulgaria is also a fun place to live and a great place to do business because of the thriving environment and atmosphere, and the booming IT industry. Additionally, Puzzel sees an opportunity to offer its solution on the Bulgarian market. It can deliver a real call centre solution to Bulgarian businesses of any size. Even smaller companies can use all the features enjoyed by professional call centres such as recording, statistics and call monitoring. One of the less expected benefits mentioned by Bulgarian customers is better control of employees responsible for communication with clients."
The company has ambition to grow in Bulgaria and the region. "Puzzel is currently putting together a communications strategy and is looking to attract talented people and a partner network to sell and support Puzzel cloud contact centre solutions," says Petr Bocek. "We already partner with Telenor and will be evaluating additional partners with an interest in innovative and proven solutions, good connections to potential customers and those looking to extend their customer service practices. Puzzel is also keen to establish its corporate social responsibility credentials in Bulgaria and believes the company can contribute to the digitisation and automation of businesses."
According to some data, about 75 percent of the products of Bulgarian IT industry are exported. But the global trends in the field, including in development and use of applications, online commerce, e-governance, cloud services, and artificial intelligence, are gaining a foothold in Bulgaria as well.
Contemporary companies, particularly ones that are growing, should not underestimate the opportunities for additional development provided by software solutions, thinks Vladimir Rashev, managing partner at Balkan Services (www.balkanservices.com), a Bulgarian company for implementation of business software. "Companies in Bulgaria need to buy a solution that will help them to manage successfully the expanded volume of their business and will provide them with opportunity for growth without losing their view of the business itself and the control they used to have when their scale was smaller," he says.
Online commerce is gaining a hold in Bulgaria, but the local market has its own particularities. "In Bulgaria, people are used to paying cash on delivery even if the transaction was online," says Yuval Ziv, Chief Operating Officer at SafeCharge (www.safecharge.com), an international company for payment solutions with a Bulgarian office. "In the past couple of years mobile apps have started becoming popular for food delivery, taxi services and online fashion. These everyday use apps are implementing online payments that are secure, easy to monitor and help businesses with money flow management and payment reconciliation. Now as more people shop online from Bulgarian and foreign marketplaces, making payments online is becoming a norm. If a payment method is easy and convenient to use, such as ApplePay, WeChat Pay, Samsung Pay, etc., it is likely to be quickly adopted by people." A factor in the development of Bulgarian online payment market are also the foreigners in the country. "Another reason for a change in the way people pay, is the growing expat population along with increasing number of foreign tourists asking for known ways of payments," says Yuval Ziv. "Tourists always prefer to pay with a known payment method, be it card or an application, instead of paying by cash. These changes in the habits and preferences have created new payment needs in Bulgaria."
Bulgarian companies for software development have gained international recognition for their innovation as well. This autumn the mobile app for online safety for children Protect Your Kid by Bulbera (www.bulbera.com, www.protectyourkid.bg) was nominated for the UN's World Summit Award in the Inclusion & Empowerment category. What is the situation on the mobile applications market, however? "The market is oversaturated with mobile applications. And good ones at that," says Deyan Blagoev, Business Development Manager of Bulbera. "In my observation clients are increasingly looking for apps that ease their daily tasks and allow them more free time for themselves. Apps that are connected with different gadgets (watches, glasses, cars) are sought after with the aim to save time for the owner. The usage of augmented reality is also gaining a momentum, as well as virtual reality. We are yet to see a number of interesting things in medicine and the application development in its field."
One of the most important fields where IT technologies are now gaining positions are state and municipal administration. "Bulgarian IT companies have been working for years on the creation of a uniform e-government, e-healthcare, one stop shop e-services for the citizens. Sadly, there is a lot more to be done in this field," says Ivaylo Rachev, founder of ArmSoft (www.arm-soft.net), a company for informational products and services for municipal administrations. "The products of ArmSoft aim to ease the work of the municipal employees, to improve the accountancy and security, and to provide quick, accurate and trouble-free services to the citizens. The opportunities that digitalisation services provide to the municipal administrations are immense." For Ivaylo Rachev the perspectives for the development in the field are defined by both the international trends and the EU policies. "The leading specialists in the country seem to have realised the need for creation of a public-private cloud that will accommodate the public services. I expect in the following years that a significant effort will be made for the improvement of Internet coverage in Bulgaria, with access to an increased number of citizens and administrations. In short: the trend is for centralisation of information in the cloud space, with quick access for any person in accordance of his or her rights and obligations."
Cloud services are not a novelty anymore, but many companies make the mistake of seeing them mainly as an option for file storage and sharing. "The companies often use the cloud services as servers, for particular programmes for distant work," says Emil Parashkevov, manager of myClusterDesktop, a company for cloud solutions (myClusterDesktop.com). "We offer services for distance work with uploading all your computer in the cloud, on remote servers. Working in the cloud makes you completely independent from the hardware, the system administration and everything else. We take care of these. This solution is mainly for small and mid-size companies, helping them to do all their work in the cloud. The technology is here, but many people simply don't see that they can use it in such a way."
"With us you basically have a computer-less computer," adds Yuliana Parashkevova, marketing and sales at myClusterDesktop. "Your desktop, with all of its applications, ERP programmes, accounting programmes, including the printers, the e-signature cards, the scanners and all the periphery, is in the cloud. This frees you to work from any place and any device, you only need an account and a password."
Commenting on www.vagabond.bg