Before we move onto
Actis Systems, I would like to talk to you about
the development of the IT sector in Russia, which
has been growing very quickly. Could you give your
assessment of the IT sector in Russia?
Miss Anya Sverdlov, Managing Director, Actis Systems:
I would say that the Russian IT sector should be
split into two parts: Russia-related IT matters
and offshore development. Both have been prospering.
The Russia-related sectors are at the beginning
of their growth cycle and every day becoming more
developed, as Russia becomes more integrated into
the world economy and more computerized; the offshore
market needs no elaboration: Russian analysts and
programmers are in very high demand. At some point
in the not too distant future, Russian software
giants will give India a run for its money as far
as software development is concerned.
There are a lot of different views on that.
Some say it is possible due to the very high quality
of Russian technical education, others aren't
so sure. Do you think its possible for Russia
to rival India?
Miss Sverdlov: It depends. I think that Russia will
not always compete on the simple coding side, but
Russia will give India, China and other offshore
development centres a run for their money in the
value-added parts of the market, such as systems
analysis, complex system programming, web development
and design. We already see many multinationals turning
to Russian software companies for value-added services.
Actis Systems has been around since 1997. Could
you explain the story of Actis Systems' development
since then?
Miss Sverdlov: Actis Systems is about to celebrate
its fifth year anniversary. Since then, we have
become one of Russia's leading eBusiness solutions
providers, having completed close to 400 commercial
projects in twenty-three countries worldwide. We
provide clients with the full spectrum of internet-related
services: web design and interactive marketing,
custom programming, consulting, and internet managed
services, such as hosting.
Our client list, in Russia and abroad, includes
Microsoft, Avon, Canon, BMW, Nestle, Siemens, ING
Bank, Toyota, Schwarzkopf&Henkel, Vimpelcom,
Sibneft, VneshEconomBank, Troika Dialog and many
others. The multinationals were originally more
convinced of the need for internet services, but
now we are getting more and more Russian companies
as clients.
Our work has won a number of prestigious international
awards, including "Best Business Website
in the World" by the Financial Times, we
were the first Russian company to be short-listed
for a Cannes CyberLions Award in 1999, ten of our
sites were recently profiled among 250 best sites
in Japan's "Web Design Annual 2003",
and we taken tens of prizes at various Russian and
CIS advertising festivals.
What makes Actis stand out from all the rest
- what is your company's competitive advantage?
Miss Sverdlov: As far as our competitive advantage
goes, I think there are several things that stand
Actis apart from its competitors: one is that there
is a western management team in place in Russia
- it is not just a few western faces dealing with
the clients, while the Russian operation is being
run the old Russian way. That adds an additional
level of security for clients. Secondly, we have
four business units in the company, which can function
on their own but which also work seamlessly together
to provide truly integrated full spectrum solutions
to our client's business needs. Thirdly, we merge
world best practices learned through our offshore
work with the talents of Russian programmers and
designers. Also, our internet-only orientation allows
us to keep our focus on our true core competencies:
we are truly one of the best at what we do. Last
but not least, I think our customer service orientation
is important. We are proud of our 92% customer return
rate and the fact that we have been working with
many of our clients for 3-5 years.
Two of the cornerstones of Actis Systems are
Actis Creative Solutions and Actis Web Development.
How would you rank their importance and how do
you see them developing?
Miss Sverdlov: In terms of importance to the company
revenue wise, perhaps a quarter comes from Creative
Solutions and three-quarters - from programming,
including offshore programming for clients in the
US and Western Europe. As to future development:
as far as Actis Web Development is concerned, it
is going to continue to be involved with custom
programming solutions and will also engage in limited
systems integration for web-related systems. As
far as Actis Creative Solutions go, that business
line will keep its concentration on web design,
but will also continue moving into multimedia services
and various media convergence work.
How does Actis Systems contribute to cost
reduction and increased efficiency?
Mr. Edward Grinbukh, CEO, Actis Systems: We are
currently finally seeing many big companies starting
to do what they should be doing with the internet:
using it as a serious business tool. We help companies
identify where they can become more efficient through
the use of internet technologies. We help our clients
to look further down the line to increase revenues.
We have a management consulting service which actually
takes the first step in this process. The consultants
come from different companies: McKinsey, A.T.Kearney,
Accenture and so on. These people are more than
qualified to analyse a company's business processes
and see how they can move from offline to online
and take their services to the next step. |
IT companies in Moscow
seem to have two directions they wish to develop
in: abroad and into the Russian regions and CIS
countries. What are your plans to further develop
your client base?
Mr. Grinbukh: In effect, we have in the past had
three offices: Kazakhstan, Ukraine, and Novosibirsk.
After a year and a half of operations we had decided
to sell these regional offices to the local partners
due to very low revenues in those markets. Companies
in those locales are not yet willing to pay the
amounts required to establish themselves properly
on the internet and the projects were involving
more and more management time and investment for
very little return.
The strategy over the next year or so is to launch
in the spring of 2003 a new sub-brand to provide
internet services to the small business community.
It is a program that we will be setting up with
a number of partners to offer to companies in Moscow,
Russia and the CIS. We think that the market among
the small- and medium-sized businesses in Russia
has a real future and we would like to tap into
it, but from Moscow and through partnerships. At
the same time, we will keep developing our web design
and web development arms - new technologies, new
media, new initiatives; we've always been at the
leading edge of new technologies and methods. For
instance, we released our latest content management
system, WebBuilder 2.0, based on Microsoft.NET technologies,
together with the official release of Microsoft.NET
in Russia.
Regarding offshore development, we are currently
looking for a number of partners in various countries
to lead our operations there. We are convinced that
it is always a matter of the right partnerships
and people first.
Do you plan to expand more abroad?
Miss Sverdlov: We have done projects in twenty-three
countries, but I think the next step for us will
either be to obtain partnership offices or full
offices to assist mainly with CRM functions in our
key markets. We have been actively considering Germany
and the United Kingdom in Europe because of the
size of their internet markets and the already existing
relationships there and we have been trying to look
at Japan for a while, though not as actively. And,
naturally, the US, which has been a good market
for us for the past five years, is likely to see
the first office opening.
The IT market has become fragmented and Mergers
and Acquisitions are on the cards according to
some reports, along with the possible involvement
of foreign companies. What is your view on those
trends?
Miss Sverdlov: As far as our segment is concerned,
many of the mergers and acquisitions have already
taken place in 1999-2000. Then, during the "internet
crash", about two thirds of all web development
companies died and only those with a strong backbone
and good management survived. While Actis was among
the survivors, we also had to restructure: it was
a matter of turning an enthusiastic idea five years
ago into a real company, with processes, systems,
and management in place.
A company's staff is its biggest asset but
its management team is also important. Could you
explain your backgrounds and personal achievements
a little?
Mr. Grinbukh: I'm the CEO and was one of Actis'
founders in 1997. I took a more active role in the
company in 1998. Prior to that, I managed another
of my companies, called ACT, a software and hardware
re-seller for the corporate segment in Moscow, which
was sold to Verysell in 2000. That company went
form zero to seven million dollars in revenue in
three years of its operation. Prior to that, I worked
at Sun (later became SunInterbrew) and was instrumental
in establishing Star Distribution to distribute
its products (beer) throughout Russia and the CIS.
I was raised and educated in the US, with a degree
from the University of Wisconsin in Finance.
Miss Sverdlov: I came to Actis in May 2000 and became
its Managing Director later that year. I was raised
and educated in the US: I have a Bachelor's in Economics
and Political Science from Yale University and an
MBA from the Wharton Business School. I worked in
brokerage on Wall Street for three years, but then
decided to broaden my horizons and go into consulting.
After business school, I worked for A.T.Kearney
in New York and then moved to their Moscow office
after a year. While there, I managed mostly financial
services and consumer goods projects around Eastern
Europe and in Russia. Prior to coming to Actis,
I briefly headed Accenture's Strategy competency
in Russia.
If we were to meet again in five to ten years
time, where would you like to see the company?
Mr Grinbukh: The company would still be a leader
in our field. At the same time, I would like to
see us more involved internationally and moving
into different vertical markets.
What would your final message to foreign corporates
be, bearing in mind that Red Herring's main markets
are the US, the UK and Germany?
Miss Sverdlov: As far as our sector is concerned,
it is one of the most open sectors of the economy,
the most de-monopolised. Most of the companies involved
in the sector here are young, talented, and enthusiastic.
Don't fear Russia just because it's Russia. Break
the old stereotypes. You can find real value here.
Mr. Grinbukh: We bring value in real terms to all
of our customers and partners, using latest proven
technologies. We welcome the opportunity to work
with you! |
