“Lviv should move toward serious domain expertise and become very valued to the industry,” convinces Wolfgang Fabisch, CEO of the company b-next. He finds the local IT very competitive in terms of outsourcing, but suggests developing specific spheres to become irreplaceable for the foreign clients.
Lviv IT Cluster asked Wolfgang why he chose the city as a new office location, and what the city needed to influence the CEE market more. To find out Lviv’s biggest threats and market goals, read our interview.
The Company in the City
b-next works in compliance space of the financial industry. It builds systems that enable its customers to control their businesses in line with the regulations that exist in different countries. The company is doing surveillance for equities, bonds and many other asset classes including contracts in such spheres as oil and gas.
b-next has started in Germany, and is on the market for nearly 27 years. “When we started, nobody else in Europe or even the world was very interested in doing surveillance,” says Wolfgang. With time, the company has opened sales offices in the US and the UK, and the most recent one in Lviv. “Although Lviv team is very new, it delivers an excellent quality with very experienced professionals,” adds Wolfgang.
Choosing Lviv as a new location was by chance, but it turned out as a good decision, continues Wolfgang. One of the employees at b-next’s German office, IT specialist from Lviv, convinced the CEO to open a new office in this Ukrainian city, and Wolfgang agreed. “If we would have had a negative experience, we would have closed down the office in a few months and move somewhere else; but the people and their delivery really convinced us to stay,” says Wolfgang. He names the professionalism and availability of IT experts as one of the main reasons the city succeeds.
“It is much easier to find professionals in Lviv. They are really well educated, motivated and view the products they work on as their babies,” adds Wolfgang. He considers university education here to be very good although the schools need money to modernize their buildings and infrastructure. Wolfgang adds: “Starting a new office is much easier over here, and it is much less bureaucratic. People are open-minded and job oriented. However, Ukrainian economy is not of interest to us as a customer base, and the same applies to other companies.” Although Western partners are bringing in production, they export it again afterwards.
Productivity in Ukraine
“Delivering professional services to the world is okay for now, but this has to change,” convinces Wolfgang. Currently, Lviv hosts the companies mostly programming for the bigger clients without delivering anything on their own. “It is not the future just to program without domain expertise. The clients can easily move to another location whenever it gets cheaper,” explains Wolfgang. As a solution, he suggests developing a value in IT services the city can deliver.
“It is not very good proposition just to have very fast coding people. It is okay to send people around the world to make money, but this job can be gone tomorrow. This is what Ukrainians have to focus on,” adds Wolfgang. He suggests focusing on domain expertise, concentrate on some spheres and get an in-depth understanding of them. “Ukraine needs to become valued for the industry so the clients cannot switch to another place. It may be against our own interests since we could move to other countries if needed, but just professional services is a bad luck for the country,” Wolfgang believes.
Besides, Ukraine is definitely not the cheap IT location. “Although the salaries here are lower than in Germany, the travel and communication costs increase the local price. However, the people are very productive, and it is the main reason to come here and to stay here,” explains Wolfgang.
He concludes: “The more productive your country becomes, the higher salaries people will get”.
Issues and Perspectives
“I have had many warnings about the corruption in here. Until now, I have not seen any of it in connection to the company, but if it happened, we would have to close down the location immediately,” explains Wolfgang. Another disadvantage of working here is the travel difficulties. “I think it will change when the situation gets more stable in Ukraine. This is not something we can change ourselves,” he adds.
Among the advantages, Wolfgang points the cultural closeness, the big market size and availability of the professionals as well as their work attitudes. “I came to Lviv many times, and I like the city and its people. It is very different from the most places in Central Europe. People are open-minded, fresh and moving forward, and the city spirit is fantastic,” concludes Wolfgang.
“Lviv IT Market is very competitive. Before moving here, we negotiated with Russian companies, and we have seen the huge differences between the culture, business, and the people here and there,” adds Wolfgang. When comparing the city to other CEE locations, he states that it is very well positioned and competitive due to its large human capital and the quality performance.
Right after opening an office here, b-next joined Lviv IT Cluster. “When going to new locations, you have to connect to the colleagues and the business in the sphere, and this is something that Cluster is doing. It is well connected to the political part of the city, and it promotes IT making Lviv more attractive to new partners,” explains Wolfgang. He adds: “I think it is very important to be a member of this community, and it is also a part of good citizenship to be involved with the city.”