Last June, Pentalog placed second at the Company Strategy Awards in France.

The Company Strategy Award aims at rewarding each year several entrepreneurs for their strategic choices which allowed their company to reach a high level of performance: internal growth, external growth, vertical integration, horizontal concentration, diversification, specialization, Europeanization etc.

I am inviting you to watch Frédéric Lasnier’s video interview (for French speakers only):

How can international operations turn an asset into a growth factor?

Calculate your offshore budget with our price maker.

- Infrastructure Management Outsourcing: A Growing Market (22 October 2010, Supply Chain Digital)
- Only 5% of firms have a cloud computing strategy, claims study (21 October 2010, Computerweekly)
- Outsourcing costs set to rise 20% under EU directive (20 October 2010, Insurance Daily)
- Spending Review: IT figures make their predictions (19 October 2010, Computerweekly)
- Retail banks: IT systems to change for retail banking (19 October 2010, CIOL)
- How Do You Measure Innovation? (21 October 2010, CIO)
- Was Kunden von IT-Anbietern erwarten (22 Oktober 2010, CIO)
- McKinseys IT-Trends: Eine kritische Bewertung (21 Oktober 2010, Silicon)
- Gartner: Weltweite IT-Ausgaben steigen nur zaghaft an (20 Oktober 2010, Computerwoche)
- CA: “Mainframes und Cloud gehören zusammen” (20 Oktober 2010, ZdNet)
- Bitkom-Umfrage:Rekordbeschäftigung in der IT-Branche (20 Oktober 2010, ComputerWoche)
- Outsourcing-Anbieter kannibalisieren sich (20 Oktober 2010, CIO)
- IT-Controlling: Wer Innovation will, muss die Kosten im Griff haben (18 Oktober 2010, Computerwoche)

Choosing

Elaborate your Offshore project with the European leader in Offshore Outsourcing!

It has been two years since Pentalog opened an office in Hanoi, Vietnam. The group had reached a point when it needed to complete its offer with „extreme low cost” services. At the time when we carried out the location study, we had to choose between Vietnam and China. Our final choice was determined by Vietnam’s more apparent cultural and linguistic resemblance to France and the certainty of having an easier access to high-level resources. The gamble has paid off, as today we have 60 collaborators in Hanoi, all English speakers, half of them speaking French as well, who are working for customers like Altadis (Imperial Tobacco Group), as well as for innovative projects within Pentalabbs. At present, we consider that our Vietnamese positioning, which is low cost but offers engineering services of high added value and which benefits from the entire Quality system and organization implemented at group level, could also represent a satisfactory response to Asian nearshore market expectations, especially to the Japanese market.

According to Gartner, the Japanese outsourcing market registered a 4-billion-dollar sales figure in 2009, more than half of which is represented by embedded software development services. Japan’s providers are especially Indian and Chinese, of course, but the Vietnamese market share (on 3rd place after the 2 giants) is on the rise, while that of India has been decreasing since 2007. Vietnamese IT providers are working for Japan in particular, but their services are often limited to testing. It is in this respect that we can stand out from local competitors: we are capable of providing high-level development services (IS and embedded systems), within large projects.

Opening an office in Japan won’t be a piece of cake. This is the first time we are going to face such a cultural and linguistic gap. But our past experience, both multicultural and multilingual (French, English, Romanian, Russian, German, Vietnamese, Hebrew etc.) will be a major asset. We are going to have to quickly identify a future local associate, with a double cultural identity, either European-Japanese or Vietnamese-Japanese, and with a genuine entrepreneurial motivation. We are launching our research right away.

Since December 2008, Pentalog and Pentalog Technology (our joint-venture with Ausy) have been ISO 9001 certified for their offices in Brasov, Bucharest and Sibiu, as well as Pentalog Iasi and Pentalog Chisinau.
The ISO certification, granted for a three-year period, was obtained following a main audit which allowed to control the practices of the group in terms of recruitment, training, sales and marketing, provider management… as well as project organization at our development and testing sites in Brasov and Chisinau. It will be renewed through two follow-up audits which will enable, after three years, to verify the conformity of all our offshore development sites in Eastern Europe. Our Vietnamese site in Hanoi, which hadn’t been created yet in 2008, but which aligned its practices to the group repository from the moment it was opened, should qualify for receiving the certification in 2011-2013.

Entering an ISO certification process has allowed Pentalog to make quick and considerable progress on its work process management and the improvements that were made by implementing the quality system have often been recognized by our customers.
If, for some of them, our rigour in formalizing specifications and detailed test plans or in holding regular progress or arbitration meetings, may sometimes seem cumbersome, in the end, there are undeniable differences in terms of transparency on the follow-up of completed workload or delivered quality, between projects conforming to our repository and those coordinated at sight, in an arbitrary manner.
Taking time to reflect, taking a step back for a better leap forward (taking more time in the conceptualization stages rather than working hastily, undoing the work, redoing it and eventually wasting time and money), this is simply what Pentalog is offering by organizing its client projects. Depending on the project context and work method, the implementation is adapted, but fundamental principles remain the same.

Customized implementation of institutionalized processes is also in agreement with the CMMI model towards which we are orienting our repository, within the specific framework of IT development and at a more advanced level of definition.

For a year now, we have been orienting our quality management system in this direction, through training sessions that we are offering our project managers and team leaders. More than 60 of them have already attended these best practices training sessions related both to the production cycle and to project follow-up and team management activities.

All our project leaders have understood and efficiently integrated these best practices into their daily management, in a gradual manner, so that changes can be noticed by the client only through the benefits that they bring them.

On November 29th and 30th, Pentalog and Pentalog Technology Sibiu, followed by the Orléans headquarters on December 6th, will be facing the 2nd follow-up audit (successfully I hope ). Then we will begin a new three-year improvement plan, more CMMI-oriented, which is also at company level. This is because at Pentalog, our certification is truly the result of a determined policy of the entire group management, the confirmation of tangible and systematic practices that are integrated at all company levels and an indisputable pillar of our growth.

- How IT’s Role Will Change (18 October 2010, Forbes)
- Indian offshoring giant Infosys boosting U.S. hiring (18 October 2010, Computerworld)
- Forrester downgrades U.S. IT spending forecast (15 October 2010, Computerworld)
- Indian IT to focus on Europe (October 2010, Offshoring Times)
- Government spending review will lead to more IT offshoring, says Ovum (18 October 2010, Computer Weekly)
- Comprehensive Spending Review: Suppliers brace for IT spending plunge (14 October 2010, Computer Weekly)
- Cloud überholt “On Premise” bis 2015 (11 October 2010, Silicon)
- Open-Source-Projekt macht Java parallel (15 October 2010, Silicon)
- Wie viel Energie verbraucht Software? (15 October 2010, Silicon)
- Kritik an Preis-Leistung bei IT-Beratern (12 October 2010, Computerwoche)
- Wer Innovation will, muss die Kosten im Griff haben (18 October 2010, Computerwoche)

Elaborate your Offshore project with the European leader in Offshore Outsourcing!

There are two reasons why I traveled to Vietnam only one month after my previous trip. The first could seem personal, but it is more than that. I wanted to be there for the millennium jubilee of this city that I love so much. I didn’t manage to free up my schedule one thousand years ago and, when looking into my agenda, I noticed that I already have other commitments for the next millennium. As I arrived on the last day and the traffic was chaotic, I didn’t get the chance to enjoy the event. But it doesn’t matter, I wanted to be there, together with all those who love Hanoi and with all Pentalog collaborators from the East.

This was also a week for reviewing two projects that are essential for us: PeopleCentric and xYz, in the field of social networking. I wanted to validate the gateways between the tools of our start-up and the SN world. This allowed me to spend a lot of time with Iulia who, on behalf of the Labbs, is in charge of managing innovation on these projects. Several decisions were taken, mobility being one of them.

This is where this famous notion of innovation management steps in. I admit to being a great beginner in this field. How can we bring together concrete projects for existing companies with an idea laboratory and an incubator such as the Labbs? For example, we resumed the subject of mobility through questions related to communication, interfaces and languages rather than through the “application” part. If everybody wonders at the low level of penetration of these professional applications after all these last years which were spent talking about the mobile revolution, it is because desktop-related concepts are meant to be transferred onto mobile devices. The tool AND the communication layer must be different. The labbs will be working on this, among others. But there is no doubt that business fields based on speed will be much more willing to buy. Let’s work for those who need the tool and let’s work on a mobility language, as well.

Therefore, Pentalog Hanoi is also getting ready to take over mobile projects, which are closer to Pentalabbs: those from PeopleCentric and those from the Labbs. Thus, we will have two mobile teams, in Moldova and in Vietnam.

We also celebrated a wedding in the team during this week, namely that of Dung, the project manager of the double platform xYz and PeopleCentric… who invited us ALL to his wedding! There were 60 Pentalog collaborators. Asia is offering wonderful lessons of social cohesion. I was also surprised by the fact that the wedding meal was organized in the middle of the week and that we all left after approximately one hour. Everybody told me that it was important to be together, without any distinction. If you are my colleague, you are coming, period!

Thank you, Dung! Pentalog wishes you the best for your future happiness!

- China’s Competitive Edge In The Outsourcing Space (7 October 2010, Forbes)
- Recovery drives hiring by IT majors (7 October 2010, The Hindu Business Line)
- Debate: does cloud computing make enterprise architecture irrelevant? (7 October 2010, ZdNet)
- European firms wasting millions on unused apps (6 October 2010, ITPRO)
- Indian suppliers unlikely to win public sector deals (5 October 2010, Computerweekly)
- Cloud Computing in the U.S. Shows Momentum (5 October 2010, CIO)
- A Small Uptick in Outsourcing Among Community Banks (4 October 2010, Bank System and Technology)
- Deutsch-türkische ITK-Kooperation besiegelt (8 Oktober 2010, Silicon)
- Q2-Update veröffentlicht: IDC erhöht Prognose für den deutschen IT-Markt (7 Oktober 2010, IT Business)
- Cloud Computing ist ein Milliardengeschäft (6 Oktober 2010, Computerwoche)
- Praktikum bei Indischen IT-Dienstleistern (5 Oktober 2010, CIO)
- Die IT-Fakten der größten Unternehmen Deutschlands (6 Oktober 2010, Computerwoche)
- Ausbau des Near- und Offshorings: Service-Provider lagern aus (5 Oktober 2010, Computerwoche)
- Offshoring: Die merkwürdigen Ideen der Deutschen (4 Oktober 2010, Computerwoche)

Elaborate your Offshore project with the European leader in Offshore Outsourcing!

Even though at present we have a clear vision on the Cloud services that we are deploying, it is clear that the industrial view that we want to apply suffers from the presence of major players who are taking over the market. Even for a company like Orange the situation is not simple.
The extension of our development activity (build) to production (run) is an obvious step, but how can we approach it without the support of major communication campaigns?

If among the fundamental values of Cloud Computing there is a total abstraction of the geographic location of data, this particular point brings forward the notion of trust in relation to the service provider which handles a considerable part of the company’s digital assets. If tomorrow production, payment or CRM data are lost, how is the company supposed to function?

What if there were a solution that offered to keep data hosting within the company? The Cloud service provider only provides the required power of execution in its datacenters. This appealing idea regarding information security obviously implies technical constraints that can easily be overcome:
- The client’s site has to be close to the datacenter in order to maintain a synchronous accessibility (or replication).
- Identical storing equipment has to be used in order to limit conversion platforms.

Now, if major players of the field are flooding companies with business offers, the community approach is interesting for offering services that are as industrial as the others, but taking into account more concrete problems:
- Geographical community: a CIO’s interest is to use Cloud Computing with “local” actors.
- Business community: the interest is in proposing packages (from IaaS to SaaS) to business managers, with already proven migration plans.

As regards the geographical community aspect, it is true that the resource mutualization capacity is greatly reduced. Moreover, except for major French towns, it is difficult to find reliable, available and modular hosting resources. I found the COLT initiative in this field to be in line with this constraint. Their offer consists in building a 500m2 datacenter in 4 months based on containers. The other problem is related to the interconnection of the IP and electrical networks. On the initiative of local authorities, local fiber networks are extending. France is not covered, but this is improving when you see plans that are in place. As for electricity, although there is little interest in placing these data centers close to a production site (nuclear or other), it is certainly easier to find a place which is redundantly covered.

On the other hand, we have already been asked several times to offer infrastructure outsourcing solutions outside EU frontiers (each had their own reasons that don’t concern me). We cannot provide a solution at the same level of performance, but we already have answers to these problems that are close to Cloud Computing.

The business community is more difficult to target because, in order to succeed, we need credibility. The main service category is SaaS and the others stem from the first. Work on software editor reconversion towards these Cloud Computing activities is going in this direction; even Syntec (the French IT association) is active in this respect. It is therefore in these editors’ best interest to group together and organize their client community in order to make them resource mutualization propositions and therefore offer more services. But not all these editors have the capacity, competence or desire to include the “run”.

In short, if we have explored the paths of generic, general or industrialized Cloud, we are also paving new ways that will allow us, together with our partners, to bring correct and precise answers to community expectations, be they geographical or business communities.

I am continually wondering what the strategy of French IT companies could be. This morning, I was talking to the manager of the French subsidiary of a well-known group which employs 700 collaborators here. This likeable manager was a little surprised to notice that Pentalog already has almost 600 collaborators involved in large or very large projects, while they don’t have more than 20 collaborators offshore. This reminds me of the encounter I had a few months ago with one of the French giants of outsourced R&D… who piteously admitted to having a total of 200 offshore collaborators all in all, while boasting thousands of employees in the referencing files that they send to their clients’ purchase departments.

I am asking myself questions on their strategy when I compare the organic growth differential, while the sales force of this company is 20 times greater than that of Pentalog. Over the last 2 years, they have had an organic growth of only 100 collaborators, whereas we added 300. With three sales people against 50, the competition is not fair. In fact, the marginal profitability of this development is likely to be negative.

We had a small friendly argument defending our models: he objected by saying that they don’t know how to sell offshore services and I answered that I wasn’t talking about offshore, but about strategy, management and profitability. When marginal returns are decreasing, one must immediately question the business model. When development destroys value, it has to be stopped.

Many IT company managers have what, in my opinion, is a misconceived idea that their clients can’t stand to see them make money. I think that they couldn’t care less about that; what they want is to pay less for the same or better results. The reality of Pentalog’s organic development clearly sets clients’ expectations for high-quality nearshore services, based on a powerful industrialization that helps them make savings of 30-50%. As long as IT companies don’t make adjustments in terms of production, i.e. by equipping themselves with genuinely local management structures, as long as they don’t understand that PM must be based on the production site but also make regular travels, they won’t stop the growth of pure players like Pentalog. If they content themselves with outsourcing tests and bug corrections, project costs will only decrease by 10%, which is very far from the truly Design to Cost expectations of their clients.

After a few months of reflexion on the approach that we are going to use for a CMMi deployment on our projects, we began by providing a first model approach to our technical management (Cornel), our quality management (Aleth), all our project managers and myself. Pierre de Thelin, who has been our “quality consultant” for 4 years now, continues to provide us with his assistance on this new strategic project.

Last September 22nd, 23rd and 24th, Pierre presented the complete CMMi model in one day, which was followed by two workshop days meant to help us determine the Deming wheels that we need to “put in motion” in order to adjust to this model. After going through the 729 pages of the repository, the situation seemed somewhat delicate, as we had yet to establish the steps that we needed to cover. During the two Workshop days, we went through the model stages again in order to determine what needs to be improved. In the end, we all shared the same view: yes, there is work to be done but improvements are the natural step forward. We felt that CMMi would be the continuation of the ISO certification (obtained in 2008) and this is an important asset. Indeed, we have continually improved our internal and production processes since 2008.

I would like to resume a debate that was started during these three days. After the first day, there was a discussion on the position of other frameworks (scrum etc.) in relation to CMMi. Several participants needed to sleep on it and the next day the conclusion was: they are completely complementary, a CMMi project can be carried out in SCRUM, for instance; one provides organization while the other provides the control points. But it was important that those (project managers) who will play an active role in managing project changes share their experiences and visions.

Of course, there is a step we need to overcome, but it is smaller than the one we overcame at a rapid pace between 2007 and 2008 for the ISO certificate; in fact, this is an ongoing process of improvement of our maturity level. We haven’t yet definitely decided about our project certification strategy, but I can already state that the CMMi certification for all projects is not the objective. On the other hand, the improvements that we are bringing to our processes will be integrated into the projects, as we have been doing for 3 years. When we start a project with a dedicated team, in which we have a best efforts commitment, we systematically deploy the same production processes as for fixed-price projects (performance-guaranteed execution). Why shouldn’t our clients benefit from the processes we commit to when we make a best-efforts commitment?

Then why are we striving to adjust to the CMMi model? This model is oriented towards a major part of our activity, software development. It has already proven its legitimacy in this field. In my opinion, the most important thing is that it offers us a path to follow for the improvement of our production processes.

At the end of these three days, we defined an action plan that covers a period of several months. The quality management and the technical management are responsible for organizing this change management with the project managers. The scope for action is set, responsibilities are distributed, the project has now been launched.

Last Saturday, September 25th, Cornel and I, as Pentalog’s technical management, hosted the autumn PM Camp (project manager camp) in Brasov. I am reminding you that this event gathers together the project managers of the office in question in order to provide them with the opportunity to communicate and exchange information. This moment is therefore used to present subjects that are requested during the preparation phase, but also to take note of their problems (customer relations, team management, technical issues etc.), and to share information on these subjects.

We began our PM Camp with Lidia’s very clear and dynamic presentation on the KPIs (Key Performance Indicators). Our project managers are indicator providers. The production of their teams contributes to our clients’ performance indicators. This raising of awareness regarding key indicators, their follow-up and analysis allowed for some interesting discussions.

Following the KPIs, I presented a subject together with Mathias on Cloud Computing. At first, I set out the concepts, values, market expectations, main consequences for developers and answers that Pentalog may bring. Mathias, on the other hand, provided a more operational presentation on capacities and architectures and made a demonstration of an application deployment on Microsoft Azure, Amazon EC2 and Google App Engine. Project managers were very interested in the presentation of this subject, as it allowed them to better grasp a subject of great complexity. Cloud Computing has become an indispensable subject for the architectures of tomorrow. Through this presentation and others to come, the technical management team is preparing project managers to understand this type of architecture in order to better meet these needs, but also to be proactive on this matter in their relations with the client. The technical management is also preparing more operational ETH meant for developers so that they may also be ready for these technologies.

In the last part of the day, Cornel (Technical Manager at Pentalog) took over to present the Adaptive Case Management (ACM). This recent approach is driven by the AIIM community (aiim.org) which has been helping organizations for over 60 years to find, control and optimize their information through training, research and better practices. One of their recent studies shows that 75% of respondents use messaging as a support to their workflows/processes and that more than 40% of interviewees think that the main difficulty is adding and changing processes. The ACM approach consists in exploring other ways than the rigid (or too complex) process which only represents a small part of the operation of a company. Process agility must consist in maintaining managed and measured processes that adapt to “real life”.

Our next PM Camp session will take place in Chisinau on November 23rd. Project managers have been sent an invitation. Some of these topics will be resumed. Pentalog Project Managers, if you want to present a theme or watch the presentation of a specific subject, don’t hesitate to communicate your wish through the usual channels!

The 6th Technology & Business convention will be held next October 14th from 9 a.m. at the Pavillon Baltard in Nogent-sur-Marne.
Meet Innov is the 1st international business convention dedicated to innovation players from all fields: innovative start-ups and SMEs, major groups, investors, research laboratories.
In order to meet us at our stand, please contact us by email (slelarge@pentalog.fr) or by telephone at 02 38 25 30 30.

- Saas Puts Public Networks Under Pressure Say Analysts (1 October 2010, CIO)
- Cloud computing: Is it ready for disaster recovery? (30 September 2010, Silicon)
- Offshoring: Why India’s outsourcers are setting up shop in the West (30 September 2010, Silicon)
- Five Reasons Why Legislation to Limit Outsourcing Fails (30 September 2010, CIO)
- Egypt targets $10 billion in outsourcing exports (30 September 2010, Associated Press)
- Outsourcing for the Right Reasons (29 September 2010, CIO)
- Why technologists come unstuck over decent design (28 September 2010, Silicon)
- Infrastructure Outsourcing: What and Why? (28 September 2010, IT Business Edge)
- Gartner: 1 in 4 Server Workloads Will Be Virtual By Year-End (27 September 2010, CIO)
- Die IT-Branche braucht mehr Entertainment (1 Oktober 2010, ComputerWoche)
- Close-Shoring im Speckgürtel (1 Oktober 2010, CIO)
- Woran Multisourcing noch scheitert (1 Oktober 2010, CIO)
- Systemhäuser misstrauen der Cloud (29 September 2010, Computer Reseller News)
- Outsourcing im Jahr 2020 (29 September 2010, CIO)
- IT-Ausgaben stagnieren (28 September 2010, Silicon)
- System- und Innovationsforschung: Deutsche IT-Branche nur Mittelmaß (27 September 2010, CIO)

Calculate your offshore budget with our price maker

Pentalog is launching a new, ultra high tech, Chip Design offer. Based on a team of 8 electronics experts who have worked for the greatest companies in the electronics industry (IBM, AMD, Intel etc.), this offer comes as a support for our Embedded systems activities. This makes Pentalog the single Eastern European player to have the entire range of competences, from chip design to embedded development for the telecommunications, aeronautics and defense industries and management applications and web services development. This offer is unique.

Pentalog will begin by serving AMD, the American semiconductor manufacturer. This activity is closely related to the start of our operations in Israel. We have now come full circle. Pentalog is now capable of designing and developing equipment and integrating it into management services on web platforms.