In 2011, Pentalog has taken the extraordinary initiative to invite all the employees who started working for the company in 2005 and a few outstanding employees who joined the company after this date to take part in an unprecedented event. Together, these employees have acquired 92% of the capital belonging to one of the most flourishing IT companies in Europe! All the participants invested in the company’s share capital by buying shares at their 1993 price! This unprecedented operation has enabled about 20 more people to attend the General Assembly. The dividend paid several months later granted them a 50% “refund” of their investment! Obviously, shareholding situations are eventually different from one another, as several employees hold less than 0.5% of the capital (however, this amounts to a theoretical value between €100,000 and €200,000) and I have reached 28%. But that’s the spirit! Certain people have cashed several thousand euro since their first participation. I am very proud of this operation which makes Pentalog stand out from other companies, in developing countries and elsewhere. In my view, there is no concrete way to better reward company loyalty. The company founders felt great joy on this occasion!

Welcome to the IT offshore press review. I think we should start with this question: do we really need new programming languages? Have you heard of Dart, Ceylon, Go, #F, Opa, Fantom or Zimbu? It’s just like people are trying to reinvent the wheel. But let’s see what are these new languages and then we will continue with our other subjects. Enjoy!

- 10 programming languages that could shake up IT (January 3, 2012, IT World)
- Bart Perkins: Is social connectivity friend or foe to corporations? (January 6, 2012, Computer World)
- UK IT professionals face nearshore competition (January 6, 2012, Computer Weekly)
- Gartner: Enterprise software spending to rise by 6.4% in 2012 (January 5, 2012, Computer Weekly)
- IT industry attacks plans to ditch GCSE work experience (January 6, 2012, Computer Weekly)
- CES Unveiled reveals little about tech in 2012 so far (January 8, 2012, ZDNet)
- 2012 Tech Startups to Watch Product Sampler (January 5, 2012, CIO)
- U.S. Report Sees Perils to America’s Tech Future (January 6, 2012, CIO)
- 7 Signs You’ve Outsourced Too Much to IT Service Providers (January 6, 2012, CIO)
- Wo sich Deutschlands Zukunft entscheidet (January 3, 2012, Wiwo)
- Die neuen BI-Herausforderungen (January 9, 2012, Computer Woche)
- Outsourcing ändert sich massiv (January 5, 2012, CIO)
- ERP schwach – CRM boomt (January 3, 2012, Computer Woche)
- 8 Beziehungstipps fürs Outsourcing (January 3, 2012, Computer Woche)
- Was aus Outsourcing-Trends wurde (January 5, 2012, CIO)

It is not our business policy to speak about potential contracts before signing them. However, these 3 particular business deals have a highly significant meaning. Their respective volume, in countries which are very far from each other, prove to what extent our nearshore service brand has henceforth become well-known. In Romania, Pentalog brand stands out as a national leader whose name is the first conjured up by those who want to carry out significant projects in sectors like software and internet. In Germany, our IT services company holds a place which can be henceforth comparable with the one held in France, not so long ago, in 2006 or 2007. We have gained our position in less than 3 years and we can see that things are definitely evolving. At the end of 2011, Pentalog is known practically throughout the EMEA area, as one of the main players of the Eastern Europe nearshore.

How much are these 3 contracts worth?
At least €11M overall per year. In a more optimistic view, these 3 business deals could yield €17M sales figure per year for Pentalog, which equals roughly our sales figure for 2010. These 2 contracts would have a minimum life span of 3 years… so this could mean a total amount of as much as €33M to €51M!
If I’m talking about it, it is because in 2011 Pentalog managed to sign a few contracts worth several millions. In addition, there are also smaller offers, which are still under negotiation. Therefore, I am fairly more optimistic as to 2012 than my colleague Monica, who shows more moderation .
Then of course, we might sign none of the 3 contracts… and this has to be considered. Or, on the contrary, all 3 ? The smallest is worth 2 millions per year and the biggest up to 10 millions. I consider that, whatever the case may be, although 2012 is heralded as a very difficult year, Pentalog’s position and market share on its areas of choice will record new progresses and that our company will become even more appealing, thus continuing to attract the best employees in the countries where it operates. We remain one of the few platforms in Romania which is able to develop projects involving up to 100 employees and which allows our project managers, Delivery Center managers and project directors to benefit from a 40% average annual growth in the last 4 years.

Therefore, keep an eye on our recruitment offers in case we sign these contracts as they will bring great technical and management opportunities. And in case we don’t, well, we’ll be happy to have been considered for so highly rated projects and it will be just a matter of time until we make it!

I wish you all have lovely winter holidays and a great new year in 2012!

- University challenge: using IT to improve services and reduce costs (September 08, 2011, ComputerWeekly)
- How to write a contract to protect you against out of control IT projects? (September 09, 2011, ComputerWeekly)
- 9/11 Continues to Influence IT Strategy (September 08, 2011, CIO)
- How To Mitigate Risk in an Overheated Outsourcing Market (September 09, 2011, CIO)
- Cloud Computing: What You Need to Know About PaaS (September 08, 2011, CIO)
- Amazon/Kindle Part 7: The End Of The Road For Outsourcing? (September 09, 2011, Forbes)
- Deutscher Wirtschaft droht Einbruch Ende 2011 (September 08,2011, FTD)
- Kampf um Neukunden beginnt (September 12, 2011, CIO)
- Womit verdienen Firmen in zehn Jahren ihr Geld? (September 09, 2011, Computer Woche)
- Green IT: So viel Strom genehmigt sich Google in einem Jahr (September 09, 2011, NetzWelt)
- Fukushima-Schock schiebt Cloud Computing an (September 06, 2011, CIO)

A month after our return from Tunisia, our debriefing work has already been accomplished; in any case, it was much easier than that following our journey between Silicon Valley and New York.

Among the clear French-speaking advantage, undoubted education quality, but also political unrest and mass emigration, Tunisia combines at the same time good points and drawbacks.

I have been wondering for a long time why this little country couldn’t see its largest companies develop explosively on the international market, supported by an unfailing friendship with France, with a Mediterranean culture and an educational system that overshadows many European countries as well as its neighbors. I have always felt attracted by this country, but the events that took place here last winter have, once again, prevented me from coming here and looking for answers to our questions.

Our first meetings have given us the main answer immediately. The No. 1 issue of Tunisian IT is the national attrition rate. This means that the young Tunisian engineers continue to flee the country, as the local economy doesn’t fulfill their expectations. Therefore, we had a conversation with a very young entrepreneur, I don’t know him too well, but many consider him opportunistic. I will not make any moral judgement, as it would be extremely simplistic to hold him alone responsible of the problem related to retaining Tunisian engineers. Each year, he supplies the French IT services companies with 300 to 400 people, for a revenue of about 1 million euro. His system is so well-honed that he says he has only 3 employees and his profitability is thrilling. 100% of his revenue is made in France. Officially, Tunisia issues 10,000 computer engineering diplomas per year, but, according to all the people we have met, among which several members of the domestic IT employers’ associations, the number of those actually “usable” doesn’t exceed 3,000, far from the official discourse delivered to the French press. The competition against Morocco around this figure resembles the statistical match which opposed the USSR to the USA in the fifties! But we can already notice at this stage the huge impact this person could have on the development of the Tunisian IT sector.

I must add that he doesn’t send any beginner to his French customers, but he carries out his “sampling” from the senior section, starting from 3 to 10 years of experience. I must add even further that, no matter how organized he is, he is not the only one who lives out of this population displacement, many candidates manage to find jobs by themselves and certain French IT services companies hire them directly on their own. Among the means used, I could mention the secondment of employees that local branch offices of French IT services companies or specialized offices practice, at times on the borderline of legality. Therefore, we can assume that, in total, the number goes beyond a thousand people per year. At an average offshore rate in France, this population displacement costs the Tunisian IT services exporters a little above 30 million euro per year, while the migration business accounts for “only” 2 to 3 million. And each person recruited by a French IT services company only generates income once, by definition, while local service provider continue lacking in human resources on a permanent basis. Thus, it is not against the 30 million euro that we must compare the 2 or 3, but against the average period these people will stay in France. There is a strong likelihood that the net loss for Tunisia reaches 100 to 200 million euro for several years. In contrast, the French IT services companies earn, for an average rate, either about 90 million euro as revenue per year, or 270 to 450 for an average of 3 to 5 years. For a developing country, it is quite a hefty sum, not to say staggering.

From an operational viewpoint, how could new entrants in the local IT economy be assimilated, if the confirmed and senior staff, expected to become experts and middle managers, disappear from the system for several years or forever? This is the reason why the Tunisian IT economy is not at the commercial level one would expect. There is also an enormous productivity reservoir that is lost.

Extrapolation? There are other figures which support my statement. While the Tunisian offshore sector is about 10 years old, there is said to be between 7,000 and 20,000 active IT specialists in the country. The figure of 7,000 corresponds to the population of offshore outsourcing centers, while the 27,000 people represent the network technicians of the administrations bodies and the local IT employees (27,000 people representing, however, 0,42% of the country’s total population, which is a proportion two times lower than in France). In any case, these figures show that, obviously, the Tunisian IT economy does not retain its graduates and that this financially bled dry country trains engineers (and doctors) for rich countries! More and more people are leaving the country for the United States, Belgium and Canada, besides France.

For the defence of our entrepreneur who is taking advantage of the exceptional market conditions, we should note that he is not to blame if local companies do not fulfill the population’s aspirations. As he has told me, “after two years in France, they become the clients or team managers of Moroccan or Tunisian offshore centers”. Moreover, our guy thinks bigger, as he has begun recruiting directly from top French IT services companies’ offshore centers… in Morocco.

Here is the basis of an incestuous relationship in which the major French IT services companies and their clients play the part of the consenting victim. They are the ones who invest in the offshore nearshore outsourcing centers, robbed by smaller-sized players who undermine their productivity efforts. In fact, our guy’s clients are not Atos, Cap Gemini or Steria… We have to look for them among second, if not third-level subcontractors of the first-level companies.

What is there to be changed to impose order in all this? The “chosen” immigration policy dear to our President of the Republic? This is said to have been done for only a few weeks and that IT development specialists are taken off from the list of jobs that are difficult to fill. Or should first-level IT services companies and their clients exclude from their sourcing the companies which rob them? This is not easy. For all I know, some of my excellent Tunisian colleagues deserve the best conditions, as they invest heavily in a ruined local software economy without compensation from the players who do not invest a single euro and simply suck out the youths who dream of France. It is alarming and too easy. Where is the moral limit that was shoved down our throats ever since we started talking about offshore and nearshore? As for myself, I know well the situation in Romania, where the same type of recruiting sergeants licensed by the French hospital administration and liberal medicine, come and shamelessly rob the country of its last doctors and nurses.

The manager of an IT pillar of Tunisian economy has revealed that he has been working on the root of the issues, meaning on the dissatisfaction of Tunisian engineers, jumbling up employees’ salary contribution, bonuses and various advantages meant to retain his staff. Until recently, this company, which ranks among the most respectable-ones, had an attrition rate of between 35% and 50%, according to my calculations. Starting with this year, their policy enables them to reduce it significantly. During this time, and in spite of the number of 200 newly recruited people per year, this representative of a flagship Tunisian IT company hasn’t exceeded 500 employees for several years! You have probably already calculated this, just as I have.

In the end, being a French-speaking country doesn’t actually make Tunisia an easy offshore destination for French players on the market. The size of existing companies confirms that, despite an excellent pool of candidates, it is not easy to grow.

As far as we’re concerned, we think we master the HR management instruments which enable us to reduce attrition rate to below 10% for years, in countries which are characterized by very high attrition rates. We are, therefore, considering opening a branch office in this magnificent and very promising country in order to benefit from the excellent opportunities it provides. In the coming days, we are starting discussions with business partners interested in the values, methods, and commercial success of the Pentalog group, which registers an organic growth between 25 and 50% each year, and whose staff will soon exceed 700 employees (see the CVs of our employees’ online).

Following this trip, despite local difficulties, we confirm that we are considering starting up a software unit which could hire more than 100 employees in 3 years . However, this decision is postponed pending the outcome of the ongoing electoral process. A member of the Board of Directors will start consultations in a few days.

Pentalog Group, through its Board of Directors, decided to change the organization chart and to divide its General Management activities in two sections: one dedicated to strategy, international issues, business development and marketing, and the other dedicated to operational management, including production and production structure management, financial management and reporting, management and development of existing partnerships, information system management, technical management as well as the incubator.

Within this framework, Frédéric Lasnier, French, 41 years old, current CEO, President of the Board of Directors and founder of the group will be in charge of the first section, while Monica Jiman, 34 years old, Romanian, formerly COO, will assist him from now on in his duties by becoming Deputy CEO. She will be in charge of the second section.

This new organization of the group aims at adapting the group to the ever-increasing client demands and to its geographic expansion. On these grounds, in the following weeks, the organization chart will be modified accordingly. As a reminder, Pentalog Group, No. 1 in the fields of software R&D and offshore IT Outsourcing in the European Union has offices in France, Romania, Germany, Vietnam, Israel and Republic of Moldova. By the end of August 2011, the group’s number of employees will have gone up to 700.

Around fifty mobile phones, the world N°1 for telecom billing software, the most important accounting platform for German SME (3 million licenses!), the most important French POS and its Retail Management version, the N°1 European software for management of tertiary spaces and distribution, the world N°1 for utility metering systems, both for connected equipment (embedded) and for servers, a management platform of security cameras and many others in the M2M sector… In total, there are close to 200 product lifecycles, the outcome of our clients’ imagination, which have been entrusted to us, either totally or partially.

These prestigious platforms, which are sometimes used by several hundreds of millions of users from all over the world (mobile phone baseline, for example) rank Pentalog high among the best engineering companies in the European Union. With a recommendation rate of 90% (!), Pentalog enjoys the favors of a large network developed by word of mouth on the old continent and this recognition is on the rise.

This very rapid development of our R&D and PLM references make me think about the opportunity of making a change in our organization. Why indeed, rather than splitting our offer in 2 business lines (Embedded systems and Information Systems), shouldn’t we organize the activities related to “products” into one single Business Line, “R&D” and “PLM” and the “service”-oriented ones into a services or “ITO” BL, or even “Build and Run”…? As a matter of fact, I wonder what is the best means of making the market understand that we are an accomplished player on the market, capable of supporting or taking care of the whole lifecycle of any software product. We are ready to do that from a legal point of view (we have strong knowledge in this area and we have three full-time legal experts in three countries), we are prepared for this from a technical point of view (we master the technology road maps and we avail ourselves of Technical Management with their own benchmarking and R&D activities), in the field of human resources (ramp up capacity at the highest level and full ISO 9001 certfied), but also in managing PLM (software platforms).

In any case, these reflections should help us become more aware of the achievements of these past few years. We have “single-product” clients who do not hesitate to entrust us with 100% of their future and there lies our main asset , in the trust of our clients and employees.

Sophie, Eric and I are going on a trip to Tunisia with the purpose of making local observations. Pentalog (IT services company) has always regarded Tunisia as one of the most appealing countries of the French-language nearshoring field, but the company’s commercial calendar, followed by the recent events which occurred in the country have prevented us from planning on opening a new office here. By “commercial calendar” I mean that our recent deployment to Germany (we have clients in Hamburg, Hanover, Frankfurt, Mannheim, Stuttgart, Berlin and Munich), or even to Switzerland and Austria, constantly turn us towards Central and Eastern Europe. Whether we like it or not, German-speaking countries turn to the former Austro-Hungarian Empire as naturally as France turns to the Maghreb. We have therefore continued opening nearshore units in Romania (where we currently have 460 employees) and in Moldova (120 employees). Vietnam and France have 60 and 30 employees, respectively.

When we recently decided to open our 5th Romanian delivery center, Tunisia and Poland represented strong alternatives to this option. But we rapidly needed a new site for supporting our growth (an additional 5 million euros in 2011), and the events in Tunisia determined us to remain in Europe this time, as well.

With 60% of our sales figure in France (and 10% in Wallonia and Romandy), the use of the French language remains one of our major preoccupations, and a more peaceful Tunisia would undoubtedly be an interesting solution. As we have just opened a new nearshore unit a few days ago (which already had 15 employees yesterday), we will not open a new office in the following months (we will probably start considering this over the next 6 to 12 months).

So, the main purpose of this trip is to make a calm and patient analysis. Eric, one of People Centric’s major shareholders, will focus on the availability of human resources in this country. This IT recruitment specialist is both a recruiter (300 people in 2011) for his clients and a genuine strategic consultant in a context of growing scarcity of resources. Therefore, Eric aims at analysing how this country can meet the needs of his European and French customers in particular.

Pentalog began its Vietnamese adventure in 2009. For 2 and a half years, the office was managed by Tuan Nguyen Quoc. A great team of 60 people is in charge of several customer projects (Altadis Imperial Tobacco, Sierra Wireless, Active System, Lexware, People Centric, Anevia etc.) or internal projects. Moreover, a team of 8-10 people will start a project for another important client in September.
This growing trend is only just starting. Our Asian strategy requires that we take steps forward, as part of a company development process which will have a special focus on the Asian market.
All multinational companies made this choice a long while ago, as the economic dynamism of the region cannot be ignored.

In the scope of this new organization, Marc Charbit has taken over the management of the Hanoi office. He joined the company at the beginning of June and spent his first weeks at Pentalog in the Romanian and Moldovan offices and at the Orléans headquarters. He is a young French manager with international experience in one of the top 5 French IT companies. He moved to Vietnam 5 years ago and has developed a strong relationship with this country, considering that he even learned the language. Like all valuable Pentalog employees, he is multilingual. He speaks Vietnamese, English, German, Slovak and, of course, French. He will play a major role in implementing the quality policy and preparing the Hanoi office for the ISO certification.

Welcome Marc! A great challenge lies ahead of you!

I choose to start this week’s IT press review with an article dedicated to offshore/nearshore. ComputerWeekly’s conclusion is that most companies choose to take their business to Eastern Europe. If you are interested in this subject don’t hesitate to take a closer look to our own analysis of the most common offshore/nearshore destinations.

-Why more businesses are nearshoring in Eastern Europe (July 6, 2011, Computer Weekly)
-Government cloud project is ‘re-energised G-Cloud’ (July 7, 2011, IT Pro)
- When IT Meets Politics (July 9, 2011, Computer Weekly)
-What do Google execs know about Google+ privacy that you don’t? (July 8, 2011, ZDNet)
-Is M2M the Answer for Job Stimulus? (July 6, 2011, M2M)
-Summer Camp for Enterprise IT: Bolster Your Team’s Skills (July 7, 2011, CIO)
-Indian Programmers vs. American Programmers: Whose Code Is Best? (July 6, 2011, CIO)
-The Captive Model for Offshoring Is Thriving, Says Research Firm (July 8, 2011, CIO)
-Ausverkauf der deutschen Industrie www.wiwo.de – (07 July, WIWO)
-Die besten Systemhäuser – (July 10, Computer Woche)
-E-Commerce auf dem Weg – (July 7, Computer Woche)
-Deutsche Firmen lagern geschäftskritische Prozesse aus – (July 6, CRN)
-In den Software-Fabriken Vietnams www.inside-it.ch – (July 6, Inside IT)

Best IT articles of this week. Enjoy!

- The IT Pro Silicon Valley Start-Up Tour (June 28, 2011, IT Pro)
- The cloud: security risk or risk management opportunity (July 1, 2011, Outsource magazine)
- 4 Common Branding Mistakes Startups Make (June 28, 2011, Open Forum)
- Worldwide IT spend set to grow 7% in 2011, reaching $3.67trn (June 30, 2011, Computer Weekly)
- CFOs Lack Faith in CIOs and IT Teams, Survey Shows (June 22, 2011, CIO)
- IT in der Cloud: Welche Faktoren wirklich zählen (July 1, 2011, ZDNet)
- IT-Fachkräfte: kaum Anerkennung für das Anerkennungsgesetz (June 29, 2011, ZDNet)
- Neue Cloud Services für die Automobilindustrie (July 4, 2011, Automotiveit)
- ,,Social-Media-Management: Chancen der Neuen Medien nutzen – Risiken für Firmen vermeiden” (June 27, 2011, Automotiveit)
- Lohnt der Outsourcing-Partner-Tausch (June 28, 2011, Computer Woche)
- Alles sicher(n) in der Cloud? (July 4, 2011, Computer Woche)

As Alex revealed to you last week, PeopleCentric was referred to many times in our meetings in California, both with regard to its role in Pentalog’s growth and success, and regarding its own potential. We will necessarily resume the latter aspect in the following weeks, in the scope of the capital increase launched by the French-Romanian start-up.

Today, I will rather talk to you about the growth potential detected by Pentalog in terms of outsourcing demand. Indeed, everywhere we went, we encountered the same issues concerning the lack of resources in start-ups, as well as in major companies. We visited Salesforce, we talked with Apple employees, former HP staff members, all of whom confirm that developers are rare and, in some cases, very expensive. The most talented of them, who use the most popular technologies and work on algorithm cores, can claim salaries of more than $200,000. And this is not an average. On the other hand, wages offered by start-ups are often supplemented by a payment in shares. This is also a simple way to temper down cash claims. The larger of these companies make use of this instrument to pay smaller salaries in the end by making their employees bank on the quality of the business plan.

Thus, outsourcing tendencies are becoming widespread, to the benefit of the major Indian companies, of course, but not only them. Eastern European companies are indeed very appreciated and promote themselves rather as emerging technological companies. Ukrainians, Russians and Belarusians in particular are widely represented here. Several Romanian IT companies are also present, as well as Chinese, Philippine and Vietnamese providers. Vietnam and China have a very bad image, mainly because of their communication difficulties and their teams’ lack of interest in the clients’ projects. This does not fit our view of the country, even though we share this opinion as regards their linguistic problems.

We have not taken a formal decision yet in terms of opening a subsidiary in the USA. Obviously, Pentalog’s numerous assets, like the Incubator or its fast ramping capabilities, are quite appreciated here, as high quality offshore companies are not so numerous. The marketing operations to be deployed are considerable. The small time difference, which is one of Pentalog’s assets in Europe, is irrelevant here, as well as our use of the French language, which, of course, is quite irrelevant to American companies. Therefore, we need to find something else. Pentalog’s impressively low human resources turnover rate project a favourable image on the company, as well as our participatory model resembling that of American companies, or our QMS and our satisfaction and recommendation rates.

In fact, our first feelings are excellent. We have no less than 4 commercial propositions to make following a presence of only one week. I can already envisage a next trip to California in the near future, somewhere between August and November, for instance. Will we have made a first closing deal by then? It seems difficult but, after all, why not?
This adventure is very demanding for me as it is part of an overbooked agenda. But isn’t organization a talent that I am supposed to have !? Many people tell me that American subsidiaries cannot be created as long as the business owner does not make a long-term journey in the country. I simply answer them that I am going to think about it and that it is not an easy decision. The transfer of the headquarters is also taken into account in certain cases: Talend, Business Objects, Viadeo are some of the French examples.

Alex and I would like to kindly thank all the people whom we met or who assisted us in organizing these exciting discussions. I am thinking of Carole Granade from the French-American Chamber of Commerce in San Francisco, of Rémi Vespa who was a colleague of my father’s at the end of the 80s and who has lived in SF since 1995. I am also thinking of Anthony, Frédéric, Anselme, Matt, George Haber (a major Romanian veteran in the Silicon Valley), Gwendal, Carlos, Jorge… Finally, I would like to express my deep gratitude towards my colleague Jean-Michel Fournier, who was my client at the end of the 90s, and especially a true friend at the beginning of my career, just like I was his friend. He became a Pentalog associate just when he left for the USA to build an outstanding career as an executive VP for major companies (HP, Unisys, United Health Group), he has remained my friend and provided us with a great welcome and useful advice. Thank you…

We start this week’s IT press review with an article published by Global Services Media. Hope you will enjoy it!

- Cloud Influence On Outsourcing (June 22, 2011, Global Services Media)
- Outsourcing: How to Avoid Contract Disputes (June 23, 2011, CIO)
- SaaS and IaaS: Expert Guide (June 24, 2011, CIO)
- The obstacles to Open Source in the public sector (June 24, 2011, Computer Weekly)
- M2M: Does End-to-End Still Matter? (June 22, 2011, M2M)
- America’s Most Promising Social Entrepreneurs 2011 (June 22, 2011, Business Week)
- Wirtschaft wächst 2011 so stark wie 2010 (June 20, 2011, CRN)
- Gartner erwartet 9,5 Prozent Wachstum bei Unternehmenssoftware (June 21, 2011, Computer Woche)
- Trendwende im E-Commerce (June 21, 2011, Computer Woche)
- Firmen geben 2015 mehr als acht Milliarden US-Dollar für Cloud-Services (June 21, 2011, IT Business)
- So erkennen sie faule Outsourcing-Deals (June 21, 2011, Computer Woche)

In 2006, Pentalog employees had an average age of approximately 25 years. This average has now risen to 28 years. As we faced a high turnover, we had to come up with an employee retention policy which included a remuneration system based on the recognition of our employees’ efforts. The problem is that the very notion of effort is not the same for everyone and, moreover, recognition of what is considered an effort or not varies with age. Considering that I myself am not an early riser, as everyone knows , I could well understand that it might be difficult for 25-year-olds to be punctual in the morning. Nevertheless, briefings and scrum meetings require the presence of the entire team. Thus, taking into account the young age of the staff in our IT outsourcing company, we decided to turn morning punctuality into a bonus criterion. I can tell you that the earliest risers among Pentalog managers could not be easily convinced

Objectivizing recognition

Likewise, we have always preferred recruiting rational and creative individuals who are able to come up with propositions for their clients, in addition to respecting the production processes, draw up the reports which enable us to invoice, to document their work and many others, which are seen as constraints by talented developers. If nobody at Pentalog questions the efficiency of the ISO 9001 quality system, that is because it is closely linked to a remuneration system which includes regularity and process follow-up.

The end quality of the delivered product and the respect for deadlines are also included in the financial rewarding system.

Whatever the case may be, the bonus system seemed like the most obvious objectivization method of employee recognition. In total, there are no less than 40 criteria which are taken into account on a daily basis by our PMs in order to determine the individual monthly bonus of each member of their teams. We are fond of this type of management innovations which render us different from other companies. Indeed, even though management costs related to such a system are significant, especially with a workforce of 650 employees, it offers us a considerable advantage when it comes to attracting and retaining human resources and renders Pentalog one of the best offshore nearshore companies in the world, with record satisfaction and recommendation rates, both in the East and in the West. Our latest internal satisfaction survey supports this claim. We are on the same tendency of permanently looking for harmonious systems designed to continually improve our performance. The waiting lists that we have in almost all of the cities stand as a proof.

From recognition to the sense of belonging

The other essential element that we promote, in agreement with the sociological studies on the Y generation, is the sense of belonging. Whether by searching for common values, joining innovation programmes or taking part in important holidays, we consider it of the utmost importance to support the project team, which is the elementary group of any IT company. Pentalog has a secret weapon for this – Team Beering! We have a small budget, which is limited because we don’t want to encourage alcohol consumption , which is designed to enable our project teams to go out for a drink together every once in a while, according to their own planning.

Finally, at a higher level, i.e. the office, the delivery center, the unit which is shared by over one hundred people, we allocate a small budget for different activities, like renting football fields, karting, the Christmas party or the collective holiday week which is so dear to our Vietnamese team. I actually heard that the latter were about to set off for a trip to Thailand. I would like to take the opportunity offered by this psychological and sociological article to wish them a good trip and a pleasant stay! Which just goes to show that expectations are not the same among the countries in which we have offices

The last point refers to online social networks. Both Pentalog and PeopleCentric display their values, their good or bad mood in complete transparency. Pentalog employees are quite active online. The Arab spring has shown everyone of us the political or rather cognitive importance of social networks. But Pentalog employees had already experienced this in Moldova, which witnessed the first Twitter revolution. Therefore, our online presence is quite natural, as these networks embody a world in which individuals experiment at great speeds their new preferences and new means of expression in harmony with the other members of their generation… Y, of course.

Here’s our selection of the best IT press articles.

- Does technology have to look good? (June 3, 2011, CNN)
- IT Manager Numbers (June 6, 2011, Computerweekly)
- local government offshoring head of steam building and I think Serco knows it? (June 3, 2011, Computerweekly)
- IT workers in local government braced for offshoring avalanche (June 2, 2011, Computerweekly)
- France bans Facebook and Twitter from radio and TV (June 4, 2011, ZDNet)
- Asian startups need connections, clear vision (June 3, 2011, ZDNet Asia)
- Silicon Valley still top location for IT professionals? (May 25, 2011, ZDNet Asia)
- ERP-Strategie auf dem Prüfstand (June 6, 2011, CIO)
- Weniger Outsourcing in der Schweiz (May 31, 2011, Inside IT)
- Die Top-Prioritäten der CIOs 2011 (June 1, 2011, CIO)
- Cloud: Wie weit sind Anbieter und was planen Anwender? (May 30, 2011, ZDNet)
- So zahlungskräftig sind die Staaten (June 3, 2011, FTD)

Connected microscopes, network crash test devices, oscilloscopes, an acoustic chamber, a TV studio, an editing system and video mixing consoles, 10 local and central datacenters, an ergonomics and design laboratory, satellite antennas, online stores, a steering room etc.

Pentalog, an IT services company, is equipped with incredible technological assets which allow it to continually improve its production. Of course, not all of this equipment is ours, but it enables us to gradually master it and, eventually, extend the field of our knowledge.

What other European IT services company oriented towards engineering or consulting can boast an acoustic chamber destined for the needs of mobile phone companies, a TV studio and multimedia laboratories and mobile features designed for our e-commerce customers? Except on our clients’ premises, I have seen this type of technological configuration only in major Indian companies which are ages ahead of Western European engineering companies. The latter continue to offer only man-hour-based services, whereas clients expect a genuine engineering solution which is fully integrated and industrialized.

Pentalog is now a technologically-rich multi-specialist firm, which collaborates with major companies and uses Open Source solutions, and is capable of providing a lot more than just code and third-party software maintenance services, without of course underestimating these activities . Thus, we can make product or service demonstration films, edit video sequences, produce augmented reality, but also test consumer electronic products, simulate M2M environments, test satellite connections, measure the quality of video servers, generate network crash tests, develop all the software layers of a mobile phone.

In all cases, we use the best specialists in the countries where we operate, who feel that Pentalog offers a rich environment for personal fulfillment. At a time when the focus is on convergence, Pentalog represents a great tool for its employees and helps its customers understand and deploy the most daring multi-channel strategies.

Pentalog received, on May 26th, a delegation of French deputies led by President Luca in our Romanian-Moldovan headquarters of Brasov. Following a lunch with a deputy mayor of Brasov and a visit to Sacele, a suburb of Brasov which is twinned with the town of one of the French deputies who were present, they paid us a visit in the late afternoon. My impression is that they were surprised by the French speaking skills of Pentalog employees, by their class and the scope of the operations that they handle. One of them said to me in an aside that he had discovered at Pentalog a different Romania, of a high technological and conceptual level, that he wasn’t aware of. He continued by saying that he found the country to be a natural European alternative to India in terms of large IT centers. I believe, despite the fact that this subject cannot easily be grasped by a Western European elected representative, that they understood that Europe was lagging behind in the field of software production because of the lack of engineers. Romania represents a possible solution to the current deadlock. Europeans must be all the more vigilant as Canadian and American offices are constantly recruiting Eastern European graduates and contribute to the migration of people who might as well join European projects.

The policies of certain European states resemble those of North-American countries in that they try to draw this population to their soil. Pentalog, a nearshore outsourcing company, uses another approach, as it contributes to the technological industrialization of an emerging European country by offering a high-level production infrastructure to professionals worldwide. Thus, we bring profits to our country of origin and export even from France, within and outside the Union. We have a European project, which was launched by French businessmen and which must now expand all over the world. We are very fond of our European framework which plays a vital role within our group and offers a privileged position to France and Romania.

The President of the delegation solemnly awarded us the National Assembly medal before taking his leave. I would like to thank them all, as well as the French Embassy, for the interest they have taken in us.

Outsourcing, offshoring. Two tags of this week’s IT press review. I hope you will enjoy it.

- CIOs increase investment in outsourcing and select multiple suppliers (May 13, 2011, Computerweekly)
- Offshoring: 7 Tips To Prepare for India’s Proposed Privacy Rules (May 13, 2011, CIO)
- Limelight Buys Web And Application Acceleration Technology Startup AcceloWeb (May 9, 2011, Techcrunch)
- Can the UK ever match Silicon Valley? (May 16, 2011, IT Pro)
- Should government rely less on outsourcing and have more web developers in-house? (May 13, 2011, Computerweekly)
- Android 3.1: Crowd-pleaser or heart-breaker? (May 13, 2011, ZDNet)
- China top in green tech money (May 9, 2011, ZDNet Asia)
- IT Leaders Forum: Practical next steps in migrating to the cloud (May 13, 2011, Computing)
- Die Trends beim IT-Outsourcing (May 16, 2011, CIO)
- Deutsche Unternehmen sehen bei Offshoring noch Potenzial (May 13, 2011, Silicon)
- Unternehmen suchen Weg in die Cloud (May 10, 2011, Computerwoche)
- Studie: CIOs setzen auf schlanke IT (May 11, 2011, Automotive IT)

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I hope you will enjoy our selection.

- How to plan now for hybrid cloud management (Mai 3, 2011, IT World)
- IT professionals are impulsive risk-takers, finds survey (Mai 6, 2011, Computerweekly)
- IT services sector bounced back in 2010 (Mai 4, 2011, Computerweekly)
- Tech startups want ‘right fit’ with investors (Mai 9, 2011, ZDNet)
- IT Outsourcing in China: What CIOs Need to Know About New Data Privacy Guidelines (Mai 4, 2011, CIO)
- Bringing IT Back Home: 10 Prime Locations for Onshore Outsourcing (Mai 3, 2011, CIO)
- Don’t Let The Innovation Lab Become An Ivory Tower (Mai 5, 2011, Information Week)
- India Adopts New Privacy Rules (Mai 5, 2011, Information Week)
- Outsourcing: Deutschland gibt den Takt vor (Mai 6, 2011, Automotive IT)
- Der deutsche Cloud-Computing-Markt 2011 (Mai 5, 2011, Silicon)
- Der beste IT-Nachwuchs kommt aus Karlsruhe (Mai 4, 2011, CIO)
- Alles über Virtualisierung (Mai 3, 2011, Computerwoche)

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