Here is an article that Livia Rusu asked me to publish:

“OPENi is a project organized to bring relevant and valuable impact on all its participants in terms of IT knowledge to which they don’t have access during their studies.
Professors, IT Companies and IT Experts have the opportunity to interact with each other and with students.

Aleth Delcenserie, our Quality Manager, had a presentation this morning on “Sensibilization to Quality in software development process”.

Don’t hesitate to follow also Monica Jiman, Pentalog COO – Vice President Business Development, online on http://www.privesc.eu/ at 4PM presenting “ITOO strategies for East Europe”.”

I do not often write in Romanian language on this blog but I have no Romanian blog, so… I would like to follow-up with an article published by the most important Romanian economic newspaper, about the 2009 performance of the IT sector.

“In 2009, estimarile PAC indicau piata de servicii IT la aproximativ 350 de milioane de euro, in scadere cu 5% fata de anul precedent.” (ZF.ro).

Pentalog reprezinta 0,75% al efectivului national din sectorul IT iar cifra de afaceri reprezinta 2,28% din PIB servicii IT. Cresterea, la nivel de grup, in 2009 a fost de 50%. Iar in Romania cresterea efectivului a fost de 44%.
Companiile romanesti, care au pus accent pe productivitate si pe ameliorarea continua a acesteia trebuie sa beneficieze de oportunitati generate de catre criza.
Ceea ce am sustinut de multa vreme incepe sa se adevereasca, anume ca sectorul servicii IT si software a devenit un sector matur si industrializat. Multumesc tuturor pentalogienilor care impart aceasta viziune si care demonstreaza in fiecare zi excelenta IT-ului romanesc si moldovenesc.

A few days ago, we have been interwied by Wall-Street in Romania. The article is about the main figures we released at the beginning of the year, the results of 2009 and the main thrusts of the 2010 Pentalog strategy:

http://www.wall-street.ro/articol/IT-C-Tehnologie/80236/Outsourcing-ul-si-criza-Cum-abordeaza-Pentalog-anul-2010.html

For non-Romanian speakers, in short, the main point we tried to emphasize is the attractiveness of Romania as an offshore/nearshore destination, that we need to maintain. Now the domestic market is still not big enough to create new business. The local IT services market significantly dropped in 2009 and for this year forecasts are directed at the same trend. The public sector used to be a good customer some time ago but now the budgetary deficit has turned the state into a question mark in the new business equation. And when I think of sectors such as embedded systems, I cannot imagine how a market without any strong production (I don’t even dare thinking of R&D) can provide work to thousands of engineers. Therefore let us keep our assets and continue to grow in the framework of international projects, where Pentalog is really successful, with over 50% growth rates our competitors are jealous of.

After developing an initial application for one of the leading French companies in social networking, tourism and entertainment on the Web, Pentalog followed up with an application for energy management and home automation before starting the development in regards to its own needs in the field of telecommunications. Pentalog has now turned towards real estate, recruitment and social networks. We also have opened discussions up with one of the most important publishers in the French press.

The momentum which started nearly a year ago has accelerated with several specific sales approches. Our latest newsletter has generated 3 leads which are presently being discussed. The NL prepared in Romania also surprised us, since it has generated a lead too, while we were just launching into the process of looking for new customers, in the style “we make iPhone applications, therefore we are cool…”

Pentalog seems to be in a position to become rapidly the leader in the Balkans in this area. The first application based on geo-location, is well known as it is one of the most downloaded Apps in France, found in the Appstore (Cityvox). Admittedly, it was a bit laborious in the development stage, but it’s now perfectly reliable and has been available for several months and is regularly used. I can say, as a user, it is absolutely wonderful. The next two that were developed did not give us any problems. Our friends from Wirecom Technologies asked us to transform the iPhone into a remote control device for the home which we were perfectly able to do and “on time”. Today it is a Skype-like application, merging an iPhone via WiFi with a Pentalog VoIP network that we are preparing to launch.

I won’t talk about the applications that have not yet entered into production, but let me say that we shouldn’t lack any work in this sector over the next two years. We are beginning to feel the interest in this market for Android, a system which is at least as powerful, portable and a lot less expensive. It’s simple, the Google platform will be in my opinion, present in this range of products along with 100% of the smartphone manufacturers in the next 18 months (except Apple of course) and in my opinion the app activities will continue to grow much stronger. The same thing could happen between Apple and Google which happened at the time of the first Windows OS in the 80’s. In the end, the one which is the most open wins… I think Jobs knew this.

From the production side, we should find the development of iPhone will continue to be present in the group, as it seems to have become a generic request. The Chisinau site also seems to be one step ahead of many others and could become the No. 1 Competence Center in this sector for the group. We will soon be making a decision concerning this subject.

I also wonder about the necessity or not, to develop a new generation of mobile platforms in the future Pentalog Labs, which has grown rapidly, thanks to an Executive Meeting with Aymeric Libeau (responsible for R & D, information systems and quality of the Group) held last weekend. I will try to get back to this subject of Pentalog Labs before the end of this week.

Pentalog is now working in 5 countries, which have different levels of practices and types of wage scales. Thus, in addition to the question of salaries, there is a genuine “large difference” between the gross annual salary in France and the salary in Vietnam which is very complex, incorporating a premium (bonus) of the New Year, which can change the monthly salary, from 1 to 3 or 4 times because of the additional earnings.

In Romania and Moldova, with patience, we succeeded, like most businesses, to impose a contractual gross wage scale. The constant changes of taxes and social charges have condemned our ability to establish fixed net wage scales.

The average remuneration scale in these 5 countries are very different, we should not hide this fact. A German company will pay a higher gross salary than that of a French company… but the net earnings are very similar, because of the impressive tax system in Germany. The Romanian wage scale varies greatly from what is established in the capital, to the different parts of the country, also if the employee has a specialty occupation or exceptional training using a specialty tool or program, if he is a junior or senior, and or if he acts as a consultant or is an “in house” employee. Thus, a BO developer in Bucharest, familiar with a leading business sector and after 7 to 8 years of experience will have a gross salary which would astonish a recruiter in Paris. I think I can say, in this case, the senior employee, working in direct interaction with customers, will reach a high pay scale equivalent to those of a provincial French city and often, could even reach the equivalent salary of Paris. In contrast, an unexperienced tester in a provincial town in Romania will make 10 to 15 times less. In Romania, in terms of what is happening in most other offshore countries there is this amazing difference between junior and senior employees, who are not in France, land of the minimum wages which have been contractually established. Thus, a German novice will often be paid less than his French counterpart, but his earnings will grow faster.

Furthermore, depending on the maturity of the IT market of each country, inflation operates differently. The offshore business may be defined as the science of differences, the companies most confident of their production model and project management are going to target these countries where new companies are coming into this sector and who will try to make rapid productivity gains. After an investment period of one or two years, they will seek to achieve the highest profitability. The consequence is obviously that the growth earning rate, will reach higher levels of profitability much faster than in countries with a high degree of maturity and where productivity gains are lower. For example, Pentalog knew very well, when it established itself in Vietnam that the wages would grow a little quicker than in Romania and even in Moldova. In contrast, as Vietnam “grew” very quickly, the interest in this country became more important in the minds of IT decision makers. The risk appears when, for marketing reasons (Romania during 2005-2007), or demographic (Ukraine-Moldova at the present time – emigration of the workforce), wages increase without being compensated with an increase in productivity.

This article is meant to reflect on the complex strategy phases of our company and in determining its fiscal policy. The crisis has shown us in 2009, with our 50% organic growth and our profitability in double digits, that Pentalog has made the right decisions. A profitable business is able to invest in its growth, in productivity gains and market share, when most others are in recession… which, in a service industry, often results in large economic losses and therefore, in productivity.

Pentalog can not build a unique wage budget model. However, we should seek to get closer to it, to facilitate the movement and adjustments in a group of soon to be 500 people. The concept of remuneration based on productivity and employee satisfaction should be the same everywhere. It remains to better integrate the issue of the Tet (New Year) in Vietnam, not to disqualify it but to integrate it into the Pentalog production card. Indeed, if we apply the same rules in other countries, by adding this supplementary payment this may force us out of a hyper competitive market.

So when my production management in preparing the Business Model for this year, asks me how much the salaries can evolve, I am particularly embarrassed. The future remains very uncertain. Recovery or no recovery? I have always believed in a quick recovery. But where are we in this first step to recovery? I feel the need to improve wages in countries where we are already established. But we must also continue to make good profits in order to invest in our business model, continuing to conduct more training, to seek better productivity gains above the average. Thus we can be more aggressive and continue to win more projects than the competition. The group’s growth has been the engine for everyone, in generating job opportunities. How many Pentalog employees have become executives within the group? How many, in offshore countries, are earning more than 1000 € (over $ 1450)? How many, in these same countries, earn over 2000 €? What does it matter to see wages rise by 20% when it comes to achieving a strong financial personal growth? To increase the salary of an employee when he confirms by his work and his intentions are to become an important element in our company?

I am going to answer the question that was asked of me. With several figures depending on the country. But more than ever, I believe in the remuneration by the effort of everyone who works for the survival and stability of the group and international social community that we comprise. This is the fairest way and most beneficial to everyone and this is ultimately the only common rule that we should adopt.

It seems that the month of December was an anniversary month for Pentalog. Frederic told us two stories: the history of the war against nature that the Pentalog Family had fought and won and the story of the birth of Pentalog in Romania, both in 1999. I should not forget to mention the pride I felt that my hometown had been chosen for this birth.

But Frederic forgot to mention that December celebrated also the birth of the first French and English versions of Pentablog http://blog.pentalog.fr and http://blog.pentalog.biz/ That’s how the Web 2.0 adventure began in December 2005. In December 2008 we launched the Pentablog.

I still remember some other dates related primarily to the use of Web 2.0 tools within the enterprise.

I read recently that companies are still reluctant to participate in the web community. The decision not to get involved is due to the lack of understanding of these tools and the lack of time. Yet Pentalog took the initiative to launch itself into the web. We understood the benefits of controlling our image on the net with the social networks and we’ve taken very seriously Linkedin, Viadeo, Xing, Facebook and Twitter, because the e-reputation of businesses also depends on their presence on these social networks, a marketing tool which is almost free and rich in possibilities.

March 2008: Pentalog began to make its presence known on Viadeo.
April 2008: Pentalog became visible on Twitter through the profile of Frederic.
May 2008: we started using more and more Linkedin to communicate in English.
From June 2008 we began to communicate in English on Xing and now we do it in German also.

For the past two years, very rich in experiences and challenges, Pentalog began using more and more Facebook, Youtube, Dailymotion, Plaxo, along with the tools already mentioned.

Another source of pride: this year the team that manages the image and communication on social networks has grown by 2 people, which means that Pentalog now has a team of the secret agents communicating in four languages (French, English, German, Romanian) and ensuring that the information concerning Pentalog is properly transmitted and the image of the company is impeccable.

The moving season of Branch offices has finished with the branch office in Iasi (Romania). Since Friday 08/01 (a bit before), everyone was ready to move into the Tudor Office Center. In one of my last posts I described moving the office in Hanoi; I quantified our relocations to 3 branches over the past 15 months. We have just completed a successful 4th move in 16 months.

Over the past 14 months in the previous premises, the growth of the branch permitted us to occupy space for 40 + people. Now it has been necessary to provide for larger premises to keep up with the branch growth. The Tudor Office Center quickly became our choice in relation to its quality according to our usual selection criteria (power, generator, location, Internet operators…). Besides its remarkable appearance which can be distinguished easily from the plane upon arrival at the airport (first time in the history of Pentalog branches). What we have lost in the view of the city (we probably had the best), we have gained in luminosity.

For the arrangement of these premises, it was the first time we called upon an architect. For 760 m² of overall space, we got an original proposal, different from a traditional division. The specifications consisted of the following: 2 adjoining and communicating meeting rooms, 2 discussion rooms (small meeting room), vast space-friendly open spaces for production, but yet separated. We were not disappointed with the results. After some adjustments, we got what we wanted for the moderate budget that we had provided for:

- The office design allows for the distribution of the workplace for up to 120 people in a friendly and modern arrangement.
- The 2 meeting rooms communicate, allowing for a larger space by simply pushing back the partition-walls.
- The discussion rooms are used for privacy for one to three people for discussions, follow-up meetings or phone calls.
- A designed floor (provided for upon construction) which provides great flexibility in organizing the offices spaces.
- The production areas are not completely segregated. They are segmented into work areas for 15 to 30 people.
- Even if the spaces are open, the temperature control system shows its effectiveness in the management of the work areas.
- User-friendliness was not ruled out with a reception area and a spacious kitchen sitting 15 people.
- In regards to IT there is a server room. The building is equipped with optical fiber by national operators who give each a connection of 50 Mbps.

It is also clear that our landlord is unusual in a country like Romania. He understood that his first priority was not to make us cough up a lot of money but rather to establish a relationship of trust and add value to his property.

The move was completed without difficulty and without damage. It must be said that it was assured by the super motivated employees of the branch and some of them had already participated in the previous move. The objective therefore was known to all: Production must continue Monday morning! The maturity level has increased. In addition, the team preparing the move under the supervision of Gregory [Constantin, Sebastian, Cosmina] did a very good job. This move started with the lowest risk ever in terms of the IT elements. Saturday at 12 am, the former office was empty. At 3 pm, everything was in place in the new-one. I would like to thank all those who participated in this successful move.

I would like to go back to the designed floor. The gain in flexibility is not immaterial. It also reduced the budget for wiring to around 4k euros. We will need to study whether the gain in flexibility and in the wiring and speed of implementation will not make this kind of floor a must-have in our next branches.

Several factors are at the origin of the low level of risk at the beginning of this move:

- We have internalized many services in 2009 which gave us greater autonomy than before: Management of the Level 3 network, Centrex. It had been systematically in changing the IP addresses (level 3) and the migration of the Centrex that deployment has not been realized on time.

- The move was anticipated so that we were able to negotiate costs and manage the unexpected. We realize that this cannot be done systematically.

Here is a quick video presentation of the branch. A further video commentary will be prepared in the coming days which will be given by the Branch director, Gregory.

Currently, there are no plans for further moves or openings in the first quarter of 2010. But things change quickly and we will adapt quickly.

Just a few words… to tell you about my recent trip to Chisinau, Iasi and Brasov. It’s been a while since I have had the opportunity to visit with my Eastern European colleagues. And I had not yet seen any snow in France this year (2009). Here, I was not disappointed.

It was an opportunity for me to discover the superb offices in Chisinau that I had not yet seen and got acquainted with a part of the friendly Marketing Team with whom I shared a delicious “Christstollen” brought by Pierre–Jean from Frankfurt. In Iasi, I attended for the first time a Romanian Pentalog Christmas party, full of laughter and emotions during the exchange of gifts… Meanwhile, the trip between the 2 countries had to be improvised in the Romanian style by car, in -15 ° C weather, in the snow, with lots of folklore and it was fun! And in Brasov, I finally met the mysterious team of secret agents with whom I have worked with the past few months, you know, those who hide behind the Pentablog press review, spying on our competitors and looking after the e-reputation of Pentalog. Thank you for the fur hat, I will think of you when I’m in Russia!

It was all very nice. The next time I try to stay longer.
Here is a selection of photos I took in Brasov, where I was inspired by the Christmas spirit: http://picasaweb.google.com/pentalog.ht/Brasov_122009

This is perhaps not the final version, but it is fairly complete. You can compare from last year’s version. This little exercise allows you to have a public record. Let’s say that for 2009, it is good. Pentalog gained more business than it lost. Only the pace of the new business has been slower, affecting the profit margin in 2010 rather than 2009. But we are now certain it will be again in double digits in the first quarter. At first we were a little alarmed by the weight of our first client, even when the eventual growth was reduced. For a moment, we thought it would reach 18-20% of our sales but it was finally reduced to about 13.

This version may still evolve a little before the final release. But for the reader of the blogs and social networking tools, it is normal to give them a sneak preview.

2009 annual report

- 50% growth in sales when the overall performance in IT services is -6%
- N° 1 of the French-speaking IT offshore / nearshore business in France
- N° 1 in Nearshore business in France
- N° 2 on the Romanian IT outsourcing market
- Among the top 10 of European nearshore companies
- EUR 13.5 M in sales
- 458th company in Europe and Middle East for positive growth in 2008, according to Deloitte Technology Fast 500
- double digit profitability ratio, up 50%
- Doubling of the overall profit margin
- Opening the Pentalog Vietnam offices in February, with over 40 employees in December
- First operations in digital television
- Rate of time & material operations reduced to 10% of the productive workforce in December
- 60% of actual sales came from competency divisions (in multi-year contracts), 20% in time & material, 10% in consulting, 10% fixed price.
- 80% of production staff is evaluated on a daily basis, using 25 to 40 criteria points
- Progressive deployment of production metrics on projects
- EUR 0,6 million spent on training
- 32 people trained on project management this year
- 169 people trained on quality awareness
- 152 people trained in French and English
- 541 people were trained (that is to say 100% of the permanent staff, + 100% of those in the Pentalog incubator)
- 77% for overall customer satisfaction (75% corresponding to “very good” and 85% “excellent”)
- Too low an index of internal satisfaction: 61% (66% = good and 50% = fair)
- The overall number rose from 290 to 430 employees
- 100 people were recruited in Romania and Moldova
- Specializing in Telecom: 40 engineer for ST-Ericsson mobile platforms (lower layers), 15 people for LHS-Ericsson billing system, 8 people in internet services for CityVox (Orange group), 3 BI consultants for Orange Romania, 6 people for the management of web services for Nordnet (Orange Group, web access control, management services and equipment).
- 26% of our Sales were signed outside of France (30% of foreign sales in Romania, 40% in Germany and 30% in Switzerland, Austria and Moldova).
- 128% German revenue growth to EUR 1.6 million
- 65 000 hits per month on Pentalog sites up till year end or 2200 hits / day! This figure does not include videos on web sharing sites
- 50 000 downloaded catalogs – Offshore prices for Pentalog services in Europe
- 12 new customers monthly
- Dependency ratio: the first customer represents 13.6% of sales. This figure is rising.

… Aymeric, Eric and I were preparing to spend Christmas with a charming family in Brasov, far from our own families. It was very cold and we were just starting our Romanian adventure. This led us to become one of the most powerful software companies in Romania. Some of the people who participated with us in those glorious days are still with us. I am bowing to them.

As vrea sa va transmit tuturor Craciun fericit alaturi de cei dragi, si un gand special pentru prietenii mei romani pe care nu i-am vazut de multa vreme.

To all others, I care for you, but I know Aymeric, Eric and I have a special thought for Romania tonight and especially for the family who welcomed us with such generosity 10 years ago.

It is clear where Pentalog has made the difference in comparison to the competition, it is by proposing, in addition to its software maintenance services (which everyone proposes), specialized offshore R & D. Our clients have entrusted us with at least 50% of their software development, in addition to their maintenance.

This has led frequently to several other business models and lots of creativity… Today, after having helped in the start-up of PeopleCentric, and including participating in the development of many other new products / concepts / solutions, we have noted that we have been missing something essential, a true innovation unit, which would help to improve and professionalize our services like what we have brought to PeopleCentric. Raluca has indeed benefited from the operational support of Eric and Monica, who also participated in the definition of the initial strategy. Similarly, I was able to help her find her a very talented person to become her French associate director.

In contrast, Pentalog has not yet been able to play the role of technological innovator that it could have expected to become. It has only been associated in the “realization”.

For this reason we are preparing to launch an incubator program that would create an innovation team that could actually be called Pentalog Labs (but we’re still open for a choice of names).

Concerning our incubator strategy: Yes, we are preparing to unveil a program included in the 30-2013 plan, which will include the acquisition of equity for Pentalog in start-up enterprises. Along with the first dossier of People Centric, we will address the needs of the software world and information technology. They will be in the world of social networking, recruitment, skill assessment and management, but also production management and software productivity.

I would like to appeal to all my Pentalog counterparts for ideas. We will qualify their ideas, evaluate them, and we will provide the means for development, management and marketing. In the future, we will help them find the appropriate financing for the development of their ideas and their businesses.

Similarly, we will call on people outside of the group, interested by an investment in their business through providing engineering capital. We envision three possible poles to host the Pentalog incubator: France (Orleans), Romania (Brasov and or Iasi) and Vietnam (Hanoi).

About Pentalog Labs: it will have at the starting point a group consisting of a financial advisor, a professional marketing, the Pentalog Chief Data Base Officer and Chief Software Architect Officer, the Network Guru Officer and one or two talented analysts. The headquarters will probably be in Romania, in Brasov or Iasi. I like the idea of Brasov, except for what continues to bother me is the damn problem of accessibility. But I love the environment and I hope this team can regularly enjoy the lovely countryside. Being chased by a bear regularly keeps you close to the realities of life Brasov is the logical place to create a Romanian Silicon Valley. It’s a shame there is still no airport to easily get to this magnificent city! This team will be there to offer the support to any truly innovative idea, whether from customers or from the group. It is under the direct responsibility of Aymeric, but it is possible that I will take an active role also in it.

December 08, in Iasi (Romania), December 09 in Bucharest and finally on the 15th of December in Orleans AFNOR auditors in charge of monitoring our ISO9001-2008 certification, which we acquired last year, came to make their first monitoring audit.

Development projects (our biggest one and 3 smaller ones), the Human resources process, Technical assistance services and facilities management but also the transversal processes (IS, sales ,..) were scrutinized. The findings were direct and unambiguous: 7 strong points, 0 sensitive issues, 0 non-compliance, and 4 process improvement tracks.

These results are very encouraging concerning our approach to quality. Our improvement loops (PDCA) will continue to monitor our development program to approach CMMI level 3.

This could not have been possible without the effort of everyone involved in executing the processes but also those who were audited and those who helped in the preparation. I would also like to note another key to this success: Aleth and her strong personal investment in her function as quality director.

The next set of guidelines has already been launched. I will soon write another note on a topic which I hold close to my heart: Change management and the training we will provide to Pentalog managers on this topic.

I received a few comments by letter, following my post concerning the aftermath of the presidential elections in Romania. I wish in particular to clarify that I do not condemn more Traian Basescu than the other politicians… as a Romanian politician. Simply he is the incumbent President and his record is what it is: inadequate or bad. The fact that he spent three-quarters of his term coexisting does not excuse everything. Concerning the subject on which he expressed himself the most, the fight against corruption, has not seen much progress neither. From the view point of the Romanian international audience, it has constantly worsened during his mandate and the management of the country’s stature abroad is far from adequate.

Companies have yet to find a viable interlocutor and corruption in public procurement is still prevalent.

I am not pronouncing in favor or against President Basescu, which would make no sense, but more concerning the political methods used by him as well as by the others. I wanted to see a President who could have profited during the past 5 years in power to gain stature and who would have worked for Romania. Alas, the Romanian President is a politician like all the other politicians in Romania and I can only regret having not seen him have a better understanding of the financial situation of his country.

The actual Pentalog strategy is to increase the development of a local customer base in our marketing plan. Let’s make it clear that we do not want to know and do not want to work under the table like so some many others. I realize to my regret that it is practically compulsory, but to bad… we are not obliged to do so… Our local private sector clients are professionals and with complete integrity. This being said, we will continue to work with them. As for public procurement, we’ll see what the new government will do in this area.

But don’t come to me and tell me this does not apply to all foreign companies. Pentalog, this year in Romania will pay taxes of 5 to 6 digits and which will fund many envelopes and from this point of view, Pentalog is like many other Romanian companies, without privileges.

Bucharest, Romania is still groggy, tired, and disgusted after the elections that have just finished. Everyone lost. Everyone? No, invariably there is someone who has not lost and that someone is the outgoing President, Traian Basescu. All the parties have lost, the business community has lost, and now the country is headed towards bankruptcy. 70% of the Romanian GDP, up to now has been based on consumption and shopping malls which sprouted like mushrooms and now are empty.

How did we get there? Why didn’t industry develop in medium sized cities? It’s very simple. In Romania, nobody (or almost nobody) made the necessary investments. Neither the state nor the local private equity funds. Everything HAD TO COME from the outside: from multinational investments, Europe… I was talking with industrialists the other evening at a gala of the French Chamber of Commere in Romania. The road infrastructure has utterly condemned all investment in Romania. No one wants to pay their income taxes: 40% of the economy remains informal! Those who protested the most against the corruption of power are the same people who are using these illicit means to make money. One of our friends, a business leader, told us the other day that at a public bid of several hundreds of thousands of euros, government officials requested kick backs representing close to 40% of the total bid… not bad for a country without money. Because of course, to pay 40% commission, you must first of all increase the market price. So it is the taxpayers and citizens who will pay. 40%… the enormity of the figure just blew me away!

The atmosphere is worse now than when I arrived in Romania ten years ago and at that time the country was teeming with energy and hope, despite the enormity of the task. Everyone is tired of the mediocrity of the political class. What excuses can you find for a president who refuses to make political compromises when the country could possibly sink into bankruptcy? Why can’t a head of state be held responsible for bankruptcy as it would be for a CEO of a company? Where is the difference? However, the actual situation is this: no government, no money from the IMF. But what about the political parties that are not longer able to come to terms with the president? Will they now play the politic of the worst case scenario? Basescu wanted to take this risk, so he must assume totally the responsibility! At the highest level of multinational companies that I have had the opportunity to rub shoulders with they acknowledge in secret the possibility of the following scenario, that we would leave the EU. I even believe that the EU must push hard on this subject. The Romanians will only move when they are pushed into a corner. 10 years of mismanagement. Sorry, my friends, it is only because I care for you that I say this!

During this time the Romanians in the diaspora who do not live with the local difficulties still support Basescu, who continues to embody in their eyes the normalization of the image of Romania. The following day after the elections, seeing how the diaspora voted for Basescu, one of the most important leaders of the Social Democratic Party, said, without laughing, that the voices of the Diaspora should be reduced by a certain percentage! I now see Romania has been divided in two, exhausted by its moral turpitude and I am extremely saddened by the spectacle it offers the world.

Of course I hope for a better tomorrow, but when will they come? It is legitimate to ask, in a country which will celebrate in a few weeks the end of the Ceausescu dictatorship… that no one will celebrate. But how, when Ion Iliescu is still the scourge of students in 1991… who continues cynically to pull the strings? Here, moreover, at a time when everyone is blaming Basescu that Uncle Ionut, who has left the political scene without even passing by prison can there be a solution? Could Mircea Geona have practically won this election if he had not supported in 90-91 this tyrant? Who knows?

I think it would be for the good of Romania, see the country turn the page and to forget the last of the communist era and the sinister foundations of the modern Romania.

The new version of our catalog has been out since last October.

- Euro version
- Dollar version

Pentalog is the only company to offer a catalog of its ongoing services in euros and dollars, updated 2 times per year.

Find nearly 130 services, available locally or offshore: developing information systems, business intelligence services, embedded systems, infrastructure, networking, telecom, outsourcing, hosting, BPO – business process outsourcing, …

Download it, save it and distribute it around you!

Tuesday evening, Raluca and I were at a Parisian party. We celebrated the National Romanian Holiday at the Romanian Embassy in Paris. We met a lot of people there. A lot were former Romanian students that I had had at Orleans, who now are at the headquarters of SG, but also Ovidiu and Alex (in the photo, the most blurry of the year). Of course I’ve found my good friend Cristi, but also, incredibly, a French Indian from Pondicherry, who is currently working in Bucharest and knows very well my friend Olivier (also in the photo). Nothing astounding about this sort of thing. It happens to us Romanians, all the time.

As expected the fourth quarter of 2009 stalled in terms of pace but accelerated in October, with a number of new signatures which had an immediate impact in terms of sales. The previous estimated growth for the fourth quarter was moving in the range of 10 to 15 points.

In the last two weeks of October, Pentalog has registered € 4M in orders, composed of approximately one quarter of new biz and 75% extensions or renewals. In France, the new signatures were with Anevia in the sector of video on demand and Look Voyages in the tourism industry. A test is also underway with a very prestigious Swiss company.

In Romania, the orders of People Centric (a close partner with the Pentalog Group, based in Bucharest) has increased, while the company Arcforce, in the interim, chose Pentalog to host its infrastructure.

With regard to renewals and extensions, they concern Altadis Imperial Tobacco in France, which should become our second largest group customer this year, LHS Ericsson in Germany has renewed its confidence and extended its collaboration, requiring the participation of nearly 20 new Pentalog employees. Our client NordNet (Orange group), signed in the early 3Q 2009 confirming and also extending its orders. No new defections or reduced budgets have been recorded during this quarter. The final figure, and with the accumulated growth of 2009, is expected to be around 50%, the final figures will be available in late January 2010.

The foundation is now set for the beginning of 2010 and it is in net progression. After long consideration that the growth of Q1 and Q2 of 2010 would be spread out, it is now more likely that it will end with a positive change, well into the double figures. The Vietnam site, with over 40 employees, now represents 4% of the group’s production, or 16.6% of Pentalog’s growth in the Q4.

I just returned from a 2 weeks trip to our Hanoi office with Iulia, the head of the software team of our IS department, where we established a new development team for the Pentalog information system. Frederic has already discussed this project in past blogs, I would like to give you a few extra details.

We have reached the third stage in the cycle of our information system. For each of these steps we PRIORITIZE the means & resources as follows:

1. Implementation: Infrastructure, Applications, and Service
2. Development: Applications, Infrastructure, and Service
3. Maturity: Services, Applications, and Infrastructure

This translates in fact into the following:
• The establishment of a more detailed data collection service that the ISD will put at the disposial of its users.
• Better communication services through newsletters.
• Paying more attention to our users by adding new communication channels including satisfaction surveys (4 per year).
• The establishment of skilled professional committees dedicated to monitoring internal projects and a strategic steering committee.
• The deployment of a permanent team for software department.

We arrived at this information system, first with temporary resources (bench time, incubator…). Only maintenance and the software helpdesk were given permanent resources. With our continued growth and the opportunities it has brought, it was time to improve and professionalize the software department. Since this summer and with the confirmation of Iulia to this position we launched this project to establish a development team in our Hanoi branch.

In 2010 the team with will have gone through 3 stages of development. We finished the first stage with the deployment of a team composed of:
- Cuang, the team leader
- Hieu, the .Net developer
- Nhu, the tester
- Quang, the PHP developer
- Yoann, the BPM developer

Eventually the team will need to increase to 10 or more people in order to meet our growing needs for our internal / external communication tools, tools related to management (production, finance) and our production (improvement of the eco-system of the development environment). The help-desk software, business intelligence cell and management will remain in Europe.

The direct consequence of this change is the working language will pass from French to English. So gradually the content of our documents, in the wikis and other tools will gradually switch to English. However, Yoann will represent the French speaking people in this team.

As with all outsourcing projects, we dedicated these past 2 weeks in Hanoi training the team in our practices, needs and their evaluation. After a few days back home, I must confess that I am not disappointed with the way it was conducted nor the level of the people we recruited. Through Cuong, Hieu Nhu Quang and Yoann, we have a solid foundation which will enable us maintain the right balance between the ISD and the company’s objectives.
It is with all the experience that we have gained in past projects for our clients that we can now deploy this project. The pitfalls are well known:

• Communication: it exists through technical discussions, weekly follow-up meetings and a monthly steering committee.
• Proximity Management: Cuong, the team leader is responsible for meeting the demands and the quality deliveries and improving team performance.
• Human relations: we repeat this constantly to our customers, that these relationships are essential in order to maintain the team cohesion in the project despite the distance. Three or four times a year, Iulia and / or I will make on-site visits for an update of ongoing projects and new projects. It will also be necessary to maintain better visibility in the future.
• Mastering start-ups: everything that can be deployed at the beginning of the project will help development further down the road. So we deployed from the beginning, our development processes and maintenance (those applicable to the customers and certified ISO 9001-2008).
• Precise Methodology: our recent successes in the deployment of the agile method encouraged us to implement this methodology for this team. This will allow us to have a faster understanding of their needs.
• Monitoring individual performance: we are building a basic work unit for our technological environment. Producers and managers thus will have a benchmark to measure performance and the progress of everyone.

The recruitment for the second phase has already begun and it will be completed at the end of December. After the integration of these newcomers, we will begin the third phase after the Tet festival (feast & traditional family event, which is much awaited). Obviously, these recruitments have been orchestrated by People-Centric from their Hanoi branch. The process also worked there, and the results are there to prove it.

We could not complete this project without sharing a friendly dinner together. So we went to the “Highway 4 (exotic specialty restaurant) instead of the snake restaurant (Iulia promised to go there next time). We really had a good time around dishes of grasshoppers, shrimp and other delicious exotic dishes.

This team, under the responsibility of Iulia already knows that its production will help support the company in regards to meeting its objectives. The challenge is enormous but accessible!

- inCode’s Top 10 Telecom predictions for 2010 (10 november 2009, CIOL)
- Xing grows revenue while profit falls – and no LinkedIn takeover likely (13 november 2009, Techcrunch)
- What Matters Most in Outsourcing: Outcomes vs. Tasks (16 november 2009, CIO)
- Why are Indian outsourcing companies such bashful suitors? (6 november 2009, Silicon)
- The Global Innovation Migration (9 november 2009, Business Week)
- Outsourcing on the rise (10 november 2009, Global Times)
- Europäische ITK-Markt blickt optimistisch in die Zukunft (9 november 2009, Silicon.de)
- Europas 100 größte Softwarefirmen (10 november 2009, ZDNet.de)
- Outsourcing: Deutsche Konzerne lockt die Ferne (11 november 2009, Silicon.de)
- Mieten statt Leasen, Outsourcing statt Eigenleistung: Warum klassische TK-Anlagen out sind (16 november 2009, Computerwoche)

- The Other Side Of Outsourcing (02 novembere 2009, Forbes)
- Technology doesn’t isolate people: U.S. study The survey was sparked by a 2006 study (06 november 2009, CIOL)
- Industry to develop cloud computing code of conduct (04 november 2009, itnews)
- Indian outsourcing companies eyes Latin America (04 november 2009, Offshoring Times)
- The next step for Twitter Lists — Entire countries (4 november 2009, Techcrunch)
- Anwender kennen ihre Sourcing-Kosten nicht (02 november 2009, computerwoche)
- Outsourcing-Umsätze in Europa fast halbiert (02 november 2009, CIO)
- Wie sieht die IT nach der Krise aus? (02 november 2009, computerwoche)
- IT-Nachwuchs will weg aus Deutschland (05 november 2009, CIO)

I spent all of last weekend-end and the beginning of this week with the client-actors of our biggest platform project in Iasi and Chisinau. This project is a challenge that our two companies have chosen to face together. Its volume classifies it in the heavy weight category; but the schedule requires the speed and footwork of a bantamweight. To maintain this type of agility and a high level of performance, we divided the project amongst the 3 cities of Hanoi, Iasi and Chisinau. What is extraordinary is that it was the European sites that gave the reassurance to our clients, but it was the Vietnamese price that weighed into the balance and allowed us to out perform our competitors. In other words, we indeed needed a Euro / Asian proposition. Today the 3 cities and 6 teams are moving at very similar and at a high satisfactory rate… with a bit more for Hanoi.

Jacques, the technical director, visited the 3 production sites, and confirmed his choice and has increased his solicitation even more so. We will soon therefore be 50 in a few days.

I am speaking to you today, but also to all the Pentalog employees who have the honor to be involved in this relationship of trust, and finally to all those who, at one time or another have been involved in similar project like this. I want to tell you that this type of challenge is not possible without the commitment of each one, customers and suppliers in a true merger of fertile talent, courage and rigor. These are the projects which forge a sense of responsibility and professionalism… and which also form many new friendships. The Pentalog employees have come through 100% and also those of Strator.

We are doing something big and we will succeed! Thank you all!

3 moving announcements and an extension this week. Who can ask for better?

- In Iasi, in eastern Romania, we have no less than doubled the size of our unit there, which will soon reach 800M2 in the most beautiful building in the downtown area. Iasi is now spearheading Pentalog in Eastern Europe and is already home to the developments that we are undertaking for LHS Ericsson (Frankfurt), Juwi MacMillan (Hannover), but also for those of Nordnet (Orange Group, Lille) , Mousset (food logistics, near La Roche sur Yon). The branch, which opened in August 2007, is already at its third address in the Moldovan capital of Romania.

- In Bucharest, due to the growth of the team involved with our client, ST-Ericsson, Pentalog has taken another 130 m2, bringing its total area in the Romanian capital to 350 m2. We now occupy an entire floor in the Diplomat complex on Sevastopol street. We therefore will retain the 1ha park that the whole world envies. This could follow with a beautiful commercial announcement in the coming weeks.

- In Hanoi. We just signed for an additional 350 m2 adding to our one hundred meters in our current location. The 200 m2 where we first began, no longer could accommodate the 3 projects we are launching in the coming weeks. Do you remember, a few weeks ago, I was talking about two or three new projects … but last night I received a call from a new client who told me he had chosen our Hanoi site for the industrial testing of his product line (I will soon talk about this). In other words, the site of Hanoi will keep its promises in the first year … frankly it’s nice, especially with a new opportunity, albeit a small one, has just appeared and my little finger tells me…

In all, that makes how many m2 in management anyway? More than 4600m2, in 8 cities, 600 on the average, ½ hectare! It was worth a few negotiations, n’est-ce pas? In Hanoi, we passed from $ 18 to 10 per m2. In Iasi, we gained 20% while improving on the quality. In Bucharest, we earned a small euro, or 5.5%. Remember that a Euro saved is about € 7 gained per employee invoiced and per month. We, therefore are talking about € 30 000 per year for the group, 2% of the operating margin… for a small Euro of negotiation. In Hanoi, we won 5 and Iasi 2! We also renegotiated our lease in Chisinau and economized 11% in the Moldovan capital.

Congratulations to the Branch Office Managers for the quality of these operations that have provide us with better working conditions while enhancing our profitability.

We had fallen behind in the release of this indicator. It is now available again with some modifications.

Here are the following Average Daily Rates for each of the countries in which we work. We have made a distinction between Bucharest – offshore, and the division of technical assistance to local clients.

France: EUR 460
Prices are progressing. This is logical since we have reinforced our team of project managers whose services are invoiced at a higher rate than that of technical assistance services. However this indicator hides many un-invoiced days. We have not yet completed the total invoiced cost for these profiles. Nor has their work schedule been lightened yet; they are regularly solicited, almost daily, for project evaluations for clients or prospective clients.

Romania: EUR 175
This figure is just a little below the price of our catalogue for dedicated teams (EUR 180) and so it still remains a competitive price.

Moldova: EUR 137
Our lowest ADR in Europe which also takes into account a few BPO services. These services are invoiced at around EUR 110 / day, lower than the Average Daily Rate.

Vietnam: EUR 91
This ADR is well within the range that was anticipated; this rate is for the moment entirely composed of the development of information systems. With new projects expected to arrive shortly (especially in the BPO industry), we should see these rates lower slightly in the coming months.

Romania – Local Clients: EUR 256
This is the average fee charged for technical assistance to local Romanians clients. It integrates an average rate for technical and functional experts, as well as for junior developers in the more conventional technologies.

The next indicator will be proposed towards the end of October and thus it will focus more on the rates of the 3rd quarter.

It was curious to see how fast they had disappeared, during the month of September and while the Euro had reconnected with $ 1.40 + +. Nobody heard Mr. Gallois speak about this a year ago on the same subject… No, everyone was waiting for Pittsburgh and even Mr. Gallois had no right to speak in the meantime. Yesterday, he said in Le Monde that things could go really bad for Airbus.

And he is right, because I think that this time the threats are much more serious. After Pittsburgh, nobody believes Geitner and Obama and their discourse about the strong $… that has moved towards the interior of the U.S… In reality, the $ is now a borrowing currency with its 0% rate policy, which will certainly continue for sometime. There is no question in my mind that Obama is thinking first of his 10% unemployed. The weak dollar is a blessing for him and the hypothesis of a 1.65 average is a reason for a real cry of joy.

The 13% budget deficit is going to translate more and more by the slow but progressive conversion of the central bank reserves.

From Pentalog’s point of view, we have never been better equipped to deal with this situation as our three production currencies are dropping against the euro and even the dollar for 2 of them.

Let’s go back to the 3 countries in question:

- Romania: our wages are determined in euros and payment is made in Leu. Our employees will have more and more Leu, since the latter has a strong chance of dropping further below the euro. In other words, for quite awhile we could be close to the status quo on our production costs. Salaries, for companies that pay in Leu are also blocked, which minimize the wage demands of new employees.

- Moldova: The currency (Moldovan Leu), has also been dropping in front of the two major world currencies which interest us. Our salaries are determined in Euros. Again, another period of status quo is likely in perspective. The wage levels asked for in Euros could possibly fall in the coming months.

In Romania, as in Moldova, we could possibly see timid reductions in costs, given the fact of the rising number of job applicants and reduced demand on other budgetary items (buildings, vehicles, air transport …).

- Vietnam: Our salaries are established in $, but paid in Vietnamese Dong. Now the Dong is under performing against the $ which is under performing against the Euro. Our production, invoiced in €, is particularly interesting today. Many developers are looking for employment and the wages requested have dropped slightly. We have renegotiated our premises rental rates down sharply and we have even found space at 10 $ / m2 monthly, which is less than € 7, where we were offered space at $ 17 in early 2009! We’ve moved in the space of 6 months, from rates higher than what we had seen in provincial Romania, to prices lower than 30%.

In short, at present, we are “relatively” protected from the risks of this currency crisis and are instead on the right side of the mathematics. However, the possibility of a violent push of inflation could relativise these protections, without destroying them. I am thinking in particular about the threats to energy and raw materials which would inevitably create serious problems, particularly in emerging countries such as Moldova or Vietnam.

Currency problems are more likely than the financial crisis to have serious negative consequences. But the commentary of this type could easily slide into cynicism. Here I have tried to stick to simple facts.

- IT professionals fear ‘brain drain’ as UK opportunities dry up (5 October 2009, Computer Weekly)
- India to add more rules in IT Act soon (2 October 2009, CIOL)
- Europe finds flavour with Indian outsourcing (October 2009, Offshoring Times)
- China’s Online Censors Work Overtime (30 September 2009, Business Week)
- Germany Benefits from Global Recovery (30 September 2009, Business Week)
- India’s new outsourcing rival–Romania? (11 September 2009, cnet); missed that-one a few weeks before, but it’s very interesting…

After taking 10% equity in the Romanian interim company Arcforce, and now planning a similar operation in Poland, I wonder about the advisability of establishing a European thematic holding company in the field of HR. No doubt that HR is the engine of IT, as People Centric, working in recruitment is 100% HR and that goes even for the interim.
I’ve seen a lot of synergies between the two companies. Enterprises, who are clients of People Centric, are of the same family as Pentalog. The HRD, who are customers of Arcforce are also clients of People Centric. But it does not stop there. What brought me closer to Arcforce and allowed me to justify my participation is my e-commerce approach to selling skills. The e-process of research and selection of employees has many commonalities amongst the 3 companies.

Finally the administrative and commercial processes are again very close.

Furthermore, Arcforce + Pentalog + PeopleCentric; together they represent a sales figure of just over 21M € in 2009. Regrouping my holdings and we would create an entity which would be the first Romanian group in HR, well ahead of Adecco, Manpower and the Anglo Saxon recruitment firms, and all the other outsourcers. For the record, Pentalog in 2009 is probably the third largest company in Romania and Moldova in IT outsourcing and consulting services. Arcforce is No. 2 for temporary employment in the country.

I will make a decision in the coming weeks, as this project makes sense and will probably give extra value to each one of the companies. Without a doubt, a seasoned Pentalog manager will take control of the operational part of this structure, which will be composed equally of control and orientation.

Last week in Chisinau, besides having a crazy angina that took me to the hospital each morning, I was able to experience the complete processof a Pentalog JV Program with people I hadn’t known 5 weeks ago.

Let’s go back a bit. To pursue a high growth and achieve the plans for 14-2010 and 30-2013, Pentalog recently launched a program to establish joint venture companies, supported by a dedicated website: www.pentalog-jvprogram.com.

This program, in addition to the development plans, has been the subject of many posts on this blog and on the professional social networks used by Pentalog: Xing, LinkedIn and Viadeo.

At the same time, in July, I wrote a post, that snowballed, about the migration of Moldovan engineers. Incidentally, I could have written the same post about what is happening with the Belarusian and Ukrainians, as someone recently remarked.

In what became a controversy on Linkedin, I had a sympathetic clash with a man, from Iasi and Suceava in Romania, who had immigrated to the U.S., then to another country which I will not name at this point. Along with this exchange, this gentleman and one of his colleagues had followed the progression, on Linkedin, of our JV-Program. They went to our web site, and downloaded what could be downloaded and… subsequently requested an appointment somewhere in the Balkans, which was held last week in Chisinau.

So we now are at the point of evaluating a potential joint venture strategy to import Pentalog services into a country that had not been on our original list but ultimately would be of interest to us. Conclusion: I’ll go see them there in November!

Apart from that, two or three other options are under consideration, both in IT and BPO.

Friday, August 28, 2009, Chisinau: between 2 major holidays in Moldova, an event of no little importance took place: the Moldovan Parliament elected the Parliamentary President. Of course, this did not happen without some disapproval from the newly declared opposition but at least the result is there: there has been a change in government, and this is a tangible sign of democracy. Those who had called themselves members of the opposition before are now in power, and those who had the power before, now have declared themselves members of the opposition.
Of course, there are still a few cranky who will say that everything is not yet done: there is still the election of the President of the Republic, and the formation of the Government. But I say: a free exchange of power took place and we now have an open democracy, no matter what happens, because the Parliament is the real power, according to the Constitution (and let’s not get into a discussion about the constitutional details).
The symbol is strong: fixed between the National Holiday (also known as Independence Day: 18 years already) and Limba Noastra Day (to celebrate the return to Latin calligraphy).
If the demand for democracy led the debate “to go” / “or not to go” Moldova now that the politicians have shown the ability to the share power; the debate needs to shift more towards:
- “What are the new areas that will allow us to generate new wealth for Moldova, in Moldova?”
- “How do we finance and what kind of guarantees do we have to support a real economy?”
- “When in the future can we integrate into the European Union?”

The Pentalog meeting room in Chisinau received for the first time a small talk show in the format of a webtv and conventional television. Two television crews and newspaper journalists subjected us to a barrage of questions. At 9 against 2, Serghei and I were not accustomed to this.

No less than 130 questions were asked by our auditors on www.privesc.eu during the talk show. I am sure that there are more questions now. The debate is well underway in the country and we will continue to keep it alive for the next few weeks. Yesterday, a leading personality in the country offered me to make it one of the principal debates of the entry in September.

I would like to say thank you to everyone who made the effort to comment on our blogs, either in French or English, in particular those who took the plunge and shared their ideas. We need their testimonies. For my part, I would like to state once again what I said this morning, that the Moldovan IT industry is barely 10 years old. And this industry is now providing a livelihood for several thousands of people in a city with one million inhabitants. This is a very good result. No one should be ashamed, neither the engineers nor their firms, or even the country. But the real questions need to be asked. The salaries need to be adjusted and there is no doubt that this is happening. But the country has not yet given 100% of their support to compensate the young age of this industry:

- By not giving the level of freedom and public services expected by a population of intellectual workers who have expectations…
- By not providing a level of education comparable to other countries or of international standards, this requires companies to take on the task of educating and giving the required formation to be equal to that of their Western counterparts. I would like to remind everyone that Pentalog this year will spent over € 0.5 million in training engineers for 280 full-time jobs, this amounts to approximately € 1800 per person. This figure rises above € 4000 when we are talking about trainees.

We will be vigilant in watching how our statements are used. One of the news agencies already altered our words. The best is to watch the entirety of the conference on www.privesc.eu:

Here is the answer of Serghei to Tatiana’s comment:

Hello Tatiana,

Yet it is true that the Moldovan education system must evolve to provide a better quality education. Today companies like ours are associated with the faculties. It is true that foreign universities are often better than in Moldova, but it must be understood – that you should return home after you have finished your studies. If you go abroad to have better education… yes – But it is here in Moldova we need you the most!!

Here is another very interesting commentary by Tatiana, a young girl who has spent several years in France. I leave you with her words:

We thought we had got rid of the communists, in 1991 when we won our independence and the Romanian language became once again the official language of Moldova. But the Moldovan economy was destroyed and without the ex-Soviet countries she served as a supplier, the poor little Moldova has found itself alone… the crisis and inflation have simply amplified the situation.

I love my country and I hope with all my heart that these elections will mobilize all the opposition because this is what is needed to beat the communists. Young people can and want to change the situation in Moldova, but without competent leadership, they have their hands tied behind their back.

Here is the sequel to a series of articles dedicated to the situation of the IT in Moldavia and particularly to the fact that we must do everything we can to keep the Moldavian engineers in the country … and maybe even to bring back some of those who left, like it happened in Romania. This is as good moment, as the youth have gained an important victory, by vote, last week.

Specifically, I will focus today on the comparison between the immigration tendencies of the Moldavians and those of Romanians. And in consequence, I have decided to tell you the story of Daniela, Romanian, who works in the Pentalog agency in Bucharest, as part of the fantastic Telecom embedded development team divided between the capital and Sibiu.

A few weeks have passed since the « success celebration party » in Sibiu where I have met Daniela for the first time… even if our paths had already crossed in the agency.

Daniela graduated from Tudor Vianu, an excellent computer science high-school in Bucharest… but her real interest was more toward physical sciences. Daniela worked hard to join a foreign university that could provide adequate facilities for a good technical education. Thus, she started filling out lots of application forms, submitted her candidacy to dozens of American universities, applied for financial aid, and in the end all her efforts paid back when she received the acceptance letter from Vanderbilt University in Nashville, Tennessee.

Daniela confirmed that, before the departure, she was really exited about this opportunity and this feeling did not diminish at all throughout the first year in the US. Her journey in the US was going to last 4 years during which her high expectations regarding the US education system were more than met. In the meantime, Daniela switched Physics with Geophysics in order to center her attention on more tangible subjects.

Eventually, the moment of making another hard decision had arrived. Continue studying for a Master degree or not? Live in America or in Europe? Dana finally chose to apply to a Master program in geophysics and was accepted by a prestigious Canadian university. Again, this process involved filling out lots of administrative and legal forms and obtaining a Canadian study visa. She then realized that this lifestyle was not for her, she had been feeling it for a while now and as she was in Romania for her holidays… she decided to stay here!

And now, 2 years later Dana… are you still happy with that decision?
THIS IS THE BEST CHOICE I EVER MADE.

She has confirmed having done this in perfect consciousness, taking her time. She probably feared she wouldn’t be able to do it afterwards. So many things were happing in this country rapidly growing. And God knows it’s far from being perfect. But however it may be it’s on this side of the world that she flourishes today.

Professionally speaking, Dana has constantly been working during these two years. She has finally returned to informatics, making best use of her high level scientific culture. Today, Dana is a “Hardware Layer” developer in one of the most prestigious Telecom teams in the country, surrounded by engineers (mostly boys), who have distinguished themselves in major semiconductor manufacturing companies in the world, whether automotive or telecom related.

So, Dana, for your evolution so far, for the courage of your decisions and for your kindness, hats down!

I would like to re-submit a comment in regards to the post Fred wrote concerning the Requirements of Democracy.

Romanians thought it would take 50 years to get rid of Communists. 20 years after the events of December 1989, we are not yet finished with them. But we are moving in the right direction. We were able to have the necessary patience and at the same time, we continued to believe.

This is exactly what the Moldovan must do! Leaving the country is an immediate personal response, but not an act of trust in Moldova. We must not forget that there are people who will remain, who will continue to believe, to keep the faith and, when the time is right will take their rightful places.

I look at the current situation in Romania. I am not hearing about people who want to leave the country. In our profession, people are always looking to go on interesting international missions, but they leave only for a limited time. Another fact, many people who have left Romania in the past are now returning home! People, who work for dynamic companies, are once again looking towards their country of origin. Maybe the crisis has become a critical factor but never forget that there is no place like home!

I do not often republish comments, but the thoughts expressed by Petru come from the heart and illustrate my point of view. Above all, it establishes what I have been saying about salaries in provincial Romania and Moldova, that there is not a large salary difference (and I think they are slightly higher in Chisinau, for the more experienced people). Though Romanian IT engineers are returning home while Moldovan continue to leave the country. I can not remember hearing of an employee of Pentalog leaving Romania recently. The time is well chosen to convince the politicians and make them understand that this is the moment to start a real revival of the Moldovan IT industry!

Petru’s comment:

Before April 5, all young people expected to see the fall of the Communist Party and they saw their futures within the Europe of today.

Moldova live! And Good Bye to the Communists!!

A few days ago, on July 29, this year’s second legislative elections were held in the Republic of Moldova, after the massive fraud of last April. I will not go into further details concerning Moldovan politics because, as I often said, legitimately it is not my place to do so, but this does not prevent me from having a philosophical point of view… like everyone else… and an investment in this country.

I am going to write 3 or 4 posts about the situation in Moldova, I would like to return to what hurts me personally, as a businessman, but more importantly on what has destroyed the dreams of my friends who feel obliged to leave the country, and to immigrate, in the case of engineers, mostly to Canada. I will perhaps return to the role that this country plays, and how it surfs over the misery of the world by plundering the few elite in these developing countries.

In 2009, because of the elections, I have spent a great deal of time in this country, and will again next week spend another 4 days there. I am constantly meeting new people, opening or participating in many discussions, looking for solutions for the future of this country, my only guide being, the interest of my business and that of my friends. I would like to recall that Pentalog ranks as 2nd or 3rd enterprise in IT in this country.

I have met this year on several occasions the Ambassador of France, but also those of Italy and Germany. I talked very rapidly, with one of the candidates running in the Moldovan Presidential election, concerning the issues in our industry. I even had the opportunity to exchange a few words with President Sarkozy on the situation in this country. But above all, I have met my fellow competitors but nevertheless colleagues, looking for protective synergies, national IT strategies or to define common business ethics for all the major players, to improve the balance of health and social institutions of this country.

A few months ago, I wrote a series of papers on the theme of competition. These papers were about the rules of competition in the market for human resources and I must admit I didn’t keep my gloves on. I’ll be more careful this time, but there will still be a little blood shed!

Following this election, I do not know exactly where it is going to take us, but it does renew hope, and therefore I want to return to the title of my paper: the requirement of democracy.
The fundamental deficit felt by the young people who have completed a part of their studies in the European Union, and who are talking on the Internet with friends around the world, is a lot more fundamental than imagines the Moldova Communist Party. This deficit is also the cause of all other problems that I will detail in my forthcoming paper, whether it’s the abysmal lack of social protection, or the difficulty of maintaining the level of education. All these evils are caused by the lack of democracy and are subsequently the reason for the increasing number of candidates looking at emigrating.

As I mentioned the other day to Mr. Lupu (one of the largest opposition candidates, running in the presidential election), during a telephone conversation, what I felt was the greatest threat to the IT sector, is not the current level (which can be improved) of the infrastructure, but the continuing loss of skilled, educated young people. Moldova in this decennia of 2000 is chasing away her children! This goes well beyond the ethnic divide that everyone imagines. I told Marian Lupu, the level of current wages, between Romania provinces and Chisinau is almost the same in IT. However, the technological levels of Romanian provincial towns are rising, while the Moldovan capital is dropping. And do you understand what is happening? Because Romanians who left Sibiu, Bacau, Iasi… to go to Bucharest, but also Frankfurt, Rome, London, Montreal or Toronto… are coming home! But on the other side of the border, the exodus continues, and it is massive and it is now affecting all age groups, except the oldest!

There is no reason why the future continues to shrink in Moldova while it improves in Romania. Seen from today, and after the elections, quite the opposite. A new wind is blowing. I understand you, my Moldovan brothers, but I want you to lift high the flag of courage and ambition. I urge you not to abdicate now that there is hope.

Those who have left Romania for the West did not have a rosier future than those who remained. More, those who have chosen to remain now benefit from many opportunities afforded to a country under reconstruction. Moldovan friends, it’s up to you to confirm that today is the first day of your national reconstruction.

My activities as of late have been a little hectic and this has perturbed my usual rhythm in keeping everyone posted. I would like to take this opportunity to bring everyone up to speed concerning the final decision of our client ST-Ericsson to entrust to us, for a reasonable period of time, several of its product platforms. This also gives me the opportunity to thank everyone and to talk about the worthy celebrations that we had because of this success in Sibiu… which closed this chapter of a long story, which started a year ago.

In May 2008, I received a phone call from Ausy inviting me to attend a meeting in Paris with one of their clients to discuss the porting offshore of a platform already outsourced in France. The subject, described in volumes and the technologies in question seemed highly motivating. Possible I had convinced them at this first meeting that Pentalog Technology was well prepared, and was ready to go even further…

From this time on started a cycle of successive validations, ultra short, where we had to explain how we were going to face a challenge of such magnitude: 33 hardware engineers, hardware layer, protocol, audio… platforms that would deliver complete low layers software to… the n ° 2 worldwide in mobile telephony. The customer dropped into Pentalog, twice in a very short time. We immediately understood that each visit was not just a social call: they wanted to know if we had the available human resources on the Romanian market first of all, then Pentalogs’ ability to establish, in a few months, what had been already established in France since several years. We understood that for each one of these concerns, we could not make a false step!!

When we were given the go ahead, at the beginning of July 2008, we were aware that this was only for a long period of evaluation (which would last one year), during which the process could
be reversed at any time since the French operation remained only partially in place (admittedly decreasing gradually). This spring was characterized by a massive effort to show our high technical level and finally confirm the job was finally ours as of the end of June.

I want to thank once again all the members of the team and their managers who have worked so hard to get us here, I know it was demanding, but this is a real project which demands excellence! Management was sometimes obliged to work with you as if you were professional athletes. Now it is over and the results are there. So thank you once again, and I am not forgetting our client who gave us the honor to compete in this unique challenge. And thank you Marc. But we must not forget that this victory is only going to last for a short time and we will continue to face many new challenges ahead.

I am posting a few photos of our weekend in Sibiu, in this huge and magnificent house that Ralu (Sibiu), found for us…

Monica and Virgil enjoying themselves

Marc and a few of the boys!!

You must be thinking that this post is already obsolete, but hey, better late than never… I usually write a little something about each professional event that I attend. The Gartner Outsourcing and IT services summit will not escape the rule…

It was a first experience in London for Pentalog last June, and for other Moldovan companies that were represented on the stand organized by ICTAM. The space for exhibitors or “solution showcase” was smaller than what I expected: around twenty companies, mostly in the heavyweight category of outsourcing (Wipro, Getronics, Tata, Siemens , Infosys, etc.). Needless to say, we felt a little bit “small”, no easy access to visitors, who gave me the impression of being over there only to visit their current suppliers and of course attend the conference rather than to study the proposals of potential new providers. There were also some national pavilions: Canada, Brazil, and Morocco with Casanearshore. Our biggest competitor in Moldova, which had announced their participation, was a no show. We made a few contacts that are interesting but certainly they will not give us any business in the short term.

Concerning the conferences I had a chance to attend, and especially those conferences that referred to the future of offshore, I was surprised and disappointed, that the speakers barely mentioned Romania and Moldova was never even mentioned, either for IT or BPO in Europe. Vietnam was hardly even mentioned, neither. It is true that Gartner clients are companies whose sales are expressed in billions of euros. And it was clear that the conference addressed these bosses who require teams of several hundred people, and therefore are more likely to talk about countries like India. This is unfortunate because the smaller countries who have gained a certain maturity such as Romania have a role to play in the Global Sourcing strategies of these large companies, through their skills, experiences and having learned how to exploit “niche” markets. They are carriers of added value compared with the usual heavyweights. We can and will demonstrate this at Gartner in the years to come…

And finally a few pictures to show the Gartner exposition and London…

This exceptional performance in the context of the global economic crisis is without precedent; it is mainly the result of our “niche strategy” implemented by the company and the development of new markets. Thus Pentalog Deutschland grew by 180% this semester, Pentalog Technology (Embedded Systems subsidiary, co-owned with AUSY), for its part, generated a growth rate of 310%.

Pentalogs’ historical markets have not been left behind, because outside of Germany and Pentalog Technology, the company registered an increase of 21% organic growth rate during this semester.

The third quarter should show an increase of 30%, while the fourth is already showing an increase of 15% based on our present back log. These figures could further improve in case of a future recovery this year.

This information demonstrates the performance of a unique business model amongst consulting and outsourcing companies; in addition to our ability to generate new business, which has allowed us to have an Ebit between 2 and 3 times higher than the industry’s average. This is also due to our significant increase in productivity, an excellent commercial, technical structure, and good administration (15%), Pentalog is not only weathering this crisis but is retaining an operating margin of two figures, and which will continue throughout 2009.

Wednesday evening, Serghei and I invited 16 project leaders from Chisinau Pentalog to dinner. We went to the Popasul Dacilor restaurant (Dacs being the local equivalent of the Gauls in France). Being the only French person around the table, and within the framework of the quasi-reconstruction of a Dac village, I actually felt a little like I was in a new episode of the adventures of Asterix: Asterix and the Dacs. It is true that some DACS around the table had a little Slav accent, Serghei isn’t this true and what do you think Victor? But there were others…
The atmosphere was very congenial and with the help of the couple Mihai / Andrei, I am absolutely sure they would be a hit on Romanian television. Photos below:

Despite the difficult environment in which the country is going through since the elections of April, we must continue to move forward and show everyone that we continue to believe in Moldova and that Pentalog will also continue to grow and that our overall results are good: Pentalog Moldova continues to recruit. We are now 92 people in this branch and we have just set up a new team of 6 engineers for the project Strator (Imperial Tobacco Altadis Group). This is the confidence that I wished to testify towards my colleagues and team mates during my visit at the Dacs!

The other evening the general meeting of Chisinau Club France was held. We applied for a position amongst the 5 members of the board… and we were elected.

In one year the club has worked in several directions and did not hesitate, at difficult times to ask the right questions. It acted decisively concerning subjects like intellectual property and promotion of brands.

Jean-François Myard our dynamic President, and also the boss of Mobi Banca, the local subsidiary of Société Générale Group, was elected for a second term, and I can say, “democratically” and without protest, except maybe from a score of North Koreans.

Pentalog with its 85 French speaking employees from a total of 92 employees, are keeping their French teacher practically working full time, and who at the same time is completely involved in the club and its orientations.

This morning, I looked at what was going on in the Pentalog joblogs. I am actually very happy with the recruitment rate through this instrument which is very visible and accessible to all. I have not measured the results, but it is very high. I saw a post yesterday on Peoplecentric.ro concerning the recruitment of staff for Sibiu (Romania) which has been extremely difficult to fill, and this helps me illustrate my point here, although I know that everyone does not read Romanian.

We have, through Peoplecentric recruited approximately 70 people since the beginning of the year… roughly the planned figure. But the progression has slowed in part because of the economic slowdown. However, we are still betting that it will exceed 100 by the end of the year. Let’s be clear, the IT people who visit us are the key to the effectiveness of the Pentalog business process. One of these days I will go into this in more detail.

I propose to take a quick look at joblog.biz, which contains all the job offers for the Pentalog group, in English, regardless of the location of the job in the world…

Our friend and nevertheless customer, Cityvox aired a video in which we are witnessing the presentation of products developed by a Pentalog -Chisinau team. We are extremely pleased and proud to serve a company which is so creative and willing to come into the everyday lives of people. This video gives an excellent idea of what can happen when there is an active collaboration between a French designer team and the implementation team located in an emerging country. We are setting up a team presently for an “Iphone application”, which will soon join the universe of Cityvox Pentalog Md.

http://orange-innovation.tv/webtv/mode/detail/461/cityvox-sur-le-mobile/lang/fr/play/1/

Frederic mentioned, in his past article he was going to modify the organizational chart, and the need for one or two more office managers in Romania. In the immediate, this means there is a need is to find a branch manager for the office in Bucharest.

I will briefly explain the specificity of this post.

Bucharest has a local business that employs more than 90% of the team. The rest of the team works on offshore projects, usually in the “niche” technologies or at very high technical levels. In the case of Bucharest, the office manager has two hats: one is related to the classical function of management and the other focused on developing business in the Romanian market.

This means, in large terms, the office manager is responsible for achieving the development objectives set out by management. This person is furthermore responsible for recruitment and management of resources, the monitoring of his or her branch (expense structures, gross margin and net margin, the average cost of a producer etc…), and therefore the profitability of his agency. An important point: the office manager is the sponsor of all the projects taking place within his branch and client contact.

The commercial element will be a very important challenge. We need to increase of our presence with our Romanian accounts. The current period is not favorable, but this is another subject that deserves another article. The local customers today are working with more than 25 people who are involved in various projects such as Datawarehouse telecom, banking applications migration, facilities etc… The objective in terms of new clients is to open, before the end of 2009 at least 3 new local accounts. The sales generated in 2008 from the Bucharest branch were approximately € 1.5 mil. Our goal for this year is € 2 million and sufficient enough projects to create 10 new posts in Bucharest.

The position is open and there are already people who have declared their intention to support this position. The final decision will be made around September. So if you are interested, the challenge is open to everyone.

Alex, Mircea and I currently are in Frankfurt, Germany, until June 19th and we will be in München between 22nd and 23rd of June and we will be available to meet local IT companies in order to talk about offshore opportunities, about Romania, Moldova and Vietnam.

If you are a businessman, an entrepreneur, an innovator, an IT diretor, a software editor and you want to develop your own offshore capacities in Vietnam or a nearshore office in Romania or Moldova, come and meet us!

Give us a call at +49 6196 7762 662 or e-mail us at flasnier@pentalog.fr

Yesterday morning many members of the business community were invited to attend the breakfast organized by Club France (Pentalog being a founding member). The entire community was there, amongst those invited were a President of a Bank, a CEO of a mobile operator and many others. No doubt, the guests of honor were the many ambassadors of the European Union: German, Italian, British and the representative of the Commission.

How to say this? The atmosphere was heavy. The state budget is in financial deficit, to the tune of 33%. The state should be in bankruptcy by fall. In a context of accelerated budget cuts, civil servants do not receive their full salary and all regions (raion) do not get their budgets (depending on how they voted in the elections).

This week, the opposition left the parliament at the moment when the President was to be elected. The Communist Party had 60 MPs and it would have taken only 61 to elect their candidate. New parliamentary elections will need to be organized, probably during the summer holidays …while people from the cities are on vacation and the students are not in the capital.

One year after the opening of this first office, the local team now has about 50 employees and it had become urgent to give this Branch Office more space in order to be more functional.

This is now done! Pentalog has just moved into one of the newest office buildings in this city of Central Romania. Eventually it may accommodate more than 80 employees.

The Branch Office in Sibiu receives some of Pentalog Group’s most prestigious clients and their operations. It was necessary to have the resources of a larger office in order to be in line with our ambitions.

Thanks to the infrastructure team and to all those who helped them moving into the new building!

On June 15 and June 16 I will attend for the first time the Gartner Outsourcing conference in London. With 4 other Moldovan companies from the IT & BPO sectors, we will have a booth representing the Republic of Moldova.

When one notices where this event takes place (a big London hotel near Hyde Park), who attends it (managers of major European companies), and the cost if only a visitor badge (over EUR 2000), one can easily imagine that such a prestigious event is not necessarily within the reach of SMEs… The organization and financing of this booth by ICTAM “Information & Communications Technology Association of Moldova“, is an interesting opportunity that we have seized in order to introduce ourselves to the UK market and promote Moldova, which is the most competitive Outsourcing destination in Europe.

There is a program of speeches with various professionals, the opportunity to talk individually with Gartner analysts; this only lasts for 2 days but they will certainly be busy and teach us interesting things!

This is not a promise yet, but an idea that is being considered within the marketing department of Pentalog. It seeks to take into account a certain situation you have inevitably heard about.

In fact, we want to create impulses & reflexes for initiatives, either to survive or to adapt, or even to dominate, and to prepare effectively for the future rebound.

I can see the incredible amount of stress within companies, which does not produce anything good, on the contrary.

I propose you to convert it into an efficient anti-crisis action: the assessment of the offshore destinations of your choice, Romania, Vietnam and Moldova.

But much better, WE FINANCE THEM! This is what matters now, I believe! We envision a formula like this one “4 stars accommodation available for any purchased plane ticket “, or “offered plane ticket” … This could take this form “open offer to the first 10 offshoring projects reaching us before …”. It’s our job to formulate this and define the eligibility criteria.
In any case, the idea is to assess an anti-crisis strategy that is not expensive.

In a journey that resembles the one already taken by many of our customers, we propose you to evaluate the universities, the Pentalog infrastructure, the Incubator, the project managers, the quality plan, whatever!

We will think abot this trick and will test it by mail and see if software engineering companies are interested.

One month after the article on Pentalog in the Romanian press, the journalists of wall-street.ro interview me.

The article presents the development plans of Pentalog in times of economic crisis: the organic growth rate superior to that of our competitors, the increase of the productivity level and of in-house quality and the creation of partnerships (joint ventures).

You will find the full article here.

On 22 and 23 May in Chisinau, 11 participants in the training cycle (project manager) finished the second part of their course. They were accompanied by Aleth, Pierre de Thelin (our quality consultant) and I. Aleth will soon post an article about this course.

For my part, I wanted to tell about the resources we had implemented to organize this remote training. Yes because it was remote! For the first part (in April) we had 7 people from Chisinau, 2 people from Brasov and 4 people from Orléans, Pierre was at this time in Orleans.

For the second part of this course we brought everyone together in Chisinau and Orleans and Pierre this time was in Chisinau. It is true that we have not been easy on Pierre since we started working together. We started with our meeting (remotely) of process definition, during our preparation for the certification ISO 9001-2008. Now that our enterprise has digital communications this allows Pierre to give his training classes “long distance” using a presentation (powerpoint), video and voice.

As Instructor, he had at his disposal:

There is also an encoder on the machine to record the session (voice, projection, whiteboard).
A machine is then set aside for the moderator who manages the various resources (switches laptop / tablet). The remote offices at their end have an octopus (conferencing system) to express themselves.

Back in our office, we used:

For these 2 sessions, all worked well, no major technical problems. This technical performance did not mask the concentration of the participants. This is very important because in a regular situation, the trainer is present and can communicate with a participant who needs further instruction.

The financial resources necessary for the implementation of this training room is relatively limited. NetViewer only requires a license (purchased or monthly rental). The means will be increased by the introduction of Level 2 links to manage the quality of services through the purchase of cameras for a motorized steering in order to have high quality images. Other resources are relatively easy to deploy. Before that, it is necessary to simplify the platform by the use of virtual machines in order to facilitate its organization. It is true that packaged solutions are available for an initial cost exceeding 15,000 euros. We have been able to do it cheaper.

I anticipate other uses of the aggregation of these resources:

The platform will evolve, as will the user requirements evolve and I will have the opportunity to talk to you once again on this new broadcasting system.