In my view, the 10th edition of the ASEAN forum organized in Malaysia (27 – 29 November) stood out in terms of quality and business perspectives which could ensue.

Around 300 business people attended the forum, among which the Minister of Transport, Mr. MARIANI Thierry, the French ambassadors in Malaysia, Brunei and the Philippines, representatives of large French companies in Asia (EADS, Alstom, Total, etc.), representatives of CCIFE (French Chambers of Commerce and Industry Abroad), French top level foreign trade advisers, heads of economics departments in ASEAN countries, companies from all sectors willing to develop their businesses in Southeast Asia, and, of course, about thirty SME under the umbrella of UbiFrance, Pentalog (IT services company) being a member thereof. This was really representative for the presence of French companies in the area.

The forum was held over 3 days and it consisted of discussion panels on different topics regarding development in Southeast Asia (economic context, legal matters, investment funds, experience sharing, etc.), B2B meetings along with the first encounter with Malaysian companies.

I must admit that, even if Pentalog has been present in Vietnam for 3 years already, we still have to gain more insight into the market from companies with more than 10 years of experience in Southeast Asia and having extremely valuable market know-how. Their willingness to share information has enabled us to enhance our understanding and shorten the research process on our target markets (Malaysia, Singapore, or even Indonesia and the Philippines).

The general conclusion of this forum comes as no surprise: at present, the Southeast Asian market has the highest potential in the world. France abandoned it a little too soon during the 1997 crisis, and yet, one of the key success factors here are endurance and long-term perspective. Consequently, those who stayed and believed in it have been very successful. The others are always welcome to come back, but they should avoid making the same mistake again. Determination is really important and the participants of this forum were very convincing in this respect. Moreover, France seems to be aware that exporting is one of the solutions for overcoming the crisis in France, and it also seems ready to implement several measures to support companies.

At the same time, our opportunity to meet so many interesting business people could turn into real business opportunities in the near future. So we’ll keep our fingers crossed; it is going to be a challenging 2012.

Several photos:

In line with our commercial development strategy in the Asia-Pacific area, Pentalog will attend the 10th edition of the ASEAN forum organized by UbiFrance in Malaysia (Kuala Lumpur) between 27 and 30 November.

10th ASEAN Forum

Around fifty French companies will come together to share their experiences, best practices related to commercial development in the area in general and in each member state in particular. Moreover, many B2B appointments have been set with a view to encountering future clients/business partners.

If you are looking for a top-level partner in the field of IT services in the area, if you have a customer portfolio, but you lack production capacity, if you have a revolutionary idea, but you need an incubator to turn it into a concept, if you want to join our team or if you are just interested in Pentalog and you are in Kuala Lumpur in this period, feel free to contact me: tnguyenquoc@pentalog.fr.

We made it, we are achieving business development in Asia. The rumour was going around the block (well, the blog) for a long time now, but we wanted to wait for the first deal to be closed before letting you know more about it.

In addition to enhancing its production capacities by setting up the new branch office in Cluj, Romania, at the end of July this year and very likely another one in Tunisia shortly, the Pentalog group strives to increase sales in other parts of the world as well, namely in Israel, in the US, in Poland, and, of course, in Asia as we have been present in Vietnam for the past 3 years now!

We knew right from the very beginning that selling in Vietnam would be (quite) different from our trade habits in Europe, so we had to carry out proper market research in order to establish where, how and what to sell. The numerous meetings we had with our potential buyers enabled us to define some of the market requirements, the purchasing habits and, above all, the services which definitely set our IT outsourcing company apart from local players.

Our expertise in large-scale IT projects, our industrialized work processes, our certified quality assurance system, our recruitment and training capacity, as well as our highly proficient international team are so many of our strengths. However, the fast growing market in Vietnam has the following distinctive characteristics:
- Mandatory face-to-face contact (online purchase is still faraway), referral-based contact is strongly recommended
- Services are seldom purchased, instead customers look for solutions including customization and maintenance services
- Difficulty in defining the needs (and in the same time the fixed-price contract is seen as a standard), the customer does not have the required proficiency to follow up and control the project development
- A few issues related to the transparency of the supplier selection process, to say the least

Therefore, we most definitely have to add a client control and a project management support layer to our regular services. Already, we have been chosen by THE very first Vietnamese customer in the insurance business sector to assist them in their strategic portal project from scratch, namely to draw the list of requirements, to plan the progress and to implement it.

Apart from the Vietnamese market, we are also aiming at reaching nearshore destinations – with reference to Vietnam – like Japan, Korea, Malaysia and Singapore in the near future. I am well aware that, in the past, we already targeted Japan and canceled it out because of the global recession, but this time we are definitely going to make it.

Taking advantage of the presence of our CEO, Frédéric LASNIER, in Vietnam, on Thursday, November 3rd, we set up a meeting in the Hanoi office with potential buyers from different business sectors: banking, telecommunication, consulting, industrial production… Our dear visitors had the opportunity to better understand Pentalog and the IT services we provide, to visit our production site which is in compliance with European standards, to have a chat with our employees and enjoy a lovely lunch together. Many thanks to them for what we see as a win-win situation as there are some promising collaboration opportunities underway following this meeting.

For further information on the services we provide in Vietnam and in the Pacific- Asia region, you are welcome to contact us in order to set up a meeting or a visit to our premises:
Phone.: 00(84) 43 79 50 699
E-mail: hightech@pentalog.vn
Website: www.pentalog.vn

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

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

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

The boom in web models brings about great changes to the economic exchanges. They can provide purchasing services with a great potential for efficiency and with considerable strategic opportunities. However, the purchase of offshore services remains confined to an unadapted local information process, which is too much related to the purchase of local consulting services, due to national listing agreements. Nevertheless, the offshore sector includes numerous strategic methods for reducing the customers’ capex. The productivity of commercial departments of IT companies, which hasn’t changed over the last 20 years, affects prices and customer satisfaction. A few thoughts about it…

If I had time… oh, another post which begins with an incantation! So, if I had time, I would like to carry out a detailed study on the appropriateness of IT service purchasing models which are currently used in the European IT sector. Indeed, I am regularly surprised to notice that among our prospects who visit us, those who always pay the most for their trip and their stay are those who have a purchasing department, having listed providers for at least one year. At a time when the web is gaining in popularity and there are less and less intermediaries, and guaranteed income is called into question, this type of practice is absurd, as there are always promotions that their listed travel agencies do not offer them. Very often, they pay between twice to four times more than us for a trip that they bought on the same day from the same company. Whenever this happens, they protest against this waste, but this scenario is invariably repeated all over again. There is a typical tendency to avoid making fundamental changes.

In the offshore sector, internalization performed by the service provider reduces the clients’ capital expenditures and boosts R&D and maintenance operational expenses

The same thing happens when purchasing IS and offshore-nearshore R&D services. We regularly receive requests from major groups in the form of average daily rates for juniors or seniors, even though it is obvious that the offshore model cannot be reduced to the price of the manpower. They ask us for the average salary, the related local expenses and try to skip infrastructure costs… whereas the difference between Paris-based IT companies and their offshore counterparts lies in the location of work, the integration of security aspects, mass training, logistics, internalized staff management… Their way of thinking resembles that of commercial managers of local IT companies, i.e. from a gross margin perspective. In the offshore sector, internalization performed by the service provider reduces the clients’ capital expenditures and boosts R&D and maintenance operational expenses! At a time when the strategic criterion is execution speed, that makes all the difference. The purchase service, which has been formatted for several years, refuses to understand this and puts its internal clients at a disadvantage by excluding the true offshore pure players, the ones who make investment efforts. Offshore stakes are, in many cases, not known. In the US, where the offshore rate is estimated at around 40%, the first questions that you are asked pertain to intellectual property, the telecommunication platform and its security, the quality process etc. In short, the subject has been understood and I truly believe that there is work to be done within the purchase departments in the offshore sector. Excuse me for smiling at the thought of the numerous Moroccan and Indian offices (which may be a part of partnerships or not) of average French IT companies which are listed de facto because their mother company sells time and material services in Paris!

Paris listing agreements do not guarantee offshore-nearshore quality

In this case, listing agreements act de facto as intermediaries (a word which is hated by buyers), which, as with airplane tickets, should regularly go through the rich and renewed offer which appears worldwide. The web can thus play a role in reducing the number of commercial intermediaries just like it did in other sectors of activity. Generally speaking, clients understand the internationalization of purchases and global engineering better than IT companies. Therefore, they have much to gain from this. The clients’ security and purchase departments might want to visit the offshore resource suggested by their referenced partner. I remember seeing an offshore project of a major aircraft manufacturer in which 3 developers out of 10 worked during the evening for another company of the same sector. Of course, this small company benefitted from the listing agreement of a referenced French IT company. In Vietnam, I saw the team of developers of a major French company within one of the important players of the country, which is known to be working for the Vietnamese army… They worked on security programmes for European borders. Paris listing does not guarantee the quality of offshore-nearshore services. No more comments.

I am sure you have understood what I mean, despite the fact that I am biased. But the difference between these companies and ours is that at Pentalog, I am the one who makes a commitment, not a sales manager who has worked for 3 employers over the last 5 years! However, I haven’t finished my criticism. The last aspect does not concern the offshore sector in particular. It is rather general. The purchasing processes within IT companies have allowed clients to exert pressure on prices for quite a while. This is a fair fight and everyone has this aim, after all.

The productivity of sales managers in IT companies has virtually made no progress

Nevertheless, I am wondering about the impact on the commercial organization of IT companies which, in order to gain this much-coveted listing agreement and then support it, end up with expensive and excessively large sales teams. On average, major IT companies have one sales manager for every 20 employees, who represents 5% of the services sales figure. This is just the direct salary-related cost. The entire sales environment weighs between 20 and 30% of the sales figure of traditional IT services companies, with a level of technology-related capital expenditures close to 0. I think that here lies an important performance and productivity stake for all of us, both clients and providers, as this figure cannot be justified in a world where technical assistance amounts to more than 50% of invoices. Even though in comparison with the beginning of the 90s the demand has skyrocketed, the average sales achieved by a commercial employee of IT companies seem to be blocked under the 2-million-euro threshold, which, if my memory serves me right, is the same as the figure which was usually achieved when I began my career in ‘93! In other words, despite the volume effect and the contribution of new technologies, the productivity of a sales manager in an IT company has not improved. This represents a lack of creativity in the management of our sector.

The experiments that we have carried out at Pentalog and Invelia in terms of virtualization of commercial positions show that this figure can easily be tripled. Pentalog has only one sales manager for every 150 employees! Clients and providers in our industry might want to give this some thought. The cost of sales positions (25 to 30%) has a considerable impact on the purchasing price, quality, profitability and social satisfaction. At a time when the service purchase framework must be reviewed in order to better integrate an offshore component which will reach between 30% and 50% of committed man-hours, isn’t this an opportunity to ask ourselves a series of questions on the efficiency of our client-provider relations?

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

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

Welcome Marc! A great challenge lies ahead of you!

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

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

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

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

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

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

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

Objectivizing recognition

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

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

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

From recognition to the sense of belonging

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

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

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

The Pentalog Group significantly increased its M2M revenues in 2011 through the arrival of two new major clients, one from France and the other from Belgium. All the other clients have placed additional orders and most of them are increasing the volume of their projects.

Pentalog developments for these clients focused on embedded applications (especially iPhone and Android, but we have also worked on low layers), as well as on control servers or intelligent network reporting servers (Mesh). In addition, we take over the development requests of NMS (Network Management Systems). Most embedded developments are carried out in C, while server applications are rather based on Java or .Net.

For Sierra Wireless, one of the global leaders in the equipment sector, as well as for the global leader on the commodities metering market, our activities aren’t limited to the mere development, as we have fully-equipped product certification laboratories (pre-production testing) in Chisinau (Moldova) and in Vietnam.

The currently booming M2M market will go up by more than 50% within Pentalog’s sales figure this year.

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

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

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

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

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

Pentalog pursues its efforts with a 29% growth in Q2, thus continuing the trend of Q1 (31%). This growth is half due to the extension of existing contracts, unlike Q1 which had seen the signing of an unprecedented number of new contracts which were immediately launched into production. Before returning to contract extensions, let us salute the arrival of at least six new clients, while the second quarter is still not over: three in France, one in Germany and two in Israel. One of them bears a strategic importance as it consists in taking over the developments of a future star of the French e-commerce sector, following a financial operation which didn’t go unnoticed on the Parisian market. This is a strategic operation also because it confirms the results that Pentalog already obtained in the electronic commerce field, especially with Magento. Moreover, one of the global leaders in social networking has chosen Pentalog for its development needs. Thus, the online selling platforms developed and set up by Pentalog will soon register an annual sales figure of approximately 1 billion euros. In Germany, we salute the signing of a Business Intelligence contract with a recognized clothing company, Gerry Weber. Following its Q1 record, the group boasts 16 new clients who have already launched their projects since the beginning of the year.

As regards extensions, Pentalog reports a second development since the beginning of the year of the operation carried out for the Telecom Billing software editing branch of the Ericsson Group (former LHS). This operation, which is being developed in Iasi, was launched in 2008 and will involve over 36 employees in a few days’ time. Likewise, one of our major real estate clients has just included more services in its request to Pentalog, while another customer operating in the same field has extended its contract with our company. In addition, the technological branch of one of the largest French energy groups has prolonged the contractual relations initiated in January with Pentalog in the M2M (machine to machine) field.

As for the Pentalabbs incubator, start-ups continue their fast-developing trend as they register a growth rate close to 100% in Q1 and Q2. They will develop by more than 50% in 2011. Their sales do not fall within Pentalog’s financial analysis scope.

For Q3, Pentalog expects yet another substantial growth, but at a lower rate. It will probably be between 12 and 18%.

The semester will therefore finish with an organic growth of approximately 30%, thus confirming both our international strategic options (Israel, Germany, Switzerland, Belgium) and the specific specialization efforts. E-commerce, M2M, embedded development in the mobile telephony sector continue to grow a lot faster than the rest of the market.

I am very happy to make this announcement today. Manuel will go up one level in the organizational chart and join the executive committee. He will be placed under the supervision of Monica Jiman, Chief Operations Officer, and next to Sophie Lelarge (Chief Sales Officer), and will take over the coordination of all production units (5 in Romania, 1 in Moldova and 1 in Vietnam) and will be in charge of production. More specifically, his tasks will include production management control, recruitment and the management of production human resources. He will be the direct supervisor of the Delivery Center Managers (the former Office Directors) and will coordinate the harmonious development of resources according to the strategic plan.

Manuel joined Pentalog at the end of his studies in 2002, as an assistant for Eric Gouin, who was then the Director of the Romanian branch and the manager of the Brasov office. Manuel, not Manu, became Office Director in 2005 and afterwards an important associate, and he has always offered his help, often through unconventional means, in order to help the company grow. He was the first to travel to Iasi to support the then inexperienced Office Director in accelerating operations. He did the same in Sibiu… and he currently spends more time in Cluj than in Brasov. My friend and our friend Manu, it is all these efforts that we would like to reward today through this nomination, because Pentalog recognizes the importance of friendship and team spirit within a large company project.

Good luck, Manuman, half Man and half Manu!

Here is an article that I wrote after the PM Camp that was organized in the Hanoi office last Saturday:

Cornel (Pentalog technical director) and I took advantage of our simultaneous presence in our Hanoi office to organize a new PM Camp (Project Manager Camp) session for 15 project managers / team leaders / future project managers. As a reminder, these sessions which last an entire day (on Saturday) bring together the project managers of a branch office in order to discuss on subjects that concern them directly. We usually talk about organization, quality, customer relations and technical matters. The idea is to provide project managers with the opportunity to present and discuss their problems.

For this new season, we have tried to improve the interactivity of these discussions. Last year, we used to offer a local PM the opportunity to tackle a subject of his choice in addition to other topics that Cornel and I covered.

This PM Camp had the following agenda:
- Agile vs V Cycle
- Case study
- Lean management
- Reminder of the services provided by the technical department and the Incubator

For the first subject, the presentation focused on customer expectations (their desire to start their project quickly, to make changes etc.). For every customer expectation, regarding software development methodologies, I presented the V cycle solution, while Cornel described the Agile method approach. Before going to the next expectation, we asked the participants to vote on the method that they found to be the most suitable to the expectation. All project managers were very active. In the end, the Agile method won (by far), despite the fact that we didn’t favour any method in our presentations.

We will resume this subject in our future PM Camps by changing it a little. We will add a few expectations (we had 11 in our last session) and we are going to use an approach that I saw in an Agile seminar called “Innovation game: Buy a feature”. Every participant receives an amount of money in a fictitious currency, “Penta-Euro” for instance. Instead of the seminar leader choosing a random subject, the participants are the ones who form groups in order to buy the topics they are interested in. This collaboration is specific to the Agile method.

“Case studies” are dealt with by using a collaborative assistance approach. We enumerated a few cases (for example: my client doesn’t want to sign the PQP) and for each of them, project managers could ask questions in order to better define the (possible) problem and then make propositions. Obviously, the purpose of this exercise isn’t to find the right answer, as it doesn’t really exist, but to work on the approach. The discussions on some of these cases were quite intense.

After a Vietnamese meal in a “Bia Hoi”, consisting of deer courses (salad, grilled meat, blood tart etc.), Cornel tackled the subject of Lean Management, thus orienting the discussion towards waste. For each of the types of waste mentioned, project managers could step in and present the cases that they were dealing with. This was another element on which we collaborated well.

In the end, Cornel reminded the participants that the technical department and the Incubator could generate value for them through technical expertise, training and the capitalization of knowledge.

Another novelty of this new PM Camp season consists in ending the sessions with a formal questionnaire on the Project Managers’ satisfaction with regard to this PM Camp: General impression, quality of subjects, applicable values, recommendation and a ROTI (Return on Time Investment). The last point is aimed at determining whether the time spent is worth the investment.

ROTI FOR THIS MEETING!

Value Feedback Lean Thinking! Transparency Courage

“Excellent. This has been a great meeting that I will benefit from. It would have been worth spending a lot more time.”

“Good. This has been a meeting above average. I have gained more than the time that I spent on it.”

“Average. It hasn’t been a waste of time, nothing more than that.”

“ Useful, but it wasn’t entirely worth the time I spent on it. Therefore, I wasted time.”

“Useless. I haven’t gained and learned anything. I really wasted 1 hour!”

We achieved a positive result, with an average of 15.6 / 20.

After a brief analysis, we are satisfied with the interactivity that we had this session. For the following sessions in Europe, we have identified a few small improvements.

In just a few days, Pentalog, a major IT player in the offshore and nearshore outsourcing sector, recruited three first-rate managers coming from Alten, General Electric and Lexmark. They are joining us to fill the following positions: Assistant Quality Director (based in Bucharest), Project Director (Orléans) and Delivery Center Director (Hanoi). Welcome to Anca, Séverine and Marc!

There are more and more people working for high-calibre companies who decide to join us in order to take up important positions. This recent phenomenon is gaining momentum. Pentalog offers these young managers a unique company project through the balance between the size, the technical and strategic levels of projects and the focus on strong human relations and on the evolution of the whole through its parts. Pentalog has as many as 60 simultaneous projects, which involve up to 100 employees for several years, in approximately 20 countries (France, Germany, Romania, Korea, Vietnam, USA, India, Israel, Switzerland, Moldova, Belgium etc.). At Pentalog, they can also find trilingual colleagues (more than 75% of them!) who are involved in mobile platform development projects, understand an entire electronic board, are able to deploy a whole IT system of a bank (which has already been done), collaborate with some of the most important telecommunications operators, integrate and develop e-commerce platforms that generate sales volumes of more than 500 million euros, and have an internationally recognized M2M experience.

In short, Pentalog, which was until recently a high-level offshore and nearshore outsourcing IT company, has become a first-rate, multi-vertical, multi-channel global IT player which is recognized by the most important European clients and the best start-ups: 2 major subsidiaries of the Ericsson group, 4 subsidiaries of the Orange group, 3 of the Société Générale, one of GDF, Karavel Promovacances, Suez Environnement, Sierra Wireless, Strator (Imperial Tobacco Group), the Austrian Press Agency, TraceOne, the Elster Amco group, the Swiss Group Givaudan, Spir etc.

What they are all looking for at Pentalog is this unique cocktail which will enable them to make professional progress a lot faster and lead an exciting social life within a high-quality group of people. In 2011, twelve Pentalog employees (including developers) became associates, with company participations of between 0.2 and 3%, for a company value which is currently estimated at 25 – 35 million euros.

On April 30th, the Pentalog group had 70 more employees than on December 31st 2010. So, welcome to Séverine, Anca, Marc and all the others, and thank you for your confidence!

Pentalog, a nearshore outsourcing company,  is making quick progress with its strategy of implementing an e-commerce cloud which combines open source solutions (Drupal, Magento, Liferay etc.) and offshore and nearshore human resources. I should add that we are getting ready to start several projects for e-commerce and online entertainment leaders in the following weeks. The strategy of consolidating our competences on Ruby on Rail, Magento, PHP, Drupal, both in Romania and in Vietnam and Moldova is widely appreciated by customers who no longer find the solutions they are looking for on the consulting and human resources markets in Western Europe. This service-oriented cloud will be based on five expertise layers:

- e-commerce design and user-friendliness: Proof of concept, design, navigation
- development and maintenance: Magento, Drupal, Prestashop, PHP, Java etc.
- SEO-SEM: multilingual referencing, which extends well beyond the French language, is an absolute necessity within a more general e-commerce approach
- Localization: we can already ensure the implementation of French, English, German, Russian, Chinese, Japanese, Spanish or Italian versions.
- setting up specialized e-commerce platforms on customers’ premises or hosting them in our own redundant data centers, in Paris or Bucharest.

Relying on its high-level development capacities and its first-rate redundant hosting capabilities, Pentalog is now able to take on all types of e-commerce projects, whether small scale or large scale. By the end of 2011, the Pentalog teams will have helped e-commerce clients achieve a sales figure of one billion euros in France and Europe, and will boast a customer portfolio that includes several market leaders.

I don’t know how things stand with offshore call centers, but in the IT industry it is not uncommon to be somewhat influenced by personal attachments, more so than by cultural reasons, when making decisions with regard to the geographic location.
The Moroccan, Tunisian, Vietnamese diasporas, but also the Romanian diaspora (which is rather small in France, but much more significant in Austria, Canada or the USA), sometimes hold important jobs and can find themselves in the position of arbitrating a confrontation between their country of origin and other competitors.

At Pentalog, we have taken advantage of this aspect on a few occasions, whether through our Romanian employees or through people of Vietnamese origin. Of course, the sincerity and professionalism of their selection criteria are not called into question. However, I can honestly tell you that this choice allows employees, if not to reduce old scars, at least to fill a void, especially when these people are from the second or even third generation.

I won’t complain, because the involvement resulting from both sides represents a particularly efficient mechanism when launching together a complex international system which relies first of all, and in principle, on a more or less significant cultural gap. A very short while ago, a few Romanian IT professionals that we didn’t even know introduced us to one of the most powerful groups of the French web industry, to which we have already made several propositions. We have also lost a deal managed by a Frenchman of Vietnamese origin, who has chosen another Vietnamese company without consulting similar offers in other countries. The Technical Director and Project Manager, both Vietnamese, from another Parisian company, chose us in January in order to manage all the development projects of their company. Only Vietnamese companies had been previously consulted for these services.

These subjective reasons invariably lead to success, as the decision-makers in question pay a great deal of attention to the provider that they choose. Without realizing it, they invest a part of themselves in these choices. I would like to thank them on behalf of all the members of our teams, from all the countries where we are based. We are aware of the importance that this choice has for them. As this heart-driven reason is, after all, the most important, we are striving not to disappoint them.

Pentalog, the European leader in the field of IT nearshore outsourcing services, pursues its 2010 momentum by achieving a 31% quarterly growth as compared to Q1 2010. Given the current size of the company, this figure translates into a one-million-euro increase for the period considered. The number of employees has gone up by 36% to around 620, i.e. 180 more than last year at the end of March. This sustained growth can be accounted for by the continued investment in the PeopleCentric branch (recruitment and related technologies), which enables the group to sustain high staffing rhythms on strained human resource markets, regardless of the country.

The end of 2010 and January and February were marked by an unprecedented number of orders, as 9 new clients, both in France and in Germany, and as many as 12 projects were added to our portfolio for a record sum. This wave of new contracts resembles the typical Pentalog clientele, as they are equally represented by fast growing firms and major companies. Among the latter, we can mention the major subsidiaries of Gaz de France, Suez Environnement and Groupe Vinci in France. As for existing clients, we have recently signed a contract for a new major fixed-price project (between 30 and 40 employees during project peaks). This project will be delivered to a Swiss client. As regards the German market, three fast growing companies have joined our customer portfolio.

In order to take advantage of this favourable context, accentuated by geopolitical turmoil on the southern bank of the Mediterranean Sea, the Pentalog Group has decided to launch a new nearshore outsourcing production unit in Romania, in the city of Cluj. This will be our 5th Romanian unit. Thanks to its Moldovan site, as well (which had a high growth in Q1), Pentalog became the leading IT player of the region in 2010, with 540 employees out of a total of 620. The company is planning on recruiting between 100 and 150 people in the new centre over the following 2 or 3 years. Thus, the group will be able to support the demands that it receives and to continue to offer ramp-up and recruitment capabilities that are currently unmatched in Europe and in the nearshore area.

In Q2, the group anticipates a slight acceleration of its organic growth to around 35%.

Faced with a boom in demand for nearshore services over the last few months, the Pentalog Group has decided to open its 5th production unit in Romania. Pentalog has chosen the city of Cluj, the most important university centre of the country after Bucharest. Cluj boasts the presence of such companies as the Emerson Group, Siemens, Nokia, HP, Endava, Iquest, Continental etc.

Pentalog has been facing a considerable increase in market demand for its European nearshore outsourcing services over the last few weeks. The group had 630 employees at the end of January after having recruited more than 200 people in 2010 and had until now planned a similar staff increase for 2011. But the number of new contracts (8 new clients and 11 projects) signed during the first 6 weeks of 2011, as well as the opening of new negotiations have determined the company to completely change its plans and to aim at doubling its recruitment capacity by opening its 5th Romanian production unit. This is the 7th unit worldwide (other Pentalog offices are located in Vietnam and Moldova), in addition to the four commercial offices in Orléans, Bucharest, Frankfurt and Tel Aviv.

“We are currently looking into the reasons for this acceleration in demand and are considering two possibilities” declared Frédéric Lasnier, the company CEO. “The events which have recently unfolded on the southern banks of the Mediterranean have brought us two customers who used to collaborate with Moroccan and Tunisian companies. Geopolitical conditions of the nearshore market have witnessed a harsh change and we have had to further postpone the opening of a nearshore outsourcing office in the Maghreb”. But the reason which seems even more convincing is related to a growing lack of IT human resources in Europe, and especially in France. Market-leading companies are now finding it increasingly difficult to recruit staff, which offers a glimpse into what is happening in the second and third tiers and particularly in French IT companies. According to Frédéric Lasnier, we are now returning to the situation of 2006-2007 when the demand for nearshore outsourcing services could mainly be accounted for by capacity-related tensions.

Pentalog, the leading player in the field of IT consulting and services in Romania and Moldova (the two neighbouring countries speak the same language), which employ more than 500 out of the 630 people working for the group, has chosen the city of Cluj, the second Romanian university centre after Bucharest, and is planning on recruiting between 100 and 150 people in this unit, based on group practices, over the next 2 or 3 years. If we add this potential to that of other branch offices, the annual recruitment capacity of the group could reach 400 people as early as 2011. The early recruitment stages are entrusted to PeopleCentric, a strategic asset of the Group in the recruitment field which leads the Romanian IT recruitment market and is about to become a leader in France, as well. In these two countries, PeopleCentric estimates an annual recruitment capacity of 1,000 employees, which is currently used at half-potential. Let’s add the fact that 18% of the 21 million Romanians speak French, which thus places Romania well ahead of Mediterranean countries in terms of the number of French speakers. The city of Cluj, formerly called Klausenburg, boasts a rich Germanic culture and will thus be a considerable asset on the German market.

Through these new means, Pentalog intends to remain the European nearshore leader and to support the growth in demand on its two major markets, France and Germany.

We are very glad to notice the interest that Pentalog employees have taken in the capital increase that we have opened to all our employees who have been with us for at least five years. Of course, not all of them will participate in this operation. But they are much more numerous than we had anticipated and their overall contributions are higher than expected. I think that more than 10 employees will join their senior colleagues in the general assembly. Romanians have shown the greatest amount of interest, outnumbering the French and Moldovans.

Let’s just say right from the start that the terms in which they are going to enter this scheme are extremely favourable, as they have joined us at a time when our growth has skyrocketed. The fact that they have supported us in a period which required a great deal of energy has sometimes led them to make a great many sacrifices: long business trips, overtime work etc. The price per share that will be offered as part of this capital increase will take these facts into account.

What will the Pentalog group gain from this? First of all, the enormous pride of transferring to offshore / nearshore regions a part of the company value, which could reach 10% of the capital if added to the shares owned by our Romanian and Moldovan managers who are already shareholders. We are thus preparing, in a concrete manner and at our own scale, the economic future of countries that we love from all our hearts and which have placed their trust in us.

But, above all, thanks to these new shareholder employees, we will be commercially stronger. What company operating in the offshore / nearshore regions could compare itself to our IT outsourcing company from an ethical point of view? In fact, this holds true both for France and for Germany, doesn’t it? Because, after all, there aren’t so many companies, wherever they might be located, whose staff own 56% of their capital (and this is only the current figure, before the next increase). We can thus display a model of balance and of economic and collective performance which is unique in its kind.

Today, before signing the contract, our clients find it particularly appealing to learn that the quality director whom they met, the Office Director who received them, the Technical Director, the Project Manager, as well as their commercial contact in France or the Project Director, are associates for their most part, thus sharing a part of their destiny and of their personal interests. Certain developers are also associates. This is clearly a model which is well received by clients who are looking for balance and guarantees when preparing to entrust their projects to remote teams.

At a time when offshore choices are again taking into account the geopolitical criterion, Pentalog would like to ensure all of its partners, clients, employees and associates that the sustainability of our performance is due to our being ahead both in terms of organization, quality, technical resources, fields of expertise and as regards the promotion of a definite European ethics that eventually acts as an essential point of reference for all stakeholders.