How local software vendors have repositioned themselves in

How local software vendors have repositioned themselves in

Romania ranks 26th out of the 28 states in the European Union in terms of digitization. Even so, local software makers say they have a growing local market. Meanwhile, the bulk of income continues to come for many from abroad.

At first it was emotion. In March 2020, most businesses closed due to the spread of the COVID-19 pandemic. Many entrepreneurs did not want to stay locked in the door and resorted to digitization. Many business processes have been automated, and more and more business people have turned to IT companies to develop software solutions to suit their business. Against this background, the revenues of IT companies increased last year by 2.5% compared to 2019, and the profit increased by 20%, shows a study by Termene.ro, which took into account the financial statements for the period 2018-2020 submitted by over 23,000 local technology companies.

EXE Software, a company whose main object of activity is the development of custom software, is among those who had unexpected revenues. “Turnover in 2020 was almost 4.6 million euros, an increase of about 19% compared to 2019. It was the largest annual advance since the establishment of the company”, says Sorin Cosmescu (54 years old), director general manager of EXE Software, a shareholding company which also includes the twin brother of the general manager, Gabriel Cosmescu, and Răzvan Udrea (46 years old), all three having equal shares.

Lockdown strategy

“Our customers have invested heavily in everything that means IT, much more than the previous year,” says Sorin Cosmescu. And the growth was felt when the company decided that all employees should work from home. In the case of EXE Software, remote work was simulated shortly before the imposition of health restrictions – the company’s management had decided before March 2020 that people would work from home two days a week. “When we saw that things were getting worse in terms of the spread of the virus, we started to run a test with 50% of the remote company, two days a week,” says Sorin Cosmescu.

As the simulation turned out well, on March 17, the entire EXE Software company moved home with weapons and luggage. The contractor also says that, from a technical point of view, there were no problems, but even so, the company also invested in new servers and upgrades for communications equipment. “The big change was generated by the fact that most of the internal meetings and even those with clients we did online,” Cosmescu describes the usefulness of investments during the crisis.

The business has consolidated, and the company gained six more customers last year, two of them from abroad. But the advance was generated not only by new customers, but also by existing ones – who came up with new requests amid the pandemic context. Currently, about 80% of EXE Software’s turnover is generated by contracts abroad, and 20% – by local ones. Most of its foreign customers come from Europe, but the company also has contracts in North America, South America, Asia and even Africa.

Cosmescu admits that last year was a period of about two or three months when he had doubts about how customers will react to the new conditions. He would find, however, that most customers did not reduce their IT investments, and some even increased them. “Demand started to grow more seriously after the second quarter, and at the end of last year we had a lot of projects to work on,” says the entrepreneur. In order not to be exposed to a single industry, EXE Software has clients in quite different fields, from transport, banking and the cosmetics industry to research marketing, distribution, retail and even communication.

After 20 years

EXE Software has a presence in the IT market for two decades, during which time it has consolidated its customer portfolio, constantly adapting its solutions to the needs of the market. “We felt from the beginning, since 2001, that there are companies that tend to digitize, that they want to automate their business solutions internally”, says Sorin Cosmescu.

In the ten years leading up to entrepreneurship, Sorin Cosmescu – a graduate of the Faculty of Automation and Computers at the Polytechnic Institute of Bucharest – has worked in several IT companies, from programmer to project manager and director. From the very beginning of the company, the three associates started with the idea of ​​developing their own solutions. Until 2005, the company produced software solutions for local customers. “Since 2005 we have started to develop custom solutions for foreign companies”, details Sorin Cosmescu, who says that the first foreign contract was signed with a Swiss company.

From that moment on, things “started to go up.” But not without emotions. The challenge was to find human resources, because, says Cosmescu, the entire IT industry in Romania was growing and there were not many programmers. Then came the crisis, and in 2009 and 2010, the business stagnated. During this time, however, EXE Software began to develop new projects, including a sales force automation solution – a computer system used to streamline the activities of sales agents.

In step with the times

This decision has shown entrepreneurs that if they use new technologies, the business can grow again. A lesson they applied last year, when they created new software solutions. Sorin Cosmescu says that in 2020, among the largest projects in the area of ​​custom development covered by the company were a platform for energy trading on the international market, one for service management, another for sales management, as well as various business intelligence solutions.

“Digitization will intensify. The companies have seen what it means not to be prepared to work online in this situation “, says Sorin Cosmescu. According to him, from a technological point of view, in 2020, humanity has advanced for four to five years. And the advance will not stop here, because with the implementation of 5G technologies will ensure much higher speeds, creating the possibility of expanding the implementation of interactive applications.

Cosmescu believes that IT companies will have many more challenges from now on, especially in terms of human resources. Given that remote work has gained more ground in 2020, some specialists, especially in the programming area, will migrate to better paid jobs. He believes that Romanian programmers will target companies in Western Europe, for which they will work from home, and Romanian software developers may also look to the workforce abroad.

Sorin Cosmescu also thought about investments and says that they will be carried out from his own resources, just like before. In fact, it did not take into account the attraction of a strategic investor and no possible listing on the stock exchange in the near future. Moreover, he says that he does not depend on banks either, the strategy being to run the business prudently.

This article was published in issue 124 of . Magazine

PHOTO: Laszlo Raduly