IT Business Solutions Adjust To Local Reality
With the development of high-speed business over the last 15 years, IT business solutions are gaining in popularity, and not only with the country's most advanced domestic and foreign companies.
Dec 29, 2005
With the development of high-speed business over the last 15 years, IT business solutions are gaining in popularity, and not only with the country's most advanced domestic and foreign companies.
According to IDC, a global provider of market intelligence and advisory services, in 2004, the IT market in Russia grew 27 percent, compared to 14 percent in Europe.
"IT business solutions are very popular in Russia and the market is very dynamic," said Konstantin Ankilov, analyst at iKS-Consulting agency.
"Besides the big and medium-sized businesses where ERP (Enterprise Resource Planning) systems are most in demand, small businesses also provide potential for development. High growth (around 50 percent) indicates that the market is still far from saturated."
Having first started using the accounting systems to provide the company with sufficient management at all levels, more Russian enterprises now prefer ERP systems.
"With slower rates of economic growth and increased competition, it is crucial for companies to improve their competitiveness, reduce costs and apply IT business solutions as tools synchronizing all company resources," said Andrei Brandaus, director at M-Service company that distribute "1C" business software to more than 700,000 enterprises throughout the country.
According to the experts, among the market leaders of ERP systems in Russia are SAP, Oracle, and Microsoft. Russian IT business solutions from "Galaktika," "Parus," and "1C" are also popular with many companies. Among the biggest advantages of Russian software, besides their cost, is the way they can adjust to Russian realities, and respond quickly to changes in legislation, said Andrei Mikhalchuk, general director at the North-West branch of the Parus corporation.
Although analysts talk about Russia's high rates of IT market growth, this growth is spread unevenly. As Mikhalchuk said, St. Petersburg is one to one and a half years behind Moscow in the application of ERP systems to business processes, whereas other regions lag two to three years behind Moscow.
"Seventy percent of the market in St. Petersburg is still wide-open. And I assume it will take about 5 years to saturate it," said Yelena Mirolyubova, head of the sales department at the North-West branch of Galaktika corporation which provides IT business solutions to large and middle-sized companies in Russia and the CIS .
Having cooperated with many of St. Petersburg's industrial enterprises, such as Electropult plant, and the fuel and energy complex TEK SPB, Mirolyubova said that now not only commercial companies are expressing an interest in ERP systems but also enterprises involved in instrument-making, shipbuilding and science-intensive industries. According to iKS-Consulting, as well as industry and mobile operators, business solutions are also provided specifically to oil and energy companies. Big companies often prefer to install different ERP systems at the same time, for example, a SAP product at the head office, and another software, such as Miscrosoft or Galaktika, at other branches.
Although, in the opinion of distributors, Russian ERP systems are more easily understood and "closer" to Russian users, many foreign retail investment companies, such as supermarkets, usually prefer to use foreign products such as Oracle Retail.
According to Mikhalchuk, Russian IT products are technically very strong, but they lack good market promotion and well-organised technical support.
"Unlike foreign ERP system providers that enter the Russian market with a lot of sales experience, business plans, promoted brands, and large investments, in most Russian companies everything still depends on the professionalism of a few managers," he said.
Moreover, corruption has also affected the ERP business.
"Unfortunately, besides technical characteristics and cost, kickbacks are also among the crucial factors that influence a company's choice between ERP providers," said Ankilov.
According to IDC, a global provider of market intelligence and advisory services, in 2004, the IT market in Russia grew 27 percent, compared to 14 percent in Europe.
"IT business solutions are very popular in Russia and the market is very dynamic," said Konstantin Ankilov, analyst at iKS-Consulting agency.
"Besides the big and medium-sized businesses where ERP (Enterprise Resource Planning) systems are most in demand, small businesses also provide potential for development. High growth (around 50 percent) indicates that the market is still far from saturated."
Having first started using the accounting systems to provide the company with sufficient management at all levels, more Russian enterprises now prefer ERP systems.
"With slower rates of economic growth and increased competition, it is crucial for companies to improve their competitiveness, reduce costs and apply IT business solutions as tools synchronizing all company resources," said Andrei Brandaus, director at M-Service company that distribute "1C" business software to more than 700,000 enterprises throughout the country.
According to the experts, among the market leaders of ERP systems in Russia are SAP, Oracle, and Microsoft. Russian IT business solutions from "Galaktika," "Parus," and "1C" are also popular with many companies. Among the biggest advantages of Russian software, besides their cost, is the way they can adjust to Russian realities, and respond quickly to changes in legislation, said Andrei Mikhalchuk, general director at the North-West branch of the Parus corporation.
Although analysts talk about Russia's high rates of IT market growth, this growth is spread unevenly. As Mikhalchuk said, St. Petersburg is one to one and a half years behind Moscow in the application of ERP systems to business processes, whereas other regions lag two to three years behind Moscow.
"Seventy percent of the market in St. Petersburg is still wide-open. And I assume it will take about 5 years to saturate it," said Yelena Mirolyubova, head of the sales department at the North-West branch of Galaktika corporation which provides IT business solutions to large and middle-sized companies in Russia and the CIS .
Having cooperated with many of St. Petersburg's industrial enterprises, such as Electropult plant, and the fuel and energy complex TEK SPB, Mirolyubova said that now not only commercial companies are expressing an interest in ERP systems but also enterprises involved in instrument-making, shipbuilding and science-intensive industries. According to iKS-Consulting, as well as industry and mobile operators, business solutions are also provided specifically to oil and energy companies. Big companies often prefer to install different ERP systems at the same time, for example, a SAP product at the head office, and another software, such as Miscrosoft or Galaktika, at other branches.
Although, in the opinion of distributors, Russian ERP systems are more easily understood and "closer" to Russian users, many foreign retail investment companies, such as supermarkets, usually prefer to use foreign products such as Oracle Retail.
According to Mikhalchuk, Russian IT products are technically very strong, but they lack good market promotion and well-organised technical support.
"Unlike foreign ERP system providers that enter the Russian market with a lot of sales experience, business plans, promoted brands, and large investments, in most Russian companies everything still depends on the professionalism of a few managers," he said.
Moreover, corruption has also affected the ERP business.
"Unfortunately, besides technical characteristics and cost, kickbacks are also among the crucial factors that influence a company's choice between ERP providers," said Ankilov.