IT company ORTEC expects to increase its headcount by 20 percent in the CEE region this year, says Herman Wierenga, managing director of ORTEC CEE. In an interview for Business Review, Wierenga talks about the IT specialists of the future and the need of the industry to have more specialists in a bid to help Romania make the transition from an outsourcing market to an R&D destination. He also talks about the increasing demand for complex technical solutions in the Romanian transport and retail sectors.

What are the expectations of ORTEC in terms of turnover and number of employees in Romania this year?

We expect to grow with approx. 25% in revenues and 20% in number of employees in 2017, in the three offices we have strategically established in Central and Eastern Europe (Bucharest, Bergamo and Warsaw).  In 2016, ORTEC registered 85 Mio in revenues worldwide, of which almost 10% in our region.

What’s your opinion regarding the overall pool of talent in the IT sector and how does ORTEC manage with staff retention, one of the key challenges for this industry?

Romania has a lot of talented IT professionals who are flexible, smart, independent and speak different languages. At ORTEC we are passionate about Mathematics and we are always looking for the best students, most of them coming from the Politehnica University or ASE.

We manage well in finding and keeping the right employees, although the job market has become a lot more competitive in the 9 years that we have been in Romania. I think the reason why we do well in this aspect is that ORTEC is a very nice company to work for. We are global leader in the field of Planning & Optimization, we make, sell and implement our own products and our developers in Bucharest work with the newest technologies and innovations. I think this is also the future for Romania’s IT sector: less focus on outsourcing and more focus on software creation, research & development.

For this to blossom, it is important that the students who come from these faculties do not quit after just a few years of studies. The Romanian IT industry doesn’t only need people who know how to code or how to work in a back-office, but also needs real specialists and people with a strong scientific background. That is one of the reasons we stimulate our employees to continue their studies & trainings, for instance by doing a Master or PhD.

How have the demands of retailers evolved in the past years, on IT services, considering the sharp increase of consumption from households?

In Romania, the retail industry has significantly developed, particularly over the past 5 years and especially in the smaller (supermarket or “corner-shop”) formats. This has forced the retailers to pay more attention to cost reductions, while adopting key strategies to maintain a profitable position on the market. In order to stay competitive, retailers seek new solutions that offer lower prices, increase customer satisfaction and have improved ways for dealing with a large number of their clients’ demands and orders. We use smart mathematical solutions and advanced analytics to optimize store replenishment and delivery, reduce the number of empty miles driven, manage cross-channel orders and fluctuating demands. ORTEC is a worldwide leader in this segment and, in Romania, two of the biggest food retailers (Mega Image and Carrefour) are our customers.

eCommerce is becoming increasingly important, but the e-commerce logistics is still highly inefficiently managed in most organizations. Many delivery addresses are visited more than once, there is a high percentage of cash transactions, high number of returned goods, and low visibility for the customer on actual arrival time of the delivery. We help both our retail customers and our customers that are operating in courier & postal services (such as DPD and Urgent Cargus) in improving their performance.

Are transport and logistics firms in Romania interested in the latest IT solutions for managing their activities?

Yes, we see more and more that the companies from the transport, distribution and logistics industry are interested in the newest technologies and innovations to optimize and improve their business processes. Companies who want to secure long term, sustainable growth, are implementing advanced planning and optimization solutions, mobile applications, and Big Data or Cloud based platforms.

The times when planning could be made on an Excel sheet and executed via a dispatcher on the phone are gone. Nowadays, transport & logistics operations are highly dynamic and customers expect high service levels for a competitive price. In order to support such challenging operations, you need very good software that continuously supports the planners and drivers by calculating solutions with lowest costs, highest customer satisfaction and providing information in real-time so everyone involved in the supply chain can track & trace the operations. We are of course happy that companies realize that and come to ORTEC with their needs.

In your opinion, what are the areas in which the local IT specialists can improve?

I think it is important that the IT industry in Romania, and therefore its IT specialists, make the transition from outsourcing activities to “added-value” and product development activities.

In an outsourcing environment, IT specialists get exact specifications for which they need to develop software. This is something that most Romanian IT specialists have mastered over the years, which has resulted in a well-developed IT sector with numerous big international IT companies using Romania as an outsourcing hub.

To continue the growth of the Romanian IT industry, even when the salaries will go up and some outsourcing companies might move on to other – cheaper – countries, the IT specialists of the future will need to master the skill of product development, research and innovation. Instead of following clear specifications, they will need to translate high level business requirements into working solutions. And instead of clear instructions, they will need to manage their own work, become innovators and experts.

I am very positive that the Romanian IT specialists will be able to make this transitions and I already see several good examples around me – especially at ORTEC – that make me confident of the future.

How is ORTEC looking at the advent of IoT, machine learning and Artificial Intelligence? Is the company developing projects in these fields for its clients?

We foresee that, in the coming years, huge advances will be made in the field of electric and autonomous vehicles, intelligent cities and Big Data, all driven by the IoT. Artificial Intelligence, virtual reality and machine learning are not science-fiction subjects anymore and will soon be a part of our daily lives.  Our company is developing projects, not only based on our customers’ current needs, but also taking into consideration ways to create sustainable outperformance and minimizing the environmental impact.

ORTEC works closely with universities around the world to stay ahead of the game especially on topics related to Applied Mathematics, Operations Research and Logistic Engineering. In Romania, we work together with the Politehnica University and ASE in Bucharest on Master Classes and common research subjects.

How does ORTEC perceive Romania? As an outsourcing destination or a country that can attract more investors for R&D?

When ORTEC decided to open an office in Romania in 2008, it wasn’t for creating an outsourcing hub, but for the business opportunities we saw in Romania and the rest of Central & Eastern Europe.

Starting as a very small office within ORTEC, our Romanian operations have grown to be the second largest (after our Dutch headquarters). The rest of ORTEC has recognized the value that our Romanian employees bring to the company, so we have moved an essential part of our product development (such as Cloud, Mobile and Web) to Romania and our employees are in high demand to work on very challenging projects around the world. Besides working on customers in our region (esp. Romania, Russia, Italy, Greece, Poland, Turkey, Ukraine), our sales, support, development and implementation people are involved (often in leading positions) in state of the art ORTEC projects in countries such as USA, South Africa, Australia and Scandinavia.

ORTEC will continue to invest in our Romanian operations. We will start-up new research & development teams in Bucharest and also in other areas we are continuously expanding. We consider Romania as much more than an outsourcing location: it is a great place for building a business, to expand our worldwide presence and to excel in research, development & innovation.