«GEOLINE Technology»: Customers expect from IT reducing costs and optimization of processes

About how IT-companies go through a crisis period, when customers pay special attention to the efficiency of projects and the demand for domestic solutions is grow, says CEO «GEOLINE Technology» Alexey Pushkin.

CNews: Please tell us about the company. In which segments of the IT-market you work, who are your customers?

Alexey Pushkin:«GEOLINE Technology» – a Russian company, provider of services in the field of information technology, engineering systems and industrial automation. In fact, we are general contracting organization, which is able to provide complex equipment of facilities with all the necessary engineering and IT-systems.

Our main areas: design and implementation of engineering and IT-infrastructure, automation, integrated security systems, etc. We can act as the EPC contractor: fulfill the full range of design and survey work, carry out the selection and purchase of materials and equipment, construction and commissioning works. This approach is highly demanded from our customers now. EPC-contractor assumes all risks for the implementation of the work schedule and budget compliance. If the customer feels himself comfortable, he will works with one company, one point of entry and control.

We are working in different segments of the market. In short, our customers – it’s medium and large businesses, including those with foreign capital, as well as companies and organizations with state participation.

CNews: What are the results of your company in 2015? All the plans were fulfilled?

Alexey Pushkin: The year was difficult. The political and economic situation affected the market. However, we have achieved most of our goals. We managed to increase turnover by a third, while the margin increased in proportion. We fully preserved our staff, although in general the reduction took place in the market. Also we opened another representative office in Yekaterinburg.

In 2015 the company was actively worked with the Russian airports. We have acquired a unique experience in design and construction of airports and major engineering systems for air transport hubs. In particular, the terminal «Kurumoch» was designed and built in Samara. Now we are working on other similar projects. We can say that we have formed a center of competence in the direction of the airports.

CNews: Did you have to adjust development strategy in connection with the economic crisis?

Alexey Pushkin: Yes, it was necessary to revise a number of business processes, but it does not impact on the overall business strategy.

We have changed the approach to solutions. Customers have revised their business strategy. Previously, they were focused on the expansion and development, but now the main trend – find a way to adapt to the situation. They need solutions that optimize existing systems, reducing the company’s costs.

Speaking substantively, we noticed the strengthening of the traditional customer interest in IT-outsourcing and IT-outstaffing, crowdsourcing. As before, companies reduce the cost of IT-infrastructure. The optimization of human resources by automating processes is continuing. A particularly striking example – implementation of management systems, which coordinates relationship with customers – CRM.

One of the principal changes, connected with the crisis, has become the choice of domestic producers in the implementation of projects. Import substitution is one of the constant demands of customers. If the Western product can not be replaced by product of domestic production, customers prefer products of Chinese and other eastern manufacturers.

Another important strategic decision was to develop a package of leasing programs. In the past year, together with partner banks, we offered our customers the necessary leasing solutions for maximum efficiency of projects.

Strategic steps taken in 2015, helped to keep the relationship with customers and develop projects in the right direction. The total number of projects decreased, but the number of customers decreased too. I want to note that due to the severe decline in IT-budgets in commercial companies, we began to take part in the tenders with the state order.

CNews: According to your observations, how the crisis is changing the Russian IT-market segment in which you are presented? Are customers requirements changed?

Alexey Pushkin: Key trends, to which we pay much attention, are optimization of costs and return of investment. Customers have reviewed the evaluation criteria when choosing a partner, they have become more demanding to the quality of services. More and more customers understand the market situation and realize that the lowest price is not the only criterion in taking the decision. More attention is paid to the ratio of price – quality.

Despite the fact that many companies have suspended or refused from number of projects in the past year, the market situation can be described as «vivid». The crisis reveals IT-projects which provides real efficiency and savings. Now the market is full of large infrastructure projects. For example, we are working on the design of complex, integrated facility covering an area of almost 250 thousand square meters. The object is very important, and the customer understands that the quality of work in this case is crucial.

Another example – the modernization of the corporate data network for the large filial network, which has about 150 geographically distributed facilities.

CNews: What directions of «GEOLINE» business are developing most actively now? In which economic sectors you have the best prospects? Which economic sectors are minimizing IT-projects?

Alexey Pushkin:«GEOLINE» actively take part in the segment of transport construction during the preparation for the 2018 FIFA World Cup. We participating in the design and construction of airport facilities. There are some projects for science cities and development: for example, we design, supply and install multimedia systems, alarm systems and access control for the «Skolkovo».

Also we are working with customers from the mining sector and their subsidiaries.
If we will speak about economy sectors, the defense industry got a second breath. The issue of information security is the issue of special importance for them. For «GEOLINE» it is one of the priority directions of development for 2016.

Western companies and developers slow down or even halted the development of production capacities. But we hope that this period will not last long. Now it is a good time to invest in the Russian economy. Some companies left the market, competition is reduced. Staff costs and partially costs of materials decreased in dollar terms.

CNews: What can help Russian companies to improve business efficiency during the crisis?

Alexey Pushkin: Trends in the Russian market of IT-depends on many factors, including the development of relations with the West. If they will come to the next level, this will be reflected in the import substitution program. But anyway, the market is already partially turned towards the domestic software and hardware produced by our eastern colleagues. It will not change. At the background of the foreign relations, now it is the time to develop the domestic economy of Russia.

A key to success for those companies, which do not want to lose the competitive struggle and maintain their advantage after the normalization of situation in the country, is well thought-out IT-strategy and IT-infrastructure development. Another issue is that each company has its own approach to the use of high technology in daily activities. Everything is determined by the business sphere, specificity, level and rigidity of regulatory documents. The winners are those who are faster and better analyze the needs of their business and have implemented those innovations, which give businesses a competitive advantage.

Many of our customers are considering or already using IT-outsourcing. They think that in this way you can cut costs and non-production costs, especially in terms of crisis. Usually a reduction in support costs and the development of IT-infrastructure in the company involve optimization of existing systems and personnel. The effect of this approach is palpable. It is connected with the fact that the model solutions that are not crucial to the development of business, as well as payment for services rendered by the external service company are cheaper.
Also we can observe rapidly developing of automation. This makes sense, because it reduces the operating costs of the business, increasing the flexibility of the company in whole. Certain tasks are quickly solve, processes are moving, decisions are made.

Definitely, cloud solutions is one of the ways to create a flexible and optimized infrastructure. However, it is twofold: perhaps our mentality does not allow us to use commercial cloud to transfer all our services, in spite of the numerous advantages.

Of course, information security of companies will stay among the most demanded directions.

CNews: Are the companies ready to invest in information security, despite the need of cost savings? Why? From what kinds of threats you protect your clients?

Alexey Pushkin: The question of information security is the question of viability of the business. On the one hand, it is unique for each organization, on the other – it is strictly regulated by legal requirements, departmental and industry standards and rules. Solutions in the sphere of information security will always be demanded, and the demand for them in the age of information is growing all the time. Means of commercial and industrial espionage are spread and develop.

The basis is constant minimization of risk and reduction of potential damage. We advise our customers to take a few steps. First, to reduce the time and cost of information recovery through implementation backup systems. Second, at the same time reduce the amount of information subjected to the risk through segmentation and separation of information system database. Third, it is necessary to use protective equipment, impeding the implementation of current threats. It is also important to raise the awareness and skills of staff in the protection of confidential information. And finally, we recommend the information security outsourcing. It means to delegate risks with specialized companies that have appropriate licenses and competence.

There are main types of threats, distinguished by our company: they are fraud and theft of strategic information, which includes data about business strategy, know-how and so on. In addition, this is leakage of customer data, transactions and orders, compromising of remote banking assets, targeted attacks, the growing number of attacks such as «denial of service», including the distribution (DDoS), and finally, the vulnerability of mobile platforms.

CNews: What benefits the customer receives working with «GEOLINE»?

Alexey Pushkin: Our main advantage is our project team! We work effectively at all the stages of the project: from initiation to completion. We fully immerse in the customer’s project in the stages of concept development, analysis of problems and needs. At the very early stages we are already ready to offer some alternative variants for consideration.

Since 2015 we use BIM technologies (Building Information Model) as a design tool. Information model – it’s not just graphics. This is information, which allows to generate drawings and reports automatically, perform analysis of the project, model the work schedule and the change of the estimated cost. Thus, the customer receives unlimited opportunities to make a decision based on the total amount of data.

CNews: Which projects were the most interesting or difficult for you in 2015-2016?

Alexey Pushkin: There were many projects, and each of them was interesting and difficult in their own way. I will highlight several of them. First of all, of course, the international terminal of airport «Kurumoch» in Samara. It is a large, complex, integrated project on the area nearly 50 thousand square meters.
Extremely short time: 14 months from the beginning of the creation of the working documentation to the completion of the facility. We were responsible for the development of documentation, construction, installation and commissioning of fire safety systems, systems of audio informing of passengers and guaranteed power supply. At the time of peak load, our specialists provided necessary assistance to related engineering companies in installation of electrical switch equipment, power supply and lighting systems.

Another project, which should be mentioned – a reconstruction of the administrative and industrial complex of the NGO «Impulse», in St. Petersburg. We redeveloped and reconstructed the building, installed modern systems. «GEOLINE» performed construction and commissioning works in the sphere of low voltage systems, fire protection and electrical systems, ventilation and air conditioning.

New working places for engineers and developers of modern MIC will be placed in the reconstructed building. The need for new workers is a result of import substitution program.

CNews: According to your forecast, what could be the results of 2016 for you?

Alexey Pushkin: The year will be connected with the continued reduction in IT-budgets due to the current economic situation. At the same time projects that do not fall under sequestration, will be focused on domestic producers. Taking this fact into account, we created a competence center for import substitution.
We will continue to invest in our employees by improving their skills with the help of various training programs. We appreciate each member of our team and plan not only to keep the entire staff, but also try to increase it. For example, we will definitely expand the direction of BI-solutions and has already increased the energy efficiency department.

Due to the fact that we are actively take part in the development of infrastructure projects related with the 2018 FIFA World Cup, we are planning to open regional offices in Rostov and Nizhny Novgorod.

We will try to make online monitoring of market situation and offer our customers the most relevant solutions. At the same time we will attract the most effective financial instruments.

At the beginning of the year we set targets, in accordance with well-known in the western management criterion SMART (specific – measurable – achievable – relevant – time bound). We hope that this approach will allow us not only to maintain our position in the market, but also to strengthen it.

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