Local software firms seek international promotion

Romanian software companies can promote their services to potential business partners in London as part of the Tech4Export program organized by the Employers’ Association of the Software and Services Industry (ANIS) from May 13-15. The export of local IT and communications services represented 6 percent of GDP last year, according to official data.

The Tech4Export event organized in London is expected to attract at least ten Romanian software companies. The software products and services presented will be mainly tailored for the financial, telecom and retail sectors.

All interested companies can pre-register online for the delegation on the ANIS website until March 25.

The participation fee is EUR 900, plus VAT, for ANIS members and EUR 1,350, plus VAT, for firms that are not part of the association.

“Constant interaction with local software companies and experience in similar projects developed previously have shown us that an active presence on the international market is essential in growing the visibility of companies and increasing the number and value of projects rolled out by Romanian firms. ANIS launched Tech4Export last year as a series of projects that should bring Romanian companies closer to potential international clients and we are glad to continue this series with the event organized in London,” said Valerica Dragomir, executive director at ANIS.

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To organize the delegation, ANIS will be collaborating with Tech UK, an organization that represents technology companies in the United Kingdom, the Romanian Embassy in the United Kingdom and the British-Romanian Chamber of Commerce (BRCC).

The program will include a presentation event hosted by TechUK, individual meetings between companies and potential partners, meetings with organizations that are representative of client industries and a networking event hosted with the help of the Romanian Embassy in London.

“Participant companies need to develop a well-made plan to make the most of this opportunity. The association is putting at their disposal networking and communication options. It is bringing into one single place a number of interested British companies, but representatives of Romanian IT firms need to set their own targets and make a consistent promotion effort,” Dragomir told Business Review.

According to official statistics, in 2014 the export of local IT and communications services totaled RON 49 billion, representing 6 percent of Romanian GDP.

This program started last year with a pilot event in Vienna in which five Romanian software companies participated.

Since firms continue to be interested in this event format as a way to connect with partners from different countries, it was decided the program would continue this year in London in mid-May, Dragomir tells BR.

“Depending on the interest of the companies we are working with, we intend to organize another event of this type in fall,” she said. “ANIS members would also like to see events in other countries, especially in Germany, the Northern countries and the United States. We are preparing to organize at least one more event in one of those countries this year.”

Local IT market still not over recession

The Romanian IT&C market has still not managed to compensate for the negative impact of the economic crunch that led to a 41 percent decline in turnover between 2008 and 2009, according to an analysis of the sector carried out by ManagerAnticriza.

Between 2008 and 2013, companies in the industry saw an average decline of 15 percent in revenues from the sale of their products and services.

The local IT&C industry is nevertheless undergoing consolidation due to legal measures to modernize the infrastructure while higher market entry standards are having a negative impact on investments in the sector.

However, the high skills of employees keep the market attractive, especially in the IT sector, according to the same analysis.

In this area, Romania maintains its position as one of the most dynamic providers of hardware and software.

Most of the turnover in the IT field comes from medium-sized enterprises that post between EUR 1 million and EUR 5 million. These companies adapted their business model to the market trends and generated a 3.7 percent annual growth in the sector turnover while their own turnover declined at an annual rate of 11.1 percent.

Similarly, these firms have been creating the most jobs, boosting their teams by 21.9 percent compared to 2008. However, at the level of the entire IT sector, the number of employees was down by 18.1 percent, according to the ManagerAnticriza analysis.

The reduction of debt in the sector from 75.4 percent in 2008 to 65 percent in 2015 suggests that the sector is returning to normal. However, the growth of long-term debt in the structure of total debt from 13 percent in 2008 to 15 percent in 2013 reflects that financing via bank loans is still the main choice for the sector.

Across the entire IT&C market, the degree of indebtedness went up by 28.1 percent in 2013 against 2008, mostly under the influence of the growth of the indicator for the telecom sector, where the need to expand and update infrastructure led to a 57.5 percent surge in indebtedness during this interval.

The economic pressures after 2008 when the financial crisis set in were reflected in the falling number of companies that remained active in this field. While at national level the number of active companies went down by 6.9 percent, the number of IT&C firms on the market fell by 0.5 percent in 2013 compared to 2008, especially due to a 12.6 decline in the telecom sector.

The economic pressures are also obvious in the number of companies that entered insolvency, which went up annually by 65 percent on average between 2008 and 2013. Between 2008 and 2013, 1.6 percent of companies in this sector entered insolvency, according to the ManagerAnticriza analysis.

Otilia Haraga