Any IT company dreams of becoming the next unicorn by finding an idea that disrupts the entire industry and having investors line up to give them money. But this is not always the case. The industry is mostly made up of companies that grow organically, adopt all the tech innovations and offer customers the best solutions for their problems. Andrei Carcu, general manager at Arggo Consulting, is one of the people that know how important it is to grow step-by-step, as he started out as a programmer and found his way to providing, together with his team, edge-cutting end-to-end business solutions.
Arggo Consulting, an innovative Romanian consulting and software development company, has just turned 5. Having started in 2014 with a small team of developers, Arggo Consulting estimates to reach EUR 3 million in turnover this year and over 80 employees. It has started an expansion by opening a regional office in Brasov and plans to cover several other regions in Romania and also go outside the country.
The company offers end-to-end, tailor-made industry solutions by blending Dynamics 365, Office 365, Azure and Business Intelligence with a vast consulting experience. Besides being a Microsoft Gold partner, the company also creates its own solutions for specific industries (Legal 365, Heavy Machinery, SMB Power Package). At the beginning of the month, Arggo Consulting launched the Arggo BPM (Business Process Management) platform, designed to transform flows into user friendly applications.
Business Review talked to Arggo Consulting’s general manager Andrei Carcu, 32, who has been in the company from the beginning, to find out more about Arggo Consulting’s road so far and its plans for the coming years.
How did you start your IT career?
I started in 2006 with the development department, which means you were programming to accommodate client requests, then I was lucky enough to take part in certain projects as a consultant and I was able to understand the clients’ requirements very well. I really liked talking to clients directly, not through colleagues, to understand their needs, their problems and figure out how they could be solved. It was even easier for me because of my experience in programming; I figured out what could be done, what would be the most efficient way and how the client can be best helped. I did this for 3-4 years, after which I took over the entire consulting team, which was a challenge since I was the youngest on the team at that time. Then there was the shift to the area of project management and sales and the moment when we set up what is today Arggo Consulting.
How did Arggo Consulting start? Did you have clients from the beginning?
Five years ago, together with another 13 of my colleagues at the time, we decided to join forces and create our own company. We started the company in 2014 knowing that we could be better, namely in the area of business applications such as ERP. It was the year we learned how to run a business; it was a great lesson for us all.
In the beginning we were mainly implementing and personalizing ERP systems and other Microsoft solutions for our clients. We had about 15-20 clients with whom we had built an 8-10 year relationship and started out with them. Then we started finding new clients, and now we have more than 150 active clients.
How has the company evolved over the past five years?
The main challenge at first was that many of us had to change our role in order to mentor our new colleagues. Many of us were forced to take a step forward and reach the next level. From a small, welded team we had to grow, hire new people and give them the same culture of doing things differently. There are currently 70 people in the team, and we hope to exceed 100 next year.
One of the services you provide is Business Process Reengineering (BPR). Do you also use it within your company?
We use it constantly. Twice a year we do assessments within our departments, to see whether we need to improve anything.
Most of the solutions we offer our clients, we try them internally first, at the end of the day we are our toughest client. If we didn’t implement the business solutions internally, it would be more difficult to offer them to our clients. We would not have a real experience.
How easily can you find new employees?
With more business directions, we look for different qualities in the people we hire. But the basic thing is that they should fit into our organizational culture. Our senior developers and consultants invest a big part of their time mentoring and sharing their expertise and passion with the new generation. We are focusing on universities: we support events at both the Polytechnic and the ASE and we hold as many internships as possible during the summer.
Students are open to anything; their challenge is that they do not know which business direction to focus on and they like to accumulate as much as they can learn from us. Some of them, who have a more flexible schedule, stay on and work with us even after they complete an internship.
What has been your biggest challenge in these five years?
The biggest problem was creating our organizational culture and being able to make our employees embrace it. Generally, we focus on communication, on how to get along with each other, how to provide feedback to colleagues both in our own departments and in the departments with which we work. We want our employees to wake up in the morning and look forward to come to work.
How do you keep up with the dizzying pace of technological changes?
Working in technology and knowing what our goals are, we keep up to date with whatever comes up. In each employee’s plan there is time allocated for training and education. This means both self-training as well as learning from senior colleagues. All our employees are openminded, creative and always eager to learn new things, stay up to speed with all the new trends and technologies.
What are the company’s financial results?
Revenue grew organically; we did not make any acquisitions. We have grown by 15 to 30 percent from year to year, and we will end 2019 with a turnover of over EUR 3 million. The profit margin is around 7 percent of the turnover. On the investment side, we first account for our investment in people and their training, and that has significant costs. At the same time, we realised that we could not only stay in the universe of ERP, CRM business applications and so on, so then we looked for ideas that could add value to our customers.
What we see in the industry is that although there are plenty of ideas, people do not always know how to translate them into solid business plans, into something sustainable that can create a product. The idea is 5 percent of a product; the rest is work and planning. At Arggo Consulting we are constantly looking for new ideas, anything can be interesting.
Clients having ERP at the heart of their business have a lot of confidence in us, which is why the new areas that we have developed have come at our clients’ request, who suggested that we could do more things to help them. Therefore, one of the areas in which we invest a lot is Arggo BPM: we hired 10 people this year in the BPM department and we want to hire more next year.
How open to new solutions are your clients?
No matter the size or the complexity of a company it is obvious to everyone that they need the best tools in order to remain competitive. Our clients are always welcoming new, scalable, flexible solutions that are helping them overcome business challenges. For example we have clients who started out in an apartment with 2-3 employees and grew to have hundreds of employees. It is all about having the vision and tools you need to be able to scale from a few people to a higher level.
There has also been a paradigm shift lately, namely that the CTO (Chief Techno-logy Officer) is no longer the only one who decides what happens in terms of technology in a company. If a sales manager needs a CRM solution, which they have seen working very well, the CTO’s opinion may not be relevant anymore. With digitization, decisions are moved to the business area rather than the IT area. Of course, implementation is done with the help of IT, but the department does not count as much as it did before in the purchase decision. This shows us that technology has touched every aspects of a business and that innovation is needed in every department.
What customer fears have you had to overcome?
Their biggest fear is that they have to change the way they have worked for the last 10-15 years or even longer. But they do realise that a change is needed. I can still use a Nokia 3310 phone that I liked very much at the time and I can still make a phone call with it, but I realise that if I want to communicate with our customers through the latest technologies, that phone is no longer sufficient.
As a rule, customers start with a pilot project on a less sensitive department within the company so as to introduce people to new technology, then extend it to all other departments. This way the company adapts more easily to the technological change.
What are Arggo Consulting’s advantages over competitors?
First and foremost, the possibility of having a personalised approach. Most of the multinationals have only got a standard approach, from which they cannot deviate as they have thousands of employees, but clients also need a personalised approach regarding the solution they are offered.
On the other hand, even multinationals need localization for their ERP solution for which they work with local partners. Ever since the beginning, we have created our own localization of the Microsoft solutions, meaning their adaptation to Romanian legislative requirements, training for employees, etc.
You opened an office in Brasov. Why did you choose Brasov as the first destination for expansion?
Based on our research, Brasov was the best place to start our regional expansion, and now we’re looking at other areas for new offices. We already have customers in the Brasov area, mostly production units, which are not usually located in Bucharest. Of course, it also counted that the city is in the center of the country and the fact that there are so many factories and companies in the area that can be potential customers. Brasov will develop a lot in the next period, and it also has the right infrastructure. If it were to open an airport soon as well, there will be even more outside influx. In addition, it also has good IT skills.
What other plans do you have for the future?
We plan to expand outside Romania, we are still researching for the best location. We already have multinational companies as clients to whom we provide our services for the whole company. Usually they are clients that approached us for their Romanian subsidiary but after the implementation they chose our services for the entire company. The next step is to target clients that we cannot reach from Romania.
This month you have launched Arggo BPM. Tell us more about it.
Yes, we’ve been working on Arggo BPM platform for over two years. The BPM platforms give us the possibility to transform any business flow, from the simplest to the most complicated, into an user friendly application. We started with clients who had requests in this direction and gained expertise from the implementations we made. We work in two directions with BPM: first there is the development of the technology itself, which involves programming, research, bringing the latest technologies, and on the other side is the business know-how that allows us to create niche applications for certain industries. As I have already said we have made implementations for our current clients, we’ve understood what changes it needed, and now we are looking to go to the wider market.
On Arggo BPM you can find the Business Solutions we have already created for specific horizontals or verticals like Legal 365, Mobile SFA application, Healthcare application and more. Our team of experts constantly develops new solutions based on the SaaS (software as a service) model, hosted on cloud that aim to respond to specific business needs by boosting, productivity, eliminating repetitive tasks, controlling costs and enhancing transparency within the daily activity of a company. For companies with specific needs or complex activities our consulting and development teams are ready to create a personalized application according to the client’s needs. Usually, we advise our clients before starting to construct a BPM application to do a BPR in order to make sure that the flows that they are constructing the BPM upon are responding to their business needs and aspirations.
For those having the necessary knowledge and desire to create their own applications we offer Arggo BPM platform on the PaaS (platform as a service) model. This solution is ideal for large companies with dedicated IT departments or for talented developers in search for the best platform to create their applications. The plans for the platform in 2020 are to find as many partners as possible for both the development and the sale of the existing solutions. Then we want to expand the platform outside the country. In terms of revenues, we want to grow by about 50 percent next year, as a result of launching the platform.
Do you concentrate your efforts in creating Business Solutions for specific industries?
Romania is not a country that generates a lot of business for a certain segment, and a software company cannot be dedicated to developing applications for a single industry. We tackled all the industries that had requests, but given the way things happened, we ended up having more expertise in some of them. One example is the agricultural heavy machinery industry, where we have the largest players on the market. But we can have equally large customers who are unique in their respective markets. We have clients like Blue Air or Dedeman, which are very large in their own segments, but we didn’t have other clients in those industries before them. However, our desire is to accumulate know-how from as many fields as possible.
Where do you see yourself in five years?
It is difficult to say what the technology will be like in five years, and what will have been invented until then. We want to continue our organic growth and expand into more cities in Romania but also outside of it. We intend to introduce to the European market the Arggo Consulting solutions and services.
We can say that we’re constantly looking for ‘The Next BPM’ a new innovative solution for us to invest in.