Southеast Europe: connectivity is the key

by Gregor Potocar, Managing Director of SAP SEE

Southеast Europe (SEE) is a highly important region for SAP – the business software company employs more than 1600 people in this region alone, most of them in development and engineering positions. There are many experts in other European countries who came from this region, with broad knowledge and relevant experience. We are continuously hiring and investing here.

While the countries of SEE are different in many respects, at the same time many things connect them. One is technology. Businesses in numerous sectors have realised the value of digital transformation, and they are taking the first steps towards using the very same technology as pioneers within Western European or American companies. For instance, chatbots are being developed for better customer care, Internet of Things technology is being implemented to make better-run cities, and consumer-grade technology is spreading among the business community. Who would have believed four or five years ago that companies from Bulgaria, Romania, Serbia or Croatia would show a similar attitude towards cloud technology as their overseas peers? Now, cloud technology is SAP’s fastest growing segment in the SEE region.

As I see it, the biggest technological investments in SEE are taking place in the manufacturing sector where there is growing competition with Asian companies. Businesses here have begun to not compete on price, so they are about to employ advanced production scenarios, offer products with more added value, and further guarantee the quality that conforms with the criteria of, for example, the German automotive industry. They can justify prices with the high level of innovation they put into their production.

The firms in the financial services sector are also acting fast, and understandably so, as their markets are also changing at a very fast pace as new risks and opportunities arise. Many banks and insurance companies address these with new solutions. They realise that solving new problems with old solutions is a nearly impossible task. These companies are working in a heavily regulated industry, but can enjoy the advantages of faster processes, and give more positive experiences to their customers – for example, simpler processes or tailor-made offerings – on the fly. These are of course the areas where modern technology can be of assistance. These factors and “newly” opened regulations are among the main reasons for the rise of fintech companies. Together with “traditional” start-ups, there is no lack of will to trans-form industries within SEE. As I meet with executives of organisations across these countries, many are dedicated to winning the industry 4.0 paradigm (ac-cording to my own impression, eight out of ten SEE executives are willing to in-novate) and set to change the business model with leveraging technology of, for example, machine learning, big data, and mobility.

In many of the countries of SEE there is also a significant movement in the public sector. Governments are seeking ways to provide better living conditions for their citizens, to simplify the management of public affairs, education, and infrastructure. I see the greatest potential for development in the healthcare sector. All SEE countries operate a public health care system which in many cases is exposed to multiple challenges. Funding is not a problem – the challenge is how the funding should be spent, backed by connected and transparent data. This is also a sector where the management of human capital is of great importance.

Many experts say that small countries are appropriate “test beds” for new solutions, strategies, technologies, and ways of work. We should be exploiting this more to our advantage. Consider the example of Estonia. Thanks to its bold initiative this small Baltic state has become one of the most advanced digital states in the world. This success story is reproducible in the SEE region, where we can see an opening to bring the macro and microenvironment to the next level.

The countries in the region have many opportunities. For instance, SEE could better exploit its geographical position, making logistics a huge industry not necessarily owned by global players. Tourism also offers a lot of opportunities – there are already many new projects which aim to bring superb travel experience.

One of the main drivers of progress in SEE countries is that they will be more and more connected. The new generations of workers and experts are more mobile than their parents were: many build their careers – at least in part – in other countries, and in numerous cases in another SEE country. The transfer of knowledge and culture can be strengthened by the growing infrastructure: new roads and railways are being built, new flights (should) connect the capital cities. This connectivity extends to the economy in the region overall. SEE countries’ population approaches that of Germany- their biggest commercial partner – it only takes smart decisions for the economy to follow suit.

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SAP is the world’s largest provider of enterprise application software. It has 11 offices in Southeast Europe (SEE) and more than 1,600 employees in the region. Its customers include both the largest enterprises and small businesses.