IBM further strengthens its services business in Central and Eastern Europe

Analysts from PAC met with Vladimir Seibert, GBS partner CEE, to discuss IBM’s development plans for Central and Eastern Europe (CEE).

The CEE region is quite heterogeneous, with significant differences in the maturity and adoption of digital technologies, but customers understand the necessity to digitalize as the business environment is changing, reinforced by the Covid-19 pandemic.

We observe a strong increase in activities around cloudification, which is one of the key strategic areas for IBM, beside strategy and transformation services. IBM also continues to perform well in application management services.

The CEE region provides scalable and attractive opportunities for IBM’s cloudification business, mainly due to extensive legacy infrastructures which do not support digitalization and are not suited to the current process and operational streamlining and modernization initiatives. IBM’s hybrid cloud value proposition seems to be a viable option for infrastructure modernization in the CEE midsize and upper market segments.

Despite the turbulent year 2020, IBM managed to maintain solid business in the region, and the prospects for 2021 are even better. Poland, Czech Republic, and Slovakia are IBM’s main markets in Central Europe, while Romania, Hungary, and Croatia are the key markets in Southern and Eastern Europe. IBM will continue to actively invest in these countries.

IBM holds a strong position in some key industries in the region that have been less affected by the crisis, i.e. banking, energy & utilities, and the public sector. Even though the automotive and oil & gas sectors struggled during parts of 2020, IBM counts them among its key industries in the region.

IBM can reference projects with innovative technologies such as Watson Assistant for several leading companies in the region. One of them is Ceska sporitelna, the leader for innovative banking in the Czech Republic, which has sped up customer care with IBM Watson Assistant on Public Cloud thanks to fast implementation within four months. Serving millions of customers, Ceska sporitelna was looking for a way to maintain the quality of its customer care despite the number of customer interactions through chat or messaging quadrupling.

In the Czech Republic, car manufacturer ŠKODA AUTO selected cloud-based IBM Watson Assistant to support the optimization of the recruiting process, not only for HR, but also for candidates. IBM Services implemented a virtual HR assistant for ŠKODA AUTO to enable job applicants to apply for a job through a virtual conversation rather than having to fill out extensive paper forms.

In Russia, IBM designed an innovative digital portal for Aeroflot that is used by flight crews. The portal is aimed at streamlining the information services provided to pilots and has become their main day-to-day application, accessible from any mobile or desktop device. Pilots benefit from its speed, ergonomics, and functionality, while for Aeroflot the project is likely to become an essential part of the digital transformation of the flight documentation workflow.

IBM also boasts references for IBM Cloud for Financial Services in the region, even though the offering is quite new. Luminor Bank from Estonia will create a new digital platform running on IBM Cloud for Financial Services as the foundation for the bank’s future agile and innovative IT environment.

The strong position of IBM GBS in CEE is not only due to the local market potential, but also to the strategic role of its Eastern European global delivery centers, which are an integrated part of the delivery capabilities IBM uses for its Western European customers.

IBM has shown a growing appetite for acquisitions in Europe to expand its strategic service lines. Most of them have also had an impact on CEE operations. In December 2020, IBM announced the acquisition of Nordcloud, a European leader in cloud implementation, application transformation, and managed services - which expands IBM’s skills around the hyperscaler clouds and builds on its focus on hybrid cloud. In mid-May 2021, IBM announced the acquisition of Waeg, a leading Salesforce Platinum Consulting Partner in Europe with deep expertise in manufacturing, healthcare, and life sciences. Both companies have been present in Poland, and leveraging those capabilities will allow IBM to further develop its position in the region.