Interview with Mr. Gertcho Karakachev

January, 2009

What is your forecast: how in your opinion will the global economic crisis influence your business in view of your potential customers’ restricted availability of resources?   

 In our opinion the IT/IS services business in general will be effected by aprox. 10-15% drop (within the CEE region) against last year´s numbers. This effects our company in two ways, first of all we have to fight more to get the business from other competitors not to see any drop in revenues but rather slower growth and second point of view is more beneficial for us, because our close relationships with our partners and customers are becoming even more important and valuable – no client can currently afford to lose any money because of selection of a wrong or incompetent supplier. Therefore clients tend to turn back to suppliers with which they had good experience in the past. And this is our advantage. We never had unsuccessful implementation project.  


Do you expect any negative influence of the global economic stagnation on the Bulgarian economy and on your own company in particular? 

Of course, Bulgarian economy is dependent on export and foreign investments as well as most of the CEE economies around, so it will be effected. We expect that it will be less effected than western European economies because there is clear tendency of many businesses to transfer their operations to less costly locations and Bulgaria is clearly one of them. These transfers could equalize the recession forces for many Bulgarian sectors, including IT/IS services. It means we expect that IT services market in Bulgaria will see slower growth but not a decline which we expect in CEE region as a whole. 


Will you take any measures to restrict the negative influence? 

We have started our “contingency plan” in summer last year, when we received the first signals from our customers that situation is getting worse. Because I cannot tell you any concrete steps we did, many of them involve working closer with our clients on better definitions of their needs, on making projects less time intensive but rather time progressive, i.e. building their solutions step-by-step, which has positive effects on cash-flows, total costs of ownership and also change management efforts.


How would you estimate your business in 2008 and what are your expectations for the current year?

Even though I am not sure if you are asking me about the numbers, I can say that we have steadily growing business and we have grown substantially (more than 100%) also in 2008. We are still expecting aggressive growth in 2009, because of all the contingency measures we have taken and amount of business we have already signed in, but of course the growth will be less progressive than we would like to and will not probably meet our plans from beginning of 2008.



Your company operates predominantly on the international market. Do you think that your company will be less affected by the global crisis than the companies that work mainly with Bulgarian customers?

Absolutely! The international operations are one of the precautions of our risk management strategy, even if there would be no economical crisis, one market has its inevitable cycles which are effecting everybody. We are now working on and preparing several interesting projects which are related with business relocation which I mentioned earlier, from more expensive to less costly countries. We could not work on these cases unless we operate on international market, because they always cover several countries.