Mandić: Adding value from available data shows the largest market potential

Digital transformation in companies and in public sector, new customer expectations with the necessity for their service and product providers to have a good understanding of their needs and behaviors, are the key drivers for the IT industry, said Ante Mandić, IN2 CEO, in an interview for ICTbusiness.biz.

“Drones and Internet of Things (IoT) in general are a different story - it’s a new industry, already omnipresent but still underutilized with different approaches and monetization models.“

“We see large applications for our drone program in all industries that would benefit from remote monitoring and data collections, especially in precision agriculture and security. Also, IN2Data, our data science company, is comprised of an interdisciplinary team of scientists and professionals with relevant academic and industry business knowledge - a perfect mix to deliver advanced analytical solutions tailor-made to the customer’s needs“, said Mandić.

IN2 is one of the biggest IT companies in Croatia. You have a wide range of solutions. What can you offer to the market?

IN2’s industry knowledge combined with our technical expertise indeed enables us to offer our clients a complete service - from core processes such as ERP systems or IT infrastructure to consulting and digital transformation. Major areas where we are present are Public Sector, Healthcare, Finance (FinTech), and of course a wide range of solutions and services for the corporate sector and manufacturing companies.

We also see ourselves having a significant role as a software integrator - as enterprises and organizations grow, they find themselves with several different systems or solutions which they want to be integrated or upgraded with newer interfaces (such as mobile), and we are here to help.

One of the newest business is data analytics and drones. IN which directions it will go in the future?

Digital reality has changed customer expectations in a way - they expect their service and product providers to have a good understanding of their needs and behaviors (even when it’s not explicitly stated).  To provide personalized services to consumers, ability to smartly process massive quantities of data has become essential. Companies that can create added value from available data are those showing the largest market growth and keeping their customer loyalty, and the role of big data and advanced data analytics will be essential.

IN2Data, our data science company, is comprised of an interdisciplinary team of scientists and professionals with relevant academic and industry business knowledge - a perfect mix to deliver advanced analytical solutions tailor-made to the customer’s needs.

Drones and Internet of Things (IoT) in general are a different story - it’s a new industry, already omnipresent but still underutilized with different approaches and monetization models. We see huge applications for our drone program in all industries that would benefit from remote monitoring and data collections, especially in precision agriculture and security. Currently, we are collaborating with Faculty of Agriculture in Zagreb on a new precision farming project that would use drones to collect data on crop health and yield with special sensors.  Generally speaking, process automation using both hardware (such as drones and different sensors) and software components is the future, and IN2 is planning to be a part of it.

You have the subsidiary companies all-around the region. How to make synergy of the culture, knowledge, and expertise?

We consider the fact that we are present on different markets on different maturity levels our competitive advantage, as we have experiences with all levels and are able to predict the trends and coming needs of our customers. Each of our subsidiaries has a unique identity and is a center of excellence in its field, and of course, knows the local market and circumstances.  This approach offers us flexibility while still having synergies through collaboration on projects and employee mobility.

Croatian IT market is pretty much oriented on the state IT spending. How to change this trend?

I think this trend is already changing - last year in particular, with the political instability and technical government would have seen to this even if it wasn't already happening. With the rise of the sharing economy and digital markets, IT companies see their chance to interact directly with consumers and make a visible impact right here, and now, so they are concentrating on smart technologies and consumer apps more and more. Business in the b2b segment is also growing - they are also seeking to find new efficiencies and provide new value to their customers, as well as expand their customer base,  and IT is one of the tools that will enable them to do this.

There is another factor in play - there is a shortage of IT workers across EU, which will only get more pronounced in time. A lot of companies situated in Croatia are currently working for foreign markets (as outsourcing partners), which usually offer better prices than currently possible on the domestic market, especially in the public sector. This is happening across the region, not only in Croatia.

On the other hand, there is still a lot of space for progress and digital transformation of core processes in the public sector. We are not talking only about increasing efficiency and sharing information across different agencies and organizations, but also building transparency and interacting directly with citizens and providing services in new ways. While we’ve come further than many countries in some respects (i.e. eHealth), we could make a strong case that public sector IT spending is not competitive on EU levels and should increase. We have several strong companies that are leading the way, and IN2 is one of them.

In past decade many of Croatian IT companies start to look for business opportunities outside of Croatia and the region. What is needed to be done for them by the government to be more competitive in EU and around the world?

Croatian IT already has quality, but same can be said for other countries in the region (Romania, Bulgaria, Macedonia and so on). To be able to compete with more-established and prosperous countries, we need to be more price competitive, which's hard to do with our current tax code and other fiscal burdens that are present for all industries in Croatia, not only IT. IT specialists are very much in demand and their salaries reflect that, and we all know how much the state takes for the highest pay bracket.

There is also a strange public mindset that entrepreneurs are of a criminal mindset and need constant supervision with rules and regulations always erring on the side of punishment, and because of that levels of bureaucracy are unreal. We would definitely appreciate more instruction and a partnership approach from the authorities - after all, we are partners in building a better economy for Croatia.

As I said above, we have a shortage of qualified IT workers, and it will be helpful that Government allows import experts from countries outside EU, primarily from the region.

What are your financial expectations for IN2 in 2016?

The IN2 group has shown growth in both revenue and headcount year on year from its founding, and we plan to continue this trend. In the last two years, we added some new members to the IN2 family (IN2Data, our data science company and IN2Trace, which provides a serialization and track&trace solution), and these new businesses will be the engines of our even more significant projected growth in the year 2017.