Sev Onyshkevych, serial technology entrepreneur and Chief Marketing Officer of ELEKS, speaks with GrowthCap, about how Ukrainian software engineers are differentiating themselves in the field of data sciences
RJ: Sev, thanks for taking the time, you have a very long and impressive track record in the technology field, perhaps we could kick off with your background.
Sev: Thanks very much. I’ve been a software and internet entrepreneur for 30 plus years now, going back to the very early days of the PC, have participated in 12 exits, some bigger than others; most recently FieldView Solutions sold to NIyte, previously Raritan Computer sold to Legrand and a number of others. I’m currently working on a project in global software development with a company called ELEKS; we’re 900 software developers primarily based in Ukraine and Poland. I’m the Chief Global Sales and Marketing Officer and am situated both in Princeton, New Jersey and in Lviv, Ukraine.
RJ: Given your longevity in the industry, perhaps you can shed some light on the evolution of technology that you’ve seen and in particular in the field of data sciences, which I believe is one of your core strengths at ELEKS?
Sev: The area that I work in now has evolved markedly; the whole off-shoring, near shoring, out-staffing industry has morphed over the past few years from staff augmentation, which has become a commodity where hundreds of developers are working on back-end, back office types of applications or migrations, in a “software factory” environment. It’s difficult for off-shoring companies around the world to compete, except on scale and price in that end of the market. But in terms of the providers and clients today, we’re moving up the food chain, up the value chain, to ever-more differentiated and value-added services.
You see substantial interest in and a lack of supply of skilled resources in data sciences around the world for two reasons. One is that it’s a relatively new field, so having people that have say three to five years of deep experience in data sciences is difficult, in terms of the supply. It takes several years to really develop the skills, the experience, the gravitas that you really need in order to be able to lead and drive projects. So there is a dearth of talent in the market and those that have the experience can almost name their own price. The second part is in terms of the interesting types of work that to a great extent has moved outside of the CIO’s or CTO’s purview to other functional areas like the CMO’s office, which is focused on consumer data or other business needs, innovating and transforming business using new technologies. For example, the advent of wearable technology or the “Internet of Things” drives massive amounts of data that feeds an application or product. But the big value is in making sense of that data, aggregating it across multiple different data sources, different channels and then doing a deep dive, finding insights and making personal recommendations, assessing risk, customer value, and constructing a personalized offer.
Two years ago, 10% of the projects ELEKS did on behalf of customers had a data science component or back-end and today it’s approaching half, in terms of the interest and our proposal funnel. We may be a little bit of a leading-edge anomaly there in part because we’ve had some successes, and have a good track record now in data science and enabling application development. But we believe that that’s actually happening with our competitors as well.
RJ: How do you differentiate from your competitors when presenting your services to Fortune 1000 clients and how do you maintain your competitive advantages?
Sev: It’s a good question. So I’d answer it on several levels. First of all, there is a level of looking at the source or from where we’re sourcing our talent. The talent pool in computer science and data science in Eastern Europe, and in Ukraine specifically, is very high. It’s historic, math and statistics have always been particularly strong in Ukraine, particularly in the city of Lviv (historically also known as Lwow, Lvov, Leopolis or Lemberg) in Western Ukraine. So that’s one channel. We’re also planning to expand our existing presence as well in Poland, in Krakow.
In each market there’s a spectrum of competitors, some of which focus on the commodity end of the market, others on the mainstream looking for the large high volume projects. And then at the other end of the bell curve are boutique specialists like ELEKS, which really focus on leading edge technologies and looking at the innovators among clients and the innovators among talent.
And so we first position Ukraine, and then we position ourselves within Ukraine, and we’re at the high end of the bell curve, and in the 90% segment in terms of pay rates within Ukraine. So we’re able to skim the cream of the talent there. The talent that comes to us is attracted by interesting, very challenging, very numerically intensive projects; word gets out there and that becomes a virtuous circle. It becomes more of a challenge for us to staff a project which is plain vanilla back-end work, or cloud migration for, say, 50 to 100 developers. The people that we attract tend to be less excited about projects like that — but data intensive, data analysis, data sciences projects and other leading-edge, innovative projects, for sure!
We’ve also bolstered the practice where we’ve separated data sciences really into four sub practice areas that look at the architecture, look at sourcing data, look at manipulating data and then look at how you turn that into insights. And so we don’t see data sciences as being one monolithic sort of category, but we see different practice areas within that. We have some modules that we’ve already developed to do certain kinds of data analysis in the fields of, say, human resources. So when we’re undertaking a data science project in human resources or in retail or in customer preference analysis we’re not starting from scratch, we’re starting with a good foundation from the best practices and tools that we’ve already developed.
The other thing about Ukraine as a source is the silver lining in the otherwise negative political and economic situation in the country today, in part because of the incursion by our neighbors on the north that have taken Crimea and are fighting on the eastern border of Ukraine, IT is the one shining light in terms of career opportunities. And IT salaries in Ukraine can be significantly greater than say for a professor, for an accountant, for a lawyer or a mayor of a city, for example. So the best and brightest in Ukraine, even more than they did before two years ago are all looking at careers in IT or data sciences. The statements that I’ve made previously about the talent pool which apply to our neighbors in Poland, Bulgaria or Romania, are now, attenuated in Ukraine simply because we can draw on the best and brightest of the 46 million people. And they’re delighted to have the opportunities available at a company like ours.
RJ: It might be helpful for our readers to understand a little bit more about the scale of ELEKS – you mentioned the 900 developers – and in terms of your client base.
Sev: The client base is primarily US and UK, some in other parts of Western Europe, a little bit in Middle East, primarily corporate, ranging from a number of insurance, financial, healthcare, and logistics companies as well as what some people might call ISVs but we call solution companies whose delivery mechanism is software. So it may be a company that sells legal or medical or other software. Their expertise is industry domain expertise. We are their partner for packaging that expertise, providing the back-end and the front-end layers, the data sciences wherever we’re appropriate. We become their software division as it were. We are also providing services to more businesses with rapidly growing companies that sell a software solution to an industry vertical, the rest are predominantly the larger corporate companies, but as I mentioned previously, not necessarily within the IT department. For example, the Chief Innovation Officer and Chief Marketing Officer, are increasingly our targets. This applies particularly for things like data sciences where it’s the functional and customer-facing units of an organization who are both making use of the data internally and then turning that data into business rules, recommendations, and personalization.
RJ: Sev, thanks again for taking the time to chat with us. This has been very informative.
Sev: Thank you.