"It's such a pity that we Czechs are often not ready for that and lack the motivation to keep improving and craving greater adventure," says Jaromír Babinec. A leading Czech manager who works to ensure that other companies that fall under Karel Komárek’s KKCG concern succeed in Europe. The Aricoma Group, for which he is mergers and acquisitions director, holds a dominant position in the Czech Republic. It is by far the largest domestic IT group, which covers the entire range of digital transformation services and is planning further acquisitions. Most of all, however, it is destined to succeed in Europe - especially to our north and west.
The Aricoma Group's revenues exceeded ten billion crowns for the first time last year. This was also achieved with the help of companies originally from Sweden (Seavus or Stratiteq), Poland (Clearcode), and Bulgaria (Musala Soft). "We've grown so much that we’ll soon be splitting up again. Into a part that will primarily handle our IT systems and infrastructure, and a part dedicated to the development of custom software. It will be more understandable and easier for us and for our customers in our push toward the goal," adds Jaromír Babinec, who has been spending more and more time commuting between Brussels and Prague in recent months.
Czechs have an inner block. As if they were afraid to succeed
"Anyone who wants to succeed at the European level must be present in Europe and get to know key people and the local environment. Despite today's technological potential, however, it’s still mostly about relationships. We grasped that when we were still trying to win contracts for the European Commission under then called AUTOCONT, now Aricoma. Success evaded us for a long time; it didn’t come until we had our own branch in Belgium and did all that painstaking work on site. That’s something that can’t be arranged or replaced from the Czech Republic," he says today, as for the second year now the company is implementing a contract worth hundreds of millions for the supply of technology and consulting services for the data centres of more than fifty European institutions. Including the European Parliament, Europol, Frontex, the European Medicines Agency and the European Commission itself, with which it has signed a long-term cooperation agreement.
To succeed with the European Commission is no small matter. It is one of the largest central public contracting authorities in the world. The only organisations that award more contracts are the US federal government and the Pentagon, something that both professional consulting companies and the largest global technology manufacturers are aware of. "There is some very stiff competition in Brussels. The Spanish, French, and Germans have had a presence there for a long time. Years ago it saw an influx of Polish companies, which are traditionally more daring and a step ahead. We Czechs are rather cautious in this regard; we’re quite fond of each other and don't like to move in search of work. This is something I’m seeing now, too, as I seek four consultants to join our team, to whom I can offer truly excellent conditions, state-of-the-art facilities and extraordinary business challenges. Despite this, there are very few Czechs applying for these positions, which I find rather disappointing," says Jaromír Babinec.
European ambitions are reality, not strong managerial rhetoric
He has been forced to change the structure of his team many times in recent months to enable Aricoma to survive in this challenging environment. "We started with the Brno-Brussels axis, which was somewhat unsustainable for our day-to-day needs. We’re now working in a kind of hybrid team of people, the core of which comprises colleagues from our Brno and Prague branches, although two people have been added in Berlin and one in Brussels. We speak English as we have a German, Belgian, Serbian and a Lebanese person with a British passport on our team. In a way I’m happy about this, because it’s concrete proof that we’re transforming from a Czech firm into a truly international company. We’ve also inspired the rest of the company. We’ve started translating reports, our intranet and important documents into English. This is a really crucial signal for the company as a whole, as it proves that our European ambitions are not just managerial rhetoric, but that these are real contracts and real people working on them," explains Jaromír Babinec, who, as he himself says, is happy to be returning to the international stage after a long time, as before joining the Aricoma in 2010 he worked, for example, as investment director for Penta Investments, and as a partner of the Kearney consulting company in the Czech Republic.
"When we decided to make our move into Europe, we went into it knowing that there was a fairly high risk that it might not work out. Yet we succeeded owing to the 'drive' that we were able to bring into an environment that was getting somewhat complacent. The decisive factors were our agility, attitude, and ability to resolve problems quickly. And perhaps sometimes take a step into a difficult place where others are unwilling to venture, as they’re too big and too sure of themselves. We’ve just gone through an extremely demanding two years, when we had to overcome the chip and logistics crisis, often having to wait months rather than weeks for components to be delivered. Representatives of the European Commission were often visibly anxious, and established players had already begun to wish they had bet on traditional IT service providers. But we bucked that trend, got through everything with our honour intact, and had an excellent year last year. As regards the figures as well as the standard of services and relationships," explains Jaromír Babinec.
We mustn’t get complacent
KKCG has already proven that it is possible to succeed in business in Europe. "The West used to look down on us somewhat. Nowadays, people are well aware that we’re not some shady eastern suppliers. Sazka's story often tends to be a good 'opener', but even so, you have to prove yourself in terms of quality. KKCG is a professionally managed family-office that has not yet fallen into the complacent mindset of a large corporation. We have energy, which is also driven by our main shareholder, Karel Komárek, who often says: 'Let's grow, we’ve got what it takes.' This is our key advantage right now, as in the big giants, people are a bit smug. They have high fixed salaries and low variable bonuses; the whole environment is a bit too laid back and not very agile. When I tell them that we work with bonuses, they’re really surprised, as they associate that with some kind of Christmas improvement scheme. When I say no, that we award tens of percent above the fixed salary when business is thriving, it’s totally over their heads. Our hunger can now make a difference, as we are able to offer similar services," adds Jaromír Babinec.
And what are the next steps for the Aricoma? More specifically, as regards information systems and advanced infrastructure, which are primarily Jaromír Babinec's responsibility? "We’ve consolidated the Czech companies so as to enable us to offer a complete solution. That's why we bought Komix, which had handled critical IT infrastructure for the state for many years. The same goes for AEC, the leader in cybersecurity. The same goes for our latest acquisition, Sabris, which is dedicated to SAP systems. However, our next goal should also be a foreign company in this line of business. We’re looking towards Germany, which is a traditional European market. And towards cloud services, in which we see great future potential. Our experience of working for the European Commission should help us a great deal with this acquisition. We have a very decent track record, all of a sudden we’re a major player even by European standards, and we deliver solutions worth tens of millions of euros. Yet the IT service and infrastructure business is rather different from that of developers. It is normally supplied from all over the world and no one worries too much about that. In contrast, our segment is more stable and conservative. As regards relations, stability, but also in terms of our economy, which we’ve proven in recent years. While customers can halt the development of an application or a new service from one day to the next, you need systems and infrastructure all the time and we are not that affected by the business cycle," concludes Jaromír Babinec.