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REPORTS: NOT JUST ANOTHER SPOT ON THE MAP BUT EVIDENCE OF SUSTAINABLE VIABILITY. CBOSS TECHNOLOGIES GAIN GROUND IN SAUDI ARABIA!
Alexey Boyko
With the growing number of contracts to supply CBOSS products to different corners of the globe, the company not only reaffirms viability of the Russian IT-industry, but also projects its own bright prospects. The future of the industry, however, depends in many ways on government support. This article provides an account of a briefing held by CBOSS Association to discuss the latest Saudi Arabian deal and certain other issues.
At the press conference Andrey Morozov, CBOSS President, once again touched upon his pet concern, which can be summed up as: “No prophet is honored in his own motherland”. In fact, one can only wonder what reasons Russia’s telecom operators might have to keep on buying imported solutions, while the country’s leading developer, being globally acknowledged as a world class producer, offers a wide range of IT products which are quite on a par with what is being brought from abroad.
The following landmark contracts indicate how the company has advanced in the world market, and highlight an upward demand for Russian-made technologies:
Jordan:
A number of CBOSS solutions have already been deployed by Xpress Telecommunication (14 products).
Laos:
Upgrading provided for CBOSSsms and further 20 software products utilized by Lao-Asia Telecom. Laos was the first country outside the former USSR to buy CBOSS solutions: from SMSC to a package of more than 20 solutions, as well as network infrastructure consulting.
Thailand:
A package of CBOSS VAS products was bought by Thailand’s largest content service provider — Electronic Transaction Services (ETS).
Kuwait:
A contract to install and implement a package of several CBOSS solutions for SMS messaging was signed with Beshara Group.
Italy:
CBOSS Oy solutions are being bought by one of the nation’s leading operators. The credit goes to our CBOSS Finnish team.
The following is an updated CBOSS client map:
Saudi Arabia is therefore to become the 22nd country in which CBOSS solutions operate.
The Saudi Arabian Deal:
The Public Telecommunications Company, one of the key local operators, is licensed to operate and provide IDEN services throughout Saudi Arabia. Telecom networks built using Motorola equipment are being tested to ensure a smooth launch of the system in four months’ time.
Under the terms of the 7digit contract supplied are not only the billing solution, but also a set of systems including almost every component of the CBOSS product line, namely:
CBOSS, CBOSSmdCDR, CBOSSmdDrive, CBOSSdss, CBOSSics, CBOSSicsCorporate, CBOSSacc, CBOSSisp, CBOSSudr, CBOSSacr, CBOSScashDesk, CBOSSacd, and CBOSStmn.
The core component of the package offered is CBOSS (Convergent Business Operation Support System), including CBOSScashDesk (an option for cash-desk operation with two automated interfaces to network infrastructure – CBOSSmdCDR (Automatic CDR Collection System) and CBOSSmdDrive (External Resources Management System)). CBOSSacd (Automatic Call Distribution System - automates call processing for customer care services).
The Internet systems comprise CBOSSacr (Automatic Cash Register — allows the user to make payments via the Internet), CBOSSics (Internet Customer Service System) and CBOSSisp (Internet Sales Point System).
Other solutions to be installed in the telecom networks are CBOSSics-corporate (Internet Customer Service System for corporate clients), CBOSSacc (Automatic Customer Care) and business intelligence systems: CBOSSdss (Decision Support System) and CBOSSudr (User Defined Report System).
All the software developed by CBOSS supports iDEN (Integrated Digital Enhanced Network) — a mobile standard used by the Public Telecommunications Company. The standard enables subscribers to use the Push-to-Talk functionality to communicate with one another and gives a number of advantages that are of specific importance to the Saudi Arabian market (e.g., the ability for customization is higher than that of GSM networks). All the system interfaces are localized in Arabic.
According to the signed agreement, CBOSS Association not only implements its solutions, but also provides extensive technical support, consulting services, and personnel training. As an additional part of our cooperation, CBOSS is later to enhance the deployed systems with a number of upgraded features.
The MForum.ru correspondent asked Mr. Morozov about the competition for the contract, what leverage the Russian company had, and whether the price was a decisive factor. "It is quite unusual, of course, to select a Russian company as a supplier,” - the CBOSS President said, “so much more delightful it is to realize that we have won that tough competition. The Saudi Arabian market is undergoing liberal reforms and it is getting harder by the day to squeeze into the market. Price was not the main concern at all. Saudi Arabia is quite a well-to-do country, as you know. The CBOSS price list indeed looked a bit more reasonable than that of our rivals. Still, it was the confidence that CBOSS would meet deadlines and provide efficient and timely support and upgrade, that ultimately turned the scale in favor of our company. I think this trust is based on previous Jordan projects, and they were a success.” Mr.Morozov declined to name the short-listed companies, saying that they might be sensitive to being cited as lost bidders, though he noted in passing that some true big-time players were among them.
The solutions supplied to the Saudi Arabian operator are all developed by Russian specialists. Since the IDEN system utilized by PTC does not support CAMEL, CBOSSrtb was not on offer.
Andrey Morozov also enlightened the audience on other pursuits of the company in 2004 and answered questions from the press.
Endeavor
In 2004, CBOSS declared that its efforts would largely focus on the global market. In February 2004, the company completed acquisition of OBS Business (On-Line Billing Solutions) from Fujitsu Services' Oy. The deal was dubbed the “Russian revolution” by the Western media.
Cross-cultural mergers are notoriously ineffective, because of different operational norms and cultural backgrounds between the take-over and the target firm. CBOSS and OBS Business managed to fuse relatively smoothly and “on the cheap” – Finnish top management was replaced: 15 employees were dismissed, 17 new ones were taken on. All this could be regarded as a regular rotation, since neither quality nor personnel structure was affected.
A comfortable mini hotel has opened its doors for CBOSS employees who come on a rotational basis to Helsinki. 26 employees are now involved in the project.
The integration of rtbilling into the CBOSS product line is ¾-way completed, CBOSS rtbilling Release 11th is out, Release12 is being tested. Russian specialists on the team installed a new release in Singtel Optus networks, Australia.
In CBOSS headquarters (Moscow), the RTB laboratory, brimming with state-of-the-art equipment, has become a Center for NSK Competence (НР Himalaya NonStop). The rtBilling™ application system is deployed there. The first step in integrating the billing system, CBOSSacc, CBOSSics, CBOSSudr and VAS into a single frame with the new platform has already been executed.
120 employees composing ad-hoc testing, implementation and technical support divisions are involved in the rtB project in Russia. Thirty more specialists are dealing with integrating CBOSS into rtB. After the merger, 150 new jobs were created in Russia, and the company’s personnel now total about 2,200 employees.
October 2004 marked yet another achievement – CBOSS Association was awarded an ISO 9001:2000 international certificate for its quality management system — a single certificate for a bi-national Russian-Finnish enterprise.
To meet the certification requirements, CBOSS Association:
- Developed the quality management system (QMS)
- Determined the quality policy and objectives
- Defined technological and organizational standards and issued related documentation
- Prepared a program of systematic internal QMS audits.
The certification audit was conducted by Bureau Veritas Quality International, accredited by United Kingdom Accreditation Service (UKAS).
The important outcome of the acquisition is a shift to a different business model. In the former business scheme Fujitsu was preoccupied with software development, while distribution, implementation and support were delegated to HP. Today CBOSS is prepared to conduct business in a different way. According to the new business model, CBOSS supplies integrated “turnkey” solutions to which НР equipment is but an element.
With an agreement to supply CBOSSrtB (rtBilling™) to one of Russia’s GSM operators, CBOSS launches a new era of online billing solutions in Russia. According to Mforum’s information, the eagerly anticipated installation is to take place in the Privolzhsky Federal Disrtict.
CBOSS (Convergent Business Operation System) is ideal for companies specializing in e-commerce and m-commerce. CBOSSrtb is absolutely unrivalled as an online billing platform. However, as Mr.Morozov put it “it is all about the needs of a particular customer”.
There Is No Prophet Honored In His Own Motherland
The government support and advocacy effort by NGOs for Russia’s leading developer leaves much to be desired. Mr. Morozov said that, although “the issue is being talked about a lot, the government does not practice what they preach”.
The Arab-Russian Business Counsel into which CBOSS was accepted in 2004 needs state assistance as well. ”We see that in other countries businesses that operate worldwide are extensively backed by their governments. China is doing a lot to help national business (e.g. the government allocates huge amounts of syndicated credits) and never shies away from fulfilling its commitment to national interests. Likewise, supporting American businesses abroad, irrespective of form of ownership, is placed high on the US national agenda.”
IT-Industry is a lucrative business. It requires no natural resources to be used and involves no tricky ecological concerns. So, it is quite ironic that the Russian government is not keen on “feeding its prospective cash cow”.
Asked about tax cuts and export incentives, Mr. Morozov said: "we would welcome these measures and would be very glad to see them applied. We can only hope that the effects are felt immediately. In fact, it is not so much the amount of taxes, but the maze of regulations and procedures that should be transformed, e.g., the VAT refund procedure for exporting companies is so complicated that even a program to reduce the number of steps, say, by half, is unlikely to cheer up the industry.”
A. Morozov believes that the industry does not need isolated moves, but a set of measures to springboard Russian IT companies into the global market. First of all, the government should grant syndicated loans to companies who sell abroad, ensure political support and full-scale promotion of made-in-Russia brands. Mr.Morozov said that in the former USSR special Trade Promotion institutions used to protect national producers. These days such organizations no longer exist, and no substitute has been provided.
Another hurdle mentioned by Mr.Morozov is a blind admiration of all things foreign. Mr. Morozov said that Russian companies are likely to opt for foreign technologies, even “other things being equal”. One could hardly consider such a situation encouraging.
CBOSS Projections
Outlining the development plan, Andrey Morozov was quite imaginative saying: “So far, we are more like the hare in Aesop’s fable who puffs out his chest in front of the elephant. But we are ambitious! We are going to stake our claim on the global market and acquire a share that would be equal to those held by the leaders. CBOSS is already looked upon as their match and we witness competition unfolding both at home and abroad. Our rivals might dream of sweeping us away while we are still green. I hope they will be disappointed".
CBOSS has plans to extend its global partnership even further. However, despite its global acknowledgment and success, the company still has not been authorized to sell Sun equipment worldwide. “It is a quite a setback. Hewlett-Packard is a little bit more accommodating, but still not easy to reach an agreement with. The Middle East market does its best to curb the influx of American computer technology, though essential products reach local markets, anyway. But... CBOSS is totally committed to conducting its business in a respectful manner and in accordance with the regulations in each of the countries it operates in. We remain hopeful that we will work out a constructive resolution to that.”
The domestic market is booming. Russian customers enjoy numerous privileges, e.g. credit against goods. The amount of revenue received by the company in 2003 is $80 mln. The estimate for consolidated revenue in 2004 is set at $110-120 mln.
© Alexey Boyko, "Mobile Forum"
