Keeping on top of the crisis

Modernisation of the public sphere is a necessity to help the country make the most of the remaining opportunities for big-time foreign investment: Technology entrepreneur and president of the management board of S&T Romania Dan Roman talks to Ana Maria Nitoi

November 2009 - From the Print Edition

Unstable politics is playing a role in further unsettling the Romanian economy, but the country will not fall off the radar for future foreign investment, argues Dan Roman, president of the management board of S&T Romania, subsidiary of S&T group, the Austrian IT solutions provider.
The IT boss believes the presidential elections due for the end of the year have affected the economy in 2009 and will paralyse the state apparatus for at least the first three months of 2010, until the political crisis will settle on a new Government.
“But Romania will continue to be interesting for foreign investors because there are huge needs to build up its infrastructure and because it is the largest market in the region after Poland,” Roman says.
In the IT sector in 2009 state authorities have delayed most tenders with central, local or EU financing. The few projects that have been available this year have been contested in the court of the public tenders, further holding up their introduction. “This is happening at a time when the state should invest heavily in infrastructure to create jobs and overcome the crisis,” says Roman.
The Romanian Government has also delayed the restructuring of the public sector and Roman believes the focus of the remodelling of public authorities should not just concentrate on cost and headcount reduction, but adopt rules from the private sphere regarding performance recognition and incentives. “Public servants should be paid according to their efficiency and the quality of their work,” Roman says.
Better management is also a necessity. Roman says that if, in Romania, state employees have not understood the need for restructuring, it is also because public institutions do not have good managers to explain the gravity of the current economic situation. Instead the state risks relying on short-term methods to boost performance and loyalty, such as blanket pay rises, rather than the long-term, often painful measures that can create a modern structured civil service and local government.
“The great danger would be for the Government to divert funds from infrastructure projects to pay salaries and pensions,” says Roman, “as this would mean private companies would start having serious financial problems, they would stop paying taxes to the budget and it would create a vicious circle, killing the whole system.”

Tech pioneer

With a lifetime of experience in the IT sector, Dan Roman, 60, has spent the last 20 years founding and growing technology companies to the point where they become acquisition targets for multinationals.
Graduating from Bucharest’s Polytechnic University in the Faculty of Automatic Control and Computers, Roman started his career during Communism working in software research. Before the 1989 revolution, he was deputy scientific director of Romania’s IT research institute, which has clocked up some proud achievements. “We were exporting software to the United States and Germany,” he says.
His management skills developed after March 1990, when Roman established one of the first private IT companies in Romania. One firm he set up in the 1990s, with 100 employees, was bought out by IBM in 1994 and became the US giant’s subsidiary in Romania. “This was the first large acquisition deal to be sealed with a Romanian company after 1989,” Roman says.
After becoming general manager of IBM Romania, he was promoted to be IBM’s boss for countries in central and eastern Europe that did not have a local subsidiary. “IBM has marked my professional life but at the same time its corporate policies, which were necessary in such a large company, were constraining me from taking immediate decisions and getting involved in several projects,” says Roman. He reached an understanding with IBM to allow him to develop his own businesses, while still working for the corporation. He set up two companies, one abroad and another in Romania, to offer IT solutions. In 2001, the businessman sold them to Austria-based S&T and became general manager of S&T Romania.
Later, he was responsible for the company’s east European region, where he specialised in mergers and acquisitions. Last year Roman decided to give up the long trips away from home and settle down in Romania to become president of the management board of S&T Romania. The Austrian company mainly offers IT solutions to firms in central and eastern Europe, but also focuses on Germany, Austria and Switzerland, as well as having a subsidiary in Japan, which is also responsible for the group in China.
S&T Romania is one of the largest companies in the group and, in the last four years, has made the most significant contribution to the accomplishments of S&T.
In Romania, the firm offers IT solutions to big names such as Orange, Vodafone, and Romtelecom, banks such as Raiffeisen, UniCredit Tiriac Bank and the central bank and energy companies such as Electrica and Romgaz.
“Because more than 75 per cent of our customers are from private sectors and some big players such as [oil and gas group] OMV-owned Petrom, we have managed quite well the crisis period,” says Roman. “The crisis has determined a 40 per cent drop in IT investments in Romania.” S&T Romania registered approximately 100 million USD turnover in 2008 and expects a ten to 15 per cent drop by end of this year. However it estimates to retain the same profit margins as in 2008.
The company employs 250 people and works closely with local partners around the country who are trained by S&T and who, in their turn, employ a further 250 people.
S&T Romania has focused between 2005 and 2008 on private customers, so that now only 25 per cent of the business is with state institutions, such as ministries. “The private sector has the advantage of being much more predictable than the public sector,” says Roman. He adds that is also easier to build long-lasting relationships with customers rather than with public authorities, because the state tends to change the management dependent on which political party is in power. ■

Who is Dan Roman?

Descendants of the crusaders for Christianity in the Holy Land in the middle ages and an Austrian company offering IT solutions may not on the surface seem to have much in common - but Dan Roman is also a knight of the Sovereign Military Hospitaller Order of Saint John of Jerusalem, of Rhodes, and of Malta, commonly known as the Order of Malta. There are 19 Romanian knights and the businessman is one of the three orthodox members, while the remaining 16 are Catholic. Roman’s relationship with the Order of Malta started once he joined S&T, which already had a relationship with the Order. S&T’s offices offer a location for the Order’s Embassy in Romania and supports its charitable activities that focus on helping young artists, the elderly, people with disabilities, orphans and children from families in dire financial situations. “A prestigious company that aims to reach its mission and goals needs to attach to its professional activity a social component, which in our case is achieved through the social activities of the Order’s Embassy in Romania,” says Roman.