Legendary IT-entrepreneur Boris Kontsevoi on the chances of Belarus becoming the IT-country — and why every company needs “Centers of Excellence”

Intetics CEO about the present and future of Belarusian outsourcing, predictive development and the magic number of Dunbar


Boris Kontsevoi is the founder and CEO of Intetics Inc., a leading global software engineering and digital transformation company. Boris is the only Belarus member of the Forbes Technonology Council, an elite community of professionals in the technology sector.

Our hero is sure: we have already become an IT country. Belarus is known in the US market, but we still lack the country PR at the international level. We are talking with Intetics CEO about the present and future of Belarusian outsourcing, predictive development and the magic number of Dunbar, naturally governing the number of employees of companies.

— 11 years after the global crisis of 2008, the world is expecting a new economic catastrophe — in 2019 or 2020. Is it really brewing? If so, what will have caused it, and how will it affect global business?

— I never heard of the “crisis of 2019.” On the contrary, the economy of the United States is growing at an unprecedented rate. And it is almost a quarter of the World economy. In the European Union, which is about 22% of the World economy, the growth is not so fast, but everything is also positive. In China (this is somewhere around 16%) — yes, there is a slowdown in growth, but it’s still growing. So, let’s leave the “crisis of 2019” on the conscience of those who for some reason come up with these horror stories.

Anyway, speaking about the IT market and outsourcing, there is no simple direct relationship between “a crisis — no demand” and “growth — a lot of demand.” We work with the innovative parts of budgets. Look, 96%-98% of the total IT outsourcing market is stable (in terms of demand). Even during the crisis, it doesn’t die because life doesn’t stop. It is like a permanent part of the market, the main part that always exists. But our perception of “good-bad” depends on the innovative part, which generates an increased demand and growth. After 2008, companies around the World first put off any innovations and initiatives, then reduced costs; while doing this, they spent reserves, then worked on restoring profitability and reserves, and somewhere around 2015-2016 they began innovative projects again. And we all were doing well in 2016-2018. Everyone was cheerfully growing! Though, since the autumn of 2018, there is a feeling that innovative demand has slowed down. The reasons? Maybe global geopolitical instability, but the connection is not very visible. So, for now, let’s continue watching and thinking. But this is not a crisis yet, and not even the eve of a crisis; investment money hasn’t been spent yet.

— Recently, in the Belarusian IT sector, there have been a lot of discussion about the importance of the transition from an outsourcing model to a product model. And a number of companies follow this course. Is this a healthy market evolution? What do you think about this trend and Belarusian IT in its context? How should we develop?

— I could never understand this contradistinction. These are two totally different businesses! Two completely different markets! The only connection between them is the fact that programmers work in both. But they also work, for example, in banks. Could we say that developing banks is better than developing outsourcing? We would better develop both. By the way, why did everyone focus on these two? The global IT services market is not divided into two segments, but into six: “horizontal” products, “vertical” products, “consumer” products, IT infrastructure management, IT services (or “outsourcing”), and Internet services. You can, of course, combine the first three into just “products”, but they are actually very different. But you can’t combine the other three at all!

— Another possible model for the development of our market is scientific and industrial outsourcing. A symbolic foundation for it is the Great Stone Technopark. Could Belarus become an outsourced science laboratory? Do we need this?

— You know, I tried. Based on both my alma mater, Institute of Physics of the Academy of Sciences, and Institute of Cybernetics. Around 2000 yet, we have received an order for…face recognition. Unfortunately, we couldn’t do it. But now we are able to recognize not only faces but emotions! “Scientific outsourcing” didn’t work. Fundamental research cannot be outsourced. This is the matter of the State and large educational institutions. There is simply no need for scientists “on the side.”

But research and development (also known as ‘technology creation’) is made by people who want to make money, monetize the science. And we all know them as “startups.” Hence, if the Great Stone becomes something like a startup incubator, something will work out. But if it will be some kind of reincarnation of the Soviet research institutes, then it will be just a ‘sawcut’ of the budget. Talking about manufacturing outsourcing, it’s just a creation of an attractive environment for direct foreign investments. Then big manufacturers will come and build factories. Living in the Czech Republic in 1997-2002, I watched this picture live. It’s like $10 billion of investments per year for 10 million population. And now the Czech Republic produces tons of everything!

— Belarusian outsourcing is far from being as cheap as it was 5-10-15 years ago. What could keep customers from the U.S., Western Europe, and Asia, if the cost of our outsourcing services exceeds 50% of the price in their domestic markets? By what Intetics attracts and keeps them with?

— The 50% threshold is very correct. The Western customer is convinced that the productivity of programmers on-site, in their office, is at least two times higher than that of remote ones. Therefore, if the price of remote programmers is greater than 50% of locals, it is better to hire them. A lot of customers told me this personally, many times. Therefore, the entire Intetics marketing is built around the idea to evidence the contrary! To a considerable extent, our concept of Predictive Software Engineering is aimed particularly at this. One of the seven principles is exactly about the productivity. But the principles of quality, transparency, expertise, and processes also contribute to the same thing — ensuring not just a timely result, but the “right” result. (The “right” in this case means the result that makes money for the customer).

On the other hand, today any outsourcing is not as cheap as 5-10-15 years ago. There is also a trend of growth in demand for programmer resources. Remember “Software eats the World” [a pronouncement by venture capitalist Marc Andreessen]? Modern hyper-accelerated development of information technologies requires programming. Unfortunately, it remains manual, and I would even say “in French” — stupidly manual! There had been no significant progress in programming technology over the past 30-40 years! This naturally pushes the prices up.

— IT entrepreneurs, officials, opinion leaders discuss how we could become an IT country. But they don’t discuss whether it is necessary and whether it will work out. After all, this is not about opening another 1000 outsourcing companies — we want to repeat the success of Israel. But for this, we can’t just mechanically copy the algorithm of actions. The main thing is the mentality, and between us and Israel / U.S., there’s an unbridgeable gulf in terms of entrepreneurial thinking and spirit. Or is it bridgeable?

— In Israel, there was no central force that was opening something. These are just knowledgeable people coming together to make money for themselves and their families. The recipe has long been known: the state creates the conditions for maximum ease of entrepreneurship and doesn’t interfere any further, just waits for the time when successful entrepreneurs bring taxes to the treasury.

It’s impossible “to open 1,000 companies.” Well, possible of course, but it will be a waste of resources. For the development of IT, just three factors are necessary: the system of education; transparent business terms; and state guarantees of the inviolability and protection of private property and investments. As you see, nothing particularly relates to IT. Just create the conditions and environment, then people will do everything themselves! And all the success of the Belarusian IT industry, all those known outsourcing and product companies reflect the development of Belarus in this direction. And, it should be said, with considerable success! Belarusian IT companies are strong players in the global IT industry; customers consider it, and the Belarus “brand” is slowly emerging (25, even 10 years ago I had to tell everyone how to find Belarus on the map and what kind of a country it is. Now everyone knows it well!) Take, for example, Intetics. Now it is an American company but it was established by “your humble servant” almost a quarter of a century in Belarus, same year when the very first website in the World was created! And I certainly never forget to advertise Belarus!

It could hardly be said that IT companies owe their success to mental attitudes. Like other companies, we were just working, sometimes doing and delivering the impossible. Could Belarus become an IT country? I think it has already become one! Coursera (coursera.org) recently published the Global Skills Index, where Belarus is included in the top category in IT. Together with Germany and Scandinavia, and higher than England and the U.S.! But, as always, there is no limit of perfection. The success must be repeated again and again; the perfection must be proven every time.

— How do you estimate the Decree number 8 in terms of completeness, depth and timeliness?

— The adoption of the Decree coincided with the growing interest in the latest technologies: machine learning, blockchain, the Internet of Things, drones, bio-, medical and other technologies. So, very timely! It creates that necessary conditions for the development of the industry, for further development of an IT nation. IT companies involved in these technologies received more opportunities and benefits. This, of course, has a positive impact on changes in IT, as well as on the country’s image.

What hasn’t been done is the international PR. I was in Davos in January this year. Suddenly, everyone has been talking a lot about blockchain there. But there was no a word about Belarus. Switzerland, for example, has attracted hundreds of IT startups from around the World, a lot of ICOs [initial coin offerings], etc. Belarus should have gone there to advertise its conditions and attract foreign capital. (My stories at my meetings there are not even a drop in the ocean!) And to attract not only investments in Belarusian startups but also new businesses to come from all over the World and work in Belarus. That would be “top class”!

— Intetics employs 700+ people. According to your experience, on what stage of development does bureaucracy and “Broken Telephone” begin? How to deal with them so that they don’t interfere with growth and results?

— Have you ever wondered why the species Homo Sapiens, coming out of Africa 30,000 years ago, spread across the whole planet? What motivated a very small population of that time to move into new and new land? There were enough “fur and feather” and natural resources for everyone in a much smaller territory. But for some reason, they conquered the seas and horizons, even somehow managed to get to the Easter Island. The answer is now called Dunbar’s number. This is the number of social connections (not to be confused with “followers” in modern social networks!) that a human can maintain on a permanent basis. And it is equaled 150. (With various alternative opinions and theories, it is in a range from 80 to 250.)

It also reflects the limit of ability of a highly organized person to manage a team of people. When a team reaches higher numbers, it not only starts to crumble and becomes ineffective but social conflicts also begin. To exist and interact, people must know each other! That’s why the Neolithic settlements usually numbered 150 people (and then settled separately!), there were 60-100 soldiers in the Roman centuria and 50-120 people in military companies of different times and armies, and some companies build offices and parking lots for exactly 150 employees. This also explains why the majority of outsourcing companies never grow bigger than this number. This is the real, natural limit of one owner, leader of a company. Therefore, to scale up a business, of course in addition to all the mature communication and other processes, it is important to have the right “centuriass.” At Intetics we call them “Portfolio” and we have 5 of them now. So, we’re going approximately according to the Dunbar number!

— Your company has a "Center of Excellence." What is it? What goals does it have? How does it help you? Is it content marketing to promote the company’s core products and services a corporate wiki or something more?

— We have not one, but 12 “Centers of Excellence”! These centers are active groups of engineers who study novelties in a certain area of knowledge, and not only theoretically but in application to an existing business problem. They accumulate the company’s knowledge and experience in innovative domains and are very similar to R&D departments in global companies. When the need arises, engineers from a Center get actively involved in building a new business line for the company or developing a new project using the Center’s domain. It is the Centers that move us forward, study and implement advanced technologies, and demonstrate a real understanding of how to apply technologies to customer problems.

— What companies need such a “Center of Excellence”? How do you start and use one properly?

— I would say that Centers are primarily needed for medium and large companies. Small companies (smaller than Dunbar’s number) are most often niche companies and naturally act like a single Center. Without “Centers of Excellence”, companies will either work at the resource level (aka ‘outstaffing’), or at some point will become uncompetitive. “Centers of Excellence” are an investment in the future of the company, a constant work to expand the services provided. Plus, this is the development of the professional interests of employees, which is very important for creating an innovative spirit and maintaining interest in working in the company. To launch the Centers, it is necessary to determine a program leader for all Centers and then leaders for each Center in particular. Leaders form their teams from like-minded people and volunteers who want to improve their personal knowledge in the Center’s domain and help the company develop this direction.

— TETRA is perceived as a center for business consulting, MVP laboratory and code testing tool. How did you come to create such an atypical model for outsourcing companies’ service? How does it connect such different directions? Probably only brilliant product managers work at TETRA.

— Yes, in fact, our TETRA was the second Center (after GIS), even when we didn’t call them Centers yet. We tried to define what “quality of a software system” is, finding out how much various “technical debts” remain in it. This statement may bring a smile to some people, but I must say that the question is absolutely not trivial! All companies promise to produce “quality software”, right? Nobody says that the work will be done badly. But what does this mean “quality”? Who measures what and why? And if someone is really measuring something, then what are the parameters for “good” or “not that good”? To date, the creation of this software quality analysis service took more than 6,000 hours of research! And now we are able to show a comprehensive, true, and detailed state of a product or system, starting from the source code to how well the product matches the business objectives. There are detailed publications about TETRA on our website.

— Your company name, Intetics, combines not just the words “Internet” and “technology, ” but also “ethics”—as in the customer care that you see as the basis for Predictive Software Engineering. Tell us about the approach: How to anticipate the “pain” and the needs of customers before they appear?

— The story of “ethics” in the name is a little bit different. This is not only about making a commitment to “work well” (after all, you won’t last long in business if you work poorly), but about the obligation to be ethical in business in relation to all participants, especially employees. You know the expression, “Nothing personal, just business”? It is quietly believed that in business you can skunk, cheat, “bend, ” etc. I strongly disagree. I even always paid all taxes, sometimes causing others to laugh!

With Predictive Software Engineering, the story is perhaps a bit similar. We are doing “engineering of software systems”, right? Any engineering in the World can clearly answer the questions of what, when, and for how much something will be ready: a house project, a bridge calculation, laying of communications, a new machine model, etc. — they are all “predictive” (except project management failures, but this is another story.) But when creating programs, we came up with a universal “excuse” that it is also “art”. So, we began to think about what elements of our “art” we can turn into “engineering.”

If we dive into the essence of the approach, then we did not invent a wheel. We do what every client wants when he requires a software solution. We create what he needs, as he wants, more precisely, as it will work and earn him money. The latter is very important, exactly “work and earn money”! Often, software companies are blamed precisely because, figuratively speaking, the customer came for a car but got a scooter. (Recall the well-known Dilbert cartoons!) And even if the scooter seems to be quite good and runs, the customer wanted a car!

Predictive Software Engineering is an approach that includes seven principles (for now): Meaningful Customer Care; Transparent End-to-End Control; Proven Productivity; Efficient Distributed Teams; Disciplined Agile Delivery and DevOps; Measurable Quality Management; and Sound Human Development. All this together ensures that we know better what needs to be done and when, at every stage.

Each principle of the approach is based on the best practices and standards of the industry, as well as the analysis of their effectiveness in the framework of the projects and the wishes of the customer. As a result, we don’t just fulfil customer expectations by 100%, but we also deliver the “right” product. It turns out that the “uniqueness” of Predictive Software Engineering is simply that the company really adheres to the best practices of the industry, not just talks about them.

— You describe this approach in detail in one of your Forbes publications and note that few software vendors apply these rules. But why? They seem to be so important.

— The work on creation of Predictive Software Engineering is just started and far away from completion! We invite other companies to join us in this work as Predictive Software Engineering is not about Intetics, it is about the industry and programming technology. Of course, a lot of companies are working on improvement of their processes. It would be great to join the forces and cooperate as this really is not about competition but about the profession. But maybe I’m a little idealistic.

— Tell us about the three orders fulfilled by Intetics that you personally are especially proud of. What is their unique feature?

— It’s a very difficult question. There have been so many things in the past 25 years! My last program (where I was the architect, designer, and PM myself) for automating the creation of insurance products was sold (by the customer, of course) to the huge insurance company Travelers. At the beginning of the century, we created for a customer from California the IMSecure product for P2P encryption of messages for all chat messengers existing at that time. It was sold in all software stores in America! (They existed yet at the time.) The project was fabulous and incredibly interesting; in 18 months only we finished the jorney from creation of technology to the sale to an investor, with an ROI of about 4,000%. And there was a dozen of such ultra-successful startups in our history. Then the navigation map of Ukraine, now used in almost all German and Japanese cars, was made at Intetics! Our project for African secondary schools was awarded the Best Technological Project in Africa last year. We made the first, very smart chatbot (a virtual assistant) two years ago. Our omni-platform for sport betting serves tens of millions of people daily. We now have the strongest PHP team in Belarus, with corresponding results. And the phrase “functional programming” is strongly associated in Ukraine with Intetics. Etc., etc. The Internet of Things, medical and biotechnology, “artificial intelligence”… There’s too much to list.

— You have been a member of the Forbes Technology Council for just over a year. Tell us what it is, what opportunities does it open up for IT entrepreneurs?

— The Forbes Technology Council is a community of directors of international IT companies focused on sharing ideas and expertise to help every member of the community to grow their business. Becoming a member of the Technology Council is by invitation only. Applicants are carefully selected. Using the Forbes platform, we can share ideas, problems, trends, and be sure that they will reach the right audience. This helps in developing the Intetics brand as a global provider of software solutions. By the way, everyone should read Forbes; it writes not about billionaires only.

— What do you think is missing in Belarusian IT-sector?

— Perhaps only two things: PR of technology study, to attract the best minds to the profession; and, of course, PR of the Country in the World. Both tasks are very difficult to solve at the company level. A broad government program is needed.

Boris Kontsevoi is a founder and CEO of Intetics Inc., a leading global software engineering and digital transformation company based in Naples, Florida, and offices located in Chicago, Düsseldorf, London, Kraków, Minsk, Kyiv, Lviv and Kharkiv. Boris has over 30 years’ experience of leading software development teams, he is a Certified Outsourcing Professional, and inventor of several business service models including Offshore Dedicated Team®, Remote In-Sourcing® and Predictive Software Engineering, as well as TETRA, a Technical Debt Reduction Platform, for comprehensive quantitative assessment of quality of software products. He serves as a Distinguished Judge of WebAward Competition for last 18 years. Boris is a recipient of Entrepreneurial Excellence Award (2009) by The Business Ledger, Gamechanger Of The Year (2017) by ACQ5 and a professional member and contributor of IAOP, GSA, Forbes Technology Council and IDG/CIO.com.

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