Motivating staff

Published: 06.01.12

News2biz Lithuania: Norwegian Omega turns to local customers in Klaipeda.

Omega Technology in Klaipeda, the Lithuanian software development subsidiary of Omega, one of Norway's largest IT firms, has secured its biggest local contract since the Klaipeda office was set up five years ago.

The firm expects the deal could signal a change of its focus from an export-based business to one with a greater balance between export and local sales.

The contract is with Klaipeda's Regional Waste Management Centre that is overseeing waste collection from the region's hundreds of thousands residents and businesses. Omega Technology's task will be to first deliver a billing system to the customer, then to complement it with several modules including accounting, analysis, personnel, salaries and document control.

Apart from its size, the deal is unique in that Omega will not adapt any of its existing products but will use proprietary application development framework AppFrame to develop new applications for the waste management authority. These will then be added to Omega's product range and offered to other customers.

"Since 2010, we started looking around for local customers. There was no particular business need for that, our main aim was to raise our attractiveness as an employer for existing and would-be employees," says Vadim Naroznij, head of Omega Technology, to news2biz.

"A lot of our work for Omega in Norway includes lengthy postings in foreign locations with Omega customers that mostly come from the oil and shipping businesses. That is not always what our staff wants or can do, most of them would prefer to stay in Klaipeda. So by securing local contracts, we will keep staff happier and also more readily available for Omega assignments as well."

According to Naroznij, the waste management centre contract is worth in man hours two years of full-time work for two software developers.

"Omega's products are mainly for big companies, so our market in Lithuania is limited. Instead, we are betting on selling our services, like is the case of this Klaipeda contract. Because our service rates for local customers are 2-3 times lower than what Omega charges its customers, financially such a setup is not very attractive, but we do get a chance to improve our standing on the labour market," Naroznij adds.

At the peak of the previous economic boom, around 2008, Omega Technology, then with 10 staff, was ready to hire 20 new staff. "This number was too big to be hired in Klaipeda, so we considered setting up a new office in Vilnius or Kaunas. Then, of course, the economic crisis came, and our growth plans were scrapped, but we also learnt that competition for skilled software developers is visibly bigger in these two cities, not least due to the arrival of big international companies and taking in IT staff by the hundred," Naroznij comments.

With more than 800 employees, Omega turned over around NOK 843m in 2010. In 2012, it wants to break into the four-digit territory: 1,000 staff and a turnover of NOK 1,000m (so it is NOK 1bn). Omega technology in Lithuania has a staff of 15.