Partner Pulse: Insights on Digital Innovation in the CEE Region

Central and Eastern Europe is abuzz with digital transformation. For this first edition of our new interview series, Partner Pulse, we've asked Liferay partners bitlife and Webtown about their take on the trends shaping the region's businesses. From the rise of AI and cloud computing to the challenges of legacy systems and data security, these Liferay partners offer unique insights into the opportunities and hurdles facing companies today.

Which current digital transformation trends in Central Eastern Europe are most likely to deliver actual value to businesses? 

Webtown: AI, AI, AI... Everyone is looking at and talking about AI. As I see it, it has huge potential, but we're still at the beginning of the journey. It will be very effective in supporting and even improving business processes. But the toolset still has room for improvement, and companies still have to learn that there is value beyond chatbots and intelligent content generation. However, it's already clear that AI can only work well if business processes and the software that supports them are well-aligned, and the connection between different software is well-designed. So, the second key focus we observe is integration... While automation is already a priority, driven by the need for efficiency, we anticipate even greater demand for it in the near future.

bitlife: In Central Eastern Europe, the digital transformation trends likely to deliver the most value to businesses include cloud computing, which improves flexibility, and scalability, and reduces operating costs, making businesses more agile. Additionally, AI and ML are being increasingly used to automate processes, analyze data, and personalize offers, leading to increased efficiency and improved customer experiences. Investing in cybersecurity is crucial to protect against the rising number of cyber threats and safeguard valuable business assets. Lastly, adopting remote and hybrid work models enhances employee satisfaction and productivity, contributing to a positive work environment.

How are businesses in your region leveraging digital experience technology to innovate and stay competitive?

bitlife: Businesses in our region are focusing on personalizing customer experiences, tailoring everything from product recommendations to website content. We're also seeing a big push toward omnichannel experiences, ensuring customers have a seamless journey across all channels. Finally, marketing automation is helping businesses streamline their efforts and deliver more targeted campaigns.

Webtown: It is difficult to give a good answer. We see that the concept of digital experience is becoming more widespread, with a growing number of organizations investing time, energy, and money to deliver a truly unified digital experience for their users. This is certainly a good sign. However, in many cases, especially in large enterprises, we see companies trying to build digital experiences on old, entrenched, inflexible, inefficient business processes, rather than allowing business processes to become more efficient based on how the market works and the needs of modern users.

Which industries in Central Eastern Europe are leading the way in digital transformation?

Webtown: Central Eastern Europe presents an interesting landscape of digital transformation. Notably, the financial sector has been an early adopter, improving efficiency despite old core systems by leveraging integration platforms. The media world experienced the most disruptive impact, with spectacular solutions changing consumer habits. Public services also saw significant development, with room for improvement in user experience but impressive growth in features. Further digitization of public services holds great potential for future development.

bitlife: In Central Eastern Europe, we see some exciting digital transformations across various sectors. Banking and financial services are leading the charge, with online banking and personalized financial solutions becoming the norm. E-commerce and retail are also flourishing, offering customers tailored shopping experiences and convenient delivery options. But it's the manufacturing industry that's truly captivating. Polish factories, in particular, are at the forefront of the digital revolution, embracing Industry 4.0 concepts like automation, IoT, and big data to optimize production and stay ahead of the curve. 

What are the main challenges businesses in Central Eastern Europe face when undergoing digital transformation? 

bitlife: From our perspective, businesses in Central Eastern Europe encounter a few key challenges when embarking on digital transformation. There's often resistance to change, stemming from ingrained organizational culture or outdated processes that hinder adoption. Additionally, securing sufficient budgets for digital transformation initiatives can be a struggle, hindering progress. Lastly, a lack of awareness regarding the potential benefits of digital transformation can lead to hesitation and missed opportunities.

Webtown: The region has a unique characteristic: it consists of several relatively small, but quite isolated economic systems. Alongside large international multinationals, there are also a few dozen local large companies, but most businesses are smaller in scale. For large companies, the approach might be simpler in theory, as they shape their digital presence on a global scale. Smaller businesses, however, often have underdeveloped processes that need to be served by digital solutions, and they tend to build these solutions based on patterns observed in larger organizations. This approach doesn't always lead to instant success. Financial constraints are certainly strong, but developing digital maturity is also crucial. I believe these are not just regional but rather global characteristics. If the goal of digitalization is to improve efficiency and business outcomes, then the direction is good.

What opportunities do you see for your customers' growth and development in the digital space in your region?

Webtown: That’s difficult to answer. The tools and trends in the area of digitalization are rather global than regionally specific, and success depends on how well an organization adapts to them. However, I'm hopeful that economic recovery in regions impacted by COVID and political conflict will provide a significant boost to digital transformation efforts. This will create even more opportunities for growth and development for businesses in these areas.

bitlife: From our vantage point, there's a wave of opportunity sweeping across Central Eastern Europe for our customers in the digital space. We're seeing a surge of interest from industry players looking for comprehensive digital transformation solutions. The public sector is also stepping up its demand for advanced digital services. Additionally, the healthcare industry is undergoing a digital awakening, offering significant potential for growth. And with increased investment in digital infrastructure, the foundation is being laid for even more ambitious digital initiatives. 

What role do technologies like AI, low-code, IoT, or blockchain play in the digital transformation journey of businesses in Central Eastern Europe?

bitlife: While AI and low-code may be the current buzzwords in the corporate world, it's actually startups - with their agility and focus on innovation - that are actively utilizing these technologies. Meanwhile, IoT and blockchain have matured beyond the hype, with significant implementations already seen in the energy and financial sectors respectively. It will be fascinating to witness how AI, low-code, and other trends evolve and shape the future of technology in the years to come.

Webtown: I believe that the more digitalization-savvy companies in the region have quite well recognized the value of the tools and solutions mentioned above. AI is increasingly being used to support customer service, data analysis, and even content generation. With low-code/no-code solutions, companies can speed up the development of simpler IT systems significantly. IoT might be gaining ground a bit more slowly in the region, but it has already spread nicely in sectors like manufacturing and logistics. As for blockchain, I’ve noticed that it's becoming a more prominent topic at IT conferences, although I have to admit I haven’t delved as deeply into this area as the others yet. :)

I feel that each of these technologies has its own experts, with strong professional competencies available to implement IT developments of any kind. I see this as being true across all the countries in the region.

Can you highlight a success story where a company in Central Eastern Europe successfully implemented a digital transformation strategy? What were the key factors that contributed to this success? And, if available, can you share some key success metrics? 

bitlife: A standout success story in Central Eastern Europe is the Polish company Allegro, the region's largest e-commerce platform. They've truly embraced digital transformation, solidifying their market leadership.

Allegro's success is multifaceted. They've invested heavily in cutting-edge technologies, adopted an omnichannel approach with a strong customer focus, fostered strategic partnerships, and prioritized innovation and talent development.

The results are impressive. They've seen significant revenue growth, expanded their market share, and increased their user base considerably. Customer satisfaction is high, thanks to improved service and delivery. And their successful IPO in 2020 speaks volumes about investor confidence in their strategy and future potential. Allegro's story is a testament to the power of digital transformation done right.

Webtown: When I think of a success story in digital transformation, the Hungarian state healthcare system immediately comes to mind. The digital service infrastructure for healthcare had been in the works for a while, but the COVID pandemic accelerated its development. We were fortunate enough to contribute to several projects within this initiative, and our team is incredibly proud of the results. While there's always room for improvement, particularly in terms of user interfaces, the functionality and impact achieved are already impressive. It's a great example of how digital transformation can truly make a difference in people's lives.

Looking at the next 5 years, which specific technologies or trends do you believe will have the most significant impact on digital transformation in Central Eastern Europe? How can businesses prepare for the next wave of digital innovation?

Webtown: I'm sure that the rise of AI and automated processes will be of huge importance, but I think the biggest challenges of digitalization are in the areas of accessibility and data security. There is a lot of potential in the spread of cloud services, and there is a huge potential in web systems that can be more stable through flexible scalability and hosting. But if you look at large enterprise procurement, four out of ten still prefer on-premise systems. This is probably the biggest difference between the CEE region and the rest of the world, I think. Here, there is greater concern about data security, more people are afraid of being exposed to cloud providers. That’s why strengthening IT security is both a natural and very necessary requirement, but also a driver for better quality digital services in the future, because it can build confidence in the use of newer solutions.

bitlife: Over the next five years, I believe we'll witness the profound impact of AI and AI-as-a-Service, not just as buzzwords, but as integral tools transforming how businesses operate. The shift towards cloud and multi-cloud solutions will accelerate, providing the agility and scalability needed for future growth. Edge computing will also gain prominence, particularly in areas like energy management and sustainable development, where real-time data processing is critical.

Furthermore, low-code/no-code platforms will empower individuals across organizations to create applications, driving innovation beyond traditional IT departments. To prepare for these changes, businesses must prioritize investing in digital talent and skills while fostering a culture of flexibility and adaptability. By embracing these technologies and trends, businesses in Central Eastern Europe can position themselves at the forefront of the next wave of digital innovation.