Interview with Tsvetan Alexiev, CEO of Sirma Group Holding
Mr. Alexiev, we have entered 2024 with a large number of economic, geopolitical and demographic challenges. How do they impact Sirma’s business strategy and operational performance?
In the second half of 2023, at Sirma, we started to feel the contraction of the IT business on a global level. It affected our US operations the most. We know that the wars, the economic turmoil and the high interest rates have negatively impacted business. The specific nature of our business in the US, namely IT consulting services to dynamically growing companies (I deliberately avoid the word startups because startups in the US are very different from startups in Europe), has put us in a very vulnerable position because of the global downturn in IT investment. We expect this trend to continue until at least the first half of 2024. However, Sirma has started the year quite strongly with new customers and a good project pipeline. We are moderately optimistic for 2024; let’s see what the future holds for us.
Despite the unstable economic situation, Sirma has a solid financial performance and reports sustainable development. The company remains strongly focused on implementing its ambitious strategy for regional expansion. Have your priorities changed?
Sirma is setting an ambitious agenda for expansion and structural improvement. The main goal of our group is to grow. It is important to expand in all areas - not only in terms of revenue but also in terms of profit and efficiency. All these efforts for growth and structural improvement are aimed at preparing Sirma for a dual listing on the US stock exchange. In addition to our ongoing focus on organic growth at all levels of management, we are also actively pursuing an ambitious acquisition strategy. This strategy involves identifying potential acquisition targets that align with our business model and can contribute to our growth.
We are currently in the process of finalizing one such acquisition. Our strategy is clear: consolidate IT talent in Southeastern Europe, a highly attractive market for IT professionals and technology. This includes expanding our network of offices, distributors, and agents in key sales regions. We’ve established structures in Bulgaria, North Macedonia, Croatia, Albania, and soon Romania to attract talent. Additionally, we maintain sales and marketing offices in 16 countries where our sales operations are strong.
The company is currently undergoing a significant structural transformation related to the implementation of our verticalization strategy. Sirma’s business is focused on several strategic verticals, including Financial Services, Insurance, Transport and Logistics, Hospitality, Healthcare, Packaging and Measurement, and Retail. The rationale behind adopting a vertical approach and structure is to improve sales outcomes by leveraging our extensive expertise, mature solutions, client references, and customer base in our historically successful fields of operation.
What are your focus areas for creating and deploying new software solutions in 2024? Where do you expect artificial intelligence to be an embedded functionality and part of standard offerings?
We are currently devising a plan for growth in all of our strategic verticals. Our main challenge for 2024 is to finalize structuring two of our verticals, which are still in the “incubation” stage - Insurance and Healthcare. We have acquired a significant amount of knowledge, customers, and technology in both areas, but we still need to refine the business model and establish the appropriate corporate structure that will enable us to expedite the growth of these verticals. We utilize artificial intelligence in most of our solutions, whether a chatbot or an algorithm performing complex optimization tasks. AI is present in over 70% of our solutions.
Sirma has been working in the field of AI since its inception. Our goal is to integrate big language models into our clients’ processes and operations. The financial industry has been the most receptive to LLM, so we have developed several solutions for banks and financial institutions. These solutions include chatbots for better customer interaction, compliance systems trained on regulatory documents, and internal rules and processes for more efficient back-office operations. We have also identified a strong demand for our solutions in the Healthcare and Retail industries.
Sirma is a pioneer in the region in digitalizing healthcare. What are the recent achievements and developments?
Sirma has a number of well-established healthcare products that are world-class: Diabetes:M (the world’s top 3 diabetes management system according to Healthline), Medrec:M - a personal medical record and patient-doctor connection platform. The next product, MPI-2, is a technology that applies some of the most advanced methods to correct stuttering, developed in collaboration with leading American speech therapists. I would also add that we have a very strong process management and medical laboratory integration solution for the North American market. Our US-based consulting company is one of the most experienced in medical systems integration.
How is AI changing the foundation of modern healthcare? Does Sirma have specialized solutions in these areas?
We use AI in our product Diabetes: M, where we try to predict (based on historical patient data) the occurrence of dangerous changes in blood sugar levels. The use of AI in healthcare is always done with great caution because of the great responsibility involved.
You run a successful company for over thirty-two years. Which established or innovative approaches do you use to best address challenges? What principles do you never break?
Professionalism is the quality we have always valued most at Sirma. As the company grows, the processes, structure, and efficient organization become increasingly important. We have never stepped back from the principle of integrity in business. As a result, we have customers who have trusted and remained loyal to our company, products and services for many years.
What is your vision for 2024, and what will be Sirma Group’s strategy to maintain its leading positions in Bulgaria and the Balkan region?
In 2024, we need to complete the company’s major restructuring related to the verticalization of our operations and the consolidation of our subsidiaries. We are also in the process of acquiring new companies. This aligns with our plans for ambitious growth and preparation for a major global exchange.
