Balázs Kotnyek: Please, Máté, tell us about your work, and your company.
Máté Jendrolovics: Our firm used to be Gránit Bank Solutions, but we recently did a management buyout and became an independent firm, Intuitech. To define our work narrowly, we are a custom software development agency, with a business twist that differentiates us from other companies in the industry. While other companies get a request and fulfil it along the specifications, we try to take an end-to-end approach: go to our client, identify how digital technologies can support their existing strategy or system, and tailor the specifications around their exact needs. We deliver the best solutions for the jointly defined specifications so we can maximize the Return On Investment in the digital transformation process. We work mostly in the banking industry, but we are diversifying our portfolio in Hungary and have insurance and intermediary clients as well. In the meantime, we are working on getting into the tech and energy sector and we are planning to go international soon.
B.K.: Could you give us some examples?
M.J.: During the Covid lockdown, the Hungarian government introduced a new Széchenyi card initiative, which aimed to help smaller businesses with a new loan. We helped build the landing system for this in a fast-paced manner. It took only 3 months from the idea to going live, so it was a BCG-style project. Overall, that was our most impactful work recently as the landing system delivered over 50 thousand loan requests in the first six months. Another fun project was with Mastercard: they created a solution that calculates the carbon footprint for every transaction that you make. We introduced this solution first globally to a banking application and we are working on implementing this in the international market as well.
B.K.: What about you, István? What do you do?
István Mag: Throughout my time at BCG, I worked with clients in the energy sector. That is why when I decided to leave, my obvious choice was MOL. Funny enough, the one and only thing I’m not involved in now is energy. I mostly work on digital strategy and transformation in a B2C environment. If you look at MOL, our company does a lot of things related to energy – from finding the oil to the retail part of selling it at the service stations. I work on the last bit of the value chain, together with our retail and mobility departments – led by another BCG alumnus, Tamás Czikora. My team – the Digital Factory – was created to build, develop, and execute a digital strategy. Our strategy is made up of two parts. One of the two is building up data, analytics, and capability, and providing a platform to support retail.
MOL has an enormous retail business, with over 2,000 service stations in nine countries, selling over 2 billion litres of fuel, 50 million cups of coffee, and 30 million hot dogs per annum. The huge number of sales generates a lot of data. That was managed separately until our team provided this platform, which can do data analyses even at the most granular level. The other part of our work consists of building and operating a technology platform that supports MOL’s loyalty program and which has transformed our customer relationship management. Instead of the traditional oil company loyalty program approach, where you have a physical card that collects some points after every transaction, and which you can later spend on something at the service stations, we completely revamped this experience and shaped it in a way that resembles airline or hotel loyalty programs, where you have different tiers with different benefits to better motivate the customer to always choose MOL. The product of our work is the MOL Move application, which you can – and some of you surely do – use. This initiative already gained a lot of traction since its introduction in January 2022, with over 700 thousand members and growing.
M.J.: Are your assets custom-built, or do they come from external providers?
I.M.: There is a global trend where you build everything on platforms and don’t develop most of the solutions on your own. We try to just focus on building on one platform as well – in our case it’s Salesforce – and even that makes you somewhat dependent on other companies and players, let alone if you combine these different platforms and introduce a marketing automation system, for example. In our case, the business logic and the target customer experience are customized for each country we operate in – e.g. the application is custom-built – while the platform itself is standardized. In terms of outsourcing, our spending is roughly 75% external, and 25% internal, so we are heavily reliant on external providers. The Digital Factory has around 40 internal employees, but the team itself consists of around 150-200 people, who all work on digital transformation. The idea is to have the “brains” of the process come internally while the legwork is mainly done by external contractors. The reason for that is that we not only execute the digital strategy but build it ourselves and are responsible for it.
B.K.: Does the size of the company influence the level of standardization and customization?
M.J.: This is a very complex question. In a sense, it does, but only partially. In my opinion, there are two stages of digitalization. One of them is that you already have digital solutions that provide a unique selling proposition. However, once the competition moves towards digitalization as well, this will not be enough. In some cases, it is easier, cheaper, and overall, more efficient to buy a digital solution from a provider instead of building it yourself, while in other cases it’s better to build it all customized. The truth lies somewhere in between and differs in every situation. Size probably matters most when it comes to negotiating with providers such as Salesforce – big companies like MOL, or OTP Bank, probably have enough leverage to negotiate with their providers, while smaller companies simply don’t have that kind of leverage and their needs simply go to the end of the backlog and a requested change might only happen years later.
I.M.: Also, purchasing a standard “base” platform gives you more control over development. With Salesforce, the limitations are defined by your own capabilities while if you buy the “full package” from a third-party software company, development falls out of your control and your needs could easily end up at the end of the backlog, just as Máté mentioned.
B.K.: István, you work for a large Hungarian company, a behemoth so to say, while Máté works at a startup. What approach do you need in your everyday work to be successful in what you do?
I.M.: The Digital Factory has a completely different approach from MOL’s. It is quite the struggle to get everyone – mainly those outside of my team – to have a different approach towards their work so that Digital Factory is to be able to deliver what we want to deliver. In the meantime, we try to maintain the startup mentality as much as possible.
M.J.: We recently started facing challenges similar to those of a larger company. We surpassed employing 80 people at Intuitech, so we had to start regulating things to achieve scalability. Otherwise, we would be just like other software companies that have hundreds of developers who are outsourced and that’s it. We want to make sure that all our teams deliver the same high level of value, so we had to standardize some processes, which obviously has led to some conflicts. There is a fine line where you can still be attractive enough to bring in motivated and talented people but ensure scalability at the same time. For us, this is the biggest challenge right now.
I.M.: We are facing a similar issue: talented, and creative people just don’t like when their work is regulated. They thrive in uncertainty, in an environment where they can figure out everything themselves and work as they wish. I think essentially this makes them the happiest.
B.K.: Quite like BCG. How do you see the future? Will digital transformation become a regular “business as usual” type of industry?
M.J.: Digital transformation is somewhat like the consulting industry. Big players on the market have their own strategy department, with internal consultants, yet they still go to BCG sometimes because BCG can provide the best experts who – compared to their internal teams – have experience from many industries too. This is how BCG creates value, and I feel that digital transformation will be much like this.
There are two trends. One is that each company will have to become a digital company sooner or later, or they will fail. To reach this goal, companies will have to build in-house capabilities. However, every forecast suggests a digital talent shortage, so those companies that can attract and retain talent will prevail. This is one of the three fundamental pillars of our strategy at Intuitech. The second is the ability to identify where technology creates value for our clients, and the third is delivering the best possible solutions. In a sense, we aim to become a specialized firm – like BCG – which can provide digital talent with knowledge and experience from multiple industries.
I.M.: I completely agree, in the case of strategy, no matter how great your strategy department is, you will have to outsource some of the work to external providers as it will never be worth developing a team that can cover strategy 100% internally – that kind of capability simply cannot be achieved in my opinion. The speed of progression for digital transformation is so fast that you must have a baseline of people who can get the job done, but the rest you must bring in from an external source. Moreover, in most companies, IT and business are separated – this needs to change. To be successful in our data-driven world, as a business, you must stop pushing data and technology-related tools and problems onto IT, and instead, you must start to understand and use them. You must become a technology company, but still, be able to recognize the situation where you need external providers to help.
M.J.: Nowadays, digitalization means introducing digital channels and automation in every possible aspect. The next stage will be having full transparency and smart insights for each decision within the organization – this will provide a better, personalized experience at scale. Most companies with the right approach will reach this stage in five to 10 years and will see a highly increased customer experience and operational efficiency.
B.K.: Will AI become fundamental for companies in 10 years?
I.M.: Yes, in many cases for sure. Let’s take a gardening company as an example: as the customer base grows, the administration will grow as well. By introducing a simple CRM capability, as a gardening company, you can create a customer database, you can automate communication with clients, can plan upcoming works more efficiently, which can lead to a much better customer experience and even more business. In Northern Europe, around 30-40% of mid-sized companies have already started using a CRM system while in Central and Eastern Europe this is less than 10%.
B.K.: Isn’t it a risk factor? If this technology becomes common, what will stop big tech companies like Apple or Google from building AI-based solutions and running digitalization-focused companies out of business?
M.J.: That will make a difference. For smaller companies, there will be service solutions that they can just simply install and pay for based on their usage of the software. Much like wix.com for websites, but for workflow development, process automation, etc. There will be a huge market of smaller companies that have certain digital capabilities, but not distinct ones. But at the same time, big companies will try to build even more digital capabilities.
B.K.: To finish up, how your life is different from your time working at BCG?
M.J.: At BCG, you work with very smart and supportive people on interesting projects, meaning that you can develop amazingly fast. Also, the work culture is unique, and the confidence you can gain is invaluable. When I left BCG, I realized that I lack experience in two important fields: sales and technology, but you can build that experience yourself. There are two main differences: the highs and lows are different, meaning that your successes feel much better, and your failures are much worse, and my freedom of designing how I work, that has many advantages, but comes with the price of never being told if you do your job well.
I.M.: Same for me. Without BCG, I would have never got my current job. To this day I use the methods I learnt at BCG to form the digital strategy and find the strategic value. I completely agree with Máté’s example of highs and lows – the responsibility is much bigger as well. I love the culture of BCG and miss it as well sometimes. The skills I needed to learn after BCG for me were technology as well, as people leadership: managing experts was never a hard task, but managing managers is a much tougher job.
B.K.: Do you still plan for 2 years ahead, like at BCG? Where do you see yourselves in the future?
I.M.: It’s difficult for me because, with a giant like MOL, you can plan for a longer period. If my projects are successful, I can see myself in the same position in two years. Or maybe in the technology consulting world, we might even cooperate with Máté in the future.
M.J.: I need to convince people to work for us, to be able to grow my company. So my plan is to do that as long as I can.
BCG BUD Alumni 