Dealing in new solutions to an old problem

With multi billions at stake daily, financial markets demand stability, security and performance from their computer systems. Meeting that need with a Powered by Orc solution has made Swedish company Orc Software into major international suppliers of integrated trading and risk management solutions.

Its Orc System technologies allows clients in 19 countries to trade on more than 40 exchanges around the world, and the list of countries and exchanges is constantly growing. This generates the need for creative and effective solutions in the software development process.

In order to meet the requirements of its growing client base with an accelerated development process, Orc Software continues to invest a large proportion of sales into research and development. To help meet those requirements faster and more effectively, Orc Software has developed software components in Russia on a small scale since 1993. In early 2000, in order to increase greatly the scope and contribution of the Russian development operations, Orc Software started utilising the specialist software development services provided by the UK based company Ru-Soft Limited.

A big vision

Nils Nilsson, Orc Software's CEO faced a dichotomy. Sweden's high cost economy had a shortage of the specific IT skills that Orc Software needed, namely C++, Java, and Unix (Solaris) programmers, in combination with a profound knowledge of advanced mathematics.

So, as part of his big vision to keep Orc Software always ahead of the game, he decided to locate connectivity programming to the exchanges around the world, which is an essential part of the OrcSystem architecture, to Russia because of that country's very favourable high skills availability/low cost ratio. Intel, Sun, Motorola and Nortel are examples of other international companies that have also set up major Russian development operations.

Pilot operation

In early 2000 Orc Software set up a pilot development operation in Moscow to expand their operations. But, as Nils Nilsson says, "Although we never doubted that the idea of expansion in Russia was right, we were soon confronted by a multitude of local bureaucratic procedures, tax issues, even local IPR concerns."

But Orc Software soon had the right sort of help that minimised their exposure to Russian laws, regulatory schemes, and taxes. This help enabled Orc Software to achieve their long-term plans to expand this resource into a full-blown development hub for the Orc System, while avoiding the many pitfalls and the considerable costs of setting up and maintaining a presence in Russia.

Nils Nilsson explains, "When Ru-Soft came on board they made a real difference and I have the highest regard for their services and people."

Ru-Soft packaged a problem-solving solution for Orc Software. They took over the employment of the initial six Orc Software programmers, recruited more when required, added an infrastructure, administration and facilities/staff management to handle and solve all the local issues.

Working with external consultants and facilitators, such as Ernst & Young and BDO Stoy Hayward, Ru-Soft has established a system of management and operational controls to handle all the local regulatory requirements, customs and practice.

This gave Orc Software a set of business protocols, by which it could concentrate on the key issue - product development - and extensive communication channels (instant messaging & VPN), that enabled it to manage and control those developments easily and securely from a remote location.

Packaged development company model

The packaged Development company model is low cost, based on a simple formula, that combines the programming, management service and facilities costs into a single fee per programmer.

It's focused on the long-term goals of organisations that eventually want to run their own development companies, but lack the immediate local knowledge, experience or capacity to start-up operations in Russia on their own. Michael Gromov, Ru-Soft's head of operations in St Petersburg, puts it very candidly when he says, "Operating alone in Russia isn't for the inexperienced. But the rewards are great if you pick the right local partner. That's because we Russians are proud of our country and want to help it to become an international trademark for the excellence and reliability of our Information Technology skills."

Ru-Soft's directors and managers have the in-country knowledge and experience that cuts through any problem. When commissioned by a client, they build the organizational and managerial framework and recruit the required programmers under it's SoffShore services offering. They quickly get the operation up and running and tie up all the legal and business requirements. So that a complete and fully functional packaged operation, with its own offices, highly experienced and proven staff, is handed over at a set date and for a completion fee, agreed at start of contract.

Twin development centres

Ru-Soft's contribution began in 2000:

• Q2 2000 Ru-Soft took control of the two teams of three programmers in Moscow and the combined team members now number 14.
• The success of the first operation in Moscow led to another four programmers being employed at Ru-Soft's St Petersburg office in June 2001. The combined team members now number 12. Early 2002 the Moscow teams were seamlessly transferred to Orc Software as agreed. During spring 2002 the transition took place in St Petersburg - the programmers became directly employed by Orc Software and Ru-Soft continued to supply office space and managerial support until the completion of the hand-over.

Contributing quickly and cost-effectively

Nils Nilsson agrees that the whole process is very cost-efficient. "The monthly Ru-Soft fee per programme, which is substantially lower than you pay in Western Europe for consultancy services, covers all the labour costs, overheads and taxes. As part of that fee, Ru-Soft handled all the local facilities and staff management activities and put all the resources we required into place. For us, it was exactly what we needed as the company continued to grow."

Orc Software now has offices in 15 countries, sales growth targeted at 50 % annually and a development platform that will offer clients more options, more flexibility and more integration possibilities. Ru-Soft is proud to have played a part in this success story for Orc Software, as shown in Nils Nilsson's final comment: "Thanks to Ru-Soft we now have two very important assets in our development offices in Moscow and St Petersburg. Both of these assets are contributing quicker and even more cost effectively than we had first imagined."

Orc Software's main products

• Orc System - a Sun Solaris based server and a scalable, open interface integrated trading/risk
• management system, comprising:
• Orc Trader - most advanced of the Orc System's client applications, handling extremely intensive
• transaction levels and complex risk management.
• Orc Broker - handles large portfolio volumes and transaction management for brokers.
• Orc Investor - flexible and powerful multi-market trading tool for institutional investors.
• iOrc - it takes the OrcSystem as a base to manage and execute orders via the Internet.

Ru-Soft's packaged development company model

• UK programming costs typically reduced by 70%
• English speaking, highly skilled programmers.
• 'Always-on' instant messaging, VPN and numerous digital phone lines
• High speed broadband Internet connections.
• Fully serviced offices, facilities/staff management, software, equipment and comms for one single low price.
• All local regulations, customs and practices taken care of.