loading
0%

Hello-Site.ru. Бесплатный конструктор сайтов.

Stand with Ukraine! Support here

Financial Stability and Management at Xpand

Nov 23, 2023 news UAbusiness
307

After the onset of the full-scale war, the IT sector emerged as the sole industry that managed to sustain work volumes, particularly in terms of export. According to the data from the National Bank of Ukraine, in 2022, the IT sector provided foreign currency inflows into the Ukrainian economy amounting to $7.34 billion (+5.8% YoY)*. In this regard, the share in the overall export of services was 44%. For the results of the three quarters of 2023, the export of IT services from Ukraine amounted to $5.02 billion, which is 8.4% less compared to the same period last year, and the share in the export of services remains at more than 41%.

But today, it is the IT sector that has become the anchor among Ukraine's industries, and IT companies continue to actively generate tax revenues to the budget, provide jobs and social guarantees to our citizens, as well as actively develop new services and products taking into account new realities.

One such company is ours – Xpand. The company has been operating in the IT services market for over 13 years. We have focused our activity on our own product development, service support, and development in Microsoft Dynamics ERP and CRM systems.

As of now, 100% of the company's clients continue to collaborate with us on both existing and new contracts, allowing us to generate tax revenues for the country's budget. We have managed to avoid project cutbacks, and we have slightly increased our workforce. The company continues to pay salaries in full and on time, provide a compensation package (insurance, course attendance), and has even launched a new direction in psychological support for our employees. We financially support colleagues who have joined the Armed Forces of Ukraine and ensure the preservation of their jobs.

As a Ukrainian company, we actively engage in volunteer activities (educational, military), assisting the defense forces of Ukraine and all those fighting for our freedom on the front lines. We do everything in our power during these difficult and dark times.

All of this became possible through rapid managerial adaptation and crisis management of the company's operational and financial activities, but what is equally important is understanding the potential concerns and "pains" of our clients. At the core of all our services is a customer-centric approach, which has allowed us, among other things, to work proactively.

We quickly adapted to the new conditions by developing and implementing clear instructions for employees and a detailed action plan for our collaboration with clients. This systematic approach and detailed analysis helped develop and implement a comprehensive Business Continuity Plan, which, in turn, focused on addressing issues in the following areas:

1. Operational Resilience, which involved a series of measures to ensure stable, high-quality, and uninterrupted service for our clients. To achieve this, the company:

  • Provided all employees with the necessary equipment, regardless of their actual location.
  • Facilitated online work through a robust business communication and information exchange system.
  • Transformed offices into autonomous hubs with generators, charging stations, and uninterrupted internet connectivity, reducing the risks of negative impacts from blackouts.
  • Diversified information security and ensured data confidentiality through both cloud and local solutions.
  • Opened a branch in Lithuania to ensure the stability of specific services and risk diversification.

2. Financial Stability, aimed at achieving financial stability and predictability in the company's short- and medium-term activities through the following steps:

  • Implemented maximum cost control measures.
  • Implemented a set of measures to monitor the company's operational activities, monitoring, and adjusting revenues.
  • Continuous forecasting and analysis of performance indicators: liquidity, team margins, project profitability, etc.
  • Active management of the cash flow and accounts receivable/payable.
  • Activated marketing and sales efforts to search for new projects/clients, expanding the company's client portfolio and having a diverse income structure (risk diversification).

This year, as well as the war, has not yet ended. Still, as of now, thanks to the implemented comprehensive measures, we can predict our activities with some confidence, providing high-quality and uninterrupted services and products to our clients, generating cash flows and added value, although it's worth noting - with a significantly lower level of business margins.

However, neither we nor our clients, and even competitors in the market should delude ourselves and form a false impression of the real state of affairs and prospects. Speaking of plans and prospects for the next year, we assess the situation in the internal and external IT services market in a few words - "challenges," "turbulence," and "uncertainty."

The above-mentioned assessment of the sector's prospects, including those of our company in particular, is supported by several objective factors. Firstly, it's the war in Ukraine, which will continue to have a destructive impact on the country's economy as a whole, and the IT sector in particular. Potential blackouts, mobilization, access to communication, sector investments, and the trust of international clients will all have an impact in the coming year.

Secondly, the global economic downturn, which with almost 100% certainty will transition into a phase of a global financial crisis or economic adjustments within specific regions, will impact the cost of services, market player certainty, resource costs, and competition.

Well, thirdly, artificial intelligence will bring adjustments to the entire IT sector, as alongside the factors mentioned above, it will force companies to consider cost reduction in wages through simultaneous automation or even "robotization" of processes.

Understanding the potential impact of these factors on our company, today we have developed several scenarios for events with specific plans for stabilizing and developing the business. New services and products for existing and new clients, entering new markets, and seeking non-standard effective solutions for clients, along with realistic forecasting of financial and commercial activities — all this creates the conditions for our business to stand more firmly on its feet in the uninterrupted and competitive implementation of our products and services to our clients.

We don’t improvise; instead, we make thoughtful strategic decisions based on our professional expertise and realistic planning.

At Xpand, we use accumulated experience and already have some expertise in facing extreme challenges that have been on our path in recent years. Simultaneously, considering market realities and the global situation, we are prepared for a marathon during which we constantly improve, adapt, and unfold both within the company and in collaboration with our clients and partners.

*Source: https://bank.gov.ua/files/ES/Trade_m.pdf

307