Digital transformation in Serbia by Diplomacy&Commerce magazine

2019

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SERBIA ON THE DIGITAL SILK ROAD Digital literacy as the biggest challenge

I N T E RV I E W

tate Secretary at the Ministry of Trade, Tourism and Telecommunications, Tatjana Matić officially visited China in August. In the interview, she talks about what kind of agreements have been concluded there, how much has Serbia achieved in digital transformation and other important topics.

You have recently visited the Digital Development Fair in China. How much can Serbia learn from China about the digital economy and how much are we lagging behind the rest of the world in this respect? — The second Smart China fair took place in the Chinese city of Chongqing. Smart technologies and innovations were presented at the fair, which also hosted the conference International Cooperation on the Digital Silk Road. The conference was attended by more than 400 guests from around the world, and in addition to government officials, including our country's delegation, representatives from leading IT industry companies participated in it. It is evident that China is becoming a dominant force in shaping the digital future and it is good that Serbia has

joined the Digital Silk Road since we need to learn from the best. Although Serbia cannot compete with the global IT powers, the double-digit growth rate of IT services, as well as the continued growth of the electronic communications market, digitalization of education and subsequent staffing are all indicators that we are following global trends and that we are well on the way to digital transformation. What happened with the arrival of the Chinese company Alibaba in Serbia? — Negotiations with the Alibaba Group are ongoing and we are finalizing plans aimed at launching the Alipay electronic payment platform in the Serbian market, as well as promoting Serbia's tourism offer in China. We again spoke with the representatives of that Chinese company on the margins of the Chongqing trade fair but also with the representatives of the Chinese tech giant Tencent Cloud about the opportunities of cooperation in the field of electronic payment. Another topic of discussion was the construction of a data centre in Serbia, which would represent the Eastern European backbone of their infrastructure. It was agreed that we should

TAT JA NA M AT I Ć State Secretary, Ministry of Trade, Tourism and Telecommunications

We spoke with Chinese tech giant Tencent Cloud about the opportunities of cooperation in the field of electronic payment

continue the talks with the company's European team as early as September. Tencent has reached a market value of $ 531 billion and according to an IT sector analysis, it is currently the second leading company in the world, just behind Amazon from the US. What challenges is Serbia facing in terms of digital transformation? — The biggest challenge is boosting the digital literacy of the entire population and their confidence in new technologies. We buy and use technology to function and work faster and more efficiently, but we also need to develop digital skills and digital security culture. An additional challenge is the integration of new digital tools into the business. To improve the overall digital literacy, the Ministry of Trade, Tourism and Telecommunications is preparing a Digital Skills Development Strategy, with particular emphasis on certain categories of the population such as young people, senior citizens, as well as residents of less developed areas to reduce the digital gap. Last year, the Government of Serbia adopted a Strategy for the Develop-

ment of the New Generation Networks by 2023. How many objectives of this Strategy have been accomplished and what still needs to be done? — The primary objective of the Strategy for the Development of the New Generation Networks by 2023 is to create the conditions for the development of the Digital Single Market. The development of next-generation networks will enable the deployment of modern technologies such as cloud computing, the Internet of Things and big data. In this regard, the Government has adopted the baseline for developing an initial network for testing the technologies required for the integration into the Digital Single Market. An initial network for testing new technologies has been launched and it currently uses a 5G base station installed in the Zvezdara Science and Technology Park, which will enable testing of equipment for new technological solutions. What about the Digital Agenda for the Western Balkans? — One of the first goals of the Digital Agenda for the Western Balkans was to reduce roaming services’ costs. In April this year, representatives of six Western Balkan economies (Serbia, Montenegro, Bosnia and Herzegovina, Macedonia, Albania and Kosovo*) signed a Regional Roaming Agreement, which came into force on July 1st and which reduced roaming prices by between 20 to 90 per cent. This is only the first phase, that is, a transitional period towards the introduction of the Roam Like at Home regime that is implemented in the EU.

From July 1st, 2021, the price for calls, text messages and data transfer in the roaming regime in the Western Balkans region corresponds to the price paid by consumers in their domestic electronic communications networks. This leads to financial savings and easier communication for citizens, but also fosters the development of the digital economy, regional cooperation and faster introduction of new technological solutions. In line with the Declaration of Support to the Digital Agenda for the Western Balkans, following the abolition of roaming charges in the Western Balkans, the next phase stipulates a cost reduction between the Western Balkan economies and the European Union. How can we increase the digital literacy of companies and people? — Research on the use of computers in domestic companies shows that 100% of businesses use a computer, regardless of their size, activity or location. However, the percentage of employees who use a computer daily is significantly lower compared to the EU countries. That is why education is the main way to increase the digital capacity of companies and their employees. To avoid human resources problems in the future, we have launched the education system reform. The Ministry of Trade, Tourism and Telecommunications, together with the Ministry of Education, Science and Technological Development, is implementing a largescale project called ‘Connected Schools’, which entails building an infrastructure required for having wireless local

Internet in schools, providing schools with computer equipment and creating digital teaching content.

The percentage of employees who use a computer daily is significantly lower compared to the EU countries

What do the amendments to the E-Commerce Law bring? — The amendments to the E-Commerce Law, as well as the new Commerce Law, regulate the online market, primarily with the view of reducing the possibility of fraud and deception of consumers. Also, they introduce a mechanism for removing inappropriate online content and allow citizens to submit market inspection reports if they receive text messages or emails that agitate them. Such changes were also necessary to protect registered sellers, that is, to curb the shadow economy. A new draft Law on Electronic Communications is currently being prepared. What kind of novelties does he bring? — The Ministry of Trade, Tourism and Telecommunications has prepared the text of the new Law on Electronic Communications that aligns our legislation with the EU’s legal framework, improves the conditions for doing business for electronic communications operators and most importantly, promotes competition and enhances the protection of the rights of electronic communications services users. The new law will prescribe mechanisms to prevent over-consumption, and specify the obligations of operators relating to informing consumers about contract terms and service prices, as well as obligations of consumers in case of early termination of contracts.

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DIGITAL TRANSFORMATION IS AN ONGOING PROCESS You can’t change anything overnight, but it’s important to start I N T E RV I E W

f you continue to lag behind the rest of the world, you won’t be able to catch up even if you run. Contemporary trends entail the digital transformation of business. Large companies have adopted this rule a long time ago, but the situation in small and medium-sized enterprises is not so uniform. The companies that feel are still wandering around in the field of digital transformation can contact the Chamber of Commerce and Industry of Serbia (CCIS) and receive concrete assistance in this process Filip Mrdak, Project Manager at the Centre for Digital Transformation at the Chamber, told us what small and medium-sized enterprises could expect from this program.

How much are small and medium-sized enterprises in Serbia are interested in digital transformation? — The first thing the Centre, upon its establishment, was to research the SMEs sector in terms of their engagement in digital transformation. The results generated from over 350 companies surveyed were such that as many as 60% had no digital projects in the past, and had no plans to have them in the future. Of the 40% remaining companies, as many as 90% plan digital projects in the form of setting up a website, opening an e-mail account, or implementing simple SW. By definition, this comes under digital transformation but it’s nowhere near what it can provide. Over one year since the CDT’s establishment, we have done a lot to raise awareness among SMEs about the importance of this topic, which is validated by the fact that a significant number of companies have applied to participate in our consulting programme and in the events we organize on this topic.

What is the first thing that you say to companies that ask you for help? — Digital transformation is an ongoing process. You can’t change anything overnight, but it’s important to start. The CDT offers to companies a complete set of co-financed services related to their digital transformation. To begin with, we provide them with certified consultants (a unique base in this part of the world). Each consultant has passed serious selection criteria, extensive training for external lecturers, and finally certification according to ISO standard 17024. They work with companies on professional analysis and develop a digital strategy. They then support the company in the implementation of the solutions defined in the strategy. I should point out that digital transformation of a business involves not only automation or insertion of technology into an existing process (digitalization) to optimize the current value chain, but also the modification of the business model. Customers also want to see modernization, streamlining and simplification of current business processes. Digital business transformation presents huge opportunities for innovation and competitive advantage, which all require a change in the organization: cultural, strategic, technological and operational changes, where processes play a fundamental role along with data. Lastly, it is important to underline that digitalization is not sufficient for a complete digital transformation of a business; it is also necessary to respond to new business models supported by new automated business processes that ensure an offer of new product and services to customers. One of the key strengths of companies that embark on digital transformation is tighter control of busi-

F I L I P M R DA K Project Manager at the Centre for Digital Transformation at the Chamber of Commerce and Industry of Serbia

We aim to have 200 companies attend our programme by mid-2020

ness processes and activities. It is also a mechanism to measure changes in revenue, costs and profit, help win and retain customers, prevent customers from leaving and assist in acquiring profitable new customers as efficient management of available resources to achieve company goals. How many businesses have attended your programme so far? What are their impressions? — About 50 companies have gone attended the CDT programme in one year. We aim to have 200 companies by mid-2020. After that, we can sum up everything we have done so far and define guidelines for improving the processes. We expect all companies that have undergone consulting processes to start implementing the defined solutions and only after that we will measure success and their impressions. So far, we are very pleased with the response and impressions of the companies which went through the programme. How much are our SMEs lagging in digital transformation relative to the region and the world? — It is difficult to explain it verbally, but let me just say that there is a lot of talk about industry 5.0 in the world and that we, in Serbia, are still at industry 2.0. Of course, this is devastating but not unattainable if we immediately turn to digital transformation and tackle the world and their way of doing business as soon as possible. Otherwise, Serbian companies will not last long both in our country and let alone in the foreign market. A year ago, we were at the same level as the region, and now we have "50 companies at an advantage.

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THE DIGITAL ECONOMY IS BECOMING THE ECONOMY How businesses adopt digital technologies will be a key determinant of their future growth

he world as we know it is continually changing, and digital transformation is one of the fundamental drivers. At its core, digital transformation is about using the latest technology to do what you already do – but better. So, what is the digital economy? It is economic activity that results from billions of everyday online connections among business – people – systems – processes – devices – data. The digital economy is taking shape and drastically changing conventional concepts about how businesses are structured, how businesses interact with people; and how consumers obtain services, information, and goods. It is the single most important driver of innovation, competitiveness and growth, and it holds huge potential for entrepreneurs and small and medium-sized enterprises (SMEs). How businesses adopt digital technologies will be a key determinant of their future growth. The benefits of the digital economy for the countries like Serbia are large. That is because it can have significant competitiveness and productivity-boosting opportunities related to access to digital products and services that help optimize processes and production, reduce transaction costs, and transform supply chains. All of this enables firms

to participate in global value chains and directly access customers in foreign markets in ways previously only feasible for large and established companies from advanced economies. The digital economy is a unique opportunity for small businesses in that it gives them access to a global playground. To date, small firms may not have been able to substitute their players – now they can swap out the whole playing field. Countries that fail to jump on the digital transformation bandwagon and adopt the rules of the fourth industrial revolution will fall behind and miss their chance to catch up to developed nations. Building a digital economy, one based on innovation and knowledge, is a necessity if Serbia is to draw level with advanced countries. If it does not do so, it risks becoming a marginalized economy in tomorrow’s digital environment. The USAID Cooperation for Growth initiative has focused on both the Government of Serbia and businesses in their joint efforts to bring about a transformation to a digitally driven economy. Its areas of activity include creating a blockchain-friendly environment and the development of blockchain projects, as well as enabling and supporting the establishment of online financing platforms.

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SA N D RA RO D I Ć Access to Finance Director USAID Cooperation for Growth Project

Crowdfunding is one of the latest examples of digital transformation in classical financial intermediation

DLT1/Blockchain: the digital transformation under your nose It is safe to say that the implementation of blockchain technology would greatly benefit Serbia’s position in terms of enhancing the economy and increasing efficiency and trust, both internally and as a message to other countries. These two key factors would have a far-reaching effect, providing Serbia with an opportunity to set the standard for the widespread implementation of blockchain technology whilst bolstering its reputation in furtherance of potential future accession to the European Union. At the outset, it is important to highlight that Serbia boasts of a skilled workforce in the ICT industry, with niche specialization in DLT that has emerged over the past few years and should be honed and nurtured. The significance of Serbia’s advantage over other jurisdictions in this regard cannot be overemphasized: other countries may not only be lagging behind in terms of a trained workforce in ICT in general, but even more so specifically in DLT. This resource needs to be put to good use, not just as a means of promoting 1 Blockchain is the most popular form of Distributed Ledger Technology (DLT). Blockchain consists of a distributed ledger on a peer-to-peer (P2P) network.

much-needed exports, but also for the better meant of the local ecosystem, where local experts can contribute advice and aid in the implementation of DLT-based systems. A supporting regulatory framework is essential for sound implementation of blockchain, with areas such as securities, anti-money laundering, financial services, and alternative investment funds all requiring adaptation to accommodate the implementation of blockchain technology. It must be noted that there is no need for a brand-new framework, as blockchain should be an enabler, not a disruptor. However, what is really and truly needed is the creation and implementation of a National Strategy for Implementation of Blockchain Technology, bringing together all the relevant stakeholders, pulling the same rope. This is of critical importance and must serve as the starting point of everything. “DLT is here, and it is here to stay. The only thing that can be done, apart from waiting for it to mature, is to create a welcoming environment for it to thrive in. This is something that can be and should be done immediately. The train of innovation is in the station, and firstclass seats are amply available. However, it is time to get on the train while tickets are still available”, Dr Jonathan Galea, Blockchain Advisory USAID CFG stands ready to support Government of Serbia to achieve the aim

of Serbia becoming one of the leading jurisdictions in blockchain technology. Crowdfunding as Digital Transformation for Traditional Financial Intermediaries Crowdfunding is one of the latest examples of digital transformation in classical financial intermediation. Crowdfunding refers to the practice of funding a project, cause, or venture by raising money/soliciting contributions from a large number of people (i.e. “the crowd”), typically via the internet. In this new model, funding is no longer restricted to conventional financial institutions such as banks, venture capitalists, or business angels, but is now open to “the crowd”, so that anybody can participate according to his/her financial means and ability. The digitalization of finance offers the opportunity to attain broad-based financing by extending the availability and penetration of digital financial services and offering digital alternatives to encourage entrepreneurs and SMEs to grow their businesses. This is also one of the main reasons why USAID CFG is advocating the establishment of crowdlending platforms in Serbia. Their advantage is mainly reflected in being able to effectively address issues and look after under-served customer segments, such as, for example, financing young and innovative companies or enabling a broad range of

The USAID Cooperation for Growth initiative has focused on both the Government of Serbia and businesses in their joint efforts to bring about a transformation to a digitally driven economy

individual investors to invest in these types of businesses. Focusing the business model to a clearly defined and narrowly limited range of problems puts these innovative companies in a position to specialize in delivering services while remaining profitable. Although the very idea of crowdlending originated in the need to provide an alternative to banking, these two funding sources rarely compete in practice. At first glance, financing through crowdlending platforms helps the borrower solve the same problem as, for example, a bank loan, but the targeted market segment, financing conditions, type, level and scope of services, as well as the effects of funding, vary greatly between these two sources of finance. And, as there are no alternatives in Serbia, we believe this type of financing could have a major impact on society. It should also be kept in mind that at least four billion euros in remittances find their way to Serbia every year through both formal and informal channels. Some Serbian expatriates feel the need to repay their debt to the society that funded their education, and would put their money into companies in Serbia if allowed to do so simply and straightforwardly. Crowdfunding is a good option for enabling such investment. 2

Loan-based crowdfunding.

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5G AS AN ENABLER OF SMART PLATFORMS Taking a lead in creating the first 5G environment is an amazing opportunity to work and get the experience gained with scientists, start-ups and other interested parties efore digital disruption we were fulfilling our needs by seeking for solutions in our surroundings. Today our needs are not different, but we are finding solutions in a digital world more efficiently. We used to buy a cd, a record or cassette to listen to favourite music. Now, we gain access to unlimited music with two clicks on a mobile phone and a subscription. More than a half of Telenor customers uses a variety of digital services bundled within tariff plans, like Deezer for music, HBO for watching movies, Bookmate for reading etc” says at the beginning of the interview Mike Michel, CEO of Telenor Serbia.

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Digital transformation is key word in almost every industry, how is it performed by mobile operators? — For telco companies, digital transformation is happening on two fronts. First is happening inside companies to serve customers in more efficient way, using new digital tools. More important front is enabling digital transformation for society at large. The number of services changing people`s everyday life increases dramatically. And all of them heavily depend on infrastructure provided by mobile operators. What are your expectations when it comes to network infrastructure development as one of the key enablers for digital transformation of the society in Serbia? — For more than a decade, Telenor has been continually investing significant resources in infrastructure and network capacities and we plan to stay on the top in providing high - quality connectivity to our customers. I’m very happy to share that Telenor just received its second P3 BEST IN TEST recognition, with the highest results in categories related to quality based on customer

experience. (P3 took 20.7 million samples from 9,700 mobile telephony users at Serbian territory). This is the third independent acknowledgment for Telenor in a short time: first one was from RATEL (end of 2018) and the second one was also from P3 who conducted its first test last year. Even though we have the best network in Serbia and cover almost the entire population of Serbia with 4G, we know that our current network will not be enough to support the growth in mobile internet use. That is why we rolled-out the 5G base station in the Science-Technology Park Belgrade, to learn about next generation technology and be ready for the moment it is commercially available. Taking a lead in creating the first 5G environment is an amazing opportunity to work and get the experience gained with scientists, start-ups and other interested parties. Who will be the first to benefit from the introduction of 5G and how it will be utilized? — I see 5G as a transformational technology that will influence the industrial processes, management mode, cost optimization and increase the automation level. According to some forecasts, B2B customers are those who should first experience the benefits; however, we still cannot integrally grasp all the possibilities that 5G technology is bringing. I also see 5G as an enabler of smart platforms. Fifth generation technology will converge Internet of Things, Big Data (processing large quantities of data) and Artificial Intelligence, creating a new ecosystem named “intelligent connectivity”. This is where 5G will reach its full potential. Naturally, for 5G to take off we need the partnership of the business and public sector, the Government and regulators as the initiators of this new ecosystem creation. For Serbia, this is an opportuni-

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ty to assume bigger and more important place on the digital map of Europe and the world. MIKE MICHEL CEO of Telenor Serbia

I’m very happy to share that Telenor just received its second P3 BEST IN TEST recognition, with the highest results in categories related to quality based on customer experience

How to you see timeline, roles and the next steps leading to making 5G a new reality for all of us? — It would be misleading to set expectations for 5G enabled technology implementation in near future. There are several preconditions that must be met, such as fully developed regulatory framework; device ecosystem which development has just started, transformation of industries that will utilize 5G technology and customer readiness to use 5G enabled services. Serbian Government has demonstrated a strong commitment to digitalization of society and public sector. For mobile operators to continue commercial 5G rollout, it will be very important that governments find a balance between spectrum price and the investments that operators will need to make. We prefer 5G spectrum auction and commercial rollout that is sensible, from both timing and investment perspective.

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THE BANKING SECTOR AND THE CHALLENGES OF DIGITAL TRANSFORMATION About 60 per cent of banking clients in Europe uses online banking, while in Serbia, although in a far smaller percentage, the share of users of these services has been growing significantly C O R P O R AT E

B RA N KO G R EGA N OV I Ä&#x2020; Chairman of the Executive Board of NLB Bank Belgrade

he use of online banking services, either on computers or via a mobile application, is steadily increasing. About 60 per cent of banking clients in Europe uses online banking, while in Serbia, although in a far smaller percentage, the share of users of these services has been growing significantly. Considering that there are more mobile phones in our country than residents, it is not surprising that mobile banking is slowly taking over the primacy in customer contacts with the bank. For example, thanks to initiatives such as instant payment, we can now make payments at any time and from any place, with our transactions being realized in real-time, regardless of branch office and

payment transaction hours. Still, digital transformation is much more than an icon on a client's desktop or an app on a mobile phone. It is a process that fundamentally changes the environment in which we operate, and the extent to which we recognize that environment and learn to respond to its challenges is crucial to our positioning and survival in the market. Digitization requires us to take a new approach to all activities because customers, already accustomed to using their mobile phones to find and buy the desired product with three clicks during their coffee break, want to do the same with their bank. They expect an unobtrusive partner who is there for them when they

need them, in the way they need them and exactly where they spend their time. The availability and data processing capabilities of digitization are a huge opportunity for anyone who recognizes it and use it to enhance their customers' experience and adapt their business to market trends. It is not enough to create a new platform for a specific purpose, but what is primarily needed is a radical change in the way we think in the organization and a clear picture of what digital transformation is, what opportunities it creates and what we want to achieve. Only in this way can we meet the needs of our clients and be prepared for whatever is coming.

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IN THE DIGITAL ARENA, WE ARE ALL ON THE SAME BOAT Question is, will you come on board?” D I G I TA L

erbia, like the rest of the world, is still in the very early stages of embracing the era of great technological change. Digital innovations are remaking our industries, economy, and society just as steam, electricity, and internal combustion once did before them. Like their predecessors, computers and its digital offspring are engines of great prosperity. Advancements with hardware, software and networks are improving our lives in countless ways and creating immense value and huge benefits for mankind. To take just a few examples, breakthroughs in artificial intelligence are helping doctors diagnose disease; new sensors are making it possible to drive cars more safely; digitization is delivering news, knowledge and entertainment more widely than ever; and mobile networks are interconnecting the planet’s population for the first time ever. It would not be an overstatement to claim that the digital revolution is the best economic news on the planet. The recent wave of globalization is itself reliant on progress in information and communication technologies backed by key expertise in these areas. The fundamental fact is that, even though we’re living in an ever-more digital and interlinked world, the benefits of this technological surge have been in certain circumstances very uneven. Surges of this type brought with them an increased demand for purposefully trained labor. In that sense, the digital revolution in Serbia is delivering an unprecedented need for a set of appropriate tools and knowledge for bolstering further growth and productivity. While this requirement for specialized workforce is yet to be catered, improvement of the overall local economy in the long run highly depends on it.

N E NA D M I L I Ć Executive Director, IAB Serbia

The digital marketing industry in Serbia is one of the very few sectors in the country which sees year to year double-digit growth for the past ten years

To be more precise: The digital marketing industry in Serbia is one of the very few sectors in the country which sees year to year double-digit growth for the past ten years (on average around 20% according to the yearly AdEx Report – Advertising Expenditure Report - conducted yearly by the organization IAB Serbia). In 2018 alone, the digital advertising industry had an estimated market worth of over 36.5 million euros. This blooming market and industry development have, however, certain obvious deficiencies. One of the main reasons for it is that the Serbian market still greatly lacks adequately trained workforce in digital advertising. It has been a cognizance that there is a serious shortage of trained people for this promising industry and the continuous new job openings (just on one popular classifieds website in 2018, there have been over 400 job listings which were looking to hire cadre with proven digital marketing skills). On one hand, traditional university educational curriculums do not provide up-to-date programs for this fast-moving business environment. On the other, there are not enough trustworthy specialized courses and trainings programs that are supported by relevant institutions which can deliver the right set of skills and educate the workforce with hands on knowledge in an industry that is everchanging. Having this situation in mind, IAB Serbia (Interactive Advertising Bureau) as a professional business association which actively focuses on supporting the growth, development and education

of the digital and interactive marketing market in Serbia, established through international partnership, a well renowned and recognizable European educational program to tackle this pertinent state of affairs. The DIMAQ (Digital Marketing Qualification) certification program represents the most comprehensive education and training in digital advertising in Serbia and, for that matter, throughout Europe. DIMAQ certificate provides one’s full understanding of key ideas in the area of digital marketing and enhances one’s ability to apply them in business. For anyone that intends to venture into the digital marketing industry, as well for employees that are already in the digital marketing industry (such as advertising and communication companies, media and publishing houses, IT firms, S&M businesses and entrepreneurs), this course provides all the tools and skills needed to grasp the matter at hand and to be accordingly trained with hands-on knowledge. DIMAQ is an international standard of digital marketing competence. It defines the level of knowledge and competence required of digital marketing specialists and serves as a tool to compare and evaluate the said knowledge and competence. We at IAB Serbia strongly believe that, only through the right educational programs and training, can the industry continue to develop and to attract further investments in this field that will create, in its turn, a greater skilled workforce and thus justify the need for higher paying jobs.

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TECHNOLOGY IS JUST A TOOL - NOT A PURPOSE IN ITSELF We, at TeleGroup Innovation, have created a team of experienced young professionals that deliver business consulting services to our clients in the segment of digital transformation

ince its beginning in 1992, TeleGroup has grown into an international tech company that successfully operates in the European and Middle East markets. The company provides comprehensive IT solutions and infrastructure engineering services tailored to various industries.

What exactly is a digital transformation consultant's job? — We, at TeleGroup Innovation, have created a team of experienced young professionals that deliver business consulting services to our clients in the segment of digital transformation (DX) in the Serbian and regional markets. As major changes in the ways of doing business across the globe are happening, they seek a fresh perspective, thus TeleGroup has decided to ride the wave of the digital revolution and work intensively with tech startups and entrepreneurs on expanding its service portfolio, centred on innovation. Our team works with our clients that include many financial institutions, retailers, small and medium-sized enterprises and companies which management is aware that they cannot go down the DX path alone, as well as with their internal teams to develop new business models, products and services. Thanks to our business consultancy services, we help our clients address not only innovative ideas but also ways of strategically implementing these ideas into the real world of daily business while focusing on solving real problems of their customers’.

How does one company truly transform themselves digitally? What are the stages of this transformation and what are the most difficult of them? — As mentioned above, our job is to find ways with our customers to help their company innovate, change its business model and introduce new products or services, all to achieve its strategic goals, such as increasing customer satisfaction, reducing costs, boosting efficiency, etc. Technology is just a tool in these processes, not a purpose in itself. That is why our work only makes sense if it involves people from all organizational levels, starting from the head, that is, from the top management. The potential “stages” differ greatly from company to company, depending on their industry, size, level of maturity, the complexity of an organization, etc. There is no onesize-fits-all recipe. This is just one of the reasons why it is important to have someone who understands the specifics of your industry, geographical location, the mentality of people, business processes and all the challenges that they bring, as well as technology and tools. What awaits us in the future when digital transformation is at stake? — Since DX as a concept has only recently emerged in our market, it is still easy to see the gap between the essential needs of businesses to adapt to the conditions of the digital economy and their willingness to begin walking down the path of digital transformation. DX comes with an unprecedented amount of experimentation and non-deterministic work in the business. As this ap-

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A L E K SA N DA R V RATO N J I Ć GLIGORIJEVIĆ Director of TeleGroup Innovation

Our job is to find ways with our customers to help their company innovate, change its business model and introduce new products or services

proach to doing business also entails many risks, the door to the processes of substantial business transformation towards the digital economy is still often locked. On the other hand, through our TeleGroup Digital Transformation Academy, which offers free curriculum for students of the Belgrade University, as well as for teams representing our clients, we see the potential in the process of transforming domestic companies into ones that are digitally aware. These young people represent exactly the kind of staff of the future, as well as individuals who will bring about a significant change for domestic companies in the post-digital era. Statistics show that, in Serbia, women make only 19% of the IT workforce. Your company will participate in the upcoming Women's Cyber Forum. Why is it important to change these statistics? — We, at TeleGroup, understand that our country’s prosperity, education, business opportunities and international relations depend equally on women and men. By organizing Women’s Cyber Forum, we seek to empower the conversation about this equality, in addition to supporting organizations such as Women in Tech, Ladies of New Business and many others in creating a platform for higher involvement of women in tech in Serbia. All businesses are suffering from talent drought and we believe that breaking glass ceilings and overcoming gender gaps will help decrease labour shortage and fuel further growth of the IT industry.

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IF YOU ADAPT TO YOUR USERS, YOU’LL SURVIVE Digital 2019 Conference takes place

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or the sixth consecutive year, Color Media Communications held Digital, a regional conference on trends in telecommunications and media. This year's #Digital2019 lasted for two days - September 5-6 (Thursday and Friday), bringing together the most prominent names in the aforementioned sectors from across the region, as well as numerous guests from abroad. The conference was held at the Metropol Hotel in Belgrade.

The conference was opened by President of the Color Press Group, Robert Čoban, who introduced the programme, topics and panellists of #Digital2019. Zoran Djordjević, Minister of Labour, Employment, Veterans' and Social Affairs of the Government of the Republic of Serbia, officially opened the conference while underlining that digitization and introduction of digital novelties in the system are the Government’s priority. In his keynote address, the US

Adrian Ježina, CEO Telemach Slovenia, Dejan Turk, CEO Vip Mobile, Slobodan Đinović, CEO Orion Telekom

This year's #Digital2019 lasted for two days

Ambassador to Serbia, H.E. Kyle Scott highlighted the importance of social networks that provide important feedback and enable direct and interactive communication with the Serbian people. He mentioned the unpleasant experiences he had with Twitter users in Serbia, as well as the positive experiences related to the good response that the US Embassy's "You are the World" campaign had. The extent to which digitization and new technol-

Dejan Ljuština, PwC SEE, Predrag Čulibrk, CEO Telekom Serbia, Mike Michel, CEO Telenor Serbia

H. E. Kyle Scott, United States Ambassador to Serbia

Zoran Đorđević, Minister of Labour, Employment, Veteran and Social Affairs

Zoran Rađen, Marker CRM, Kenechi Belusevic, Discovery CEEMCA, Simon Slonjšak, Telekom Slovenije, Marijana Vukašinović, Telekom Srbija

ogies are a part of all of us has been demonstrated by Mr Scott’s spontaneous gesture - he took selfies before addressing the audience, and afterward discussed the historical context of the two countries' relationship, the current situation and which things the two countries should work harder and better on in the future. The Minister of Administration and Local Self-Government, Branko Ružić opened the second conference day. The Minister informed the participants about current projects and laws, closely related to digital issues with the goal of citizens distributing to decision-making process via modern technologies. One such is the Law on the Central Registry, which has been adopted but will come into force on September 1st, 2020. Indian Ambassador to Serbia, H.E. Subrata Bhattacharjee also spoke on the

Branko Ružić, Minister of Public Administration and Local Self-Government

second conference day. Since India is one of the countries with fast-growing digital literacy in the world, has been closely following global trends and applying innovation since the beginning of 2000, thanks to these activities the country has managed to reduce poverty. One of the Indian government’s plans is certainly to better link the government with citizens through new technology products, which is a kind of challenge given the size of India’s population. Romania's ambassador to Serbia, H.E. Oana-Cristina Popa also attended the opening of the second conference day where she presented the current programmes and engagements of the Romanian Government. Over the course of two days, at various panels, several case studies and presentations, experts in various fields spoke about trends in telecom-

H. E. Subrata Bhattacharjee, Ambassador of India in Serbia

The conference was opened by President of the Color Press Group, Robert Čoban, who introduced the programme, topics and panellists of #Digital2019

Mateja Norčić-Štamcar, Deputy Head of the EU Delegation to Belgrade

munications, media and technology, crisis communication in public administration, ethics and aesthetics of the new age, trends in the production of global channels and VOD-platforms, truths and misconceptions about the Twitter community, the digital economy, contemporary business, marketing in the world of emerging technologies, relationships with employees in the digital era, and other important topics. Many international guests also attended Digital 2019, and numerous B2B meetings with potential partners took place during both conference days. The conference was supported by FOX, Telekom Serbia, AMC, Direct Media United Solution, Discovery Channel, Viasat World, Epic Drama, National Geographic, AMS Osiguranje, Smart Water and Romerqeulle.

Ekrem Dupanović, Media Marketing, Sarajevo, Ivan Lalić, Mikser House, Belgrade, Vladimir Čeh, Institute od Advertising History, Belgrade, Petar Vojinović, TangoSix, Belgrade

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GO FOR THE REACH, FORGET ABOUT THE QUALITY, AS THOUGH THERE’S NO TOMORROW! An interesting phenomenon appeared in Serbia and among the domestic clients – of all the influencers and social media, they want only Instagram and YouTube, neglecting all other social media and platforms (and you can find people who have something smart to say on Facebook, blogs, Twitter, etc. as well). Why is all this interesting?

acebook, which was an extremely strong platform, is no longer interesting to the younger generations and influencers. Why? Facebook is the home of the older population (mainly 28, 30+ years of age), which is not interesting to the kids (both influencers and the audience). On this social media platform you do have to write, or read something, aside from the photos. The younger generations hate to read and they (mainly) go online only to watch (for this reason we have a larger number of Instagram and YouTube users). Also, Facebook requires not only more effort and time, but also more money and knowledge of algorithms so that your post could be seen. Ruthless commercialization seems to have ruined Facebook. A combination of all of the above has affected the popularity of this social media, and it increased the number of competitors for the “prize”. This network transformed into an arena where gladiators fight for victory, i.e. for survival. However, they have been here for a long time, they have an army of loyal followers that doesn’t back down or give up. And herein lies the value of this network. Another interesting thing is that texts and blog posts, even though still strong, are becoming absolutely unrecognizable by the clients. The audience is still very much there, as well as people who like to read a quality content (and such content still exists). But, even in this segment they are taking the path of least resistance, and less and less attention is being paid to the written word. Companies have neglected quality bloggers, and the bloggers, in a desire to appeal to the companies, started writing less and publishing only photos in their blog posts more. This way, an extraordinary sphere of communication is slowly shutting down. Blog fans will exist forever

D & C A N A LY S I S

J E L E NA RA D OV I Ć Director of Pasaž advertising

The companies have lost compass in their chase for a reach and impressions, which have to be presented in the final monthly, quarterly or even annual report

and this field of communication should by no means be neglected. Quite the contrary. When someone needs a recipe – they visit a blog/page with recipes (written word). When you need a travel tip – you visit a blog/webpage about travels (written word). However, the clients/brands started skipping this feature. For example, my entire family very much prefers a written word and that is why we like to buy books and quality magazines. Regularly. We also keep them alive by doing this. In the end, not everything is digital or online. And in order for something to survive, you have to nourish and cultivate it. YouTube found a nice connection between word and image here – presenting content in video form. The platform that replaced (now non-existing TV) entertainment, as well as educational program (the latter is in absolute minority) (primarily) for the younger generations. Still, here we have a problem with a large number of low quality channels, channels with a large number of followers, but also with questionable content. And we can notice here as well that quantity is far more important than quality to the clients, and also that tomorrow and conversions don’t exist. The client start to massively sponsor channels with huge numbers, as though they don’t think about the target group itself, about sales, or about the positioning of their product in general. The companies have lost compass in their chase for a reach and impressions, which have to be presented in the final monthly, quarterly or even annual report, and the authors (influencers) lost authentic and quality content. All of the above can present a brand/product in a completely wrong way. Here arises the question: Does such marketing them serve only for brand image (which is not bad by itself ), and

they find other ways to reach conversions and sales (for example via traditional media – TV, daily newspapers, weeklies, magazines, etc.)? And why are they all reduced down to only two platforms? Laziness, ignorance or is something else at hand? And we know very well (or we should know very well) that each platform has a wide array of most diverse followers/users. What is certain is that advertising on social networks must exist. It is certain also that companies and brands benefit from this. If they didn’t, they wouldn’t be there. The only question is where did the diversity go to and will everyone drown in a sea of equals or will some, better swimmers make it to the surface. The internet is a universe where there is room for everyone and everyone will find their audience. The companies/clients are there to choose the best audience for their brands, without too much wandering. Therefore the companies themselves have to have somewhat educated people who will understand the quality to quantity ratio. Since I have a marketing agency, I cooperate with both clients and influencers (and I myself am part of the both niches), I noticed over the past several years how much more important a photo (plain and simple) has become than the word (especially for the more and more younger persons). And this is really starting to worry me. Primarily because of the new generations who identify information with knowledge, neglecting education. Internet is a perfect thing - if you know how to use it. And how can you use it wisely if you don’t have all three items mentioned above? All of the above refers to both clients and influencers, bloggers, twitter users, YouTubers, etc. , but not to the audience itself. If there will be no demand, and thus no diverse content. And vice versa.

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WHAT DO WE WANT FROM OUR MOBILE PHONE SERVICE PROVIDERS? Every third user of mobile telephony in Serbia considers the process of selecting mobile packages complicated, while 3 out of 4 say that they would like to choose a mobile service package that suits them and stick to it. These are the results of the "Mobile path to purchase" study conducted in Serbia and Croatia by the Polaris team which operates under I&F Group C O R P O R AT E

oo much information and a myriad of choices that the modern lifestyle offers require simplicity and clarity as a kind of balance. In the process of purchasing and selecting a mobile service package, simplicity and easy understanding of the offer are crucial. Almost 90% of mobile phone users want to get all the information they need in one place and in a clear way, and 84% expect to get that information on the service provider's website. Although the study shows that 80% of users have had a positive experience when selecting their last mobile package, choosing a mobile carrier and the right service is not something most look forward to. When it comes to choosing and considering the best deal for our needs, service providers are expected to simplify things for us, and this can be manifested in many ways: a straightforward, informative and easy-to-read website, brief training on the use of the device that comes with the package, service of transferring data from the old phone to the new one they have just purchased, etc. Most users have a positive attitude to the possibility that the service provider monitors their consumption and habits and as a result, provides them with a personalized offer. Considering that users are looking for a simpler package selection process, it is a bit surprising that only one-fifth of them opted to purchase online the last time they chose a mobile package. 40%

of users have downloaded the package online at least once. The main reasons for this are ease, speed and additional benefits offered by service providers when purchasing online. Outlets still have an advantage because, according to users, they can get all the information in one place there and have a better overview of phones and devices. Although a higher percentage of users complete the transaction at a branch or other outlet, the study shows that 2/3 of them still start this process online. Google search and carrier websites are the first places where most users check for offer and prices. Recommendations and opinions from other users are important for decision making, with 1/5 of users going to forums and blogs to get more information, and almost 80% of them, after choosing the package, talks with their friends and acquaintances about the overall experience. The Internet tops the list of the sources that influence package selection the most, but when aggregated, traditional 'offline' channels continue to have a greater impact on users through 'the consumer journey'. The survey results also showed that proximity to users is not a strong side of service providers in Serbia, but there is a kind of inertia and habit that causes a large number of users to stay with their existing service providers. Winning the consumer's heart is important, but it's not easy. Customers want simplicity, flexibility and personalized service

from their provider, as well as communication that is both informative and non-burdensome. Where and when to send a message to the user, what online channels to use, how to make selecting a mobile package easier and more interesting are just some of the topics and questions that The Retail Buying Studytm answers.

Customers want simplicity, flexibility and personalized service from their provider, as well as communication that is both informative and nonburdensome

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