EPAM Systems, a leading global provider of digital platform engineering and software development services, has made growth part of its formula for continued transformation.
Where most companies are undertaking transformation programs to address the threats of disruption, EPAM has made constant growth part of its formula for pushing continued transformation from its core. Arkadiy Dobkin, founder and CEO of EPAM, has spent the past 25 years helping leading ISV’s and global enterprises take early steps into the unknown, at least when it comes to technology. “It’s a common misconception that the value we brought in the early days was from labor arbitrage or traditional outsourcing. It was never about that; it was about seemingly impossible challenges put before us by expert technology leaders who were struggling to solve problems that were on the leading edge,” says Dobkin. “How could you outsource something you didn’t really have a plan for in the first place? So, you went after fundamentally different types of solutions and completely different types of partners to help deliver them. That was, and continues to be, the position EPAM occupies today, and hopefully for a long time to come.”
Today, EPAM sees most of its customers undertaking at least one significant transformation program. What companies fail to realize is that those initiatives are hard. To transform the core of the business, challenges must be addressed that are very specific to the industry, the company, and even down to the individual use case sometimes. Complexity means many layers of the business must be touched, from legacy business models to legacy systems that cannot connect to new platforms to organizational challenges that require totally new skills and new types of teams. “We are in a position to help across all of the dimensions of these transformation programs,” says Dobkin. “Our business consultants are working on new models and strategies that help enterprises understand how to build digitally native businesses, and we can scale up integrated delivery globally to over 100 locations.”
Building Transformative Capabilities Through Acquisition
For EPAM, internal transformation also involves creating new teams with new types of thinking and doing—and that means acquiring companies that “expand our understanding, our capability, and ultimately, our value to clients,” Dobkin says. Over the past six years, the company has purchased more than 10 companies ranging from product engineering providers to physical/digital design studios to specialists in next generation experiences. It’s the design and innovation consulting companies, including Empathy Lab, NavigationArts, Continuum Innovation, and TH_NK, that allow the Company “to play in a fundamentally different game.”
“What we’ve learned is that to help customers build better solutions, we must be at the table with them from the start, and without the right people with the right skills, we aren’t trusted to do transformation,” says Dobkin. To help connect the multidisciplinary skills needed to develop the right strategies and design the right solutions, EPAM Continuum was recently launched as an umbrella brand, connecting the company’s business and technology consulting with its design and innovation services.
An “Engineering DNA” Core
As much as EPAM has evolved, its “Engineering DNA” continues to be a core focus. If anything, advanced understanding of technology and the ability to build real scaled solutions have become more important as the pace of technological change has increased. “Technology is changing dramatically almost every year,” says Dobkin. “We need a constantly learning workforce with agile, multidisciplinary skills for us to continue to grow.”
So far, it’s working. EPAM’s revenue has grown organically by 20+% year-over-year for over 32 consecutive quarters (as of FY 2018), and its stock price is up 402% since 2014, far outstripping the S&P 500’s 49% gain.
Dobkin plans to sustain this start-up culture at EPAM, and that means continued high growth in a market that is also growing faster than traditional IT services. According to a recent IDC report on digital transformation, worldwide spending on digital transformation will be nearly $2 trillion in 2022.
“We cover an enormously broad business and technology landscape now—helping our customers with every type of transformation program from cloud migration to platform build-up to industrial IoT and automation—and even some next-gen programs in AI, machine learning, and blockchain that are starting to become real,” says Dobkin.
Internally, EPAM is continuing to turn the entire company into a more consultative and solution-led organization. “We must do for ourselves what we do for our clients, and that means we must be able to engage on strategy, but link that strategy up-front with design, architecture, and ultimately optimized delivery and to constantly adjust the entire enterprise based on learnings,” says Dobkin. “When it comes down to it, EPAM has one purpose: to help us and our clients, and maybe the world more broadly, be more competitive.”
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