Written by: Tim Gosling
Photo by: Jan Vágner

Unicorn is a leading Czech IT company. The owners aim to be the biggest, and claim that the key to their success is sticking to their principles, while remaining ready to adapt.

Vladimír Kovář

VIENNA, 1991. Vladimír Kovář, a 29 year-old computer programmer from Prague, stands in Siemens’ office. For some months the entire capacity of Unicorn, founded by Kovář a year before, is contracted to the German electronics giant. The Siemens manager is impressed with a piece of wizardry on Unicorn’s database. Kovář promptly launches a recruitment drive, expanding his firm’s capacity by some 800%. The nine computer programmers spend the next two years in Vienna.
Prague, 2004. “That Siemens project was a huge opportunity to really earn some money and get Unicorn up and running,” recalls Kovář. “The first big break.” These days Unicorn offers a myriad of IT services, including consultancy, systems maintenance, and training. Its core activity, however, is the custom design and construction of software solutions for businesses to implement information systems. By their own estimate, they are the local market leaders, with a 15% share and customers in the banking and utilities sectors, as well as Czech-based giants such as Škoda and Eurotel.
Kovář graduated in mathematics and nuclear physics in 1985, but went to work with Russian copies of IBM computers at the Prague University of Economics. “On an eight-hour shift the computer would crash for seven. It was very good training,” he says. Otto Vitouš, Unicorn’s marketing director explains that before 1990 there was an embargo on western technology, meaning there was little if any IT industry at the time. Of course everything was about to change.
As the owner and CEO of Unicorn, Kovář has learned to embrace. He explains that his targets are “continuously expanding”, and that the organization of the firm has been adapted many times to allow maximum flexibility. Nevertheless, the ultimate goal remains constant: “I want to have a huge company,” he grins. Returning from Vienna in 1993, Kovář concentrated on a Czech IT market still in its infancy. Local businesses had little knowledge on the matter, but demand was enormous with very few companies to satisfy it – ideal for making a quick buck.

From the outset however, Kovář aligned his strategies to his fundamental ambition. Unicorn would work systematically, crafting quick, efficient, yet exhaustive production processes. The central aim was to offer clients added value and thus grow. Many companies that were Unicorn customers in 1993 are still with them; one is Česká spořitelna. The contract helped Unicorn establish a strong reputation in the banking sector and achieve one of Kovář’s first ambitions – annual turnover of one million dollars.
In 1994, Kovář saw a big problem. The IT industry was rapidly evolving, but Unicorn’s 40 or so established programmers were not. Vitouš suggests that their previous knowledge was “a burden”, so a new employment policy was born. Creators of Unicorn software are young; fresh graduates with few preconceptions who are able to assimilate constant change. The average age of today’s 800 employees stands at 25. By the late 1990s, many IT companies had gone to the wall, leaving customers empty handed. Unicorn needed to offer clients security and confidence: to “send a message to the market,” explains Kovář.

 

 

So, in 1997 Unicorn, a. s., was formed and the company recapitalized to the tune of CZK 10 million. A continued drive towards a sturdy public profile has seen capital increased to CZK 87 million in 2002 and CZK 100 million this year. All investments have come from the company’s own sources. Kovář doesn’t want “shareholder interests” to dilute Unicorn’s central principles and strategies. The shorter-term goals of investors could conflict with the systematic, and sometimes unpredictable, routes the company takes to develop software. These building blocks, combined as needed, allow the projects they tailor for each client to be implemented very quickly.
By the end of the last century, turnover had risen steadily to CZK 200 million, double that in 1996. Unicorn hit a growth spurt as it moved towards its teens. In 2003, revenues of CZK 562 million came close to trebling the figure from 2000. What has fed this boom? Kovář suggests that they overcame some general barriers: building the name and an element of trust in the market. More concretely, he points towards the company’s distinctive management structure, designed to maximize competency throughout, and also the methodology, adopted in 1999, used in developing their software.

Benchmark – Short-term strategies based on long-term goals – Systematic approach – Adaptability to match industry trends – Flexible management structure – Rapid, managed growth

Typically, Unicorn always rejected traditional IT industry methods for developing projects, citing them as too slow, too inflexible, and too expensive. The topic animates Kovář: “Make it smaller, make it simple, split it into parts, whatever. But implement it!” Unicorn preferred its own amalgamation of techniques, but without an acknowledged system of development, some multinationals were wary of the small private Czech company. Kovář is convinced that incorporating the Rational Unified Process (RUP) – an uncommon methodology of developing software, but one recognized in the IT sector – was a huge step, because it is a systematic tool that allows clients to deliver fast.
The itinerary towards establishing a monolith inevitably meant that the Czech market would start to feel too small. Sales offices were set up in Slovakia and Croatia in 2000, joined by a US entity two years later. Development and production remains based in Prague, save for a small facility attached to the Slovak operation. For the time being, international deals account for 20% of turnover, but by 2012 Kovář hopes that 80% of turnover will be coming from overseas.
Kovář claims that specific strategic goals will achieve the targets he has set. The next of these steps is to start working internationally with companies that will raise Unicorn’s profile. Characteristically, the maths graduate has precise ideas of where he expects Unicorn’s future to lead, and he starts scribbling equations to illustrate. “I want to continue to grow in the Czech Republic until 2012,” he says. “I will be 50 and I want a turnover of CZK 2 billion from the Czech market as my birthday present.”

IT on demandTHE BULK OF Unicorn’s 800 some employees comprise a “pool” of IT graduates – around 600 programmers that are deployed as projects demand. Vladimír Kovář, founder of Unicorn, states that each development project requires 400 different pieces of know-how. Management keeps a constant tab on the skills of each employee; upon entry new hands are trained to fill any gaps. “It’s a bit like a boot camp,” says marketing director Otto Vitouš of the initial training. Education in new technologies and skills is continuous within the “incubator of [Unicorn’s] future management,” he adds.

 

Diversify and conquerUNICORN, A. S., is a holding company containing numerous subsidiaries, the majority of which provide IT services to businesses. In addition, they run an IT recruitment firm and plan to offer university education in IT in the near future. But that’s not all. Other companies within the group include an internet toy shop; a kitchen designer and manufacturer; a hotel; restaurants; and a construction service. Although only contributing around two percent of turnover, marketing director Otto Vitouš asserts that these non-IT businesses make an important contribution to the group. They provide a sort of laboratory to test and show off Unicorn software, utilizing IT to “gain a competitive edge in their respective industries,” as Vitouš puts it. Unicorn also uses these spin-off sectors to assess their various management approaches.