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CASE STUDY
Transforming a South Korean manufacturing giant into a blockchain powerhouse
McKinley Rice
6 min read
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Learn how Citylabs used SecondOffice to revamp their 40 year-old business for the tech era, and solve the recruiting problem their competitors couldn’t.

The challenge

Help Citylabs transform from a manufacturing business to a leader in the tech industry by recruiting blockchain professionals that are difficult to find in South Korea.

 

THE SOLUTION

Create a continuous pipeline of blockchain experts from proven backgrounds and construct an R&D team that keeps Citylabs at the front of the tech pack.

 

THE OUTCOME

A 35 person team of specialized blockchain researchers and engineers that create cutting edge technology products - all while their competitors are still struggling to hire.

 

A COMPANY IN NEED OF RADICAL TRANSFORMATION

CityLabs is a KOSDAQ (the South Korean equivalent of the NASDAQ) listed established business that has been in operation for over 40 years. They create smart city infrastructure products predominantly in the realm of Intelligent Transport System solutions. But, they weren’t always this way.

There is an idea in business discourse that software is eating the world. Especially old businesses. In today’s market, it’s almost essential to be some form of tech business - because if you aren’t, you’re already obsolete. And as an old manufacturing business, this was the exact problem Citylabs was facing. They were becoming obsolete.

This wasn’t a problem Citylabs had faced before. During South Korea’s transition from an agriculture-based economy to a tech-based economy (think Samsung or LG), there was a huge need for an infrastructure makeover as more and more cities grew and developed.

Citylabs specialized in traffic-related equipment and hardware such as traffic lights, so this need for infrastructure provided a fantastic goldmine for them. And their business grew in proportion, swelling to hundreds of employees, multiple factories, and a national stock market listing. The only issue was after a certain point, all necessary urban infrastructure is already established, and the need for products such as traffic lights dries up. What was once a growth market turns into limited demand, then stagnation, and death.

Eventually, time was going to run out. So Citylabs decided to make a change. They had to undergo a digital transformation. If their business was going to remain competitive they needed to bring their offering into a rapidly digitizing world.

Capitalizing on their strengths and the wealth of data they had at their disposal, Citylabs realized they could transform from traffic equipment to traffic management systems - using traffic data to create digital city and infrastructure designs and smart city technologies. But they needed to do this fast.

One immediate issue they faced was security. When you’re positioning yourself as a tech company in charge of an entire city’s network, security suddenly becomes of the utmost importance - after all, a bad agent could theoretically track someone through an entire city in a “Black Mirror” type scenario. This had to be prevented.

The solution to this was blockchain technology - Hyperledger to be specific. This would make everything as secure as possible while providing the foundation needed for incredible products.

However, finding software engineers, let alone blockchain experts in South Korea proved to be next to impossible. With a population of 50 million people, South Korea doesn’t produce an enormous amount of engineers, compared to say, the US. On top of that, the good engineers are always snatched up by FAANG companies (Facebook, Amazon, Apple, Netflix, and Google) or South Korean market leaders like Samsung or LG. After all, these brands are big names - and have the employer brand appeal to draw in talent.

With all of Citylabs’ pedigree, they could not claim the same. While they were a successful company with a lot of capital at their disposal - they could not compete with the brand recognition of a FAANG business or market leader like Samsung.

The result was that while they had an excellent digital transformation strategy, they were struggling to find the engineers to actualize it. To make matters worse, they were starting to run in the red.

This was the situation when we started working with Citylabs. They had the vision and capital, they just needed the engineers to make it happen.

We immediately recommended they globalize their operation - as this would help them find the blockchain experts that simply weren’t going to be found in South Korea. But they weren’t so sure. They’d never truly gone global - so could it really help them? And the few times they’d dipped their toes in the globalization pool and worked with Indian outsourcing agencies, the results had been mixed to poor.

But, recognizing the need for a new solution, they decided to give globalization via SecondOffice a try.

 

CREATING AN UNRIVALED BLOCKCHAIN TEAM

The immediate issue was finding the Hyperledger suite blockchain experts that would propel Citylabs to where it needed to be. To solve this, we set about profiling businesses in India that had a presence within the blockchain space and then targeted their former employees for recruitment.

The two businesses that stood out were IBM and JP Morgan. In some ways, JP Morgan was the pioneer of blockchain technology and IBM had established a large blockchain research department in India. We targeted these companies and others, and although it was extremely difficult, we eventually built a team of 11 professionals for Citylabs’ SecondOffice.

Since India has an enormous population of engineers, this allowed SecondOffice (and Citylabs) to circumvent the poaching by FAANG companies that was the norm in South Korea. Likewise, finding extremely niche blockchain engineers was comparatively easy (although still a challenge) due to the sheer increase of talent that India’s workforce offered.

Through SecondOffice we managed the office space, snacks, payroll, taxes, insurance and perks & benefits - leaving Citylabs and their new team to get on with the work that mattered. Additionally, we helped Citylabs adjust to working with an international team and integrating their SecondOffice into their day-to-day operations.

One thing that became obvious early on was that due to Blockchain being a cutting-edge technology, Citylabs was going to have to keep pace with new developments. This required the establishment of a highly competent R&D center that could hyper-focus on research and documentation - so that Citylabs products were in line with the best that the blockchain could offer. To set this up, we recruited a team of 4 consisting of 2 ex-professors and 2 Ph.D. graduates who brought a wealth of blockchain understanding and research capabilities.

Through the Hyperledger suite blockchain team and the R&D team we’d recruited, Citylabs now had all the human capital it needed to skyrocket its digital transformation.

 

THE FRUITS OF SUCCESSFUL DIGITAL TRANSFORMATION

Today, Citylabs is a successful, profitable, digitally transformed business. Continuing to work with us, their SecondOffice team has now grown to over 35 people, broken down into various departments that work together with the South Korean HQ to create new and extraordinary products.

While their success is chiefly due to their intelligent approach to transforming their business and embracing the need for digitalization - their efforts to globalize with SecondOffice helped make this approach a reality. By partnering with us to establish themselves in India, Citylabs gave themselves a chance to find developers in India that simply did not exist in Korea - an advantage the benefits of which cannot be stressed enough.

The best example of this advantage for Citylabs would be that of all the Korean businesses in its weight class… Citylabs is now the only company that no longer worries about finding the engineers they need.

A reality that is impossible in Korea and in most if not all developed countries across the world. But with SecondOffice, it’s possible in India.

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