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(English) Russia and India should deepen collaboration in IT sector in post-pandemic world: Dmitry Lukovkin, AI International Sales Director, Zyfra

09 июня 2020

(English)

Dmitry Lukovkin, AI International Sales Director at Zyfra, tells The Economic Times Dipanjan Roy Chaudhury what lessons Russia and India should take from the current crisis, and which digital solutions could help companies recover faster after the pandemic.

How do you assess the prospects for the joint development of solutions in industrial artificial intelligence by Indian and Russian companies?

The joint development of digital solutions between Russian and Indian companies is certainly possible. Right now, we are witnessing a situation where Indian companies know almost nothing about Russian companies, especially high-tech companies. Figures of the international trade between India and Russia speak for themselves – India takes 16th place in Russian exports, and Russia takes 36th place in the exports of India.

Historically, the inception and growth of IT sector in India was closely tied with the activities of technology companies from US and Western Europe. What is more, Indian IT companies operate in the United States and Western Europe and therefore they know these markets. India also has a large domestic market, both B2B and B2C. The Russian and Indian IT industries do not cross paths so often as soon as Russian domestic market was usually the primary focus of the Russian high-tech companies.

IT companies of India and Russia generally meet in third countries where they compete with one another. So, Russian companies, in turn, also know little about Indian companies and perceive them as competitors without carefully considering reasons to work together. Therefore, it is currently quite difficult to talk about any kind of joint projects.

Zyfra is actively operating in India with such companies as Indian Railways, Godrej Group, and Murugappa Group. We are ready to develop solutions together. Moreover, we are already prepared to transfer as many competencies as possible to our Indian partners so that they can deploy our solutions on their own, train the client’s personnel and provide support after the implementation of our solutions.

On the issue of joint projects, I would like to point out the rich history of cooperation between Russia and India in the fields of heavy industry and defense. This cooperation dates to 1950s, with a construction of Bhilai Steel Plant marking a beginning of a long-term cooperation. Joint AI initiatives can develop faster in the areas where Russia and India know each other well.

Who should be the driving force behind high-tech cooperation between our countries – the state or the companies themselves?

I do not really believe in the state as a driving force. Rather, the driving force is the demand created by competition or conditions; the current crisis, for example is such condition. It has taught us, among other things, that it is critical to transfer as much expertise for implementing a solution as possible to one’s partners and clients as well as customizations of the solution if necessary.

I will use the coronavirus vaccine as an example. If there was a joint effort, I’m sure that it would have been developed faster. What seems to be happening now is a tug of war.

In Russia we have a fable called “The Crawfish, the Swan and the Pike”. So, a Crawfish, a Swan and a Pike set out to pull a loaded cart. The Crawfish scrambles backwards, the Swan launches itself skywards, and the Pike pulls toward the sea. It is not for us to say who is guilty here and who is right, but regardless – the cart is still there to this day.

What other lessons have you taken from the current crisis?

The coronavirus pandemic has shown that Russia and India should collaborate more closely in the IT field. If you have a local partner who knows the market, understands its needs, and also has experience in implementing your solutions, you are able to quickly respond to challenges in a crisis situation – that is, to step up with solutions needed here and now, or to customize existing ones, which means getting actively involved quicker.

We have also joined hands with Softline, a leading global Information Technology solutions and services provider focused on emerging markets of Eastern Europe, Americas, and Asia. Together, we will offer to our customers in India solutions to achieve digital transformation.

In my opinion, collaboration is essential in today’s business environment. In Zyfra we have first-hand experience of how fruitful collaboration can be. Being a Finnish-Russian company, we are trying to take the best from cultures and traditions of both countries. Everyone knows that Russians excel at mathematics and computer programing while Finland is one of the most stable countries in the world. Finland is also one of the best in the world in using information and communication technologies (ICT) to boost competitiveness and well-being. Unfortunately, the full potential of bilateral relations in the field of science and technology between Finland and India has not yet been realized.

Are you seeing the emergence of demand for any new digital solutions?

Remote work, which enterprises have been forced to switch to due to the spread of the coronavirus, has led to increased demand for staff positioning solutions.

A lot of clients are concerned about occupational safety. They have begun to pay attention to solutions that were once second or even third priorities for digitalization: those related to staff positioning and supervising what staff are doing from time to time.

Those practices related to machine learning, video analytics, and image recognition, that we used to apply in the technological field for recognizing a certain production process and compliance with it, are now in high demand for monitoring staff productivity – from simply checking whether they are using personal protective equipment to monitoring their production tracking and minimizing contact with people by using certain technologies.

Many enterprises, including oil and gas companies, understand that to quickly start switching back from remote work, they need to implement similar technologies – ensuring minimal contact between people.

Furthermore, we have interviewed our customers, and many of them have reported detecting “superfluous” managers. Several people at the same time said that they had noticed having extra managers and extra managerial staff who had become lost in this remote work, so there was no actual need for them. This is an interesting trend, especially in vertical and hierarchical companies. It seems that a certain layer of managers could disappear once this situation is solved, and the structure will become more horizontal.

Does Zyfra have solutions in the field of industrial safety?

We have developed a comprehensive product to significantly reduce the risk of spread of COVID-19 at industrial and other facilities. The system, based on artificial intelligence and computer vision, allows automatic mask monitoring with the help of video analytics, monitoring safe distances between employees and real-time reports about violations. Additional functions like measuring body temperature and alertingemployees about violations of distancing rules are also available.

As for the oil and gas sector, the recent drop in oil prices has led to overstocking of crude and oil products, as well as disruptions to the shipment of raw materials and products to buyers, which is resulting in tens of millions of dollars in fines and lost profits. The high volatility of the oil market requires the prompt reconstruction of supply chains at both the manufacturers’ end, and on the part of the consumers of oil and oil products. Realizing the acuteness of this problem, we have developed the Production Shipment & Planning solution. This solution allows oil companies and marine terminal operators to promptly optimize production planning and product shipments to maximize profits and reduce losses.

Do you think that COVID-19 will accelerate the digitalization processes in oil and gas companies?

It is too early to assess the impact of the COVID-19 pandemic on the digitalization processes in oil and gas companies. We will not be able to do this objectively for half a year at the earliest.

As for the current situation, the acceleration of digitalization has occurred primarily at the communications level. At the same time, it has become clear that not all oil and gas companies were ready to work in the remote mode from a technical perspective. In this sense, many companies have found that their existing systems and regulations do not allow them to quickly respond to external factors and make it difficult to adapt the business to new conditions – the need for remote access and “working from home” are clear examples of this. Not everyone was able to afford a quick transition to the new rules of business. This has led to the appearance of gaps in the existing operational chains of relations and interaction both within companies and with external participants.

One way or another, all communications are gradually becoming digital. Everyone is now learning to open access to collective means of work but should instead be opening access to actual production data.

Most digitalization programs in the largest oil and gas companies are being implemented at the same level, and there are even new initiatives appearing. It is now understood that the human factor must be kept to a minimum as the most vulnerable link in the face of a pandemic. But new initiatives are being launched very selectively since most companies are sequestrating their budgets by an average of 30%.

For IT companies, the integrity and continuity of the production process and business relationships with partners is a priority. Therefore, we have, for our part, made every effort to ensure that the customer’s workflow was not interrupted even for a second: we’ve provided our partners with the necessary specialized software, and remote training and demonstrations of the software, organized remote communication on a corporate platform, and accelerated the development of an online platform for large-scale production tasks in oil and gas companies.

In which direction will oil and gas companies move now?

All oil and gas producing companies will start to move towards creating virtual or digital Real-time operation centers (RTOCs) where employees can interact with each other and analyze production data in real time. This analysis is critical primarily for engineers and technicians who plan and control production operating schedules and are generally responsible for production efficiency.

In any oil-and-gas producing enterprise, there are shift personnel, who must remain directly at the facility and close to the equipment, and this can only be changed by introducing robotic automation. There is no real need for engineers and technicians to be present at technological facilities. By moving these personnel to remote work, the risks of spreading infection in industrial facilities can be reduced.

RTOCs, where employees from anywhere in the world have access to data, tags, events, and equipment status, can be organized quickly and easily based on industrial platforms. Such solutions are unique in their simple and convenient user interface, pneumatic circuits, dashboards, and reports. RTOCs are essentially the interaction between a group of specialists to manage production, where specialists see different data in the same format, as well as each other’s actions, which creates a complete imitation of teamwork in a single space.

Oil and gas companies have also taken an interest in digital solutions to optimize their operating costs with instant returns. For example, most oil and gas companies and oilfield service companies have switched to remote operation using real-time drilling support solutions that are not tied to a user’s location.

These processes are explained by the fact that quarantine restrictions force oil and gas companies to conduct all work processes outside corporate centers in a distributed and remote form. In these conditions, one simply cannot do without modern digital solutions.

The second factor driving companies to accelerate the adoption of digital technology is the volatility of hydrocarbon prices. This factor requires most focus to be on the technological and economic optimization of production, and the reduction of costs, risks, and non-productive downtime.

How quickly do digitalization solutions in the oil and gas industry pay off?

In our experience, the cost of developing and implementing solutions depends on the functional and technical requirements of the customer, and on the maturity of the company’s IT infrastructure. Regarding the pay-off period of implemented solutions, even in the current economic situation, we can safely talk about 3-6 months, when the benefits of introducing this type of solution begins to surpass the expenses.

Regarding engineering support for directional and horizontal wells drilling, the target indicators from the implementation of these solutions can reach up to 50% less time spent on solving routine tasks and up to 20% less total time for the entire planning process and for actual drilling and well construction. The number of possible technical and technological incidents is reduced. The quality and safety of performing work in the fields increases.

Thriveni Eartmovers has awarded Zyfra the contract to implement its Intelligent Mine solution at Pakri Barwadih Coal Mining Project (PBCMP) in Jharkhand. What is the status of the project?

The project is more than 60% complete. From January to March, a wireless communication system and a system for high-precision positioning of the mining transport complex were deployed at the quarry, and software was installed. As per project parameters, information concerning the equipment will be transferred to the concerned departments. What is more, the data will be seen by the excavator operators and the truck drivers on smart panels in the cabin. After each loading and unloading, drivers will obtain the optimum route according to several criteria.

At the end of March, we switched to the remote implementation of the full software and hardware complex. For us, this is the first remote implementation of a project of this kind. We realized that teamwork was more important than ever and that with the support of the customer, we could do 75% of the remaining work remotely, thus reaching 90% readiness of the entire implementation.

In addition, another important thing we realized during the implementation of this project is that we were partners and not in a customer–client or seller–buyer relations. When Russian engineers had to be urgently sent to Russia because of the coronavirus pandemic, and all exits in India were closed, our Indian colleagues reacted promptly by providing logistical support and filling out the necessary documents. They also kept in touch with us until the Russian team had boarded the departing aircraft. We were deeply moved by this friendly attitude from our Indian friends.

 

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