On May 26, 2018, RUSSOFT, RAEK, RVC organized traditional Saturday IT breakfast at the SPIEF 2018., The event was dedicated to the topic of digital business transformation this year.
During the IT breakfast participants and experts discussed what is digital transformation, how it is implemented at the level of business and the state, what is the role of the IT industry in the digital transformation of the economy in Russia and the world, what are the obstacles to the digital transformation of the economy in Russia and ways to overcome them, what kind of practice exists, and what are the prospects for international cooperation. The participants also answered the question of how much the Russian IT industry and the Russian state are ready to interact with the common goal of broad introduction of digital transformation technologies in our country.
First and foremost, the organizers of the IT breakfast noted the growth of digitalization in the Russian and world markets, and the contribution of digital transformation at the level of business and the state to the economy of the country.
“A successful practice of digital transformation has appeared in many spheres nowadays – digitalization has ceased to be an abstract concept and has become a reality. The Russian IT industry today is one of the active players in the global digital transformation market. Following the results of 2017, RAEC estimates the contribution of the digital economy to 2.42% of Russia’s GDP. The impact of Internet markets on the economy is growing by 10% per year. Today we will discuss the digital transformation – international experience, the best Russian practices, the role of state support for digital transformation – in areas that are tightly integrated into the life of modern society” Sergei Plutarenko, RAEK Director told the participants of the IT breakfast.
“I can say that last year significantly changed the situation in the software sales market of Russian companies abroad. In 2017, we noted a 16% increase in overseas sales to $ 8.5 billion, in 2018 we expect sales for $ 10 billion with growth of 15%. Digital transformation with security systems are one of the main lines of activity of Russian service and IT companies in the world market “- said the president of RUSSOFT Valentin Makarov.
The Director General of RVC, Alexander Povalko noted that the work on digital transformation is carried out in all directions – from the creation of educational programs to the support of IT developers: “We have a clear financing tool – venture funds created by RVC, working with IT solutions. NTI supports the formation of competence centers on the basis of universities and scientific organizations which creates consortias for the development of end-to-end technologies. It will be the unification of organizations and people to overcome the technological barriers of the digital economy. A preliminary scheme of selecting leading technical centers has been established for developing new solutions. It does not have to be state structures, we rely on commercial companies. We will start supporting them next year.”
The first topic of discussion was the issue of digital transformation in large companies. Speakers noted the importance of exchanging experience and cooperation with competent IT industry leaders to implement the necessary changes.
Kirill Menshov, vice president of information technologies at Rostelecom, PJSC said that Rostelecom is currently in the process of becoming an ecosystem carrier in the field of digital transformations. “Rostelecom recently rethought its position on the Market, formed a new strategy which we are a digital partner of society and the state. We are a technological infrastructure provider for companies with industrial experience. Our further developments are strategic alliances, the organization of joint ventures to create common solutions. It will radically change our lives” – he concluded.
“It’s plesant to see how many companies have taken up their own digital transformation. It is interesting to see the differences in approaches between foreign and Russian companies. Russian companies do not have sufficient competencies that require digital transformation, because business processes and basic approaches to operations change in parallel. The combination of these factors gives rise to the requirement of rethinking the work at all levels. That is why it is necessary to turn to the assistance of companies that have a broad foreign experience in digital transformation, including in project management. In addition, at the level of regulators, it is necessary to improve the work with reference documentation and the legal and regulatory framework” – noted Alexander Egorov, General Director of Reksoft.
IBS General Director Svetlana Balanova noted the importance of efficient organization of processes for digital transformation. “The IT business market has changed a lot. Before the system integrators went after the vendor, which was a “window on the market”, but today it is hard to survive in the market for system integrators who do not transform themselves. Non-digital businesses will not remain in the world. It is necessary to have strategic partners in the form of IT companies which main business is the understanding and tracking of all digital trends. Austrossing companies have a huge experience in transferring transformations through industries, and also allow the customer to concentrate as much as possible on their own business” – she said.
Andrey Tikhonov, Head of the Internet Security of Internet of Things, Kaspersky Lab, told about the “success formula” of digital transformation. “Today, security matters in IT are given significant attention around the world, as the security of Internet of things is entering a new stage, becoming the subject of legislative regulation around the world, which in fact equates IoT to a critical infrastructure. The leading requirement is security by design. Practices that used to be the prerogative of the cosmos and the military are coming to the infrastructure of the Internet of Things and cyber-physical systems now. The concept of security has become more complex, involving a wide range of risks after the advent of the Internet of things. At the moment, all countries are looking at technological sovereignty in terms of trust, while international cooperation is expanding in the direction of security of the Industrial Internet and the Internet of Things. The formula for success is a combination of Russian technologies and international standards” – he said.
Experts shared their experience in the development of digital transformation in the global and Russian markets. And also speculated about whether the “Russianness” of IT companies is an advantage when entering global markets.
“Digital transformation for us is the need for an independent transformation in the direction of working with data. The use of data is a key factor in the transformation. We turn to the experience of large companies working with digital technologies around the world. We are actively investing in Russia. We are engaged in the technologies of artificial intelligence, detachment, we develop software and we do it in Nizhny Novgorod. Similar programs can be extended to other regions of Russia. We want to use the data effectively, so it’s critically important for us to transform” – said Shannon Paulyn, vice president and director of new technologies for the global markets for Intel.
The operating director of Microsoft Rus, Pavel Ershov spoke about the main directions of digital transformation. “It was noticed that the digital transformation is so active that in a few years there will be no businesses that would not have passed this process. When we talk about digital transformation, we distinguish four main areas: changing processes, changing ways of interacting with customers, transforming products and how to make customer employees use this process. Unfortunately, our study showed that only 17% of Russian companies are at a sufficient level of digital culture development. In fact, digital culture is the ability to use technology at the maximum. It is necessary to train employees not only IT sector, tell them about digital transformation” – he explained.
“I would like to emphasize the changing role of vendor companies and system integrators, as these concepts are blurred. In the era of digitalization, changes penetrate all departments of companies. We need to support several key areas of digitalization: the development of standards for civproposal based on open data, participation in them and the joint creation of technologies useful for use within these standards” – said Kirill Korniliev, vice president of sales, head of industrial solutions for IBM in Central and Eastern Europe.
“The digital economy is impossible without human interaction with machines. The appearance of a digital personality will not be possible without the means of reliable identification of a person on the basis of biometric data. Increasing efficiency entails new challenges and threats. There are serious biometric developments in the field of security In Russia – this is a significant step on the way to the development of the digital economy” – said Dmitry Dyrmovsky, Director General, member of the Board of Directors of the STC.
“If we hope that we acquire all the necessary digitalization technologies abroad and we can count on their continued support, then we will be subject to a significant risk of sanctions. On the other hand, we can not create all new technologies solely on our own. It would be simply impossible. But in the process of accumulating experience in the creation of digitalization technologies, we had several ideas. The first way is the creation by joint efforts of products based on open source code, the second one – a deep transfer of technologies. By creating this way in a sanctioned manner sustainable products in all technological segments, we can successfully deal with digital transformation” – said Vladimir Rubanov, Managing Director of Rosplatforma.
SPB TV general director Kirill Filippov shared his experience of interaction with the Chinese market: “Our experience with China is quite successful, although they and we are working in conditions of sanctions. A large number of Chinese partners want to enter the Russian market. Cooperation between Russia and China in the field of IT is very promising, extremely useful and effective.”
ABBYY Russia CEO Dmitry Shushkin answered the question of how Artificial Intelligence (AI) and digital transformation are combined. “Not only Russia but the whole world is affected by the digital transformation, because it is a way to do more and more effectively. Artificial intelligence is a tool for achieving progressive goals. We see, for example, that with the help of these technologies banks can robotically issue loans, chat rooms are used everywhere, purchasing operations are automated and much more. There is such a trend as automation of routine business processes by robots due to the fact that people should focus on intellectual tasks. In the digital transformation, the use of such technologies allows companies to achieve competitive advantages. Russian companies need to exchange their experience in the field of digital transformations in order to achieve high results.”
The next topic for discussion was the creation of country alliances of states to develop joint solutions against the backdrop of tightening of sanctions and trade wars, with the aim of achieving linguistic sovereignty by increasing competitiveness. This idea was emphasized by Valentin Makarov, speaking about the agreement on strategic partnership between IT companies LINAGORA (France) and AstroSoft (Russia), concluded within the framework of the SPIEF.
Alexander Zapolsky, co-founder and CEO of LINAGORA, noted that “LINAGORA is developing open source software. We develop a large number of software products, we have a successful history of working with governments and large organizations in different regions of the world. Now there is active competition going on between American and Chinese IT giants. But there is also a third way, related to cooperation in the field of open source software development. France and Russia can together follow this third digital path associated with digital sovereignty. That’s why we signed a document on strategic partnership with the Russian company Astrosoft”.
The founder of AstroSoft Pavel Vasiliev added that “the achievement of technological independence is possible in cooperation, where everyone brings their own strongest qualities – this is how synergy is achieved. The strength of AstroSoft is, above all, mathematics as the basis for a deep understanding of programmable processes. Today, more and more professionals are needed to solve problems with a high level of uncertainty of incoming parameters and manage multi-agent environments (= IoT), so the business itself requires a solid mathematical foundation. That is why Russian mathematicians are more competitive and demanded than ever, and mathematics is a new global trend. Signing of the agreement on strategic partnership with France is a reserve for realization of our far-reaching plans in the field of digital development”.
The participants of the IT breakfast also discussed the topic of mutual intersection of digital transformation and the Internet.
Is the Internet a necessary condition for transformation? This question was answered by David Conrad, Senior Vice President and Chief Technical Officer of ICANN: “As for the Internet and digital transformation, all this is tied to the concept of networks. It is necessary to use the network effect for digital transformation proceed successfully. It is necessary to use the environment in which this transformation takes place. This ecosystem must have certain properties associated with the transformation. This presents great prospects. However, there are problems that need to be addressed: security, political influence on functioning”.
The leading specialist in information and communication technologies, the World Bank’s regional coordinator Carlo Rosotto, brought into focus that digital transformation is the key to competitiveness. Countries need to create policies that can quickly adapt to technological changes, including the digital economy. “Our organization closely follows the development of the digital economy and the processes of digital transformation. The World Bank uses the possibilities of digital transformation, and we understand the risks that may arise in this case. We must work proactively. It is necessary to develop tools and approaches to digitalization that could reduce or mitigate existing risks, all processes need to be improved and accelerated. It is necessary to continue developing the infrastructure for developing technologies” – he said.
Executive Vice President for Interaction with the bodies of state power of VimpelCom, PJSC Mikhail Yakushev noted the need of effective state regulation of the processes of digital transformation. “Digital transformation can not occur in isolation from all processes that take place at the global level. For effective transformation, first of all, knowledge, experience, skills of using complex technical systems are needed. There is a need for learning and self-learning. All this applies to public authorities. Unfortunately, in our country many decisions occur without taking into account the opinion of professionals from the business side and without taking into account the necessary globalization of the developed solutions. What has been said here testifies to the high level of expertise of Russian professionals and Russian business. The state must listen to us”- he concluded.
Director of the Autonomous non-profit organization Coordination Center of the national Internet domain Andrei Vorobyov said that now the necessary condition for digital transformation is the involvement in this process, not only the IT industry, but absolutely all categories of people. “Digital transformation involves the use of information technology a huge number of people from industries that previously were not associated with the Internet. This process requires a radical change in the regulatory process and taking into account the views of an increasing number of stakeholders. In addition, it requires extensive involvement of young people, comprehensive educational programs and international exchange of experience” – he said.
Director of the Institute of Internet Development Sergey Petrov explained the importance of involving state structures in the process of digital transformation: “It is necessary to create a favorable environment for a digital transformation – the legislation, judicial, law enforcement and tax systems should support these changes. Players of the market and representatives of state authorities are still speaking different languages. Our main task is to support an open interindustrial dialogue. The second direction on the way to digital transformation is the willingness of the state administration system to transform. We need to allocate guides, digitization agents – in this direction we are carrying out the project “Digital Region”.
Pavel Gudkov, Deputy Director General of the Innovation Promotion Foundation, spoke about financial instruments for maintaining and developing the process of digital transformation in Russia. “Today there was a lot of talk about digital transformation, but small business and start-ups were not mentioned. We are confident that new ideas, new people and new companies should play a key role in digital transformation. The fund, which I represent, for a quarter of a century is engaged in grant support for start-ups. International cooperation is also an important aspect for our foundation. We have a number of agreements with a number of countries, including France. I would also like to draw your attention to the fact that the more projects in the field of digital transformation, the easier it will be to move in this direction” – he noted.
At the end of the event, the speakers discussed the possible consequences of the digital transformation: massive job cuts, risks of transferring control to artificial intelligence, requirements for changing the training of personnel.
Yandex vice president for corporate relations Marina Amelina noted that “the scale of digital transformation is difficult to assess. Different companies have all the technologies necessary for digital transformation and the entry of these companies to a new level in our country. But the legislation is colossal. Nothing will happen without this – no transformation, no breakthrough. I suggest next year within the framework of IT breakfast to measure the level of real transformation – both digital and legislative”.
Chief Executive Officer and co-founder of BlaBlaCar Nicolas Brusson specified that digital transformation is the main theme of the present time. “It often surprises me how we underestimate the speed of change. In just 10-12 years we managed to create a network of trust, so that people would travel between cities more effectively. We were able to bring tens of millions of people together, taught them to trust each other. Changes in technology lead to accelerated growth”- he shared.
“All that needs to be done both for enterprises and the country to ensure digital transformations is to create comfortable conditions for people who are moving with the times” – said Alexey Katkov, managing partner of Sistema.
MGTS General Director Andrei Ershov explained that “the main thing that needs to be changed in traditional businesses is people’s attitude to digital transformation. If they do not want to switch, use these technologies, we will not succeed. The DNA of innovation within the company is an absolute guarantee of success. However, digital transformations require a radical business restructuring, which does not always suit the owners of companies. In addition, digital transformation is necessary so that we do not lose contact with our customers”.
Anastasios Tzikas, President of the Board of Directors of The Saloniki International Fair Helexpo SA, relied on cooperation between the ICT of Greece and Russia. “ICT is a strategic direction for us, because of the crisis. Now the conditions are improving, and we need to ensure the development of the country. We invested a lot in ICT in Greece. After two years of hard work, we see growth in this area. We create clusters and incubators for young companies. I think we need to look for ways of cooperation between Russian and Greek companies” – he said.
Based on the results of the lunch, experts agreed that the main factors in the development of digital transformation in Russia are:
- attention to the problems of digitalization by the state at the maximum level, establishing a dialogue with government authorities;
- the need of companies work on digital transformation with industry experts;
- enhancement of corporate culture for digital transformation within companies;
- mandatory work with users. Users should be able to consume the services that the company creates;
- emphasis on the fact that the digital economy is global.
You can watch the video at: https://www.forumspb.com/programme/56980/
Source: Roskongress Foundation, http://photo.roscongress.org/
RAEK, RVC and RUSSOFT organize and conduct a traditional Saturday “IT breakfast” at the SPIEF for 7 years. The format is very popular and successful both in the environment of experts and in the media. Over the years, IT-breakfast has discussed all the problems of developing online markets, software markets and IT-segments: from personnel issues for the industry to the specificity of Russian IT companies entering international markets.
Accent of 2018 – successful experience of digital transformation in Russia and in the world: opportunities for international cooperation.