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It is impossible to manage new equipment with old methods – director of IT-Enterprise

It is impossible to manage new equipment with old methods – director of IT-Enterprise

Oleg Scherbatenko, director of IT-Enterprise, is speaking on the digital transformation of business, the complexities of introducing new solutions, sabotage and what motivates people to work.

– Please, tell us about the stages of digital transformation in Ukrainian business. After all, you are not new to the market and could observe how business has changed in the country.

– I have been leading the company for more than 30 years, and, of course, the whole history of automation in Ukraine has passed through us.

We worked only with large enterprises. They are leaders, pioneers who always want to use something new that will allow their business to function effectively. This gives us the opportunity to introduce advanced technologies and change their business.

European countries have always been the driver of technology development. At some point, the European community, realizing that it could not compete with the Chinese market, initiated Industry 4.0, relying not on equipment and technologies, but on a control system. The transition from computer systems to digital transformation implies a change in the very approaches to business management.

– How many years will the Ukrainian industry need to catch up with the leaders?

– Without a systematic desire of the state, Ukraine will not be able to cope with this. As long as the staff is not growing, there are no investments in engineering centers, there is no support for innovation. Even if a digitalization policy is adopted, a plan of real actions is needed.

It is necessary to clearly understand that in order for investors to invest a lot of money in enterprises, preferences are already needed at least for importing new equipment and introducing new technologies. If this is not done, only a few will survive.

If we do not begin to systematically become the soil for these new productions to grow, nothing will happen.

– If the state is not ready to help, perhaps companies will do it?

– We are the conductor of this position. We need to get rid of the inferiority complex, see what our colleagues are doing, and try to implement it.

We made the first case of transformation into Industry 4.0 with the Kharkov FED enterprise, the second – with Interpipe. And if FED is an example of how a company with 300 employees can make changes and become a company with 1,000 employees in 3-4 years, constantly increase turnover, work around the clock and export high-tech products for aircraft manufacturing to China, then the project at Interpipe allowed us to carry out such changes in the entire integrated operating chain: from collecting scrap metal to smelting steel, manufacturing products and selling to world markets. As a result, both companies reduced costs by 30% and downtime by 25%. In addition, we launched a predictive maintenance system, when the system did not signal a problem that had already happened, but helped avoid it.

– What is the basis of this predictive service? Artificial intelligence technology or machine learning?

– For the past five years, we have invested a great deal in the development of machine learning, the Internet of things, and mathematical modeling systems. All this underlies predictive maintenance. Previously, all equipment maintenance systems were based on systems of preventive maintenance plans (PMP).

Six years ago we analyzed how global companies worked and found that only 20% of all equipment could be serviced using the PMP method. Then, we studied other technologies that were used in the world, combined several methods and were the first to launch them in Ukraine.

– When you introduced machine learning and all other systems into your software products, which companies were you targeting?

– We analyze the achievements of world leaders; we see technologies at GITEX, CeBIT, Hannover Messe world conferences. We look at what achievements are, where we are lagging behind, and where we are ahead.

However, Ukraine has a different mentality. The Protestant work ethic works on the European market for making a decision: do it well and you will be rewarded, so there is no need to explain what needs to be done and what is not. We do it like Zhvanetsky said: until you explain why we need it, we will not do anything. We have to overcome it.

– What are the companies most often asking for help in the transformation?

Basically, the need for IT reflects the state of one market or another, because they think about IT either during a crisis or when everything is good and you want to live even better. Most of our customers are exporting companies that are faced with competition in world markets. They understand that they will not be able to resist only at the expense of new equipment and cheap labor. You can not manage the new equipment with old personnel and techniques. Therefore, they invest in these changes.

Many companies understand that if you are drowning, then most likely you don’t think about automation. If you understand that you have a chance, it means you need it.

– Can you estimate the volume of the market and what is your share on it?

– There are IDC studies on the volume of licenses sold, but they do not reflect the state of the market. For large enterprises, we are leaders in the direction of automation. However, we try not to rely on research, but on a visible result.

– If we talk about a possible growth vector in a product sense, how do you see the development of your company?

– We are changing too. Earlier we focused only on production. Now we have been working with service companies for more than 15 years. It happened that when large service companies or companies from the banking sector came to us, we said: "No, we are not working with you". However, then we moved from basic industries – engineering, metallurgy, chemistry – to other levels.

We created a solution to cover the entire market. Our system became a platform for digital transformations at enterprises of very different scales and industries. At the next stage, we released cloud solutions. We created a fully integrated solution for large businesses, cloud solutions for small and medium-sized businesses. We are trying to change all this multitude of enterprises within a single system.

– What is the distribution of orders in your portfolio? What is the percentage of large companies and solutions for them, what is the one for small, medium-sized businesses, and cloud solutions?

– Now about 60% is orders of big business. If we talk about licensed installed products and cloud solutions, we are striving for global trends with a distribution of 50 to 50. We still have this ratio of about 80 to 20.

– Why? Is there some kind of prejudice against the cloud?

– Everything is evolutionary. Changes in the worldview are taking place not only in Ukraine. Movement to cloud technologies is inevitable, now special attention is paid to cybersecurity. The main fears are related to the fact that, moving to the cloud or giving preference to service technologies, business loses controllability of data access.

We are developing many areas of cybersecurity. During the attack of Petya, our products resisted thanks to the integrated digital signature technology when updating the product. Therefore, the global trend of strengthening cyber defense is also reflected in the demand for integrated systems. Everything is solvable.

– What are the vectors of technology development in Ukraine?

– The biggest problem in Ukraine is to find a customer who really wants to introduce all new technologies. Exporters are important. And there everything is limited by the charisma of the company's executives.

– Will the introduction of these technologies lead to the extinction of any professions?

– If you remember, at the beginning of the 19th century, the Luddites smashed looms in England because they considered them a threat to themselves; they thought that they would be left without work tomorrow. If we analyze the impact of industrial revolutions on the labor market, there is always a fall, but there is also an increase in the need for productive forces. Now there is a lack of specialists in many industries. In the sphere of production, the number of people decreases, more and more processes become automated, and more and more decisions are made by the computer, not by people. In the sphere of service and in the sphere of new technologies, the need only increases.

However, not everyone understands this, so when introducing our projects we often encounter sabotage. Everyone aspires to a state of rest, and if you pull them out of the comfort zone, they are afraid of changes. Therefore, they sabotage. You cannot fight with this, except to continue to do what is needed.

– What is the measure of the success of your solution for you?

– The fact that we are changing the company's activities. This is a great motivational drive for all our specialists, when they understand that thanks to them, there are transformations in companies, the work of thousands of people is changing. So we come to the company – the state is on the one level. We leave – and the manager does not just read the prepared report and say: "Wow, how great it would be if I did it!", but a large number of processes and roles really change. People begin to work quite differently.

It's hard. You work there, struggle with sabotage, change all this. However, when you got the result, when you climbed to the top, then you are...

– The king of the hill?

– Yes. You say: we did it, we won.

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