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Digital Transformation of Business: International Experience and Russian Practice
26 May 2018
08:30—09:45
KEY CONCLUSIONS
Russian businesses are successfully navigating the initial stages of digital transformation

Last year saw a major change in the overseas software sales market. We increased exports by 15%, which is great. We expect about the same amount of growth this year — Valentin Makarov, President, Russoft Association.

The internet is not growing as fast as the IT sector. We are recording annual growth of approximately 10%, but at the same time, the digital economy already accounts for 5% of GDP – around RUB 5 trillion. In our opinion, the 5% growth rate will remain for the next five years, i.e. following a fairly stable development scenario — Sergei Plugotarenko, Director, Russian Association for Electronic Communications (RAEC).

Digitalization is becoming a key factor determining competitiveness

Digital transformation is the key to nations’ competitiveness: cities, companies, regions and countries determine their global competitiveness through their adoption of digital technologies. It is a sector that is growing faster than the rest of the economy – the digital sector has a higher growth rate — Carlo Rossotto, Leading Specialist for Information and Communications Technologies, Regional Coordinator, The World Bank Group.

We have transformed into a services company, which must become a strategic partner for leaders of the Russian economy specifically with regards the digital transformation process. That means that in actual fact, there will no longer be any non-digital businesses in the world. Any business unable to undergo digital transformation within a short space of time will cease to exist — Svetlana Balanova, General Director, IBS.

It comes down to how you use data. How do you use the data that you generate yourself, or how do you use customer data? <...> You are either going to become some version of a digital business, or you will not be around in 5–10 years — Shannon Poulin, Vice President, Director for Implementing New Technologies in Global Markets, Intel Corporation .

Digitalization is radically changing business processes

Digital transformation means having the ability to do the same thing, only quicker and more efficiently, while spending less and earning faster. That is why artificial intelligence is a tool for achieving this aim — Dmitry Shushkin, Chief Executive Officer, ABBYY Russia.

When we speak about digital transformation, we highlight four main areas of change: changes to processes; changes to ways in which we interact with customers; transforming the product, which should better respond to the current technological challenges; and – the most fundamental aspect – identifying the steps needed for your employees and customers’ employees to take advantage of this process — Pavel Ershov, Chief Operating Officer, Microsoft Rus LLC.

I’m a bit surprised by how we sometimes miscalculate the pace of change. <...> It is always interesting to see how big transformations, such as with mobile phones, or maybe with the autonomous car one day, can drive change much faster than we think — Nicolas Brusson, Chief Executive Officer, Co-founder, BlaBlaCar.

Digitalization requires a heightened focus on security

It is absolutely appropriate to be focusing on the problem of security. Across the globe, a huge amount of attention is directed towards it. <...> In Russia we have seen the adoption of Federal Law 187, which covers the security of critical IT infrastructure. This is laying a major foundation for similar work — Andrey Tikhonov, Head of Safety of the Internet of Things (IoT), Kaspersky Lab.

ISSUES
Attempts to monopolize the process

Western companies are much more effective at using a range of tools which to this day are considered in Russia to be either not quite right or somewhat inconvenient. <...> In Russia, companies are attempting to amass all integration processes for themselves and play first violin in the orchestra. At the same time, companies frequently do not have the requisite expertise to undergo changes of such magnitude, which digital transformation requires — Aleksandr Egorov, General Director, Reksoft.

Regulatory control has not kept up

At the federal level, work on regulatory and reference documentation, as well as with information, is merely limping along. Projects are being launched which are not supported by a regulatory and legislative foundation. As a result, significant sums may be invested ineffectively — Aleksandr Egorov, General Director, Reksoft.

Across various companies in Russia we have all the technologies to make a breakthrough and put the country on a path of leadership in the process of digital transformation. However, the legislation is massively lagging behind — Marina Amelina, Vice President for Corporate Affairs, Yandex.

SOLUTIONS
The creation of a digitalization ecosystem

We need to build a positive environment, because all the surrounding elements – legislation, taxation, judicial bodies, and law enforcement – must fully support and enable digital transformation — Sergey Petrov, Director, Institute for Internet Development.

We see our role within the new strategy as a digital partner of society and the state. <...> We are a technological provider – a technological, infrastructural partner for those with industrial experience and seeking to resolve industry-related issues. As an example, we are developing a national biometric platform. <...> This will completely change our lives. We will be able to move fully over to remote ID — Kirill Menshov, Vice President for Information Technology, Rostelekom.

As part of the National Technology Initiative, we are a centre for developing competencies via higher education institutions and scientific organizations, whose task is to build consortiums for the development of multi-application technologies — Alexander Povalko, Chairman of the Management Board of RVC.

Developing effective security systems

The digital economy is impossible without effective interaction between man and machine. They understand us, speak to us, communicate with us, and recognise our faces and voices. The creation of digital ID, of a digital twin, will be impossible without a reliable means of identification – passwords are no longer considered to be sufficient — Dmitry Dyrmovsky, General Director, Member of the Board of Directors, Speech Technology Centre.

Staff training

In order to achieve digital transformation that is effective and fit for purpose, we primarily require the knowledge, experience, professionalism, and skills to both operate complex technical systems, and utilize them. And with digital transformation comes the need for training — Michael Yakushev, Executive Vice President for Government Relations, VimpelCom.

Fresh new ideas, new people and new companies should all play a key role in digital transformation — Pavel Gudkov, Deputy General Director, Foundation for Assistance to Small Innovative Enterprises.

A change of mentality

We can state with certainty that unless we change people, then nothing will change. Currently, instead of supporting people who are willing to change everything and be active pioneers to the greatest possible extent, we are pressurizing them or creating unhelpful conditions for them — Alexey Katkov, Managing Partner, Sistema.

The main thing we need to change is people’s attitudes towards digital transformation. No matter what technologies we try to introduce, in the end it is people who use them — Andrey Ershov, General Director, Moscow City Telephone Network (MGTS).

In order to have a successful digital transformation, it is likely that you’ll need to be able to take advantage of the network effect and take advantage of the environment in which digital transformation needs to occur — David Conrad, Senior Vice-President, Chief Technology Officer, Internet Corporation of Assigned Names and Numbers (ICANN).

Building international cooperation

As a country, we cannot create all the requisite technologies ourselves. It would require a colossal amount of resources. And even if we had all these resources, it would be pointless, as we’d just be doing something akin to inventing a bunch of bicycles. We all know that innovation and isolation are completely incompatible with each other — Vladimir Rubanov, Managing Director, Rosplatforma.

Russia and China are collaborating very successfully on software and digitalization. In particular, quite a large number of Chinese companies broadcast to the world on our platform — Kirill Filippov, General Director, SPB TV.

The competition today between the American giants and Chinese giant internet players is very tough. But we think there is a third way other than the Chinese and American approach. This third digital way goes through open-source and collaboration. We share, between France, Europe and Russia, the same interest to develop this common approach — Alexandre Zapolsky, Co-founder, Chief Executive Director, LINAGORA.

We have to find ways for Russian companies and Greek companies to collaborate. An idea for that is to have a Russian delegation next year at the ICT exhibition for startups, which we are planning — Anastasios Tzikas, President of the Board of Directors, Thessaloniki International Fair Helexpo SA.

The material was prepared by the Russian news agency TASS