Interview with Yury Tertyshnik, the head of directorate on work with defense industry enterprises of Galaktika corporation

Yury Tertyshnik

TAdviser: Yury Anatolyevich, what processes, in your opinion, require automation on defense industry enterprises first of all? What are specialized solutions for defense industry enterprises?

Yury Tertyshnik: Automation is required by all processes. Perhaps, except for financial and accounting modules of most of which the enterprises already took care. Many consider that first of all design automation, but it not so is necessary for production. Now already nobody works at drawing tables, an automatic design system and engineering developments stand practically everywhere. Automation began with them. Today it is necessary to think of production management and the technology capacity of the enterprise.

If to speak, about specialized solutions, then I am deeply convinced that any specialized not only IT solutions, but also technology processes, processes of creation of products for a MIC should not be. The economy should develop harmoniously. Because if we speak about metal working, about assembly production, and about other technology processes, then all this should be approximately identical in all industry. It is possible to say that defense industry enterprises work not in market conditions, and according to the state order while all other organizations work in market conditions only. The radical feature and difference also consists in it.

The defense industry enterprises which are turning out end products in Russia are monopolists. I am convinced that features, in terms of technologies, preparation of production, management of it, should not be.

TAdviser: As far as, on your observations, in a MIC did demand for the Russian ERP systems and other IT solutions in connection with sanctions and a general course towards import substitution in Russia increase?

Yury Tertyshnik: Process of change of a management system not fast, but necessary in modern conditions of import substitution. Here the main thing – not to commit follies. What works, at least, at the initial stages is important not to pull down, and to construct the road map which would meet the requirements of resource-saving and efficiency. Import substitution and use of domestic goods have essential plus, it is necessary to remember it, is an economic benefit. Due to growth of currency rate support of the western products very strongly rose in price. We remain at the level.

TAdviser: Whether exist, in your opinion, real dangers of use of the western ERP systems? If yes, that what?

Yury Tertyshnik: There are several stamped horror stories. The first is the termination of technical support which will lead to a stop of work of the enterprise. The second - information leak that is absolutely unacceptable in a MIC. And the third is a destruction of an information system due to existence of the unauthorized, not declared opportunities. All these threats belong to information security.

But it seems to me that the biggest danger of application of the import systems is a braking. Your import system will not collapse, it will function, but once will become an anchor for the enterprise. Why? The probable opponent from NATO - the Russian Federation, it is stated in their doctrine. It is difficult to provide that someone will give to the probable opponent the most modern information systems to restless times. It is an improbable situation. Activity of a MIC is directed to protection of the country, to fast and adequate emergency response which can arise. Thus to rely on software products which are main for NATO countries, essentially incorrectly.

Now it is impossible to predict all effects of the made choice to parts. Everything will depend on extent of threats from the probable opponent, but the fact that it is unreasonable today and will be also unreasonable tomorrow - it is possible to tell unambiguously. Defense industry should be under construction on independent information systems. I do not say that it is not necessary to use world achievements, but the MIC should be independent that we did not use.

It is impossible to forget also about the economic party of a question. By different estimates of rating agencies such the company as Microsoft,SAP,Oracle earn hundreds of billion a year from the present stage, from them 90% are a public sector including defense industry enterprises. It is wrong to feed economy of foreign partners, especially taking into account that we have domestic analogs their solutions.

TAdviser: What now the general situation with ERP on defense industry enterprises?

Yury Tertyshnik: The matter is that different business processes which are inherent in the enterprises of defense industry complex are automated differently. Of course now you will not find any plant at which accountants would consider on accounts, but it belongs only to the accounting systems which are everywhere implemented. And here personnel management, logistics – all these processes are automated no more than for 30-40% as it seems to me. There are no open data on this question, it is possible to be guided only by experience and certain plans. For example, there is a plan of information technology implementation in a MIC which provides automation of the enterprises till 2020 no more than 60%.

As for production processes, the level of use of specialized solutions is nearly on zero. There is practically no complex implementation anywhere, with rare exception, which, for example,Uraltransmash is. At most the enterprises production processes are automated at most for 10%. This indicator is rather critical as modern methodologies of management require radical review: transition from a hierarchical management system to project.

TAdviser: May you give examples of failure from the western systems on defense industry enterprises and transition to your solutions for the last year?

Yury Tertyshnik: No import substitution in terms of information technologies at us in the country really happened in general. Just now begins to there be a speech about filling of empty niches where business processes were not automated on the western software in any way, and that in a small amount. People are afraid of responsibility that large sums for the foreign systems which need to be taken down and substituted domestic now that will lead to additional investments were spent. Hardly anyone will decide on it.

Also large role is played also that very slowly in our country there is a process from decision-making before its implementation. The course towards import substitution was accepted still a year ago but only now was published 188 Federal Laws which becomes effective since January 1, 2016 and gives advantages in the market to domestic developers. In turn it provides creation of the register of suppliers which will only be still created according to just appeared government decree No. 1236. The plan as to us to make the implementation plan of the plan. And this long process from decision-making before its implementation at the level of legal acts strongly slows down process.

TAdviser: Give, please, examples of the largest implementations of your systems on defense industry enterprises?

Yury Tertyshnik: The project on JSC Uraltransmash (Yekaterinburg) – one of the largest last year. There were product introductions "Galaktika ERP",Galaktika AMM is production management. Also it should be noted a number of projects of our partner – "Financial technologies" at engineering enterprises in Siberia. I will bring only some of them:the JSC Altayvagon enterprise (Siberian Business Union holding), In Tula the big complex project within High-precision Complexes holding of Russian Technologies State Corporation started.

TAdviser: How did requirements of customers in a MIC to solutions and projects with approach of a crisis situation in economy change?

Yury Tertyshnik: The Russian market for the last a year and a half underwent significant changes, I would tell what not bad stirred up it. And if in many sectors of economy a certain recession, then the mechanical engineering industry is observed, on the contrary — began to revive. Very important tasks connected with increase in defense capability of the country are set for it. It is the main trend of today and the main state order which will not be subject to market disorders. Focus on mechanical engineering is in many respects connected with a political situation, in its development considerable investments, in particular, into the production area in defense industry complex are planned. And it is necessary to understand that, developing a MIC, the state develops also allied industries as it is necessary to use up to several tens for production of one product, and even hundreds of the enterprises.

TAdviser: How in Galaktika do estimate the draft resolution of the government concerning restriction of purchases of import software?

Yury Tertyshnik: Any initiative of the state directed to protection of interests of domestic manufacturers — always plus. But it it is a small part of what should be made still. Personally it gives us obvious advantages in a priority of consideration of offers. Because often software products of domestic developers are not even considered. Such initiative enters actually strangely enough, exclusive advantage, and rather absolutely normal competitive conditions. Domestic manufacturers can take advantage only when all functional and technical characteristics conform to requirements of the customer.