Interview with the CEO of Business Logic Victor Weinstein

Victor Weinstein: Paper in EDMS will disappear forever. All documents will initially appear in electronic form so all contacts in the company, between them and also with the state will be conducted in electronic form

TAdviser: Victor, kind of you characterized a present status of the Russian market of EDMS?

Victor Weinstein: The Business Logic company professionally works at the market of EDMS practically from the moment of its origin in Russia. At first the Russian market strongly differed from western, but the difference gradually disappears. It becomes similar to the world market in terms of requirements to products though still quite serious differences still remain. For example, in the West there is no "clerical" component of EDMS which is so strongly developed in Russia. When I worked with one of the companies practicing the western management to me with laughter told that any foreigner at the level of the top management, coming to Russia, first of all found out what is the memo. There the head sends e-mails directly so sluzhebok, passings on route, approvals, nothing of that kind is required.

Now there is an alternation of generations of the implemented systems: the former systems are complemented with new features which in them were not earlier, and the general direction of development – functionality of ECM (corporate content management). Estimating a present condition of the Russian market of EDMS, one may say, that it continues to grow, before saturation it is still far. At least, results of our sales testify to it.

TAdviser: What functionality of EDMS, in your opinion, is the farthest from saturation now?

Victor Weinstein: I would select several such directions. First of all it is the areas of corporate activity requiring application of the specialized systems for work with unstructured information i.e. that activity where it is impossible to be limited to simple automation of office-work (namely for this purpose still and used EDMS). It is the financial block, electronic archives of information of a different type, technology works on which course difficult documents are created (design or construction documentation, documents which appear during an operating or marketing activity). We already developed some such systems, the appearance of others forms now. Many customers do not understand up to the end yet as it is better to automate the available information, but well represent the purposes which are aimed to be reached.

TAdviser: How do you estimate perspectives of your company?

Victor Weinstein: We consider that in the next three-four years we, at least, will surely grow. It is promoted by three circumstances: 1) emergence in customers of new technology processes and need of their automation what they did not think earlier of; 2) import substitution and the new opportunity for customers connected with it to increase efficiency of the financial investments; 3) the continuing alternation of generations of electronic document management systems caused by desire of customers to implement a number of new features.

Form base for creation of our application solutions as the closed industrial platforms, and products with an open program code (Open Source). The added value put in our EDMS is completely domestic product, we enter to it the business logic. Other software solutions proposed by us provide a technology basis of work of EDMS. The choice of these elements is defined by the customer's maturity, necessary loading and technology features of the built solution. And we for a minute do not stop R&D, we create new functionality. We are going to open for ourselves the new markets, relying on business needs.

Basis of our promotion – a conversation with business in its language with the subsequent transfer to a technology substrate of tasks for achievement of the objects set by it. So perspectives, in my opinion, quite good.

Two years in a row, in 2013 and 2014, we grew for 30% (in rubles) whereas dynamics of all Russian market of software for content management, according to IDC, was lower. In view of the burst crisis, we planned rather modest growth at the beginning of 2015, and IDC predicts for 2015 significant recession of the Russian market of software for content management at all (more than for 40% in dollar expression and about 10% in rubles), but now it is obvious that our plans should be increased. And also sales of software licenses where the first violin is played by IBM, Microsoft, Documentum, and implementation business in which these international companies do not participate grow.

TAdviser: What state initiatives had a significant impact on the market of EDMS?

Victor Weinstein: The main influence from the state, in my opinion, is expressed in a position of the Ministry of Telecom and Mass Communications of the Russian Federation on development of criteria for determination of domestic software. We participate in these discussions too. At first case went in the constructive direction, but fight was now started: some lobby an open source code, others suggest to be limited only to that requirement that the main profit on sale of the program remained in the country. It is an important issue which will have significant effect on the market as since January 1, 2016 the law will oblige the state customers to prove the choice by software for benefit of foreign if at specially created register of domestic software there are Russian analogs. Such state support will have beneficial influence on activity of Business Logic.

TAdviser: And how the import substitution subject will influence the market?

Victor Weinstein: Let's not speak about a political component of this question, we will consider only economy. For development of our solutions we also use contractors from the countries of the former USSR. The developers from Belarus or Ukraine working in our segment of the market got used to tie the salary to a dollar equivalent. Sharp change in the exchange rate of ruble led to the fact that the cost of work of our colleagues was strongly raised. On the other hand, the western solutions for the Russian ruble economy became very expensive. Therefore the Russian customers for the objective reasons begin to pass to most localized products. Despite the increased cost value of development we try not to raise food price. But it is necessary grow, and we selected for this purpose other way – further accumulation of functionality. Besides, we adhere to policy of the maximum loyalty in customer relations. If he wants to receive the source code, then such opportunity we will give. Transfer of the code is executed according to a certain procedure to be insured from bad faith concerning further use of our code, but the customer can exercise the right to have the source code in full.

TAdviser: Whether the subject of Open Source, in particular for EDMS received new sounding?

Victor Weinstein: In my opinion, there is no basic difference between proprietary products and open code systems. The code really open only when at the disposal of the customer are available a repository in open access, development tools and the contact with community of developers is come. All this together. Otherwise there is no sense in the open code. That use of open software was effective, first of all existence of the community created around it with which the customer can actively interact is necessary. If the customer receives the source code and begins to make to it changes privately, then the system support and maintenance under the threat is given: the inexperienced owner of the code can cause damage which nobody will prevent. But there is also other party supplementing community of developers – rather big community of users. Otherwise the Open Source solution will not receive financial feed for development. There is also general principle: availability of the source code is a guarantee of tranquility of the customer for a case of force majeur circumstances. For this reason we actively advance the Alfresco system which community of developers adheres to this paradigm.

As for interest in Open Source, Business Logic conducted a special research for a segment of ECM from which it follows that interest in this subject grows recently.

TAdviser: What new features of EDMS are at you in development now?

Victor Weinstein: Lately we actively deal with issues of legally significant document flow, including for building of the channel of exchange of documents with state agencies. Such solutions require the organization of specialized flows of documents (financial document flow, exchange of technology information, selection of the documents necessary for arbitration procedures). Often we should not just set EDMS at the customer, and to replace a former system new. On domestic (in particular, on Open Source) it is more and more cases of replacement of the western proprietary EDMS: to the organizations began not only expensively to service them, they also constrain development as treat the systems of the previous generation. Recently we pay special attention to development of the interface: customers appreciate when functions work "in one click", the design differs in convenience and is adapted to mobile devices.

TAdviser: What technology trends in general define development of EDMS today?

Victor Weinstein: There is a lot of them: cloud computing, mobility in EDMS, implementation of syntax and semantic analysis in document flow and others.

As for cloud computing, public clouds, in my opinion, will occupy a worthy niche for EDMS in small and medium business – a business model very suitable. For the large organizations the only type of a public cloud which demand it is possible not to doubt, - a cloud of state services. For large business important that the accumulated information was most protected. But to implement information security in full within a public cloud it is impracticable, only within a private cloud. We are going to adapt our platform for cloud infrastructure, moreover, we already have first solutions: for example, we set EDMS for medical institutions in one of regions of the country. This system works in the form of a private cloud which has a specific owner - the organization supervising all medical premises connected to a system. Interest among small and medium business in creation cloud EDMS is very big today. And in this segment of the market the group of strong players was already created, for example, interesting solutions are proposed by SKB Kontur company. We are guided by creation of solutions for large business, and in the next two-three years this orientation will not change. The reason is that business models of cloud solutions for SMB and large business absolutely different.

Customers perceive use of mobile devices in EDMS already as the obligatory element of a system which is not requiring special development and adaptation today. We develop function of mobility in the solutions on two directions: mobility friendly that means identical convenience of work in a system both on desktops, and via mobile gadgets. Generally it comes down to transition to adaptive design in applications. The second direction is connected with a possibility of deep customization of mobile solutions: we attract partners who integrate our solutions on all widespread mobile platforms taking into account requirements of the specific customer.

Document flow at the enterprises is connected with processing as structured and the unstructured information. But if for work with the structured information there is already an exhaustive list of technologies, then for implementation of high-quality extraction of data from the unstructured information which is stored in documents still not all that customers want to receive is made. Now their interest is attracted by the technologies connected with extraction of a semantic component of documents and also intellectual search. We study how it is possible to apply technology of semantic and morphological analysis AbbyyCompreno in real document flow, we prepare the pilot project.

What else new it is possible to wait from EDMS for? For example, scanning of documents camera of the tablet or mobile phone, automatic recognition of the document. It is possible to expect implementation of voice actuation, but this counter has limited application and is suitable, perhaps, only for top managers in the company. So far we do not consider technology of voice input by candidates for implementation in our systems. Type the invoice by voice too difficult, it is simpler to make so that all documents arrived in electronic form at once.

Main technology trend: paper in EDMS will disappear forever. All documents will initially appear in electronic form so all contacts in the company, between them and also with the state will be conducted in electronic form.

TAdviser: The electronic signature is for this purpose necessary. How does implementation of this technology go?

Victor Weinstein: The EDS technology is very demanded among customers, but still is not legalized completely at the legislative level for all types of documentary exchange. For example, we had to come up against situations when the regional tax inspection permitted customers to apply the electronic signature of documents, but in addition specified that during conducting tax audits only the documents provided in paper form with authentic signatures are considered as suitable.

TAdviser: What else difficulties arise at implementation of EDMS?

Victor Weinstein: Provide that the customer gives to the programmer the picture made in the park and sets a task: "Define in what place it is made". The programmer answers: "Not a question! The database of parks and a geolocation is necessary". The solution is ready in 5 minutes! And now the same task, but in the picture in the park is photographed an unknown bird. It is necessary to define its breed. The programmer says: "Well. On the solution of this task five years and a team of 20 people will be required".

At implementation of EDMS there is something similar: the customer not always realizes complexity of a task which he asks to solve. Also other delusions meet. For example, that the reference platform of EDMS is a ready-made solution which is enough to be set at the customer to construct EDMS. But the customer not always realizes that the platform – only a basis, middleware. For implementation on its basis of full-fledged EDMS year of extra works can be required. It is surprising to some customers. The real labor input is realized at once only by mature customers.

TAdviser: Whether it is possible to count payback of EDMS?

Victor Weinstein: In our practice there were already several cases when the partners who are engaged in implementation of EDMS counted its cost efficiency. According to their data, customers really managed to reach positive effect. But to calculate these indicators for classical document flow rather difficult. Nevertheless our solution rather transparent in terms of economy. The customer can estimate payback of EDMS in advance, comparing how many people are engaged at workplaces what costs exist what money is spent for.

TAdviser: How do you use the Internet and social networks for promotion of the solutions?

Victor Weinstein: On the Internet – the official site of the company and the corporate blog (http://ecmblog.ru) around which we create community for informal communication with the market. We collect "signals" and on their basis we increase "responsiveness". Regularly we conduct surveys of clients. Generally, it is an effective feedback channel with the market and personnel of the company.

As for social networks, their role in promotion of EDMS is small. Social networks are generally inhabited by youth, it is possible when they rise at the head of the companies, these tools will be demanded. But not now. Should tell that the western vendors already actively apply new social technologies as a part of workflow systems. For example, the private social network IBM Connection appeared. It is not business process yet, but the IBM Verse e-mail client focused on information transmission format through social networks is already released. However, the IBM Connection tool is offered long ago, is actively advertized, but in Russia is not heard about its implementation yet.

TAdviser: Tell about the largest customers and projects of Business Logic in 2013-2015.

Victor Weinstein: In 2014 the company executed 77 projects on creation of the different ECM systems. Among them there are largest state and commercial organizations of the country: Rosneft, JSC Transneft, FTS, FPS of Russia, FMS of Russia, Tele 2 Russia and others.

The most significant projects:

• Creation of electronic storages of financial documentation for subsidiaries of JSC Transneft
• Creation of ECM subsystems for the AIS "Tax-3" of FTS
• Creation of a system of scanning and recognition of documents based on the solution ABBYY FlexiCapture in 30 branches of Rosgosstrakh
• Replacement of the EDMS Landocs constructed on the Microsoft platform by the solution "Logic of EDMS" on JBoss Open Source platform in JSC Corporation Tactical Missile Armament
• Replacement of EDMS on the Documentum platform on the solution "Logic of EDMS" on Alfresco and PostgreSQL Open Source platform in FMS of Russia
• Creation of a system of stream input, storage and management of client documents for banking operations using the solutions ABBYY FlexiCapture and IBM FileNet in Rosselkhozbank
• System implementation of Logician of EDMS on the IBM Notes/Domino platform in RN-Bureniye company

TAdviser: What structure of income of the company on services, own and to partner licenses?

Victor Weinstein: Turnover for 2014 financial year (April, 2014 — April, 2015) made 1 billion rubles.

Structure of turnover is as follows:

• Services of consulting in the field of ECM – 57%
• Sale of licenses of vendors (IBM, Abbyy) – 25%
• Sale of own licenses – 18%