Mikhail Fogilev: Electronic biddings - a good method to bring order both to the state, and to purchasing department

: Mikhail, tell, please, our readers about your company? How long you in the market? What main activities for themselves chose?

Mikhail Fogilev:  The FogSoft company (Fogsoft) is engaged in design and development of IT solutions for business. We work more than 6 years and achieved serious success in the Russian IT market. Our purpose, in Fogsoft company – to increase business performance of clients due to automation of their business processes. Help our clients to do more at smaller costs.

The main activities of the company are design and development of software solutions for business management, IT consulting. From software solutions I will note custom development, support systems of innovations and electronic trading system. Also, we actively develop also other directions – the banking sector, insurance, project management systems.

TAdviser:  What your company in the market of electronic biddings is engaged in? How long you here what product is flagman in this area? Tell, please, in more detail about opportunities of this system?

Mikhail Fogilev:  As well as means a question, we are engaged in automation of process of biddings, trade procedures, auctions, tenders and so on. In this market we already for a long time if does not change me memory, since 2006. Our first electronic platform was implemented for public procurements, it was such blossoming of platforms for biddings on 94-FZ.

Our flagship product is the ITender Electronic marketplace. In fact it is the platform for creation of electronic trading systems. Since the creation moment, we constantly improve the platform, we release new "generations". Now it is a powerful system which meets the most modern requirements imposed to electronic platforms. As for state procurements, requirements if to compare them to the initial version of the law, changed very considerably. We propose solutions for different spheres of business. I will not list all opportunities of our system, I will tell only about the main. It is support of all main forms of tendering: auctions, tenders, public offers, quotation requests and so on. Also automatic verification of requirements of business logic, automatic generation of protocols and documents on the set template, the notification and mailing, interfaces for integration with external systems, settings under different business requirements. 

TAdviser:  Who your main customers in the field of automation of electronic biddings? On what sector do you stake – state or commercial? In what industries automation of electronic biddings is most demanded?

Mikhail Fogilev:  Here at once three questions. At first I will answer simple. We stake on both sectors. They are very different, require different approaches and interest from end users as you understand, absolutely different so do not compete among themselves at all. Now let's discuss an issue of demand of electronic biddings. It is necessary to draw accurately a distinction between the state and commercial organizations. To start simple and the known fact. That the organization or the person purchased something it is necessary to have motivation. Some set of factors which push to purchase commission. And so in case of the state organizations this motivation is created by the state. There was the 54th order of the Ministry of Economic Development ordering to use biddings electronically for sale of property of debtors and everything there was a market of ETP for tendering on bankruptcy. Was well-known 94-FZ even earlier and all public authorities began to carry out purchases electronically.

Private business it perfect another story. Nobody can force the owner of business to spend money for electronic platform if in it there is no need. Respectively, if we speak about demand of electronic biddings, then let's mean private business. The circle of our customers is very wide. And geographically and by types of business in which they are engaged. It both arbitration managers and banks, and energy companies and publishing houses, industrial enterprises.

TAdviser: Tell, please, about several interesting, remarkable projects in the field of automation of electronic biddings which were implemented by your company?

Mikhail Fogilev:  A difficult question for me, frankly speaking. Perhaps, those projects where I was directly involved were most of all remembered. From recent, for example, the project with Moscow Heat Distribution Company. Terms were tough, the customer was configured on the best solution at once, there were enough subtleties of business requirements. We like to work with such customers, ourselves exacting and understand that such approach improves also customer organization, and ours. It was pleasant to see result.

TAdviser:  If to speak about a public sector. All of us know that now the question of transfer of state procurements to electronic rails is particularly acute for the state enough. What your opinion in this respect – whether is it really necessary measure what it will give? Your company somehow participates in this process? (diskussionno, as participant of industry associations, another)

Mikhail Fogilev:  Well, let's talk about a public sector. In general, let's begin with the fact that other questions are particularly acute for our state enough. Transfer of purchases to an electronic form is only a method of the solution of these sensitive issues. The situation looks as follows. Our state declared corruption war. One of the purposes in this war – to make so that the state money selected for state procurements was used effectively. As the mechanism of achievement of this purpose biddings electronically were selected. It was supposed that thus they will become more transparent, it will become more difficult to manipulate results of biddings, more participants who will compete among themselves will be attracted. As far as all this worked, here everyone can draw conclusions.

On my belief, the desirable result is not achieved. Yes, now everyone can go to the Internet and find results of any purchase made by the state organization. If the result of biddings seems suspicious, it is possible to protest this result. Alexei Navalny is engaged in it, for example. Case this noble, but by and large ineffective. Though it is necessary to be engaged in it certainly, but it is not enough. For 2010 according to his statements it was cancelled biddings for 268 million rubles. And all the volume of state procurements for this year is estimated at 5 trillion rubles. Compare these two amounts. What I all this want to tell. That the tool what remarkable it would not be cannot solve system problems in the state. It is all the same, as if at the ship in a board a hole, and we solve this problem the fact that we pump out water more effective pump, we provide that all were informed how many water was pumped out in a day.

But, it of course does not mean that we sit, idly. Our company participates in the actions aimed at improvement of the legislation regulating tendering electronically. We reside in contact with our clients, we obtain from them information, we analyze and we generalize it. Then we send our offers to regulating authorities. Also we participate in the round tables devoted to questions of carrying out electronic biddings.

TAdviser:  Let's take business company which had a need to automate process of purchases and to transfer it to an electronic format. How many ready-made solutions exist in the Russian market how in them to orient?

Mikhail Fogilev:  A question interesting first of all for the organizations which decide to get own electronic marketplace. There are several standard scenarios of succession of events. The first, it when the company "spots" what product their colleagues from other companies use. In all industries all about each other know something. Therefore when at some large company, we will tell in the energy sector, there is the electronic marketplace, such information disperses very quickly. Respectively, when in the company there is a need for own platform, the responsible, most often it is the head of procurement, the beret phone and calls the colleague. Finds out everything about the platform, about whether are happy with cooperation with firm by the producer of the platform, what level of maintenance, generally, a standard set of questions of the potential buyer to already experienced user. For us such scenario of succession of events is ideal. We care for the clients therefore they give positive reviews about cooperation with Fogsoft company.

The second scenario is a scenario when the company conducts a market research. In this case it gets or on the website of the company of the producer of marketplaces or on the website of Association of Electronic marketplaces. There information on developers is provided. We there, naturally, too are provided. Here from among these producers the potential buyer also selects. Other scenarios already quite exotic. It some IT company which was not engaged in development of solutions for automation of process of purchases earlier can have own development or the order. But it is valid exotic. Though we had several addresses after similar experience.

My opinion that for the client work with the specialized company the best exit as does not distract the client from own cares and allows to have the modern solution not only at the time of project completion, but also a year later and two.  Own electronic platforms in most cases order the large companies, and they are not inclined to risky experiments.  If to speak about digits, then I can tell that in this market not so there is a lot of serious players. We constantly compete with them, each other we know all. I think, the choice usually comes at most from 5 companies.

TAdviser: What advantages of use of electronic marketplaces to business? What real effects of their implementation can be?

Mikhail Fogilev:  Good question. When we only began to propose our solutions in the field of electronic trading to private companies, naturally went in the standard way. Showed that from implementation of this specific solution this company will get such specific advantages. For example, biddings become more transparent, it is less than opportunity for falsification. The bigger number of the companies can take part in biddings that will allow to increase the competition and, as a result, will allow to buy a required product or service for the minimum money.

It became quickly clear that these advantages not always work with private companies or work not at all levels of the company. The reasons here weight, each specific employee has the responsibility. For example, there is a civil engineering firm. And at all not the main thing to find it the supplier who will deliver, say, cement at the minimum price. Much more important here quality of a delivered goods and degree of reliability of the partner. Respectively, such company does not feel urgent need for increasing the number of bidders, to achieve the price, minimum possible in the market. Even on the contrary! Let's assume, some unknown supplier came on participation in tender, in Moscow and area never performed works, with obscure resources, but with incredibly attractive price and terms of execution of works. Sometimes it is  an additional headache for the head of procurement. With transparency of biddings too everything is not so obvious. Therefore for private business other opportunities given by electronic marketplace have value.

TAdviser: What it is opportunities? 

Mikhail Fogilev: System implementation of electronic biddings "disciplines" all participants of this process in the company. Sometimes, not always of course, but it happens that in the course of purchases the mess reigns in the company. Notifications on carrying out tenders it is published with delay, orders on tendering are antedated and so on. And so emergence of an electronic system "forces" the people involved in this process everything to do in the correct sequence and in the correct time. Well the electronic platform will not allow to publish the notification on carrying out tender if of date of publication before end date of order taking for participation less than 30 days. Or to announce purchase without attachment of the special resolving document if there is no this purchase in GKPZ.

Besides, the quantity of human errors sharply decreases. Usually purchasing departments consist of several people who are filled simply up with work. It is clear, that working under constant pressure it is possible to forget easily something, to make not that and not so. The electronic platform undertakes different checks to the maximum, acts as convenient "reminder" about important events which cannot be missed. Many errors have accurately expressed cash equivalent so minimization of these errors leads to significant economy of means.

One more advantage - reduction of number of routine work and performance improvement of work in sales department. This point is closely connected with previous. I was in some purchasing departments which represented rooms which all space was filled with piles of papers. Height approximately knee-deep, and even above. Still there were tables of employees and "footpaths", free from paper, from a table to a table. Implementation of electronic marketplace allows to work mostly with electronic document revisions. What is still very important, the electronic platform automates creation of numerous protocols, and an opportunity to make a mistake here is excluded. Here, perhaps, the main, notable practically at once, effects of implementation of electronic marketplaces for business. And cost reduction is by itself.

TAdviser: To what aspects at automation of biddings it is necessary to pay attention? What errors need to try to be avoided?

Mikhail Fogilev:  I am afraid to seem banal, but it is necessary to consider everything properly. The electronic marketplace is rather difficult hardware and software system. It should be implemented, after that it should be accompanied. You see, when this process of creation of electronic platform only begins, people who are going to be engaged in it concentrate the attention mostly on clear and specific problems. From whom to purchase the software? Where to install the server? With what Internet service provider to sign the agreement? How not to be beyond the budget? All this very important tasks therefore people concentrate on them, but sometimes does not ask a question at all and what will be when the platform begins to function? Yes, the necessary effect of implementation will be gained, many routine transactions will consign to the past. But, it is necessary to be ready that implementation of electronic marketplace will lead to emergence of new tasks. Well, the staff of sales department does not send to clients the tender documentation any more, does not print protocols of opening. But, if not to be prepared in advance, then on the same most phone numbers, from the same clients calls with questions about the EDS, about "unclear" ActiveX and for some reason the blocked pop-up windows will arrive. So I would recommend to potential owners of marketplaces, operators, to think of that time when the electronic platform begins to work and service real users. The operator often is absolutely not ready to that quantity of calls from bidders. For us it is clear therefore we always advise the clients to pay attention maximum to the organization of a support service and personnel training. It removes very many problems.

TAdviser:  Whether there is an ability to integrate electronic trading systems with the systems of customers how it is implemented? How security issues of electronic biddings within your solutions are resolved?

Mikhail Fogilev:  Very correct question. The maximum effect of implementation of software products is gained when they work in a complex, forming the unified information system. Agree, it is quite strange when bidders are registered on electronic platform, and then all same information, all these partners with all attributes which, I will repeat, is already on electronic marketplace, other employee "drives in" into 1C. Therefore our platforms are initially designed so that it was possible to perform integration with other systems which already work for the customer.

The security issue of electronic biddings is one of the major! Many lines in the orders and laws regulating carrying out electronic biddings are devoted to it. To ensure safety of biddings the whole package of measures is applied. Threats for security not one and not two, they very different inherently. Therefore requirements to a hardware-software complex are developed, these requirements are constantly specified and if it is necessary, then become tougher. For example, initially electronic platforms on a sale of property of bankrupts did not need to meet requirements of FSTEC, now this mandatory requirement. And, of course, the software should be designed taking into account all potential threats. We, in Fogsoft company, carefully analyzed from where threats and what cases confidential information is most vulnerable can proceed. Results of this analysis formed the basis of architecture of our electronic platform. For obvious reasons I will not disclose all details, I will tell only that a cornerstone of architecture of security is use of mechanisms of the Electronic digital signature and enciphering.

TAdviser: May you characterize the Russian market of electronic biddings as mature? What stages of development should it take place in the future? What, in your opinion, a role of the IT companies in this process?

Mikhail Fogilev:  Frankly speaking, I find it difficult to answer a question about "maturity". What to consider criterion of this maturity? Scope of electronic biddings steadily grows, the state transfers to electronic rails one type of biddings behind another. But nevertheless, at all obvious advantages, at all this positive trend, I would not hurry to call the Russian market of electronic biddings mature. First, many processes at the legislative level are not ground yet. Now to all appearances in state procurements serious changes as there are many claims to 94-FZ approach. Constantly the legislation is improved. Processes of formation happen also in the commercial organizations. In it there is nothing bad, on the contrary, all this correctly. But all this indicates that still we did not reach "maturity".

Still there is an important point related to participants of this process, those who directly participate in electronic biddings, more precisely with their overall level of computer literacy. Call this level high language does not turn. So ahead still long way. A role of the IT companies in this process of formation of the market of electronic services important of course, but also I did not begin to revaluate it. Make the qualitative, clear software in use, in every possible way to support and help clients, reveal discrepancies in the legislation and propose measures for their elimination – here than we can and should be engaged.