In his publication for the VECTOR website, Maksym Sohatskyi, the leading developer engineer of the State-Owned IT Enterprise “INFOTECH”, debunks some of the most common myths about the Ukrainian State-owned IT, shares his personal experience in this area and how it differs from Western outsourcing “giants”.
State-owned IT companies are not commonly considered as successful and innovative as commercial ones. The reasons for this phenomenon are not consistently objective. A large number of stubborn stereotypes have formed around State-owned IT companies.
Maksym Sohatskyi has been working at the State-owned IT company “INFOTECH” since September 2019. He has 20 years of experience developing production software in the field of enterprise management (ERP) and experience working with such companies: NYNJA Group, Gaon Capital, “Privat Bank”, Cloudozer, Deutsche Bank, International Land Systems. We asked him to tell us about popular myths surrounding State-owned IT companies and to counter them.
During the time working at the “INFOTECH”, I was able to meet an extraordinary team that collectively has over 500 years of professional experience building complex socio-informational ERP systems and has made the way from alphanumeric displays, DOS and FoxPro to modern technologies. We not merely develop new and interesting products for the Enterprise’s portfolio, but also support a range of open-source by-products.
Although this is the first and only State-owned company where I happened to work (thus I cannot speak for all companies), my personal experience assures me that at least in case of the “INFOTECH” it is possible to try to confirm or counter some of the most common “myths” about working for a State-owned IT company. Namely:
Outdated Technology
This one is the oldest myth; thus, a short digression required at the outset. When State-owned enterprises discussed, usually the technology
mentioned existed at a time when IT penetrated State authority bodies at a minimum.
20-30 years back, both the State and private enterprises used DOS, FoxPro, Delphi. Software products were predominantly developed by their staff, meaning that they were written, as they say, “for themselves”. The system of quality control, when implemented, focused exclusively on the core business activity, while IT units were considered ancillary. Staff turnover in dedicated IT departments always has been and remains very high; that is why when the author of a product quits, its further development and modernization become practically impossible.
Over time, the majority of enterprises and government agencies concluded that maintaining own software development is significantly more expensive and less efficient than to implement solutions developed and maintained by companies that specialize exclusively on software development and its integration.
Nowadays, when ordering a software solution from an IT company, its ability to work exclusively with modern browsers is an essential prerequisite. The necessity to install and regularly update any additional programs on the user’s workplace becomes a deterring factor against the purchase of such a product. Compliance with the modern-day regulations requires the software solution to be developed using modern technologies.
With web technology, there appears to be a gradual migration of outdated approaches to working with data on a web page. For example, at the time when browsers were still very different, jQuery had been used as an abstraction library, though it has long lost its relevance. Also, WebSockets are already being used instead of XHR, and graphics along with analytics, based on d3.js and SVG.
Where C / C++ / Delphi had been used previously, now we use Rust, secure virtual machines (CLR, JVM, BEAM) and languages that give at least some guarantee as to memory and errors at the stage of execution. Even JavaScript already demonstrates a trend to use compilers, exceedingly industrial type systems such as TypeScript from Microsoft and ReasonML from Facebook. Therefore, evolution is inevitable.
Here are a couple of examples of the “INFOTECH” products to understand the relevance of technology used for their development:
Corruption
This one is the most sensitive myth. Corruption, traditionally defined as abuse aimed at the satisfaction of personal interests. A State-owned enterprise ought to be established on such mechanisms that make such a situation impossible. Even in the absence of corruption de jure, a technological corruption can be attributed; this is when several players at the public services market form a collaboration that could harm the global information system of Ukraine or provoke bias in any direction.
For example, such may happen even of “good intention”, although in the absence of experience. With focus only on economic indicators, there is a risk of a so-called technical debt of the IT company that can lead to a protracted nosedive in strategic planning.
Such is the purpose of the Ministry for Digital Transformation of Ukraine, tasked to be mediators and moderate horizontal links between State-owned IT enterprises. Such issues are mainly infrastructural, related to the construction of a national cloud platform for State processing. They arise out of the fact that State-owned enterprises are not able to place information belonging to the State on third-party cloud domains such as Azure, AWS, GCP.
Sensitive places where both the technical corruption can occur along with the “technical debt” can accumulate through the purchase of hardware and software, as well as software development.
Let’s consider each in turn:
“INFOTECH” strategy is to minimize risks associated with commercial contractors; thus, we do our best to try using our production resources throughout the entire software development cycle.
Low Qualification
The myth about substandard qualification is the one know the best. The main stereotypes, in this case, are based on the idea about low salaries and, as a result, unskilled employees. Fortunately, the current State policy is based on a constant search and attraction of highly qualified specialists with experience in the corporate sector.
State-owned IT companies’ vacancies share the same market with commercial IT companies. There is no difference between the former and their commercial “colleagues” in terms of production. Both require high- and low-level specialists alike.
Wages here may be the only indicator: the modern labour market in Ukraine guarantees adequate and fair renumeration to skilled workers. Thus, market relations, to which any IT company is the subjected, preclude attraction of qualified professionals for inadequate monetary remuneration.
Lack of Motivation
Dull work is the most infantile myth. Here are two extremes that can serve as starting points from the employee point of view. First – working in a large company with corporate processes in place, where he learns to develop complex systems and gets acquainted with large industrial complexes regulated by standards and protocols. Such type of work best suits young workers wanting to understand the development of grand systems.
The production process deforms the worker in some way, over time, to the point where he realizes that in a small team and in an informal way one can move much faster and achieve better results. This is how the second point of view appears – mobile working groups and teams, startups, etc.
Workers change these perspectives often throughout their working lives. That is why it is important for a company to integrate informal mobile teams together alongside more bureaucratic production processes regulated by the rules of business.
Such practices often appear like this: a person works for a series of large companies, loses motivation since there are no immediate results of his work in view, thus moving to a risky startup, where he can feel and get that coveted satisfaction. Such a process often repeats in a cycle; the anarchism of a startup gets boring, wanting stability, thus people return to large enterprises. A company that can offer both models would be able to reduce its HR traffic.
As for the satisfaction and personal results monitoring, State-owned companies provide the opportunity to feel it both as part of an informal mobile team and as part of a product along with the complete production bureaucratic documentation. Because of this, you can feel the results of your work immediately: your services are being discussed on the news, you share them with your friends, meanwhile, a final stage of realization of personal professional development takes place.
Bureaucracy
The myth that is the most difficult is the one associated with bureaucracy in the country in general. Management of modern IT enterprises is regulated by the same production standards – ISO-
9001 and CMMI – that are followed by all large IT companies as well as large industrial enterprises.
These regulations are indeed part of a system of bureaucratic standards; however, their main tasks is to manage this complexity, its optimization according to certain KPIs and enterprise performance indicators. The following can also be mentioned here:
When it comes to security, the State sector completely meets the standards of transnational corporations – that is a family of X.509 protocols.
Without these standards, the company risks drowning in the “not invented by us” syndrome, thus spending effort developing new products, standardizing them, and providing additional quality control. Often
products by small companies can truly compete with expensive products by large companies.
Therefore, the management of State-owned IT companies is indeed bureaucratic; however, such bureaucracy is motivated by optimal management.
Age Cap
The youngest myth claims that the average age of employees at the State-owned enterprises is higher than it is in commercial companies. On the one hand, this is true, at least for the leadership. This phenomenon relates to increased risks and responsibilities, along with the political situation.
Nevertheless, the technical staff is composed predominantly of young professionals who respond quickly to production challenges, mostly with prior experience in the corporate sector. Another side of this coin is that working with senior specialists grants younger colleagues the necessary expertise.
In this respect, State-owned companies are more reminiscent of the banking and industrial ERP sectors, where the education and young talent promotion is present within the company. Such initiatives include a mentoring system, professional development and psychological support, etc.
Examples of the Contrary. Effective technologies and companies
Here are some examples of not standard yet efficient technologies that have optimized the work of State-owned enterprises, demonstrating that success can be achieved without expansive licenses and complex products by transnational corporations.
Although the JSC CB “PrivatBank” was originally established as a commercial enterprise, it now serves as an example of a State-owned enterprise that is built on efficient technologies. Since 2005, “PrivatBank” has had its focus on the language from Ericsson – Erlang, with the Erlang flag hanging near the “PrivatBank” main office in Dnipro for a long time.
The Erlang’s use helped reduce production costs and optimized systems for future workloads related to the development and scaling of the bank to the national level. Ever since Facebook purchased WhatsApp, written in the Erlang language, for $19 billion, it became clear that the decision made back in 2005 was the correct one and it proved to be successful.
State-Owned Enterprise “Derzhinformresurs” is the national operator of the document management bus of the Executive bodies. The ISO-11756 standard chosen for developing the system due to its MUMPS global key-storage repository based on the commercial product by the InterSystems Caché.
The MUMPS system is in use by the US healthcare system as part of its national product – Vista, a management system for State-run hospitals. MAMPS also had been used for the development of the original VISA card processing with a speed of 300,000 disk transactions per second on a single instance. The choice of this system enabled the State-owned enterprise to survive workload spikes and continue to escalate production capacity with minimal effort and costs.
State-Owned Enterprise “INFOTECH” is the operator of the Unified Information System (UIS) of the Ministry of the Internal Affairs of Ukraine and the author of a range of ERP products. An open ERP platform based on Erlang / Elixir used for the “MIA: Document Management” product. It has already established itself successfully at the “PrivatBank” as a basis for the “PrivatBank Deposits” product, in operation since 2015. In addition to Erlang / Elixir, “INFOTECH” uses TypeScript, Scala, C++, .NET, Java and other less well-known modern technologies.