No. 3, 2004

Interview with Georgy Gens,
President of the LANIT holding company


The Laboratory for New Information Technologies (LANIT) is a diversified holding company with a far-flung regional network of affiliates, branches and technical centers and an established clientele, which includes the biggest Russian and CIS companies.

Q: LANIT is 15 years old this year. How would you evaluate the company's performance over this period?

A: The idea of creating the company was directly connected with my own experience and professional interests. As a university graduate I worked at the All-Union Research Institute for Control Automation in the Nonindustrial Sphere (VNIINS), which developed what was originally called Automated Management Systems (AMS) and is now referred to as "integrated control systems." We designed quite interesting systems for various sectors of the economy, mainly in the nonindustrial sphere: healthcare, construction, the Ministry of Foreign Affairs and the Academy of Medical Sciences. Then the Pronto (Programming and Scientific and Technical Services) cooperative appeared, followed by LANIT (Laboratory for New Information Technologies). We started virtually from scratch, since Pronto continued operating independently. Today, LANIT employs 1,500 people, has several subsidiaries and operates in a wide variety of fields.

It is, I believe, to our merit that, over these 15 years, we have not changed our bearings and stayed in the IT business. Also important is the fact that we have trained our managers ourselves and people who have Тgrown upУ in and are still working for LANIT make up the backbone of the company.

From the outset, we have tried to make our customers understand that a computer system is not an end in itself, but merely a tool for achieving corporate goals. We can always explain to them how to make the most of their money in any given situation. Our cooperation is most fruitful when we supply an operating system rather than just a batch of equipment. We create systems that resolve our customers' problems, and by joint efforts we are able to set up a team, since a system is not just software and hardware - it is, above all, human resources. It is very important to train people, to make them the vital component in the control system.

I believe our company has contributed to the development of the Russian IT industry by being the first to promote many new products. What is more, we have always promoted not only mass-produced products, but also quite sophisticated high-tech solutions requiring advanced skills.

I think the partners we work with have also learned a lot from us. Many major computer firms began as our dealers. LANIT cooperates with hundreds of regional companies that grew up alongside us.

Q: What are LANIT's core lines of business?

A: Our company engages in systems and network integration, diverse distribution operations, unique systems development, and our own software solutions replication. In addition, we actively provide management consulting, not only in the IT sphere, but also in related ones, such as strategic management, the management of finances, production, logistics and supply chains. A separate line of business is training, again, not only in computer handling, but also in financial and economic disciplines. There is a separate strategy for each line of business, though their synergetic effect is also of major significance.

Q: Are there any specific features of LANIT operating in different regions of Russia?

A: The company's head office and several core units are located in Moscow. Today, the company's regional branches include eight affiliates operating in Almaty, Barnaul, Vladivostok, Kiev, Nizhny Novgorod, Petropavlovsk-Kamchatsky, St. Petersburg, and Khabarovsk. We are reviewing the possibility of setting up a subsidiary in Eastern Siberia. In addition, LANIT has over thirty authorized service centers scattered from Kaliningrad to Petropavlovsk-Kamchatsky. Certified training of IT experts is provided at 15 training centers run by regional partners of the LANIT Network Academy.

We attach tremendous importance to work in the regions. Our broad network of affiliates and partners throughout Russia allows us to unify the quality of our services. A project we undertake in Vladivostok is no way different from a project implemented in Moscow. A multitude of unique experts work for LANIT's affiliates and partner companies. Proximity to the project site, ensured by the ramified network of partner companies, allows us to come to the help of the customer as soon as any problem arises.

Q: What are your best partners in the Russian fuel and energy complex?

A: Our customers are the most diverse organizations, from territorially distributed structures belonging to the Top100 biggest Russian companies, which can spend at least $1.5 mln. a year on information technology, to small companies on the so-called middle market. Take, for example, our ERP systems: Microsoft Axapta for medium-size and big companies, Microsoft Navision for small and medium ones. The same applies to the banking sector: we work with the Bank of Russia, with big banking groups and with relatively small regional banks. What is important is our approach to the customer. We not only resolve narrow specialized tasks, but also participate in the development of a company, growing alongside our customer and building our cooperation on a long-term basis, solving increasingly complicated tasks with each passing year.

One of the most important and, at the same time, most complex of our markets is the fuel and energy complex (FEC). On the one hand, oil, gas and energy companies have considerable financial resources at their disposal and, as a rule, a precise understanding of the tasks to be automated. On the other hand, these are very big, geographically scattered companies with a multitude of affiliates. Professional work with them requires experience and extremely high-skilled IT specialists.

Here are just a few of the traditional problems faced by oil and gas companies: the information infrastructure is often quite diverse, including from the functionality point of view. Different software complexes have no common interfaces. There is no integrated electronic system for geological and production information gathering and document control. Virtually nowhere are there any modern systems for supporting management decision-making. We are oriented in our work not only on sectoral specifics, but also on the specifics of individual business tasks. In accordance with the tasks set, we create, on the basis of a universal product, an individual solution for each specific FEC company. Let me give you a few examples.

In JSC Tyumen oil company, we have completed the first stage in introducing the Hyperion Enterprise system. With its help, the company is resolving the task of accounting consolidation on the basis of actual and planned information in accordance with the Russian accounting standards. Accounting consolidation is performed not only in accordance with the official organizational structure of the company, but also by type of activity.

In December 2001, we introduced a project management system in JSC YUKOS. Within the framework of the project, a unified methodology was created for the complication and financial analysis of business plans in accordance with international accounting standards, which permitted automation of the procedure for drawing up the project schedule and budget, as well as creation of a unified information space for the company's regional branches.

Another sphere in which LANIT operates is paperwork automation. The first project for introducing the LanDocs system for record-keeping and archiving of electronic documents in the oil and gas industry was completed in September 2002. Our customer was one of the biggest refineries in Russia - JSC LUKOIL-Nizhegorodnefteorgsintez. The system provides for paperwork streamlining, executive discipline tightening, documentation processing cost reduction, information provision lag shortening, etc.

In the summer of 2001, a project was successfully completed for launching the Hyperion Pillar budgeting system in Vatoil JV which subsequently joined JSC LUKOIL-Perm and was transformed into its affiliate. Somewhat later, the Hyperion Pillar system was set up in LUKOIL Overseas Holding Ltd., and in the fall of 2003 - in LUKOIL-Perm. There is an advertising slogan: "We are recommended to friends," and, as you can see, this principle works in our business, too.

So we have already achieved visible results in launching different automatic management systems at various FEC companies.

Q: How do you see the development of information technology in Russia in general and in its fuel and energy complex in particular?

A: Overall, the level of informatization in Russia is still low and will obviously rise. The IT infrastructure of big Russian corporations has largely already been built up, but the bigger it gets, the more it costs to run. Like roads - difficult to build but even more difficult to maintain. So corporate investment in the IT infrastructure will only go up. Moreover, demand will grow for management systems, in particular, management consulting.

Recently, Bill Gates, the Chairman of Microsoft Corporation, noted in an interview that the number of people involved in information technology in the United States is about 76 mln., meaning those actually engaged in setting up IT systems. In other words, the efficient management of any business is based, today, on a foundation of information technology, so active investment in IT will continue.

As for FEC companies, I believe they have, in recent years, gone through two waves of automation. The first, 1994-1997 period saw the introduction of local automated systems, of individual modules, often by one's own efforts and virtually without using outside integrator companies. The second period going on since 1998, has witnessed a diametrically different approach: companies have started setting up expensive, high-quality corporate management software complexes. We are now on the threshold of a third wave of automation that will bring about complete integration of all the automated systems that have been introduced in oil and gas companies. At this stage, it will be simply essential to involve professional outside integrator companies. We are ready for the third wave of automation of the oil and gas companies. LANIT has already elaborated a methodology and design solutions for setting up corporate information systems in the companies of the oil and gas industry.

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Oil of Russia, No. 3, 2004
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