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We can deploy various types of robots in your company

With Robotic Process Automation (RPA), i.e. software robots, we can streamline and speed up many business processes while reducing the error rate to a minimum. When deploying a specific type of a robot, it is essential to clearly describe the processes in which the robot is to be involved and to define the exact criteria it should follow. The following examples will show you what types of robots are available and what kind of tasks they can handle either with or without human assistance.

A robot: your trusted colleague

One of the simpler software robots is an On-Demand Robot that works only when you need it. Let’s take the example of a contact centre. If a customer calls the contact centre with a request to cancel part of a purchase order, you as the operator then type in the purchase order number; this initiates the robot, which will find the necessary information about the customer and the ordered goods across various systems. The inquiry takes a few seconds. You then verify the information with the customer and modify the purchase order as requested. A more sophisticated solution is an Attended Robot working in tandem with you as the employee. Once the robot is running, you do not wait for the result and you can fully focus on the customer and other activities. The robot works in the background and notifies you when everything is completed. These types of robots function as virtual assistants, helping you when you need them, and are especially suitable for back-office tasks at Finance, HR, IT, and many other departments.

More work for the robot means less for the employee

By combining the two previous types of robots, we get a Hybrid Robot. This is particularly useful if the work takes a little longer to complete. An operator or other employee at the contact centre provides input data to the robot, which will check the original purchase order in all the necessary systems. This part is relatively fast, and the customer can stay on the line and be immediately informed that their request is ready to be processed. As the operator needs to continue using this robot, the collected data is sent to another robot that works independently. After working hours, or at a specifically chosen time, the second robot launches the completion process of things like cancelling all collected orders. When finished, it sends a notification about the job completion.

The robot can also work Partially Unattended, and hence you do not have to wait for the outcome. For example, if a company needs to refund a customer, a Finance Department staff member enters this request into a file (such as an Excel spreadsheet). At a specific time, the robot automatically activates itself, reads the file, checks the data, and then processes all the refunds. Similarly, this type of robot can also be utilised by IT departments for the onboarding of new employees, or for another process where you can enter specific input data and do not need to immediately work with the outcome of the robot’s work; in this case, the IT specialist only enters the necessary data, and the robot orders new devices for the new employee or generates access to the company’s systems. If a new hire is replacing a leaving employee, the robot revokes access for the offboarded employee and then generates access to the same applications and orders the same devices for the newly onboarded employee.

For processes that can be fully automated, you can use a Fully Unattended Robot. These robots need no assistance or activation. Whenever the robot detects a new request, it activates itself and performs the tasks based on predefined criteria. Flawlessly. We know from our own experience that the robot works reliably without any fluctuations according to the way we and our clients jointly set it up. If a new invoice arrives in our accountant’s e-mail, the robot opens, reads, processes, and books the invoice in all the required systems and we only get the final notification. We have used full automation for our clients to do things like process power supply disconnection and reconnection requests, generate various regular reports, and execute GDPR compliance processes where the robot’s task was to delete sensitive customer data.

Even though many business processes can be partially or completely automated, there are activities where the human factor is necessary and irreplaceable. Processes that cannot be completely automated include those where the robot does not have clearly set-up criteria for it to work reliably, where a decision or approval of a physical person is required, and where several departments need to be involved in the process: for example, a handwritten document can be digitised, but the robot cannot guarantee the collection of all the necessary data from it unless it is a structured document. A loan approval may require an assessment of the applicant’s current income and liabilities, but another important factor is the applicant’s behaviour during their interactions with banking staff. In such cases, we deploy Long-Running Robots combining the work of a human with various types of robots. When the robot completes part of its work and the next step requires human involvement, the robot creates a task for the human, clearly specifying the expected outcome, and waits for the task to be completed. It then resumes the automatic task processing.
The robot can therefore help with the processing and preparation of all necessary information, do the necessary checks, and display all the relevant information to the human employee. The task for the employee is to make a single-click decision about the next steps. The robot then completes the job.

Flawlessly and with a quick return on investment

Robots work exactly the way they were set up. If we enter the right criteria together, the robot makes the right decisions. It accesses systems based on how we have set it up. It never gets tired or stops working due to being bored of repetitive processes. It is not a problem even if the system is overloaded or if it crashes. The robot reopens the system and resumes working where it left off because it continuously logs all completed operations. If you decide to invest into partial or full automation, the return on your investment depends on the size of the automated process. It may vary from three months for simpler solutions to one or one and a half years for automating more complex processes. The robots will also save you labour costs and eliminate errors. If you need advice on how to start or extend process automation and digitisation, we will be happy to help you, analyse options, and prepare a strategy for your company. Getting all the necessary licences will not be a problem for you either. We can rent them (RPA as a service) or get them for you. The benefit of renting is that you get all the updates as well as the IT support and service. At Soitron we take care of the robot completely. If you decide to purchase a full licence, we can train your specialists and provide them with all the necessary information.

Two important lessons e-shops have learned from the pandemic

What lessons have established e-commerce brands and brick-and-mortar stores with e-shops learned from the pandemic?

Internet shopping has become an integral part of the lives of most Slovaks in recent years. The popularity of e-shops had been growing steadily for a long time, but the corona crisis has significantly accelerated the adoption of new habits. For some months in the past year, online stores were the only way to get access to certain goods, and some consumers started to prefer using e-shops to eliminate the risks of infection.

As a result, some online stores enjoyed huge increases in sales. For example, the turnover of Alza, one of the largest e-shops in the Czech Republic and Slovakia, rose by 70% year-on-year. According to Eurostat, in the pandemic year of 2020 almost 70% of Slovaks shopped online, with an average of two purchases a month worth 214 euros.

Retailers realize that, to a large degree, consumers will maintain their newly formed habits. This is why many retailers took quick decisions to take actions they had originally planned for several years in the future. According to analysts’ estimates, the e-commerce sector as a whole has moved forward several years in terms of its thinking, strategy and, in some cases, investment in the past year.

So what were the most important lessons that retailers learned from the pandemic?

1. Scalability is the key

The first important takeaway was that only players who can respond to extreme sales fluctuations are able to ride the wave of online shopping growth. This applies to maintaining delivery dates as well as to responding to various customer requests, such as the refunding of payments for cancelled prepaid orders or handling claims.

Unlike in the past, when e-commerce retailers or companies with an online channel were able to predict and adequately prepare for fluctuations in demand, such as before Black Friday, no one could predict the sudden increase in sales during lockdowns. For example, Nay’s online sales grew by up to five times in the first days of the pandemic.

However, immediate revenue growth was not the only factor where scalability turned out to be the key differentiator for e-shops. To a large extent, scalability sets them up for future success or failure, which depends on their ability to build a reputation, acquire new customers, and deepen relationships with existing ones. Disappointed and frustrated customers do not come back.

2. Customer experience at the expense of price

This brings us to the second prerequisite of success in the world of e-commerce underlined and highlighted by the pandemic: customer service and the overall customer experience.

Despite rising unemployment, the economy slowing down, declining consumer confidence, and general economic uncertainty, price sensitivity in purchasing decisions has paradoxically been reduced during the pandemic. As many as three-fifths of consumers claim they have no problem paying a premium for products and services if a brand offers them a better customer experience.

In other words, today consumers are less willing to tolerate poor customer support, order delays, and the prolonged handling of complaints or refunds than any time before. One third of them lose patience with a retailer after their first bad experience, and up to 90% would not buy from a retailer anymore after two to five bad experiences.

If an e-shop fails to scale its processes and provide a first-class customer experience, it loses customers and unnecessarily increases customer support costs. Because, for example, if the customer does not have the information about the status of their order available, or if they cannot get it automatically on request, they will unnecessarily burden the customer helpline. Worst still, they can cancel the order. This also increases the risk that next time they will choose to buy from a competitor.

Automation is a must

The two key lessons for e-commerce from this pandemic – the need for process scalability and an improved customer experience – have a single common denominator. The principal factor in ensuring both prerequisites of success is automation and customer self-service, to the maximum extent possible, which includes Robotic Process Automation (RPA). In other words, this refers to software robots that are able to automate any repetitive rule-based processes.

Just for illustration, imagine the sequence of steps triggered by a simple order cancellation request. Staff must find the order, verify the status, stop the goods dispatch process at the supplier, inform the customer, and possibly also refund the payment. Software robots can handle all these steps almost instantly, regardless of the number of cancellations received by the e-shop per day.

The same applies to other processes, the volume of which may significantly vary depending on demand. This includes checking the availability of goods at suppliers, checking and handling complaints, and internal processes such as report generation and the processing of the attendance records of temporary workers.

Naturally, even robotic software automation is not a panacea. If appropriate processes are not selected and the availability of input data and the natural limitations of robots are not considered, it can fail like any other project. At the same time, however, there is no doubt that to scale traffic and provide exceptional customer service without RPA will be extremely inefficient, if not impossible, for e-shops in the future.

Soitron at the Jasna 2021 World Cup event

We will be there over the weekend of 6 to 7 March 2021. Of course, not as competitors. Even though we are at the top of our field, winter sports are not our discipline. We will not be there as spectators either, because no sports fans are allowed to attend due to pandemic measures.

Together with Cisco, we will participate in this downhill skiing World Cup event as a technology partner. We will take care of the Wi-Fi coverage of outdoor and indoor areas during the championship. Our task is to provide access to the Internet (including a firewall for Internet connectivity) for the entire organizational team, TV commentators and journalists, paramedics, the registration system, and all support systems (other than the timing system) that are necessary for the smooth running of the race. Unfortunately, Wi-Fi will not be made available for the public, as spectators will not be allowed at the World Cup Jasna 2021 event due to current Covid measures.

The Wi-Fi signal will cover all outdoor and indoor areas defined by the event organizer, such as tents, portable cabins, and mix zones. Our network will also be used to transmit images to large screens throughout the site. On top of that, we will also provide a cable LAN connection.

We will carry out this awesome assignment alongside our vendor Cisco. We will use Cisco’s industrial (outdoor) and office (indoor) switches on the slope and beyond. In total, there will be 35 to 40 pieces of hardware, 18 to 20 of which will be access points. These industrial switches are designed for a wide range of temperatures (from -30°C to +70°C), so they can handle the outdoor conditions.

We have huge respect for the championship. And we are very happy to be a part of it. Go Petra!

5 basic questions that need to be answered when choosing an RPA supplier

VIKTÓRIA LUKÁČOVÁ BRACJUNOVÁ

Digitalisation, robotisation, and automation have become an essential part of the strategic thinking of all managers and entrepreneurs who look for ways to improve performance of their companies so that they do not miss the boat and lose their competitiveness.

Anyone who has learned about the benefits of Robotic Process Automation (RPA) and decided to use this technology to increase people’s productivity, reduce costs, speed up processes, and improve efficiency and customer service is inevitably faced with the dilemma of choosing a supplier.

Since process automation solutions can be based on several different technologies, and companies that implement RPA systems may be very different in nature, choosing the right supplier can be quite challenging. Soitron consultants have suggested five questions that need to be answered carefully when choosing an RPA supplier.

What technology will we use?

For robotic process automation, it is necessary to choose a supplier who will implement the RPA solution as well as the software technology the solution will be based on. The most frequently used tools include UiPath, Automation Anywhere, and Blue Prism.

Naturally, each of them has its pros and cons that make it more suitable (or unsuitable) for certain cases. They differ in what options they offer, the ways they are used, their abilities to collaborate with existing systems, and in their licence pricing.

This is why if the decision on which RPA to use is made by a company’s business department, it is advisable to also consult IT specialists or choose a supplier who is a partner of several RPA tool manufacturers, who can thus recommend the most suitable technology to each customer based on practical experience.
What type of supplier should we choose?

Today RPA solutions are offered by a plethora of different companies, such as consulting firms, software houses, and system integrators. There are pros and cons associated with each type of supplier.

Companies who have a core business of consulting may emphasise that they have a good understanding of business processes and have extensive experience in optimising them. On the other hand, technology companies may highlight the technical know-how needed to acquire digital data from various systems and integrate the RPA with the existing IT environment.

The ideal choice seems to be a supplier who has the consulting capacity for optimising business processes as well as strong development and integration skills that allow it to overcome potential technical issues and make automation work well with existing information systems and applications.
How are we going to operate the RPA?

In addition to choosing the tool and the supplier when implementing a robotic process-automation solution, it is necessary to decide how you intend to operate the software and how you want to pay for it. One option is to purchase all the necessary licences and install the RPA in your own IT environment.

However, a good supplier will also allow its customers to use software automation as a service. This option may be especially suitable for companies that do not have strong IT departments, or who lack the time and human resources to dedicate to automation.

Moreover, few companies have processes that require a non-stop robot usage. Some companies need to activate automation for no more than one to two hours a day. In such cases, it may be more cost effective not to purchase licences but rather to pay only for the time that the robot actually works.
How do we maintain and further develop the RPA?

Software process automation solutions are not off-the-shelf software. That is why it is better to avoid suppliers who approach RPA implementation as a one-off project which is completed by signing the acceptance protocols.

The way a supplier suggests handling the implementation says a lot about their approach. There is a world of difference between blindly following a customer’s assignment and striving to understand and analyse in detail what impact the automation will have on other related processes. It is equally important to test the solution in different scenarios before handing it over.

Thorough documentation and testing of the automated process reduces the risk of the solution not working properly. However, a fair supplier will also monitor the process in its live operation for some time and then guarantee support for possible changes in the future.
Will data be handled in compliance with legislation during automation?

Due to strict data protection legislation, companies must be extremely careful when handling data, including data processed by software robots.

That is why when choosing an RPA, one should inquire if the supplier can prove what activities the robot performs during the process and if they can support this with corresponding documentation if necessary. It is also important to make sure that companies involved in the project have developers who are certified according to the standards of the technology being used. Moreover, the supplier should guarantee that no data is permanently stored anywhere where it could be exposed to the risk of misuse or of being leaked without the customer’s knowledge.

Before handing the solution over, a meticulous supplier goes through the source code with the client and transparently explains what the software robot does in individual steps, what data is accessed by the robot, and how it is handled.

Viktória Lukáčová Bracjunová

Business & New Technologies Products Development Manager
viktoria.bracjunova@soitron.com

Three questions to answer before RPA deployment

If you have ever been interested in Robotic Process Automation (RPA), you are most likely familiar with its benefits, which include increasing productivity and efficiency as well as reducing cost.

A software robot never sleeps, which saves a lot of time and speeds up processes; it also relieves people of time-consuming and routine tasks. This results in improved services for customers and the general public as well as higher employee satisfaction.

But even RPA technology cannot do everything. For it to be successfully deployed, some necessary prerequisites must be met. Here are the three basic things to keep in mind before implementing RPA.

1. Nothing is done without input data

RPA needs digital data; it cannot handle paper documents. If you want the software to automate things, such as the processing of written customer complaints or invoices arriving by traditional mail, these documents need to be digitised first.

Ideally, input data should be “structured”, i.e., organised in a predefined way. The data available in companies and organisations (such as emails, audio recordings, videos, and images as well as digitised handwritten forms) is often unstructured, which may seem to be a major obstacle to the effective implementation of RPA.

However, having data in a form inappropriate for robotic processing is not an insurmountable problem. Today, paper documents can be quite reliably “read” using Optical Character Recognition technology. Similarly, there are solutions for transcribing audio recordings from contact centres and turning them into text files.

2. A software robot has no brain

Robotic software can process anything it was programmed to do, but it is not intelligent enough or able to learn on its own. So you cannot expect it to answer questions that have no clear answer to them. Such questions require careful consideration by humans and cannot be outsourced to robots.

For example, when approving loans or any other type of application where an applicant may meet some yet not all criteria, an automatic rejection could possibly mean the loss of business or an unhappy customer. This is why the automated application approval process should be complemented in some cases with the expert opinion of an experienced person which may be partly based on feelings.

However, the need for human judgement and decision making at some stages of the process does not automatically mean that the activity is not suitable for automation. It only means that the automated process conducted by a robot may sometimes require the involvement of a human. This can be done, for example, by a window popping up on the screen of the person in charge whenever the robot is unable or unauthorised to do something on its own.

The lack of RPA intelligence can also be dealt with by incorporating artificial intelligence and machine learning elements. In such a combination, the software robot is able to adapt and learn to make decisions based on the broader context as well as past experience.

3. Necessary integration

For RPA to be effective, it may sometimes be necessary to process large amounts of data in a variety of formats from multiple sources. For example, accounting departments tend to receive invoices from multiple vendors in a variety of formats, with individual data being located in different parts of the document. For the software to be able to read the data, it is necessary to either unify the format or adapt the robot to be able to read the data from any required form and shape.

As with the previous points, the diversity of formats and data sources is not an insurmountable obstacle. It is merely a complication to consider when determining the total labour intensity and making a costs-benefit analysis when deciding which processes are cost effective for automation and where the return on the investment may no longer be adequate.

When considering limitations and possible obstacles to the implementation of RPA, it is worth remembering that a software robot will not fix an essentially faulty or inefficient process. This is the reason why we at Soitron analyse the affected processes and, if necessary, propose how they can be improved using business process management tools before the automation.

To sum it up, when considering RPA, it is essential to find a partner who knows the prerequisites for the successful implementation of automation very well and who provides a wide range of services (including integration and process management) that may be critical for the effective use of RPA.

Location data will make your customer service perfect

MARTIN ČAPRNKA

The way we work will be changed by the quarantine. And so will our offices. More and more people and companies believe this to be the case. However, the question that no one has a definitive answer to is “HOW WILL IT CHANGE?” One of the solutions can be provided by location tracking and the data produced as a result of it. Let’s take a look at what we can use location data for and in which other areas these analytics may be useful.

Do we really need such a large space? Or would a smaller space suffice? And wouldn’t it be better if we removed few desks and built another meeting room instead? Companies started asking these sorts of questions long before we all moved to home office. There are basically two ways to find an answer. One option is to make an intuitive decision and if it doesn’t work to change it again. However, this way you risk wasting precious resources and frustrating your employees.

The second option is to make a change based on data. Today it is possible to detect how many people are present in a company or how much time they spend there based on the number of devices connected to WiFi. However, this data quality can be taken to a whole another level. You can have a look at which departments have the most intense collaboration, which meeting rooms are the busiest, and even whether or not the capacity of the staff kitchen is sufficient. This will help you reduce the cost of renting space, use space more efficiently, and save the time spent on moving between (unnecessarily distant) departments.

FROM BASIC ANALYSIS TO ARTIFICIAL INTELLIGENCE

Of course, analytics can be used in many other areas as well. For example, imagine visitors to a museum, castle, or zoo. Location tracking allows you to see if visitors saw the entire exhibition, if they continued to other parts of the museum or castle, if they visited the gift shop, and where they spent the most time. The goal is not to track individuals, but rather to evaluate what exactly visitors want and then modify the services accordingly. Based on such data, a museum or castle may choose to change the location of an exhibition or better inform visitors about any new ones by placing promotional material in the busiest locations.

Analytics also have a great potential in shopping malls and recreational facilities such as ski resorts, water parks, and amusement parks. There are a large number of people moving around, and without proper analytics it is extremely difficult to tailor the service to their specific needs. Location tracking allows you to evaluate what services they would like to use and where. Combining this with some other data in the evaluation process (e.g., data from the operation’s application) will further broaden your service personalization options.

But, of course, the more data there is, the more complex is the evaluation. That is why in cases where several different data sources are combined, we increasingly use artificial intelligence (AI). AI can effectively evaluate the data, suggest the best way it can be used, and then implement it. For example, it can contact customers for you by SMS, email, or in-app messaging, or it can suggest the sending of information by conventional mail. It can tailor the notifications to the preferences of particular users and send them information so that it is as effective as possible, such as when the user is in the vicinity of a store. In addition, AI can learn on its own and improve the results.

ARE YOU INTERESTED IN LOCATION TRACKING?

DO YOU HAVE ANY QUESTIONS?

Leave us your contact and our network specialists will contact you.

Martin Čaprnka

Network Presales Team Leader

martin.caprnka@soitron.com

Item location tracking saves lives and detects thieves

MARTIN ČAPRNKA

When hearing the term ‘location tracking’, most people picture the GPS on their mobile phones. However, in addition to the movement of people, location tracking can also be used for various goods or devices. Accuracy may vary from a few metres to a few centimetres. This can result in a more efficient operation as well as more saved lives. Let’s look at when and why it is worth knowing where some items are located.

IF IT MOVES (OR DOESN’T), EVERYTHING IS OK

The most common use for goods location tracking is in industry and logistics. In addition to helping reduce downtime and streamline production processes, location tracking can also be used as protection against theft. While goods should move as much as possible (rather than lay unused in stock) for operation optimization, in the case of theft it is the other way around: if we capture the movement of an item that should not be moving, we can detect a thief in real time.

FEWER DEVICES, MORE TREATED PATIENTS

Item location tracking in hospitals can be used to track portable devices such as X-rays and ultrasounds. This allows those departments that do not need their devices non-stop to share them with others. All they need to be able to do this is to see their device’s current location. This will reduce unnecessary costs and allow resources to be used elsewhere. Effective device location tracking will also allow patients to receive treatment faster and may even save lives.

WHICH TECHNOLOGY SHOULD YOU CHOOSE?

A number of different technologies can be used for item location tracking services, be it conventional WiFi, specialized static sensors, Bluetooth, or UWB (Ultra-Wideband). Which one to use depends on your goal: what you want to track, what you want to use it for, and how precisely you need to know the position. For example, if you only need to know a radius of ten metres, WiFi will suffice. However, if you need to know the exact position down to a few centimetres, Ultra-Wideband is the technology of choice. With Ultra-Wideband you are also able to detect an item’s vertical position (such as the shelf in the warehouse where these goods are located).

ARE YOU INTERESTED IN LOCATION TRACKING?

DO YOU HAVE ANY QUESTIONS?

Leave us your contact and our network specialists will contact you.

Martin Čaprnka

Network Presales Team Leader

martin.caprnka@soitron.com

Office layout and cultural experiences: What location tracking can improve.

MARTIN ČAPRNKA

While location tracking during the pandemic has mainly been discussed in connection with quarantine, in business this service has many more potential applications. Let’s forget about navigation in our smartphones for a while and imagine, for example, an exhibition in a museum or an office layout. Even things such as these can be made more effective with the use of conventional WiFi or Bluetooth. So, let’s have a look at where else location tracking can be useful.

A NEW TAKE ON NAVIGATION

Imagine a tour of a museum or a castle courtyard, or a walk through the locations of your favourite movie. Now imagine that you can learn all the interesting details without an audio or live guide. You don’t need anything other than your phone. Your phone will be your virtual guide.

Take a gallery or a museum as an example. Whenever you come to a part of the exhibition where there is something interesting to be learnt, the information about it will appear on your phone. It can be any digital content: text, video, audio, or historical images. Just turn on the Bluetooth feature on your phone. It picks up a signal from a ‘beacon’ located near the installation. This is a small device that continuously sends a signal identifying the specific location you are standing in. When your phone receives the signal, it displays the corresponding content.

MOVEMENT CAN ALSO BE AN INTERESTING DATAPOINT

To be able to better customize your services for your customers, you need to know how, when, and how often they use them. Information such as the number of customers and the time of day they visit your business is commonly available. However, what is not so easy to find out without technology is how exactly they move around. This is a valuable insight that can make services significantly more effective and attractive.

Localization allows you to find out which branches clients visit, how long they wait there, and whether or not they are VIP clients. All it takes is for them to be connected to WiFi and to use your app.

Of course, all this is done in compliance with personal data protection regulations and the data is anonymized. The goal is not to track specific customers but rather to evaluate general trends. Based on this, businesses such as bank branches, ski resorts, shopping centres, and aqua parks can get the number of staff right and strengthen services that are of the greatest interest.

MORE EFFICIENT (AND LESS EXPENSIVE) OFFICES

Location tracking can also be very useful for office layout and employee collaboration optimization. This allows you to find out how much time employees are spending in the office and how they move around. It makes it possible to improve the building layout and redesign business processes so that they are no longer an obstacle to the collaboration of departments or work groups. Of course, the data in this case is also anonymous: the purpose is certainly not to check who spends how much time by the water cooler. The point is for the company to be able to make an informed decision on how much space it actually needs and to save on unnecessary costs and to learn which departments should be closer together due to their intensive collaboration.

ARE YOU INTERESTED IN LOCATION TRACKING?

DO YOU HAVE ANY QUESTIONS?

Leave us your contact and our network specialists will contact you.

Martin Čaprnka

Network Presales Team Leader

martin.caprnka@soitron.com

Four myths about corporate IT: What managers believe versus reality

When we look at managers and the world of IT, we often hear about the disconnect between the two. But let’s start with something they have in common – there are few other functions in a company that would be subject to so much cursing and gossiping by employees than managers and IT staff. However, there are many other reasons that make them ideal allies. Paradoxically, the most important reason is company development and competitiveness.

The following article is intended for managers who do not understand their IT staff – be it their own employees or an external provider taking care of hardware, software, data, and applications. Few companies can afford not to have such people. Indeed, for more and more companies, the interplay between their IT department and top management decides whether they survive and enjoy success or get technologically outperformed by their competitors. Together with consultants from Soitron, we have prepared the following list of myths about corporate IT.

1. IT investments do not return

“Managers often complain that there is a mismatch between IT investments and their actual benefits for the company,” says Zbyszek Lugsch, who helps companies improve their technological base. “This is often because companies are unable to quantify their dependence on IT, and this is despite the fact that their core business often depends on it. Today, for many companies, their IT essentially generates revenue.”

According to Lugsch, this misconception has historical roots. In the past, IT staff were perceived more like maintenance workers. Today – when even technologically conservative industries such as manufacturing, engineering, and heavy industry are undergoing the process of digitalization – the role of IT specialists is different. “Our added value is not that we would take and configure something but rather that we come to a company and think about how it operates and how it could work more efficiently without IT being a barrier.”

IT is no longer a competitive advantage only for software development companies or digital service providers. It can also bring an increasingly strong competitive edge for companies in the traditionally conservative heavy industry sector.

Lugsch believes that cloud solutions have made cost efficiency calculations easier, because in a few clicks a company can easily choose storage, servers, and other services – such as a warehouse database or a mail server. However, Lugsch says that such a simplified calculation of the price of partial services distorts the total long-term costs. In this respect, the cloud can actually turn out to be more expensive.

2. The cloud can fully replace a company’s own servers

“Let’s take the example of a local manufacturing plant that produces parts for car manufacturers using a ‘just in sequence’ system [i.e. parts arrive at the assembly line exactly at the moment they are needed]. They have their information system in a data centre in Germany. Can you imagine what would happen if they lost connectivity to Germany? Their production would stop. In their case, this would mean fines that they have no chance of paying,” Lugsch says in describing a typical example. The company solved the issue by creating a local “mini-data” centre with a copy of their central information system. According to Lugsch, there are many such cases. Most companies need at least one application critical to their business, and they certainly need data availability.

“It is important to realize that what data centres usually guarantee as part of their basic package is 99.9% service availability rather than data availability,” says Lugsch’s colleague Štefan Pater. “Services include things like email. It will run with 99 per cent availability – i.e. the mail server may be down for only a few hours a year. However, the availability of company data, such as the data you have stored in your SharePoint, is something entirely different. Information about data availability is often hidden somewhere deep in the small print. If you manage to find it, you realize how much it would cost you to ensure the 99 per cent availability of your files. As a result, you need to either create some backup scenarios so that you can restore the data, or you need to buy another service. And suddenly the price is in a totally different ballpark.”

3. Owning servers is expensive

In the past, a company’s IT infrastructure consisted of three separate parts – data storage, servers providing computing power, and networking. Such hardware, which was physically located and connected somewhere in the corporate server room, is referred to as the “traditional architecture”. Building such an architecture was certainly an intensive investment, and because of this many companies decided to move their servers and data to the cloud. But then they started to experience problems with application speed, data availability, and often also with price. A hyperconverged infrastructure emerged in the meantime as a new innovation. This is often cheaper, although paradoxically it is an on-premises IT solution. The original three parts of the IT infrastructure remain, but now they are integrated into a single “box” with unified and automated management.

infografika 3 základne piliere firemnej IT infraštruktúry

“Hyperconverged solutions have brought the price of on-premises solutions down so much that when I compare the cost of the same computing power, servers, storage, and so on in the cloud, and I also include management costs, I realize that having my own on-premises infrastructure would be actually less expensive. In other words, a company could benefit from more power than in a cloud for the same money.”

4. By having things in the cloud, I do not need as many IT managers

“No one wants to spend more money on IT than is necessary. And even if they wanted to, there is a lack of skilled people in the market. In large companies, the teams are larger but they are not growing either. The shortage of people with necessary skills impacts them even more,” says Marianna Richtáriková, an IT network expert at Soitron.

“Finding capable IT people is a real problem these days,” says Lugsch. However, claims of “the end of IT departments” in magazine headlines at the peak of the cloud craze have proved to be overoptimistic. “Over time, it proved to be total nonsense. Paradoxically, this was all the more apparent with smaller companies.”

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An IT specialist: Myths about expensive corporate IT are partly the fault of IT experts

Who should be in charge of quantifying how much corporate IT costs and how much it earns? Until recently, this was mainly the responsibility of IT staff. However, according to Soitron’s specialist Zbyszek Lugsch, this has often caused more harm than good. Rather than realistically quantifying actual costs, many companies have chosen to move to the cloud. At first glance, this seems easier and more cost-effective. But is the cloud really always less expensive? And how can one find out what is best for their company?

In this interview, you will learn:

why companies should not consider IT only in terms of costs but also in terms of revenue
what the deployment and testing of new online services and applications in companies looks like
how some IT departments cut corners when discussing IT investments
why some companies pay too much for IT, even when they do not have to
how to enjoy the benefits of the cloud in your company without having to move everything to an external data centre

What are the most common myths you encounter when talking to managers about their corporate IT?

They often complain that there is a mismatch between IT investments and the actual benefits for the company.

Is it a myth?

I personally think that, in many cases, this is the fault of IT managers who have an inability to provide valid arguments and show the added value and importance of the IT environment they create for the company.

But it is unreasonable to expect that IT administrators are able to sell their accomplishments. Their role is to understand those systems.

This is also because companies are unable to quantify their dependence on IT. And this is despite the fact that their core business often depends on it. Nevertheless, IT is often viewed solely as a cost item.

How should it be viewed?

For many companies, their IT is essentially a revenue item. In other words, their core business would never work without IT.

But it was not always like that.

They have already reached this point. However, one of the frequent objections is that the costs associated with running IT are disproportionate to its benefits.

What is the problem? Are we unable to quantify it?

The problem is not so much quantifying the initial investment as how much the operation of individual parts of the infrastructure costs.

Business people want more and more systems. But they have no idea about what it takes to make it all work. This is often because their legacy systems – that were built in the past – are ineffective.

To get a better idea of what you are talking about, could you give us a simple example?

Let’s say that a company has a CRM (Customer Relationship Management) system. It costs a certain amount to buy, deploy, set up, and operate. If the company was more interested in the costs of each aspect, their second step would be: “OK, now let’s achieve some savings.” And so they turn off the CRM system, because they do not use it much, it costs them a lot of money, and they can actually do without it or get something simpler and less expensive. And that is exactly how much money they want to save.

So is the problem that we shouldn’t look at every bit of the system in this way?

Well, we know how to do it, but most companies still do not do it – even with traditional systems. This prevents them from switching to newer systems – such as hyperconverged infrastructure – which could reduce their costs. If they do not even know how much their IT is costing them today, they are unable to calculate any savings. To make matters worse, the traditional IT infrastructure that used to be built in companies is fragmented. It comprises many different systems from various vendors, with each of them having a different management tool. This makes any calculation all the more difficult.

IT staff have transferred the responsibility for cost calculation to cloud providers.

There are probably some cases where it has worked out. How do these companies differ in their philosophy concerning IT?

They look at it as a service. They are no longer viewing it as just a pile of hardware but rather as a price that includes operation, maintenance, upgrades, and so on.

Isn’t this what I get as a company when I switch to the cloud?

Yes, that is exactly what is so sexy about the cloud. I buy a clearly defined capacity and then it is easy for me to calculate that if I were to add a CRM to my system, it would cost me this much. In fact, the cloud has made it much easier for IT staff to provide relevant arguments about the costs. This is much clearer for CFOs, unlike in the past – when IT departments would say that, in addition to CRM systems, they also needed to buy additional data storage, add servers, increase computing power, and so on.

Does this mean that companies’ desire to innovate their IT is still best answered by the cloud?

It depends on what kind of company we are talking about. For many of them, it will be more beneficial to move to a hyperconverged infrastructure combining the benefits of the cloud and having an on-premises system of their own. This means that they do not need to run any critical applications in an external environment.

Let’s look at another example. Let’s say I have an e-shop and, in addition to conventional online sales, I also sell goods using a mobile application.

The first thing I would probably consider is how often the company makes changes to their systems. Many companies struggle with the fact that they often need to upgrade their environment. For instance, e-shops are essentially dependent on it. Something new comes along, and they need to do a quick upgrade and refresh the platform which their online shop runs on. They need to fine-tune the user experience and temporarily limit users or customers while the company upgrades its platform to a newer version. In practice, this is done by having multiple test environments for the existing e-shop for development purposes.

You mentioned a hyperconverged infrastructure. How would you describe what that is to non-IT people?

Hyperconvergence basically means that the three parts of the IT infrastructure in any organization – data storage, server computing power, and networking – are integrated into a single solution. To put it very simply: it is all in one box.

What is the advantage of this?

Extreme flexibility. I no longer need to worry about how each of the three parts works and how to set it up. It is largely automated and controlled with a single management tool rather than three separate tools. The environment in which the software runs seems to be less dependent on the hardware settings. In IT jargon, we can say that it is “virtualized”.

I am not sure if it is apparent how companies can benefit from that.

We have mentioned companies that often make some changes to their software and applications. In the case of a hyperconverged IT infrastructure, software is much less tied to hardware. There is no need to constantly reconfigure, physically reconnect, or buy anything if you want to change something in your software.

In addition, something like this can be implemented extremely quickly. In another words, you can quickly make it work in your existing IT infrastructure and start reaping the full benefits of hyperconvergence.

There are situations when owning your own IT is less expensive than the cloud.

When software is independent of hardware, isn’t it potentially less stable?

Real-life experience does not suggest that. Another benefit is that it reduces the number of hardware manufacturers, because ideally a hyperconverged infrastructure is a single-vendor solution. This is the case with HyperFlex by Cisco.

Isn’t it a disadvantage for companies to narrow down their choices and reduce their ability to use hardware from multiple vendors?

Not necessarily, because it can still be combined with the existing infrastructure and the cloud. The only question is how cost-effective it is. And we are back to square one, because if companies really knew the cost of each part of their IT – including the costs of administration, management, and dealing with availability issues – they would find that buying the cheapest products from various vendors is actually not the most economical solution.

But this does not explain why you should not buy it all inexpensively in the cloud.

The reason for that is that the cloud appears to be cheaper simply because you pay for it in monthly instalments rather than up front in one large investment. Many companies have found that cloud services are not a universal solution. In many cases, the cloud is more expensive than building an on-premises environment.

What makes it more expensive?

From a certain size – and I do not mean the company size, but rather the size of the IT environment that the company needs, and also depending on other factors – the cloud can be much less cost-effective. Hyperconverged solutions bring the price of on-premises solutions down so much that when I compare the cost of the same computing power, servers, storage and so on in the cloud, and I also include management costs, I realize that having my own on-premises infrastructure would be actually less expensive. In other words, for the same money, a company could benefit from more power than in the cloud.

Despite that, many companies have moved to the cloud.

The reason managers find it so appealing is that they do not have to make any initial investment. They buy everything in the cloud. But when they calculate their expenses over five years, they may find that they would have paid much less if they had bought it themselves.

But from a managerial point of view, it makes sense. Companies rarely have a pile of money lying around that they can afford to spend on IT.

This is the wrong way of looking at it, because if it is only a question of money then the initial investment can be financed.

It is rather about changing the attitudes of people – both managers and IT staff. It is important to educate them so that they realize that there are more cost-effective solutions out there than buying everything in the cloud.