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“People and Systems”,
Dorozhe Deneg #9

Victor Diachkov is the General Director of ICL-KME CS, a company where more brains are concentrated on a square meter than anywhere else not only in the Republic but in the whole country. In the endless corridors of an extremely long five-storied building you can see people moving like fish in the World ocean. These are persons who create corporation management systems, provide information security for banks, improve clients’ business processes. There are almost no mere performers among them, only creators.

When at school I always refused to sing in a quire or in any other way participate in cultural activities. Besides, I have rather poor handwriting. No wonder, I wasn’t awarded a gold medal at school. But the school administration couldn’t leave me without a medal at all—then they would have felt uncomfortable giving medals to other school leavers. So I received a silver medal and forty years ago left my village in Tambov Region and came to Kazan with a view of entering Kazan Aviation Institute (KAI). An acquaintance of mine who had finished the same school two years before studied in KAI and spoke about it so enthusiastically that in fact I didn’t need to choose, I was absolutely sure that I would go only to Kazan. And would enter only KAI. As for specialization, Computer Engineer, in fact I chose it by chance.

True romantics worked at Kazan Computer Factory when I came there after graduating from the Institute. At that time the Enterprise manufactured 40 per cent of all the computer equipment in the USSR, there were always waiting lists of those who wanted to buy its products which were also delivered to the Warsaw Pact countries, India, Cuba... Actually I have been working at one and the same place for 35 years, only the names of the enterprise have been changing: Kazan Computer Factory, Kazan Manufacturing Enterprise of Computer Systems (KME CS), ICL-KME CS...

In the Museum of ICL-KME CS, one can see a model of a computer manufactured by Kazan Computer Factory which was used for launching the first manned spaceship in the world. It would have been impossible to calculate the motion trajectory of Gagarin’s spaceship without our computer. It weighted a ton and a half, like all computers all over the world at that time, and couldn’t be squeezed through any doorway of the factory. In order to carry it out we had to break one of the building’s walls... On seeing this model, Naoyuki Akikusa, the Chairman of the Board of Directors of Fujitsu Group, part of which our Company is at present, said: “What a similar way we have walked...”

And, in spite of all, for many years the opinion that Mathematics was a serious science for respected people and Cybernetics was a false science, was rather popular. Probably, it was that prejudice that prevented the USSR from becoming the leader in the technology sphere...

Our industry has spent almost five years trying to penetrate into the brain of the black American box. The decision to begin developments based on IBM standards was taken in the USSR in the seventies. As nobody gave them to us as a present, our task was to study them out and then to start supporting and developing them. Being students and undertaking internship in Erevan, we already studied IBM computers using American self-teaching manuals. It took us several years all in all to understand the standard, it was as hard as to understand a foreign language without anyone’s help. We could not get advice from anyone and had no opportunity to watch for updates. In five years we could say that we knew the IBM 360 standard in and out but at that time the IBM 370 standard already appeared, and we had to start the race again...

My first attempt to found a joint venture with Americans failed because there were only two international telephone numbers in Kazan in 1990. By that time the ‘perestroika’ had already crippled the Factory (then named KME CS). An idea came to our heads: we decided to found a joint venture company on the basis of the Factory, that was a then very popular way of making the Western technologies available for us. As I knew English, I became responsible for that field of activities. My friends from Moscow sneered at me. It seemed funny to them that a man actually from the plough-tail—just a machine-shop manager—was planning to create an international business! “You’d better learn more at first,” was their advice. Well, OK. Of course, there was nothing like MBA in Russia at that time so I began attending directors training courses at the Academy for Foreign Trade and then was taken into the first group of top managers who studied in the Business School at Duke University. After on-the-job training in NCR, an international company, I offered them to organize a joint venture manufacturing computers. We agreed that the Vice President of the Company would visit Kazan in order to sign the contract. We failed to implement the project due to a very simple reason: in those days the level of communications in Kazan was so low that it was impossible to agree all the dates, flights, time of visits over the phone: NCR just could not get us on the phone...

In 1991 we set up the first IT joint venture in Russia—ICL-KME CS. ICL, the powerful British corporation lobbied by Mrs. Margaret Thatcher, had recently gone private and pursued a mission to become a global company. RT President Mintimer Shaimiev signed an agreement on ICL technology transfer to KME CS in London in 1991. It is still valid and during his recent visit to our enterprise President has acknowledged that he supports our strive for further progress and development.

We moved into the Communist Party premises—there were only 11 employees in ICL-KME CS at the start-up stage (I should note that today we employ over one thousand people) and we were allocated one room within the local Communist Party committee’s premises. It was the time when the collapse of Communist Party had just begun...

Following the State Planning Committee (Gosplan) schedule, the factory kept manufacturing its range of products but sales were poor and the warehouses were filled to capacity... What happened next is a real sad story: it was hard to see that ailing economy. And during that time we had to adopt the advanced technologies within the framework of a new joint venture.

Some windows in our premises are equipped with read-out protection facilities. It didn’t come cheap though, but we always follow the basic rule—‘Customer First’, and we have to take care of customer privacy and confidentiality, especially for such customers as the RF Defense Ministry or Gazprom. When dealing with such institutions and companies we have to comply with the specific standards. Generally speaking, customer data security is a must.

The question burning in my mind—the projects that failed. Everything seems to be OK—the company’s growth anticipates the market’s needs, our sales volume exceeds billion RUB, ICL-KME CS representative offices and service centres operate across the whole Russia; the list of our customers includes federal ministries and departments, large Russian and foreign companies, banks and enterprises. At the same time many projects remain unimplemented!

Let me give you only one example. There is a well-known problem: hardware becomes obsolete quicker than the software. But today software has become more hardware-specific, that is why hardware upgrade consequently requires software upgrade. There is a number of industry sectors where a vast volume of software tools has been accumulated, for example, missile launching. Within the framework of the “Year 2000 Problem” tackling we proposed a project that enables hardware upgrade leaving the software intact. We won the bidding in Moscow; but a month later we were informed that a government official responsible for project supervision and monitoring had been fired. In one more month we learned that the bidding results had been canceled. As a result, our country allocated lots of money to develop a new software and somebody might have made a pretty penny on it ...

Being an IT Advisor to President Shaimiev, I have never asked him to provide any financial support for our enterprise. I have sought his support on strategic issues only. For example, we have been trying over a period of years to convince Fujitsu to build its new manufacturing facilities in Tatarstan instead of Malaysia or China. There were different projects approved by Mr. Yeltsin, Mr. Chernomyrdin and others. Now the land has been allocated in Kazan suburbs to build computer assembly facilities with capacity of one million PCs per year.

Electronic equipment production in Russia is on the downgrade. During the post-Soviet period the whole Russian industry, all plants, R&D institutions that had been working at management system design and development were disintegrated and then completely destroyed. To recover the industry today, even if given an unlimited funding, it would be very hard to find experts who could work out a correct technical strategy and define the milestones compatible with public and state interests. I discussed this issue with Leonid Reiman, the former RF Minister of Communications and Information Technologies. But the Minister expressed no interest in it. However the US officials have another point of view: they consider management more powerful weapon than the nuclear one, because this weapon is twofold: it can be used both in peace and war.