Martin Procházka, the co-founder of OKsystem a.s., also appeared among selected personalities in the October issue of Computerworld magazine " Czech ICT Stars". In an interview, he described how the idea of founding a software company arose in the 1990s, what visions lead him in his business, and how he views the topic of succession in the company.
The interview was published in a printed version of the magazine.
Read the whole interview with Martin Procházka here or in english version below.
OKsystem is this year celebrating 30 years in existence. What caused you to set up such a company?
I studied and worked in Czechoslovakia, where people complained about conditions. Then came November 1989 and suddenly many things changed. We could travel, do business, the embargo on computers from the West was ended. Whoever stood up on his or her own two feet all of a sudden had no excuses. We wanted to prove that we could do it. We didn’t have money, but we had a will to learn something new. We started to work “on our own” in November 1990 without knowing what we were starting. The first goal was to earn enough money to continue the business. In 1991, we needed revenues of CSK 600,000. We achieved three times that and grew at a plus-200% pace for the next 4 years.
There are not many Czech companies like this in the ICT field. Tell us what is your recipe for success?
I’m a long-distance runner – I ran a couple of marathons, half-marathons and 10-kilometer races. If you want to run a marathon, you need to train, but decisive is a strong will, endurance, and an ability to overcome difficulties. And I have taken the same approach to my business. Other businesspeople found a company – today we call it startup – achieve fast growth and sell their shares in an inflated bubble. After the rocket start at the beginning of 1990s, we wanted to develop and stabilize OKsystem. We cared about the good reputation of the company and of our products. We could feel this ourselves without any lessons on branding.
What else contributed to the fact that OKsystem has been successful already for 30 years?
Important was that we didn’t make big mistakes. I led OKsystem for a quarter century, initially as managing director of a limited liability company, later as CEO of a joint-stock company, and I made decisions about many things. There was always a discussion among leadership before making decisions in important matters, and I also asked other key employees. After we expressed our opinions on the subject at hand, I decided. A business corporation is not a parliament; you cannot vote about everything. Democracy has its limits in business. The CEO must decide and take full responsibility for the decisions. Another condition of success – in my opinion – is not to fear risks. We grew up in the field of scientific–technical calculations. In 1990, we switched to bulk data processing and relational databases. We won a contract for a countrywide information system for the newly created labor offices. We launched payroll and personnel systems. We founded Novell and Microsoft training centers. Although we had no experience in construction, we bought a vacant lot in
Pankrác and built a large administrative building. We mastered new technologies on the run – chip cards, multilayer architecture, automatic testing, mobile applications. Each such step required a timely decision to take on risk. We are successful also because various attacks from the media don’t make us angry anymore, and we can cope with the fact that our successful projects became subjects of political games.
You face various media attacks? Can you elaborate on that?
From time to time newspapers write about information systems of the Ministry of Labor and Social Affairs and present purposefully distorted information. OKsystem has been a long-term supplier of complex systems for employment, state social support, help in material poverty, social services, and social and legal protection of children. With the help of these systems, labor offices pay out each year non-insurance social benefits, unemployment, and retraining allowances in amounts totaling about CZK 80 billion. Through more than 25 years it has paid out a well over a trillion crowns, and all of that by amounts of a few hundred crowns in billions of transactions. Our information systems are modern, secure, and work without outages. Each year, we supply new versions containing legislative updates. We have passed checks by the Office of Personal Data Protection. Although we have always lived up to our commitments and never paid penalties, our information systems are described as obsolete and overpriced. Considering the complexity of application systems for labor offices, the price of several hundred million a year is appropriate. The opposition parties criticize the coalition government for the state of information systems at the Ministry of Labor and Social Affairs and ask for a contract for new information systems. There were two such attempts in the past 10 years, at the time when Jaromír Drábek was the Minister of Labor and Social Affairs and recently when Michaela Marksová was Minister. In both cases, the state wasted billions of crowns without coming near to any new and functional solution. We believe that behind the media attacks there is a hidden interest of our competitors to acquire important projects at the Ministry of Labor and Social Affairs instead of us.
Are you active only in OKsystem?
About 4 years ago, I moved a little bit into the background at OKsystem. As chairman of the Board of Directors, I concentrate on strategic matters, long-term investments, and relationships with partners. Apart from this, I am a managing director of two other limited liability companies, OKBC and VinoDoc. OKBC is the owner of the land and administrative building whereas OKsystem develops software and is the biggest tenant in the building. VinoDoc imports wines from Italy, Spain, Germany, Austria and France and sells them together with Moravian wines through online stores.
What has software development to do with selling wine?
A couple of years ago, OKsystem invested into VinoDoc, which needed to strengthen its capital base. We were drawn by a professional interest in electronic merchandising and developed our own e-commerce platform for VinoDoc. At present, we operate in the Czech Republic and Slovakia a blog and the online wine ship VinoDoc offering selected Italian wines. The turnover of VinoDoc is currently growing at tens of percentage points from year to year. At the beginning of the year, we launched another project called HNvino.cz in partnership with the publishing house Economia.
What do you value most from OKsystem’s results?
I value most my colleagues – great experts who together make up a reliable and stable working team. Even though there is a shortage of programmers on the market, we have succeeded in retaining experienced specialists and in attracting and training new ones. I believe this is due to the company culture, interesting work, financial remuneration, and a pleasant working environment. If we continue to join demanding work with friendly working relationships, I‘m not worried about the future of OKsystem.
Hasn’t the time already come time to engage abroad?
Yes, we want to work more abroad. We make great products, such as the human resources system OKbase, and the Czech basin is already too small for us. A product to be sold globally is the BabelApp system for secure corporate communication. It enables sending encrypted text messages and documents and ensures encrypted voice communication using VoIP. It differs from its competitors mainly by using a unique mechanism based on a secure, blockchain-type database to verify encryption keys. Many users abroad have installed also the IFF mobile application developed for the International Floorball Federation. There are also chances to employ abroad our CheckBot web application that monitors robots in industrial production.
So how will OKsystem look in the future, say in 2030?
I expect that in 10 years we will operate our program systems in the cloud and we will offer them to our customers as a service. The application will be intuitive, secure, multi-lingual, using methods of artificial intelligence, and applicable globally. An important part of the turnover will be revenues from abroad. But most importantly, I believe that OKsystem will remain a place where employees feel well, work hard, have respect for one another, educate themselves, and feel proud of the results from their work.
Martin Procházka – cofounder of the company, Zuzana Hofová – Chief Financial Officer, Eva Vodenková –Chief Personnel and Operations Officer, Vítězslav Ciml – CEO of the company.
A great difficulty for family businesses is the question of succession, integrating subsequent generations into the leadership.
Many family businesses got shipwrecked on the rocks of succession. OKsystem became a family business quite recently. For nearly 30 years, it was a standard business corporation owned by four partners. In the past 4 years, my long-time colleagues and co-owners decided to sell their shares. I appreciate that we stayed friends. I am the majority owner now and my two daughters have become members of the top management, which means that we meet the definition of a family business. The Chief Executive Officer is Vítězslav Ciml, who came to the company 10 years ago. He progressively earned respect and worked his way to the very top of the organizational structure. In purchasing back shares he became a minority owner, so he is motivated to lead OKsystem to further growth and success. With my daughters and Víťa we agree on how to direct the company forward. I don’t want to jinx anything, but I think that in terms of generational change OKsystem deserves a grade of excellent.