Martin Procházka co-founded OKsystem shortly after the revolution. A few years ago, when his associates opted to sell their shares, he chose to redeem their stocks and integrate his two daughters into the company’s management structure.
How much has the IT landscape changed since the inception of his project? Why is digitalisation progressing so slowly in public administration? What are OKsystem ’s strategic plans for the future?
Answers to these questions can be found in the interview conducted by Martin Procházka for the print journal E15. The full version is also available for reading on the E15.cz website (Czech only).
Not everyone is willing to sell their shares, says the CEO of the family-owned company OKsystem
Martin Procházka co-founded OKsystem shortly after the revolution. Faced with a challenging decision a few years ago when his associates opted to sell their shares, he ultimately redeemed their stocks. Subsequently, he established a family business, currently operating in both the public and private sectors, playing a crucial role in the digitalisation of state services.
Today, the trend is to sell one’s shares, but a few years ago, you took the opposite step. What motivated you to make that decision, and what was OKsystem’s journey toward becoming a family business?
Not everyone is willing to part with their shares. Since the establishment of OKsystem in 1990, we have been committed to long-term growth and development. Our focus on software development and authorised training led to the creation of a payroll processing program, now evolved into the comprehensive human resources information system known as OKbase. The Ministry of Labor and Social Affairs remains a key client of OKbase to this day. Using our programs, the state disburses around one hundred billion crowns annually to families with children, socially disadvantaged individuals, the unemployed, and citizens with disabilities.
We have been dedicated to the development and operation of these information systems as a proudly Czech company for thirty years. When my associates decided to depart some time ago, I gradually bought back their shares. Vítězslav Ciml became the Chief Executive Officer and co-owner during that period. Over the past few years, we have transitioned into a family business as my daughters assumed increased responsibilities. Zuzana Hofová, the older daughter, now serves as the Chief Financial Officer, while the younger one, Eva Vodenková, takes on the role of Human Resources and Operations Director. Both have also become shareholders this year. I continue to hold the position of Chairman of the Board and majority owner, applying my experience in strategic management. The generational transition has been successful, and I am confident that OKsystem will thrive for decades to come.
The IT industry has undeniably undergone significant changes during your tenure. Are all these changes for the better, and what are the biggest challenges it faces today?
Over the past half-century, I've been a witness to dramatic changes in information technology. In the 1970s, I specialised in automatic computers at the Faculty of Electrical Engineering at the Czech Technical University in Prague, back when information technology didn't have a separate study program. Today, it constitutes an entire faculty. I created and fixed my first programs on punched tape and experienced ferrite cores, predecessors to semiconductor memories. The memory of mainframe computers was measured in hundreds of kilobytes, while today, mobile phones contain memories a million times larger.
Are computers, the Internet, mobile phones, "big data," and social networks bringing changes for the better?
Sometimes they do, and sometimes they do not. On one hand, we are surrounded by smart devices and computers assisting in manufacturing, transportation, storage, e-commerce, healthcare, and services. On the other hand, mankind is struggling to counter cyber threats, the emergence of computer dependencies, and the misuse of personal data. The monitoring and profiling of all of us surpass the world of Orwell in the 20th century. In response to these negative phenomena, the European Union has issued regulations on personal data protection, cybersecurity, and digital services and is preparing additional regulations on artificial intelligence. I just hope that the regulation of IT in Europe will not go too far, similar to the Green Fate.
The previously mentioned AI has become a great topic. How are you currently integrating it into your work?
We have been incorporating AI, particularly machine learning procedures, into our software systems for many years. It is crucial in shift planning and attendance approval within the OKsystem personnel system. The system utilises historical performance data, employee expertise, workloads, and preferences for shift planning, along with records of past shifts. AI then suggests and assigns shifts to suitable individuals. Supervisors can make adjustments and approve changes among employees through the shift marketplace. This process is closely tied to ongoing attendance tracking, utilising attendance terminals, home computers, and mobile devices. The majority of attendance records are automatically verified with the assistance of AI, and supervisors only deal with unusual cases. The OKbase system evaluates compliance with labour codes, significantly saving time for managers. AI also has the capability to detect changes in employee behaviour within personnel systems, helping prevent turnover or burnout.
Your company is actively involved in the digitisation of public administration, particularly at labour offices. How does it proceed? Are there any obstacles that you encounter?
Public administration is often governed by outdated laws, and the pace of modernisation and digitisation has been slow. Lawyers and methodologists have insisted on strict adherence to administrative procedures, including manually signed documents, for years. However, significant changes occurred with the COVID-19 pandemic, the Ukrainian crisis, and the surge in energy prices. The threat of an unknown virus and the immediate need to aid hundreds of thousands of refugees from Ukraine, coupled with a sharp increase in those entitled to social benefits, prompted change. The Czech state responded by contributing to employment maintenance through the “Antivirus” subsidy program, providing humanitarian aid to Ukrainian refugees, and offering one-time benefits to most families. Previous obstacles have fallen, and space for the gradual digitisation of all agendas has opened. Notably, over a million applications for social benefits have been submitted electronically, and ongoing efforts are focused on completing the digitisation of child benefits and housing allowances. Information systems at labour offices, once deemed outdated, have become exemplary for other authorities. Officials have reduced administrative tasks, allowing more time for client interactions. We are delighted that OKsystem plays a role in these successes, affirming its position as a reliable supplier.
One of your domains is personnel systems as well. How are the requirements from companies changing in this area? What are they currently placing the greatest emphasis on?
Both government organisations and private businesses across various industries use our OKbase system to streamline routine activities, foster digitisation, automate processes and enhance decision-making. Our users demand reliable and secure solutions, continually evolving to comply with legislation. In the past, on-premise installations on company-owned computing equipment were the norm. However, with the changing landscape, the majority of new customers now opt to store sensitive data and operate OKbase in the cloud. Rather than making a significant initial investment in licenses, they prefer the software-as-a-service model, entailing monthly fees and no long-term commitments. Key features that companies are currently emphasizing include the integration of personnel management with attendance and payroll, mobile control, the use of AI, functions for recruitment, education, evaluation, remote work, benefits, electronic signatures, and access to crucial data for top management.
How is your company doing, and what achievements do you value the most?
OKsystem has achieved excellent financial results for over three decades. We've experienced consistent revenue growth of twelve per cent in recent years and have expanded our workforce by approximately six per cent annually. In 2022, we were honoured as the Czech Leader among all companies with a turnover exceeding 200 million Czech crowns.
Do you have any other plans for the future, when it comes to foreign countries, for example…
We are going to strengthen our public administration position while increasing the revenue share from the private sector. Internationally, we have been successful with the Check-out application for Yaskawa robots monitoring and the VacayMyWay project. As a financially strong Czech company, we are also considering further growth through the acquisition of other IT companies.
Martin Procházka
Martin Procházka graduated from Technical Cybernetics at the Czech Technical University in Prague. Following his graduation, he worked as a programmer and department manager at the Computing Center of ČKD PRAHA. He co-founded the Czech software company OKsystem in 1990 and assumed the role of chairman of the board. Over time, the company gradually transformed into a joint-stock company, and after acquiring shares from the remaining founders and involving his daughters, it also evolved into a family business. His hobbies include tennis, long-distance running, and skiing.