Smart technology for business development, public sector: SILICON MOUNTAINS 2022 summit held in Yerevan

How can smart management affect the public and private sector in Armenia? What is smart economy and why is it needed? What problems does the banking system face today in parallel with the introduction of new technology? What are smart infrastructures and why is their development so important? The SILICON MOUNTAINS 2022 technological summit, which was held in Yerevan on December 9, was dedicated to all these questions.

Armen Baldryan, president of the organizer of this summit, the Union of Employers of Information and Communication Technology (UE ICT), told NEWS.am Tech that the event can show the business and public sectors how modern technology can contribute to their development and what they can get from those technologies. He noted that for real effective development and transformation, both the business and public sectors should not only introduce new technology, but also change their philosophy and way of thinking.

"Of course, we can introduce technology and automate them, which we do ‘manually’ today. But it will be difficult to call it a ‘revolutionary decision.’ It is necessary to radically change the philosophy, the model of business—taking into account the development of modern technology," he said.

What is the situation in Armenia in smart management of public services?

Today, management using modern technology and digitization achievements is called “smart management.” And that concept is relevant both in public administration and business.

According to Armen Baldryan, the introduction of smart technology can make public administration more transparent and faster; each and every person can see and grasp what happened, and if necessary, participate in management. And all that will increase people's satisfaction level.

It is true that the situation related to the implementation of digital technology and "smart" solutions is still far from ideal in Armenia.

During a panel discussion within the framework of the SILICON MOUNTAINS 2022 summit, Lea Hakim, a senior economist at the World Bank, noted that the Armenian government is committed to the ideas of digital transformation, and the World Bank has included Armenia among the countries paying significant attention to “GovTech.” But although almost 100 percent of the country's population has access to the Internet, only about 50 percent use the World Wide Web to interact with government agencies.

Why?

On the one hand, the problem may be that the number of public services available on the Internet is actually limited. On the other hand, it is possible that the population is not yet sufficiently informed, or does not have the necessary knowledge and skills, to take advantage of the already available opportunities.

For his part, Vache Gabrielyan, Dean of the Manoogian Simone College of Business and Economics at the American University of Armenia, noted that today we are very close to the "critical point" after which a sharp jump can take place in the domain, but so far this jump is not happening in the country. According to him, in order to move to smarter management in Armenia, it is necessary to solve a number of issues related to the interaction between different databases, and only then it will be possible to expect exponential growth in this domain. It will also be necessary to create a number of infrastructures, including a national identification system and an attached security system.

"From this point of view, I was very surprised that the government adopted the decision on tax declaration earlier than introducing an identification system. In other words, we introduce smart systems in a not so smart way," Gabrielyan noted.

The president of the Union of Industrialists and Businessmen of Armenia, Arsen Ghazaryan, in his turn noted that attempts have been made to introduce the e-governance electronic management system in Armenia, but the question is whether it helped to increase the efficiency of management.

According to him, there are many problems in Armenia today. A total of 91 percent of the country’s economy does not use the achievements of modern technology at all, and therefore there is a big gap between them and the remaining 9 percent—the IT sector and banking system—with which it is unclear what to do. Apart from that, on the one hand, there is a serious problem of unemployment and poverty in the country, and on the other hand, they cannot find qualified employees in some sectors. Another problem is that today 50-60 percent of the fertile lands of the Ararat valley are not being cultivated.

"Smart management can help to solve these issues. But we need to solve more fundamental issues so that the system starts working," said the specialist.

Smart management in business: Why is business passive?

Smart management can also bring many benefits to business, increasing both competitiveness and the degree of employee involvement in the management process.

Smart management can bring many benefits to business, too, increasing both competitiveness and the degree of employee engagement in the management process.

As UE ICT president Armen Baldryan mentioned, if at least something is being done in the public sector in Armenia to change and improve the management model—whether or not that work is effective is another question—then the private sector, oddly enough, is more passive.

"Here it is important to understand why the private sector is passive. Maybe there are financial or human resource issues? The application of smart management in the private and public sectors is very important, and it is good that it is being discussed today. At today's event, we will formulate clear steps that we will present to both the state and the private companies. With the results of this summit, we will share our vision of where to move," said Baldryan.

According to him, the labor productivity per capita in Armenia is quite low today. This indicator can be increased only with the help of smart technology.

"Here it is very important that the business begins to understand and correctly assess the real power of modern technology. At first glance, it may seem that implementing this or that innovation is very expensive. But if you analyze the situation in a few years, you can see how your business will develop, what sharp growth can happen if you decide to innovate. And successful businesses will increase the competitiveness of Armenia's economy in the international market," added Baldryan.

Smart banking: What problems can introduction of new technologies introduce?

The banking system is one of the most advanced in Armenia; it readily accepts and implements many innovations and technology. Already today, many services in the financial sector can be obtained online through a home computer or smartphone, and more and more people are using such services today.

It is true that the problems of banks are also not few today, and the development of technology implies the emergence of new problems that did not exist before. Among them are, for example, the problems related to cybersecurity, preventing leakage of user data, etc.

"Today, the banking system faces many problems, including how to use solutions to protect customer data, prevent data leakage. Banks take this issue very seriously and spend a lot of money on it. However, it is not enough to simply acquire solutions to protect the data; they must be applied correctly and have appropriate specialists who will monitor the system 24 hours a day in order to respond to a possible [cyber] attack in time," said Artak Hanesyan, President-General Director of the Directorate of Ameriabank CJSC.

Accodring to ACBA Bank CEO Hakob Andreasyan, there are standards for data storage in many countries, and it is very important to have such standards in Armenia as well.

"There is no need to invent new bicycles. The technologies are they, we just need to apply them," he said.

According to Andreasyan, the use of cloud technologies can play an important role in increasing the level of security and standardization in the sphere of smart banking.

There is no need to be afraid of these technologies, and if it is forbidden to store important data in cloud storages located in other countries, we should think about creating such a storage in Armenia.

According to Andranik Grigoryan, Chief Executive Officer and Chairman of the Executive Board of Converse Bank CJSC, another problem is that today there are several databases in Armenia that are not synchronized with each other. If they were synchronized, many things in the country’s banking sector would change for the better, clients would be identified more easily and quickly, and they would not have to waste time and nerves on various issues, and on submitting various documents and references.

Another problem related to the banking system is that people often do not have enough knowledge to properly take advantage of all the opportunities that are provided today.

As Text'nPayMe founder Arthur Karapetian mentioned during SILICON MOUNTAINS 2022, for example, in Spain, children are taught how to use the banking system from school age. They get that right only at the age of 16. Karapetian is sure that such a practice should be implemented in Armenia as well because young people learn something new more easily than adults.

As per Andranik Grigoryan, Chief Executive Officer and Chairman of the Executive Board of Converse Bank CJSC, there are programs to introduce financial literacy in schools in Armenia, but they are not enough.

"We need to overcome that big gap so that the public becomes truly financially literate," he said.

Smart infrastructures: Why are they important?

Along with the introduction of smart technologies, the development of smart infrastructures is a really important task.

As Gevorg Gevorgyan, head of the Communications Department of the RA Public Services Regulatory Commission, mentioned in an interview with NEWS.am Tech, today the coverage of fixed networks based on fiber optic technology in Armenia is about 65 percent, and these technologies are available to 97 percent of the population. Mobile coverage is available on 100 percent of all settlements, and 91 percent of them have access to two networks at once. According to the specialist, this is an excellent basis for introducing new technologies.

According to Hayk Faramazyan, General Director of "JENCE-ALPHA" CJSC (Rostelecom), telecommunications companies are already starting to provide digital services, enabling private companies and state bodies to outsource their IT services to telecommunications companies.

"We are talking about data centers and cloud solutions. In the near future, we will see large-scale investments by telecommunications companies in Armenia. In particular, we plan to create and put into operation a serious data center next year, which will provide all kinds of services, including Internet and cloud services. This is important for business, because it can get all the solutions from one person," he said.

According to Ara Khachatryan, General Director of Yucom CJSC, smart infrastructures can provide serious advantages, for example, in the field of production. For example, one robot can replace 12 workers, and it will work much more efficiently – 24 hours instead of 8 hours, without days off.

According to Khachatryan, the investment made on such a robot will justify itself within 3-4 months, and when more businesses start making such investments, the demand for 5G will increase noticeably.

This is already the fourth summit of SILICON MOUNTAINS 2022 and the second one this year. During the previous one, which took place in June, such topics as digital transformation, cybersecurity, and modern financial technology were discussed.

Now this list has been expanded and includes "smart infrastructure and management, economy, and banking system."

According to Viva-MTS CJSC General Director Armen Avetisyan, all four topics are very important; moreover, they will work effectively only through interaction with each other.

"Smart management is the ‘head,’ smart economy—the ‘heart,’ smart banking system—the ‘blood,’ and smart infrastructure—the ‘venous system.’ All of them can live without each other, but they will live very poorly,” he said.

You can listen to all panel sessions at the following link.