Interview with Martin Procházka Chairman of the Board of Directors OKsystem, Czech Republic

Oct 2024 Interview with Martin Procházka Chairman of the Board of Directors OKsystem, Czech Republic

OKsystem has become a leading Czech software development company. Currently operating in both the public and private sectors, this well-established family business has played a crucial role in the digitalization of State services. You co-founded OKsystem back in 1990. What was the impulse behind the launching of OKsystem? How is your company doing, and what achievements do you value the most?

We established the company as a result of significant changes in Czechoslovakia. Before 1989, it was not possible to run a private business as everything was controlled by the state, limiting any entrepreneurial activities. However, after the Velvet Revolution in 1989, the situation changed, and by 1990, we had the opportunity to start our own business. Three years later, in 1993, Czechoslovakia peacefully split into the Czech Republic and Slovakia, and we continued our journey as entrepreneurs in the newly formed Czech Republic.

I was the initiator and invited my three partners to establish a software development company. We were experienced in software development and professional training. Using our personal computers, local area networks, and our expertise, we decided to go out on our own. The start was extremely successful; at that time, there was limited competition in Czechoslovakia, the large global companies were still not here.

We had experience in the administration of computer networks and we also became the first Novell authorized education center in Eastern Europe. We had the opportunity to educate administrators and support the new businesses that were in very strong demand.

In the beginning, within the initial four years, our growth was +200 % annually. It was unbelievable, we didn’t expect such strong growth. For the first ten years, we rented offices, then we built our new office and headquarters in Prague, which we still use today, and our workforce and revenues continue to grow. Currently, we have approximately 500 employees. Our target this year is to achieve a revenue of 1 billion Czech crowns. It is about 43 million USD according to the current exchange rate. We provide a very wide range of products and services, and we are successful in several segments. We also have branch offices in Brno and Ostrava, two other big cities in the Czech Republic.

Since 1993, we have been developing computer systems for employment and social benefit services in the Czech Republic, and we continue to maintain it today. This extensive system enables the government to distribute substantial funds to families, disabled individuals, and people on low income. The employment services provide benefits for unemployed people, job support, etc. We secured this project ahead of companies like IBM, HP, and others, and we have successfully maintained it ever since. While this project plays a key role in our operations, with a significant portion of our revenue stemming from government contracts, we are also increasingly focused on expanding our private sector and growing internationally.

Last but not least, I have to mention our financial success. We have been profitable for 34 years with the exception of one year. All the other years, we have been growing and prospering. We are not only experts in IT, but we are also a financially strong company, offering us the possibility to invest and acquire other technological companies, both in the Czech Republic and internationally, in order to grow and strengthen our position.

One of your aims is to make business operations simple and easy to handle, enabling better productivity for the companies using your products and services. Could you indicate what makes OKsystem competitive in this regard?

As a partner of leading global technological companies, we embrace new technologies, development systems, databases, artificial intelligence, and more. We try to remain very flexible, and following the latest technological advances is a top priority for us. These innovations are quickly integrated into our projects. This adaptable approach gives us a significant advantage that our customers can benefit from.

We are also a 100% Czech-owned company. Given our size and success, we are frequently approached by investors and global companies, but we remain faithful to continuing as a Czech family business, which our customers greatly support and appreciate.

Investor appetite for tech companies is higher than ever, with Artificial Intelligence at the top of that list for prospectors; software companies seem ready to navigate a golden era. What are the challenges for software companies at this particular moment?

The challenges concern how to use the new technology, how to employ Artificial Intelligence, robotics, and other trends into the existing and future solutions. However, the basic requirements remain the same. The software should be user-friendly, easy to use, and needn’t require complex training. When the software is used by a greater number of clients, it needs to maintain its response time, be flexible, and its user interface updated smoothly. These are important features.

Tell us about your foreign activities and your involvement in your American-based project: www.vacaymyway.com.

VacayMyWay is a project or a startup company that started about five years ago. The American founders were not satisfied with the services of the current leaders like Airbnb, VRBO, and Booking.com because these large companies had unfavorable conditions for both hosts and guests. The founders saw the opportunity to establish something new that could provide better services. They envisioned the system, but because they were not IT specialists, they needed to find somebody who could develop the system. One of our former employees, whom we are still friends with, was a colleague of one of these founders. He recommended OKsystem and our abilities and expertise to the founders. They approached us, we discussed the terms, the price, and the conditions we could deliver on. Initially, we only intended to create the code for the application that would be invented and designed completely in the States. However, we moved from the position of coders to designers, analysts, and partners of the project. Over time, they understood we could add more value to the project than just being developers.

After several months, they appreciated our approach and results, and we were entrusted with delivering the complete design and development of the system. It has been a great honor. Initially, the American company only intended to pay us for the development work. However, after several months, we were offered the opportunity to become not just a supplier, but also a partner in the project. We made a reasonable investment and continued the development in exchange for shares. I then became a member of the board of directors of VacayMyWay, and I am now responsible for overseeing the future development, influencing strategy, and design of the system.

We managed to deliver the first version of a running system with basic functionality in just 18 months. When our American colleagues presented our VacayMyWay system at some trade shows and mentioned that their European partner had developed it in only a year and a half, people could hardly believe it. A project of such size usually takes years to develop. Following this, we are now in a strong position to become one of the leading systems in the United States.

We decided to focus on the American market first. However, the short-term rental market in Europe is similar to that in the States, and we plan to leverage our presence in Europe to extend VacayMyWay’s activities here and later on in other markets too. While we are currently focused on the US, we are preparing functionality for global use, such as multi-language support and currency conversion.

Let’s talk about your global solution Checkbot which focuses on robots.

This project also began in a simple and informal way. One of our employees was a friend of a technician at the Czech branch of Yaskawa, part of the global leading producer of industrial robots. This technician recognized an opportunity for specialized software that could help his customers, and that was the very beginning. Long story short, together we realized that this solution could be replicated across customers and that we needed to create a suitable software product. Over the next few years, we developed an application that is able to monitor the work of robots online and perform real-time analysis of their operations, tasks, signals, maintenance functions, production features, and much more.

From the beginning, our solution was fully focused on complex online and remote help to the principal users of robots. We connect robots and sensors in a single application, handle predictive maintenance, and complex conditional monitoring of Yaskawa robots using various Artificial Intelligence procedures. In a nutshell, we evaluate unexpected issues, send reports to the technicians and engineers, allowing them to prevent unplanned production downtime. For example, in an automotive factory, a failure on a production line that leads to a production stoppage can be very costly. We help to prevent such situations.

After one or two years, it was not only welcomed by the customers of Yaskawa in the Czech Republic, but we also quickly secured installations in several other European countries as well. Our expertise was the key to our progress. We excelled in industrial automation, providing an exceptional software solution. Our expertise in cybersecurity, in UX/UI, user support, and the overall quality of our solution was greatly appreciated by our customers. As a result, in 2022, our software was recognized as part of the Yaskawa ecosystem, and since then, it has been officially promoted and delivered in several countries by Yaskawa to their clients. We are invited as a partner to exhibit at trade fairs, and Checkbot is now part of Yaskawa robot showrooms.

Currently, Checkbot is used in 15 countries around the world. In 2024 alone, we completed our first client installations in the United States, Italy, Finland, and France. Several Yaskawa country organizations offer Checkbot as part of their service agreements with customers. This allows Yaskawa specialists and service engineers to remotely support users through our software. When clients report issues, they can connect after authorization from the clients and remotely monitor potential problems. This saves time and money for both customers and technicians, often eliminating the need to travel hundreds of kilometers. The product is very relevant and trendy. This is an exciting opportunity for us, and we plan to further invest in the product across several areas in the future. We look forward to the coming years with great anticipation.

Do you have any other similarly successful projects?

Yes, another success story that I can describe is our HR system: OKbase. Back in the early 90s, we began with a much smaller system. It was just a simple payroll program back then, but when the big players arrived in the Czech Republic, companies like SAP, Oracle, or other big German companies; although it was easy for them to translate and deliver a financial accounting system, it was not so simple to deliver a payroll system, personnel, and HR system, because the regulations and laws differ significantly among different countries and that’s where we came in with our solution.

Our solution, which was developed according to Czech regulations, proved indispensable, and we got a considerable part of the market. About 15 years ago, we introduced a new generation of this software. It was not just payroll, but also complex attendance and HR systems, all planning shifts automatically. We have a significant market share here in the Czech Republic now. It is used, especially, for mid-size and bigger organizations, both private and public (for example, by half of the Czech government and ministries).

In the private sector, we have clients such as Allianz, DHL, Konica Minolta, Carborundum Electrite, GE Aviation, REWE – a German company that owns Billa and Penny Market, they have over 12 thousand employees in around 400 shops. All this employment base is served by our software. Although in Germany and Austria Billa and Penny Market use SAP, here in the Czech Republic they have selected our HR system. We also have hundreds of clients who use OKbase internally for themselves. And we also have companies like KPMG, E&Y, Deloitte, Grand Thornton; all leading global companies, that use OKbase for outsourcing payroll processing for their clients. Currently, we are limited to the Czech market, but we would like to have global access eventually. Our target now is to expand abroad and thus follow the needs of many of our clients.

Regarding the workforce, what is your policy at spotting personnel, training them, and very importantly, retaining the talent within your company?

The IT job market has become highly dynamic, making it challenging to attract and retain specialists. Despite the talent shortage, I believe we are successful in this area. We care about our employees, have a great benefits system, and maintain a good company culture. We have managed to maintain flexibility and a friendly atmosphere despite our growth and size.

In our recruitment, we leverage top references, interesting projects, and the company’s good reputation on the market. I am very pleased that our current employees actively recommend working with us, which helps us attract a number of specialists. I am very proud that several of our employees who left to gain experience elsewhere have come back to us. The great company atmosphere and culture is actually the main reason I continue this business with my two daughters and resist selling OKsystem to an outside company.

The Czech Republic is an economic success story, transforming its already strong industrial base towards a knowledge-based economy, globally competitive. Do you think American investors should look more to the trade and investment opportunities taking place in the Czech Republic?

I can confirm that the opportunities for investors are highly rewarding. The mastery of technology and IT expertise in the Czech Republic is high, but the cost of its workforce is still quite competitive. This is why many global companies are establishing their development centers in Prague and Brno, and companies like OKsystem compete with them for experts. It is a good prospect for investors, and there are still opportunities to expand.

This trend is supported by our government because we would like to transform from an automotive and industrial past into a new approach and a new mind-base with value-added services. In the Czech Republic, there is still room to improve the education of young people and support this transformation and digitalization on a larger scale.

On a personal note, what would be your dream or any goal that you would like to achieve by the end of this year or next year 2025?

I would like to be as successful internationally as we are now in the Czech Republic. It’s a relatively small territory with a limited number of clients. I believe we have the ability to use our expertise and experience at an international level. I would like to build on our success and experience with international projects such as VacayMyWay and Checkbot. The role of my CEO, Vitezslav Ciml – who is not a member of my family, but he is a co-owner – is to multiply the revenue. My recommendation to him and my main priority is to maintain the position we have achieved in the Czech Republic and to rapidly expand internationally.

What would be your final message to the readers of Foreign Policy on why they should choose the Czech Republic as a place to do business, as a place to invest?

Prague is one of the best and most beautiful cities in the world. It has a great history, a good environment, with very flexible and capable people. This is something that supports international business and is one of the many reasons to invest in the Czech Republic.