Today is an important day in our company’s history. First of all, on this day we celebrate the 12th anniversary of our founding as IP Systems in 2008. Over the past decade, we have digitalized energy through more than 160 projects in 13 countries for system operators, gas storage facilities and energy traders. IP Systems’ IT platforms have become the quality standard for energy market IT solutions in Hungary and the broader region.
Based on our proven value and accumulated professional knowledge throughout these years we want to develop ourselves further. During our exciting journey across the European energy markets, we recognized the need for a unique name to help us compete at the European level, and a new image that better reflects our values and professional commitment. IP Systems Zrt. has therefore officially changed its name to Navitasoft Zrt. as of August 31, 2020, concluding the rebranding efforts initiated two years ago.
But do you know how and why we got started?
The business developer with a global view
Our CEO and founder Ákos Füzi founder recalls what motivated him in the early days, and where the journey has taken us through the years:
I returned from Japan to Hungary in 2005, after four years working as a business developer in the pharmaceutical industry. In Japan I was introduced to rigorous business development methodologies: 10-15-year R&D planning windows; thorough partner selection systems; efficient and precise management of R&D cooperations. On top of that, I had learned to deliver results with a culturally diverse team spread around the world.
When I got back I was eager to combine my degree in electrical engineering with my business development knowledge. The biggest independent Hungarian IT company back then offered me a position as Chief Architect in the sales department, as at that time “business development” as a concept did not exist. Former colleagues laughed, “You can develop products or technology, but how do you ‘develop’ business?”
I was responsible for industrial sales. My goals were to find opportunities in
- software development, the company’s focus,
- a business field where our software is mission-critical to the customer,
- an industry that is improving in 10-15 year periods,
- in a financially stable market,
- with a low barrier to entry but requiring specialized knowledge,
- with B2B partnerships.
The perfect project
After analyzing several directions, such as retail, manufacturing, automobile, transportation and logistics, I discovered the challenges of energy liberalization with a project that perfectly met my criteria. At that time the Hungarian gas TSO just started to operate third-party access with imported software that was not able to print Hungarian characters, and the provider didn’t solve that problem for a long time. This may seem like a trivial issue but for example, the TSO was not able to print the name of their customers on the invoices correctly – some characters were replaced by box characters. Imagine what this meant for customer satisfaction! Management at the TSO was extremely frustrated with the inflexible vendor.
A year later, we started a software development project and I led the delivery team. I implemented an agile project management methodology that I learned in Japan, which is now known as SCRUM. Colleagues called us the “IP guys” because the software was simply called IT Platform, or IP for short.
My CEO at the time didn’t see TSO software as a sustainable business field, since there is only one TSO per country and each country has different regulations. But I viewed it as an entry to the broader energy IT market, which was non-existent in Hungary at the time. I was so convinced that I became a certified energy trader and even earned a master’s degree in energy studies. In time, management came to support our vision; we agreed to establish a spin-off company and worked for the “mother company” as a subcontractor. It was funny that a few projects later – the mother company became our subcontractor.
Shy developers and a culture of growth
At IP Systems we established a special mixed culture of Japanese management and eastern European small business in small groups of 15 employees. I remember, we all agreed to begin daily stand-up meetings, but the first day when I asked the team to come to the board, they all hid behind their monitors and when I called them by name one-by-one, all of them were embarrassed. Yet a few months later – after summer vacation – the team admitted that they felt lost in the product backlog, nobody knew who was doing what. They came to me and asked me to hold stand-up meetings. At that point it was clear that the Japanese method had become our own.
After market participants began to use our TSO platform, many of them contacted us to develop trading solutions, later a gas storage platform and other software products for scheduling, risk management and the like. A few years later, we received inquiries from neighboring countries like Croatia, Romania, Czech Republic, Switzerland, and so we began the shift from tailor-made solutions to customizable standard products. Over the years we developed 16 products, but that was too much for marketing as well as maintaining the code base. So we started to consolidate, both in architecture and functionalities, to provide a more comprehensive, flexible solution. This led to the three suites we offer today – Trader Suite, Operator Suite and Communicator Suite – all based on microservice architecture principles.
A shock and rebirth
Back in 2017, we ran into serious complications: a big Ukrainian customer had us develop a complex solution but did not pay for it, and as a result we had to cut the number of staff in half. It was the most challenging year since our foundation. We and I personally learned a painful lesson. The company was turned into a closed joint stock company, we rebuilt our team, focused on significant market openings, recruited several talented colleagues with international experience, and I trusted in our capability to evolve. Our activities expanded toward newly liberalized markets like the Ukraine power market in parallel with very innovative markets such as Estonia, Latvia and Lithuania.
A lot of people seem to have the impression that eastern European countries are somehow behind the times, technologically and otherwise. While this may still be true in some cases, the hard lessons from their challenging history and the need to make a break from Soviet-era technology has led to some extremely innovative outcomes. They say necessity is the mother of invention, and this was clear in the Soviet-Socialist energy industry: engineers and managers with limited resources improvised and found ways to make do. Now a new generation of engineers and managers is in charge, with the same inventive spirit but with a little more budget and a mandate for liberalization. Energy market liberalization projects in eastern Europe have in some ways leapfrogged western counterparts who liberalized earlier - such as Estonia, which is not only a leader in digitalization of energy but is acknowledged as the world leader in digitalization of, well, nearly everything.
In a few cases advances in eastern Europe are the result of being later to the party and thus taking advantage of more modern technology. In other cases, the very obstacles in legacy infrastructure that once held them back have driven highly creative, advanced solutions. System operators and energy suppliers in the west could learn a few lessons from our customers in the east.
As energy transforms, so do we
At the beginning of this new decade, the 20s, the energy industry is facing the challenges of IoT, algo-trading, prosumers, aggregators, renewables: the new phase of digitalization and democratization of a once monopolistic industry now driving a free and open market. Large asset operators (TSOs, SSOs) will have to keep innovating and discovering new business opportunities, as will legacy trader companies. There are new areas opening up for digital innovation at the DSO and end customer levels. We would like to keep focused on energy – namely “Navitas” in Latin – and develop more commonly used software products for the smaller energy market players, too. That is why we are letting go of our old name “IP”, which is less specific and reflects drivers at the time of our foundation, to a unique name of Navitasoft.
Nearly every aspect of our lives is undergoing a digital transformation. From banking to healthcare, from the way we research and shop to the way we work, learn and travel, to the fundamental models of owning or using goods, we have already experienced radical change – and more is on the way. Similar fundamental change is coming to the energy industry, where further, innovative digitalization is going to be required. We look forward, together with our innovative customers and partners, to playing a major role in this change.