Pavel Vakhnin: Business project with an IT component

Pavel Vakhnin: Many companies implement systems based on business applications of Oracle, however in Russia of the projects similar to ours, did not become yet, even in other industries. Unique our project is done by three basic elements. First, it is long term of the contract – 10 years. The first 2 years are allotted on creation and stabilization of a system and 8 years – on support. Secondly, orientation to reduction of labor costs and performance improvement of business processes. A project objective is not just start of a system, and achievement of target indicators on increase in productivity. These indicators will allow to define success of implementation of the corporate information system (CIS). And, at last, thirdly, the complex nature of the solution – BearingPoint develops a system, delivers and configures the hardware, delivers necessary licenses, it will be it in general and to accompany. It is uncommon approach, I did not hear yet that the similar task in such scale was in a complex solved by someone.

TAdviser: If to speak about project scales what digits allow to characterize it?

Pavel Vakhnin: In the current CIS more than 2 thousand users work for us. All main divisions of the company are involved in the project: production, sales, logistics, supply, personnel management, finance, reporting. From BearingPoint more than 30 people are involved in the project, from Uralkali – more than 100, from them nearly a half on a 100% basis. About 80 representatives of functional divisions and about 20 IT specialists are a part of a project team. Development and deployment of CIS is, first of all, a business project. Business project with an IT component.

TAdviser: Whether to the project of CIS experience of implementation and application of products of Oracle had Uralkali?

Pavel Vakhnin: Yes, Uralkali uses the solutions proposed by Oracle since 2003. It is more than 10 years. So we have an experience of cooperation – the relations long, fruitful, and, respectively, in IT infrastructure solutions of Oracle prevailed. However for last decade technologies took a serious step forward – there were new requirements, there was consolidation of Uralkali to Sylvinite, respectively, it was necessary to bring a system to new level. Therefore we formulated new tasks, held a competition and selected the contractor. BearingPoint proposed the solution based on Oracle – and, it turns out that we in the same system, but already with a new view build CIS.

TAdviser: Whether means it that within tender you considered only solutions based on Oracle?

Pavel Vakhnin: No, we considered all offers – irrespectively systems. Therefore tender was interesting. We not just allowed a possibility of installation of other system – we considered this possibility and estimated. We did not put such restriction that there was surely Oracle. Those companies in which capability to provide required result were allowed to participation in tender we were sure, – regardless of the offered system. We paid much attention to selection of participants, watched their technical and functional expertize, studied the reference projects. As a result, at a final stage of tender we had 2 offers based on Oracle and 2 – based on SAP. We were ready to pass to other system if it for smaller money provided achievement of the main business objective – gave the chance to reduce labor costs and to increase efficiency.

A system is a tool, and it is important to estimate precisely its efficiency in relation to the specific purposes facing the company. In our case the purpose was recorded uncommonly - reduction of labor costs. After the description of business processes there was an opportunity to speak reasonably about a possibility of the solution of the task facing us due to use of this or that system. We did not compare a system abstractly, we compared them in relation to our business processes.

TAdviser: How essential to you was that circumstance what a system based on Oracle will be simpler for mastering by the users having experience with products of this developer?

Pavel Vakhnin: Certainly, it will simplify transition to a new system. So, on final project stage training more than 2 thousand users is planned. The most part of these users works already now with products of Oracle therefore our task within training comes down to explaining "delta" – i.e. what exchanged in a system in comparison with the previous version. Will be trained in the functional directions, all educational process for 2 thousand people is going to be completed within 2 months. The majority will be trained within one day. A part will study on places, a part – in educational classes. Special training programs will be developed, at the end of a rate employees should pass examination.

TAdviser: What stages will be gone by project implementation of CIS?

Pavel Vakhnin: We on the basis of an implementation methodology of a system of Oracle make a detailed plan of works, its main stages are recorded in the contract. Now we are at the first stage within which there is refining of the description of business processes and also requirements to new elements of CIS, the list of organizational changes forms. Besides, the project charter and functional strategy prepare. This stage will be completed until the end of July of the current year.

During the subsequent stages we should prepare a system, test it, prepare infrastructure, train users, hold a big complex of the events connected with shutdown of the old systems and transition to a new system. Respectively, there are decision points when it is estimated whether everything is made, whether everything is ready, whether it is possible to begin to pass to a new stage.

So, the grade level is planned for the beginning of the next year. We will perform transition to a new system on April 1, 2014. Since this date, on the main accounting objectives given will not be entered into an old system any more, trial operation of a new system will begin. Thus, the project of CIS is characterized by deadlines – less than a year on preparation of a new system, setup of new blocks. Yes, of course, for 60% CIS will consist of the blocks which are already working for us, but 40% are new, or strongly changed elements. Terms are quite tough, everything needs to be prepared, to test, train – and, as a result, CIS should not just earn, and solve a problem of decrease in labor input and performance improvement.

TAdviser: What do the tasks standing within the project just before the division headed by you consist in?

Pavel Vakhnin: The process engine in the project of CIS is not IT, and business. A project objective – to increase efficiency of business processes, to increase performance. Respectively, it is important to understand where and at the expense of what optimization is possible. Business develops the relevant decisions, approves them and puts into practice. IT plays a role of the expert more here, helps with system to solutions. Basic functions of IT in the project is an administration, development of new accounting forms, unloading and converting of data, formation of reference books. I.e., functions important, but not defining. And just groups of functional specialists work with business processes, representatives of IT are called to give examination. We can explain why a system works so, but not differently. We support the existing system, we know how it functions. IT can explain why this or that solution is applied.

TAdviser: It is obvious that CIS is not the only IT project implemented now by Uralkali. Whether it is possible to tell about other projects on which the directorate on information technologies works?

Pavel Vakhnin: Other large projects are an internal portal and the system of internal document flow. The portal is created on the basis of Microsoft Sharepoint, with the workflow system we upgrade EDMS "Chancellor" to the new version. But on amount of works these projects CIS there is less. If with CIS at us aggregate term of the contract makes 10 years, then on EDMS and the portal – 5 years. Development and stabilization of a system at the same time takes less than a year. Contracts are signed on long term, we use approach just the same, as with CIS: setup, delivery of licenses, the hardware, and then maintenance, all in a complex.

TAdviser: What advantages does similar complex approach give?

Pavel Vakhnin: We thus lift the limits which are not allowing the contractor to provide the end result. The situation when the hardware is provided by one supplier is widespread, the software developer gives the license, support is provided in general by the third company. Similar approach bears in itself significant risks, and we wanted to remove them. Tender was appropriately constructed, relevant provisions were included in the contract. We wanted that the contractor located all tools allowing it to reach the end result. We do not put restrictions, the main thing – to achieve result.