Interview with the vice president for IT of EVRAZ Artem Natrusov

TAdviser: Artem Vladimirovich, whether there is at EVRAZ an IT strategy? If yes, that what term it is expected and what its main points?

Artem Natrusov: We, certainly, have an IT strategy, and it defines the detailed purposes the next calendar year and common goals for 3-5 years. There is no package financing on long term at the same time. Our holding is subject to influence of price situation, and depending on it an opportunity to spend funds for upgrade year by year different. Therefore we carry annually out audit and we define projects the next year, but at the same time the target status remains invariable.

Planning process of projects in EVRAZ is performed by means of committees on IT which are organized by the divisional principle. In the fall at us there take place actions on which projects and tasks for IT for the next year affirm.

TAdviser: How the IT staff of EVRAZ and what its number is arranged?

Artem Natrusov: All IT main resources in Russia at us are collected in one organization under the name "Evraztekhnika" which is the center of IT services which is engaged in all IT elements. In Evraztekhnika, and it, generally Novokuznetsk, Nizhny Tagil and Moscow, works about 1500 people now, at the same time the circle of their tasks is rather wide: in addition to traditional IT both production communication, and a considerable part of works on exploitation of an APCS concerns them. From here such significant amount of people.

In the IT state it is possible to note rather high extent of centralization: in recent years the IT personnel which were at our plants and in service companies were gradually transferred to Evraztekhnika at the expense of what there is an optimization of personnel and increase in efficiency. At plants there are only services of the order of IT services - not numerous divisions which are engaged in formation of requirements and control of quality of provision of services. This element is necessary to set the correct balance between requirements of plant and quality of the services provided to Evraztekhnikaya.

For the last 2.5 years that I work in the company, in Evraztekhnika the general KPI, for regulation of relationship with plants were implemented, i.e. all employees, all companies work in a single system of Service Desk. It belongs to Russia, to Ukraine, to Switzerland. For example, in one month of Evraztekhnik processes more than 40,000 addresses. All their processing is centralized, reports are provided at the level of plants and management companies on KPI, there is a transparency here.

It is one area of work. The second, not less important in which I was engaged and brought it to a certain logical conclusion it is implementation of metrics of efficiency in Evraztekhnika. It is calculation of labor productivity for which a set of certain parameters was selected: for example, the number of the PC on one person in a support service of the second level, or the number of servers on one administrator of operating systems, or quantity of systems on one database administrator, etc.

We have also very specialized KPI, for example, on an APCS we use the scheme with conventional instrument units which was initially developed in Soviet period, but now it is adapted, created by us an internal technique which allows to compare efficiency of divisions even if they support a different set of the equipment. So it allows to compare complexity of one section of an APCS with complexity of other section, and at the expense of it to see what of divisions works more effectively. Due to implementation of these techniques we saw that some divisions work more effectively, others is less effective, and now we eliminate an imbalance.

In 2013 Evraztekhnik it was reduced by 10% without loss of level of service.

TAdviser: What is represented by a hardware component of IT infrastructure of EVRAZ? Whether the company has own DPCs?

Artem Natrusov: In the territory of Russia EVRAZ has three main data processing centers - in Novokuznetsk, Nizhny Tagil and Moscow. Recently we upgraded DPC in Novokuznetsk, the project was done with involvement of the external contractor. We selected the concept of use of own DPCs when one DPC services several enterprises at once. Why own DPC? In the conditions of metallurgical assets it is cheaper: in a problem is not present since in the territory of plant it is possible to pick up the building from already existing and it is possible to use it for DPC, it is possible, the electric power — in it is not present problems, nobody will notice electricity consumption by DPC, the electric power from several substations - is also provided, on it essential costs are not necessary.

The model works with three regional DPCs now. At the same time there are intersections – for example,the Yuzhkuzbassugol company located in the Kemerovo region gets access to SAP from DPC of Nizhny Tagil, separating a system about the Kachkanar GOKOM. We use redundant communication channels from two providers for ensuring necessary level of availability.

TAdviser: Tell, please, what business applications are used in EVRAZ

Artem Natrusov: At the big enterprises, for example, EVRAZ of NTMK, the Kachkanar GOKE and in Yuzhkuzbassugol SAP solutions, in the medium-sized and small companies - "1C" are used. At the same time regarding 1C the standard solution, some kind of template which already comprises the standardized chart of accounts of EVRAZ is used. Thus, at us about 60 enterprises in the territory of Russia use, in fact, the same system. It considerably reduces costs for completions and support.

SAP SOFTWARE strategy assumes use of a uniform template for a mining division. So, in 2013 we completed the big project on SAP implementation on Yuzhkuzbassugol for what the SAP system which is earlier implemented on the Kachkanar GOKE was taken as a basis. It was modified under the general tasks and, in fact, the uniform template was implemented. I will note that in general these companies very different: Kachkanarsky GOK is the found field on extraction of ore, Yuzhkuzbassugol is a coal and underground mines, however at the same time all this belongs to mountain production. The analysis shows that we selected an optimal way in terms of the cost of ownership of a system.

In total this project took one and a half years and was implemented in two queues. It was executed completely by forces of Evraztekhnika, without attraction of external consulting. If we did separate implementations, also using external consulting — that cost would be many times higher. Among new business applications -the CRM system based on Microsoft Dynamics CRM. In 2013 we finish the project of its implementation in the EvrazHolding trading company located in Moscow and now there is a trial operation, in our terms - productive operation with the strengthened support.

TAdviser: If your basis of infrastructure is formed by SAP solutions, then why you selected the CRM system not of SAP, and Microsoft?

Artem Natrusov: Two pacing factors played a role. The first is a convenience to sales managers of work in the interface approximate to the products Microsoft Office. The second is aspiration to efficient expenditure. CRM from Microsoft was for us cheaper. It should be noted that at the same time its integration was more difficult.CRM SAP in itself would be more expensive, but it would be simpler to be integrated with the existing systems.

TAdviser: What else applications are used in your holding?

Artem Natrusov: For document flow a system BOSS-Referent (in 2012 it is renamed into Logician of ECM, - a comment of TAdviser) on Lotus Notes is used, it is implemented at all plants. Recently it was considerably expanded due to own developments. The majority of actions at our office becomes through the electronic request: order office supplies, place the order for a business trip or, for example, on movement of a workplace, or on access to information systems.

Also we work on providing the automatic interface of collecting of all information from the APCS level to the BI level, in particular at the NTMK EVRAZ enterprise now. We achieved the quite good level of automation: all reporting at us on a daily basis is going to SAP and now is available at the level of BI in the form of certain reports. Work on creation of interfaces on NTMK took one and a half years, creation of the reporting continues now.

On a business intelligence, in particular, we use the SAP solutions BW - it is all main management reporting of all enterprises, including America and Europe and also SAP BCS - for financial consolidation and control of budget implementation. It is the reporting of the top level, it all is made in a unified way.

TAdviser: And how in the company cloud computing is used?

Artem Natrusov: Now we finish the project in America on financial consolidation and consolidation of the management reporting, we for this purpose use a cloud solution of Host Analytics company. SAP is in Switzerland on an external hosting, it is SAP hosting level, everything at the level of basis is supported by the external company, and everything that at the level of the application — is supported by Evraztekhnikaya.

TAdviser: The companies of EVRAZ abroad use the same business applications, as in Russia?

Artem Natrusov: Not absolutely. There rather different systems are used: somewhere self-written, and in America, for example, there is a lot of Oracle E-Business Suite. Work on gradual harmonization of a landscape goes.

If to speak about the projects covering all our divisions including foreign, then now at us the large project on creation of a single mail system based on solutions Microsoft Active Directory and Microsoft Exchange, and the uniform portal is close to end based on Microsoft SharePoint. This single solution for all our assets, it already for 80% is implemented. In its framework each employee of EVRAZ receives the postal address of evraz.com in what country it was. Besides, all employees can exchange own calendars, get shared folders and so on. The portal will also be the general. So far it is implemented only in holding, and it is farther it will be unrolled on all other countries and regions — the Urals, Siberia, Ukraine, further - to North America.

TAdviser: What else large projects of the last time could you cite as an example?

Artem Natrusov: It is possible to select automation of boiler units and turbine generators at the West Siberian combined heat and power plant. I give this example because it is not small work, the project cost more than 100 million rubles, and is executed by Evraztekhnikaya. Not traditional the IT, is the APCS system, a production system which automates operation of boilers at a low level. In Evraztekhnika there is an engineering center which is engaged in this work.

Also as an example it is possible to cite the project on power accounting and energy efficiency which has two cuts - the bottom level when electricity counters, flow rate sensors of gases, natural, domain, calorimeters, and the second cut - the analytical reporting are put. The last is already a part of traditional IT in which we see, on the one hand, that there is a consumption of energy resources, and with another — accomplishment of the production plan, the fact plan. And we see how one correlates with another. If in some of days or the plan, any of hours, is not implemented or production is lower than regulation, and the electric power or other energy carriers are spent — it means that work is constructed inefficiently, and this efficiency can be eliminated. The project which was executed on NTMK last year on energy efficiency showed payback less than in a year. The similar project is complete also in ZSMK.

The interesting project at us is kept according to the electronic digital signature. It is the pioneer project, probably, the first such scale. It becomes together with TerraLink company. The idea in the following — is the trading company, there are plants, and there are clients. The trading company can be or the agent, or through it sales are made. For both of these schemes there is a large number of fiscal paper documents - the invoice and the delivery note which subscribe, stamped and archived in paper form. They should be provided in state bodies on demand. We from it leave, using the changes of the legislation accepted at the end of 2011. They allow to transfer document flow to an electronic form and to use the EDS, using one of the certified operators, for example, of SKB Kontur.

Exchange of documents in this case looks so: at plant when shipment becomes and material goes to the trading company or in the direction of the trading company — directly from SAP the person just sends to the client it clicking of the button, and it appears in other SAP, already relevant company, at the same time no paper documents appear in general, i.e. they are not even printed.

TAdviser: It turns out that so far this scheme can work if the system of SAP is also installed on the side accepting the document.

Artem Natrusov: So far yes, so far the scheme is implemented only between plant and the trading company. In the same way, the next stage, we will work with clients that will demand integration. Clients will be able to visit the website and to receive documents on the website. The most important that at us no paper turnover occurs, efficiency sharply increases.

In mountain production it is possible to note several projects. The interesting project on the Kachkanar GOKE: there a GPS system with integration with a geological system is implemented. The automatic workplace in the excavator on which we understand ore content in that place where the excavator works is created. The excavator is equipped with GPS modules, a radio communication transmission system, and we, in fact, far off see how it moves, and from a geological system we see ore content in each specific place. Depending on this contents the excavator operator can distinguish it ore and overburden. At the expense of the best accuracy the production efficiency increases. The price of a share of percent of increase in average content of iron in ore are millions of dollars. Therefore such automation is important for production.

TAdviser: Tell, please, about the closest plans of EVRAZ in the field of IT.

Artem Natrusov: An environment in respect of the prices on which we depend, now not really good therefore we focus on projects with fast effect, on accounting, on energy efficiency in those domains where it can have really fast effect. Somewhere we need performance improvement, for example, on the Kachkanar GOKE. Any projects which lead to reduction of labor costs at business are welcomed, and we have several projects such. Here it is possible to mention also the same project by the EDS which reduces a certain number of people, the project on CRM when we the next stage give creation of the order to the client and we remove the intermediate stage of correspondence, the order, losses of information and so on. It leads to optimization too. Also development of solutions of the trading company, development of BI solutions is planned.

The important subject for IT of EVRAZ is business continuity planning. The idea is in estimating all risks at IT. Already now all critical systems are identified, on each critical system there is a plan of disaster recovery. The next step scenarios which describe what losses business as a result of misoperation of the IT elements can suffer prepare. So we know how many means will be lost by the company if this or that system fails, and we know where our biggest risks.

Now we are at a stage of preparation of plans for decrease in these risks. Some of them require the additional financial investments, some is not present. There is clear cost of risk reduction, and business can make the decision consciously. In this direction we will continue to work. Among priorities at us also the information security is registered now. Already there is forefront on its improvement.