Interview with the board member of Energy Consulting Group Svetlana Ivanova

Svetlana Ivanova: Market size on financial performance really fell last year. Unfortunately, the techniques used today by researchers of IT market are not so perfect that on their basis to do exact forecasts. By different estimates falling was, depending on the technique used at a research, from 20 to 40%. If to rely on the digits mentioned above, then today the volume of the Russian ERP market in general can be about 60-80 billion rubles. As for financial performance on separate segments, on my feelings, business volume in the field of acquisition of the IT equipment and licenses more decreased, the size of the market of IT consulting – decreased to a lesser extent, regarding maintenance of ERP systems as it seems to me, market falling in general can be considered insignificant. The last is explained by the fact that the level of penetration of ERP systems on large enterprises is high on so many that significant cost reduction can lead to business continuity threat. At the same time decline in the market in the field of consulting was followed by structural changes of demand for these services – we observe decline in demand from big customers, the state segment, and medium business, on the contrary, began to show keen interest in the systems of the class ERP. Thus, an observed roll of demand in the Russian ERP market – towards medium business.

Svetlana Ivanova: In general match. In particular, the quantity of new implementation projects of ERP systems at big customers decreased. However we managed to approach crisis in good shape. We have the offer optimal today on a ratio price/quality regarding the product Sage X3 localized for Russia focused on the average client. As a result we quite successfully compete with all who work at this segment of the market. Only in 2015 we increased a market share, by our estimates twice. And it allowed to compensate substantially decline in demand from big customers. Today Sage Rus has more than 200 clients in the different industries through the whole country.

Svetlana Ivanova: Global significant changes in the market regarding the main players did not happen. As for the Sage direction, I believe, we occupy about 1% of the ERP market for today.

Svetlana Ivanova: It is great result, in our opinion, as as I already noted, we doubled the market share.

Svetlana Ivanova: Affected – the number of new large projects of implementation of the western industrial ERP systems was reduced. But cardinal improvement of positions of the Russian vendors at the same time did not happen.

Svetlana Ivanova: On large enterprises where the SAP solution is already implemented, for example, the big way on system implementation, personnel training is passed, big investments are made. And if to pass to other system, it will lead to new investments, new time and human expenditure which should have serious business justifications. Especially in crisis. Yet about significant projects on large enterprises on replacement of the western ERP systems on Russian in the market there is no information.

Technology more modern, innovation, more effective industrial solutions of the Russian vendors for business could become one of such justifications. There are no such solutions today. It is obvious that IT-Business are, first of all, investments into the ideas, into their development and implementation.

Cardinal improvement of positions of domestic vendors is possible only on condition of creation of infrastructure for search and development of the innovation ideas, considerable investments into the Russian developments which still lose for today western by many parameters. And investment volume should be comparable at the level of the Russian vendors the problem cannot be solved with the western, and local investments. It is big, serious work in which the state should be engaged, creating conditions for innovations. Without long-term daily laborious work on search, acceleration and implementation of the innovation ideas import substitution, effective for business and economy, does not happen. There will be only declarations of short-term validity period. Before updating of a political environment.

Svetlana Ivanova: Difficult question. In terms of national security – perhaps partially and, are justified. But at the same time, in my opinion, in use of the western ERP products for the Russian large business there are more pluses, than minuses. If automation reaches the main production processes (oil and gas production, discrete production), it allows the Russian companies conditional free of charge (in addition to the product) to receive the western standards and production technologies. And effect of it, full implementation in practice very big. Another thing is that at implementation of the western ERP products case reaches automation of the main business processes seldom, implementation is limited to finance and accounting.

As for the Russian solutions, at the level of end-to-end automation of all business processes of large enterprise, including production, they just have no functionality - it is only declared. For an average segment of functionality of separate Russian developments it is enough, implementations in the market are known. In it there is also a key difference in approaches. On average business all main decisions in the course of implementation are made by owners, pursuing the aims, main of which – efficiency and transparency of business. In this case the client is initially aimed at obtaining the maximum business effect of system implementation and is ready to optimize all business processes of the enterprise.

Svetlana Ivanova: The first, objective reason consists in the low level of standardization of business processes on the Russian production, in insufficient qualification of workers of the main production, need of their retraining. To implement the ERP system at the level of the main business processes it is necessary to deal with it at first. The second reason – mentality of the Russian leader who considers that automation of finance, accounting, managerial area – it is effective and is no need to fall by the production rate simply.

It is possible to tell that readiness of the owner of business or the company executive for automation of the main production processes – the indicator of a managerial maturity.

Svetlana Ivanova: About 80% - the direction of implementation of ERP systems. Here not only implementation of the implementation is meant. But also the whole complex of actions, with it connected. It both management methodological consulting, and Enterprise resource planning setup, and its maintenance. The remained 20% of a portfolio are an auditor business and the legal, tax, accounting, investment consulting accompanying it.

Svetlana Ivanova: We started the Russian localization of this product of the British company Sage Group in 2009 and in one and a half years solved this problem. It should be noted that localization assumed not only creation of the Russian interface, but also a possibility of maintaining in the system of full accounting, tax accounting for the Russian standards. Already in the second half of the 2010th the first sales went. 2013-2014 business in this direction of dews approximately for 30% annually. In 2015 we grew by 60%.

In addition to Sage X3 in our product portfolio there is an EDI solution TENOR EDI for suppliers of the Russian component parts to cars of a number of the western producers (Renault, Nissan, Peugeot, Citroën). This solution allows the Russian manufacturing companies of autocomponents to interact with ERP systems of the western carmakers. In the last 2-3 years we observe significant growth of volume in this direction of business. Today TENOR EDI use more than 200 Russian supplier companies of the European car makers. The western partners of the Russian producers of automobile components managed to build up the relationship with the Russian suppliers, to implement the western quality standards that allowed to begin export of cars and autocomponents of the Russian production abroad.

If till 2014 sales and support of Sage X3 were just one of the directions of business, then in May of the 2014th the separate legal entity, the Sage Rus company which became the only master distributor of Sage Group company in Russia was created. And today we actively expand this business, gradually creating a partner network on Sage X3 distribution.

Svetlana Ivanova: Last year business grew by 1.6 times. In last years growth was at the level of 30% annually. The customer base – suppliers of autocomponents, holdings, the enterprises with discrete production, the distribution companies (Internet trade, pharmaceutics).

Svetlana Ivanova: Not for nothing Sage X3 is a world leader of solutions for medium and small business. Key advantage of Sage X3 is the technology platform providing to the product web and a mobile oriyentrovannost at the system kernel level.

SageX3 - completely mobile ERP. So the user has access to all functions of a system via any browser on any device without additional completions on creation of mobile applications or web interfaces. Thanks to the aforesaid, Sage X3 there is just beautiful system. Still any client did not tell that the interface does not suit him or is difficult in mastering.

SageX3 gives a maintaining opportunity in one installation of production, accounting and management accounting by any number of legal entities, by different legislations without restrictions on currency types and so forth. It is crucial and exclusive functionality on conducting full management accounting for groups.

Besides, Sage X3 offers the mass of "nice" services of type: drag&drop technology of report generation, visualization of business processes, etc.

At this solution very good functionality, first, on management of discrete production on which there was good demand from the Russian companies of an average segment. In particular, we implement implementations in production of small machine-tool construction, engine building, production of filters for nuclear power plants and other. The second advantage of Sage X3 is, an inventory control, the logistics developed functionality regarding distribution. And the third scope of a product – management accounting in holdings as the solution allows to conduct at the same time several types of accounting and to collect the consolidated statements on holding.

Svetlana Ivanova: The boxed, previously set up solutions focused on each of the called spheres – for discrete production, the distribution companies and for holdings are created. We began promotion of such solutions in 2015 that was one of pacing factors of growth of business.

Svetlana Ivanova: The vendor, Sage Group company, constantly develops the product, and already implemented a cloud solution for the American companies. The version which we offer clients today is the completely mobile platform giving the chance from any mobile device to work in a system, to completely use its functionality. As the master distributor of Sage Group in the Russian market we have the obligation for localization of each new version of a product. Respectively, the next step which we are going to make next year, - start of a cloud solution for the Russian clients. The corresponding negotiations with a number of cloud operators are conducted, the pilot project with one of our clients is planned for the current year.

Svetlana Ivanova: Last year a row enough large projects on SAP which results we have no right to sound proceeding from confidentiality terms of agreements with clients was complete.

Svetlana Ivanova: In the foreseeable future we are going to focus on maintenance and development of SAP solutions. Besides, we, as usual, are open for implementation of essentially new technological solutions. But here it is necessary to consider that in a priority at vendor today the American market. Dynamics of business development of SAP there many times is more, than in any other local market, including Russian. So it is possible to expect that in our market SAP will develop, try to support the share, but the innovation will hardly offer something or to show true flexibility in partner relations and clients.

Svetlana Ivanova: The first problem about which we already spoke above, - the low overall level of standardization of business processes in the Russian economy. As result – in the Russian conditions before implementing the ERP system, it is necessary to prepare the description of the existing business processes at first. And each ERP implementation in the Russian market is a research and development. Respectively, it is difficult to plan previously the volume of costs and financing of the project and consequently to try to obtain cost efficiency of the project. The western practice assumes that the implementer will never be engaged in the description of business processes of the customer as this case of the specialized consulting company.

The second problem point connected with the first – low competence of consultants for ERP solutions in features of the Russian business, understanding of business processes of the project orderer.

And the third problem – need of purposeful state policy on creation of infrastructure for support of the new ideas, the innovation startups, the preferential mode on taxation of IT-Innovations and startups. For today such policy is pursued "kusochno", not consistently, and, as a result, the effect of it is practically absent. The state provided tax benefits for the IT companies, but it, of course, it is not enough for cardinal improvement of a situation. In Russia there is no created infrastructure for consolidation and development of competence in innovations in IT yet. While customary practice of large western vendors – financing of research laboratories, incubators of the ideas, as allows them to keep superiority in the field of IT.