Information Technology at Segezha Group

2024: How to use SAP in the absence of a vendor. Vice President of IT Segezha Group shared his experience on TAdviser SummIT

Speaking at the TAdviser SummIT conference on May 28, 2024, Igor Kozlov, Member of the Board - Vice President for Information Technology and Process Automation of the Segezha Group Timber Holding, shared his experience in operating SAP products in the current environment.

In 2022, the group opened an internal integrator - Segezha Digital Solutions, where expertise in the field of information security, infrastructure, user support and main IT systems is concentrated.

TAdviser

The project for the implementation of SAP solutions in Segezha Group began in 2019, in 2020-2021. it was actively developed with the involvement of a contractor. During this period, the stages of formation of the main functions of accounting and logistics, consolidation of financial statements in SAP were completed. In 2022-2023. the project made a sharp turn. The holding faced the task of transforming export flows and entering new markets, as well as the need to optimize the costs of supporting the implemented SAP solutions. By this time, the automation of basic functions had already been completed, the company focused on end-to-end business processes: procurement, warehouse storage, transportation, etc.

Since the Segezha Group was forced to abandon large resources attracted to the project from outside, from mid-2022 it has been developing by an internal team, which now works only with SAP tasks where the business expects an understandable economic effect (reducing cost, overhead costs, accelerating logistics or increasing margins).

The changes also affected the structure of work of the internal implementation team. If earlier the staff was mainly focused on business support and, to a minimum, on the development of systems, now the labor costs are approximately 50/50. In 2023, the company itself has already carried out about 90% of SAP development work, and in 2024 this figure will reach 100%. At the same time, the SLA level increased to 95%, and the availability level is 99.95%, which Segezha Group considers a good result.

Problems with obtaining regulatory updates necessary for tax and accounting were resolved with the involvement of a new independent supplier. A disaster recovery plan for SAP was also prepared, which is especially important, since SAP itself is no longer the last support line in Russia, and you need to independently guarantee the continuity of the system.

The implementation strategy has also been transformed. Initially, they tried to implement as quickly as possible, almost completely adjusting the business to the capabilities of the system. Now, on the contrary, we are talking about the fact that the system is being adapted to the requirements of the business as much as possible, finding new opportunities to optimize processes in the company.

In the field of replication of information system modules, the company is now focusing on the most technically trained enterprises of the group, where key end-to-end business processes are fine-tuned, after which the experience will cascade to other enterprises.

After the introduction of EU sanctions packages 8 and 9, Segezha Group initiated the termination of all existing SAP cloud service agreements. The most difficult of them, Igor Kozlov calls the situation with the mobile maintenance program (maintenance and repair of equipment). In addition to migrating these services to the data center in Amsterdam, which did not meet the request of the Segezha Group, there was also a risk that with the new package of sanctions, cloud services would be turned off at one point. By the time all cloud contracts were terminated, the holding team had already written its own mobile maintenance system, which it has been successfully using since the 4th quarter of 2023.

In our experience, not a single SAP product and solution that would be of interest to the company could be established in 2023. Support for Russian clients has ceased to date, but an alternative technical support business has formed in Russia. We also used this service, while strengthening the internal expertise in order to manage the system as quickly and efficiently as possible on our own, "says Igor Kozlov. - It is much safer to have competencies in the main modules and business processes used within the group.

In the long term, Segezha Group is considering a parallel project to deploy 1C: ERP in the holding. At the moment, this is not a complete replacement for SAP, Igor Kozlov emphasized, but, rather, the "second leg" for greater stability of the group and risk reduction. This is especially true against the background of the acquisition of new assets by Segezha Group, where, as a rule, 1C is used. The company has extensive experience in supporting 1C solutions.

Several factors interfere with the complete transition from SAP to 1C. One of them is architectural: SAP was originally created as a system for large businesses. Segezha Group's own experience in various 1C systems suggests that a complete transition to 1C:ERP will require significant performance tuning and an increase in infrastructure capacity in order to maintain the processing of the required amount of data in the usual time frame.

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О TAdviser SummIT

TAdviser SummIT, held on May 28, became the largest in the history of its holding: in total, more than 1.5 thousand delegates attended the conference, and more than 50 stands of IT products and services suppliers were deployed in the exhibition area. Nine thematic sessions were held as part of the event - more than last time. About 150 people made reports in the plenary part and thematic sessions. TAdviser SummIT was supported by Ministry of Digital Development. It was attended by the Minister of Digital Development, Communications and Mass Media Maksut Shadayev, who in the format of an interview on stage answered sharp questions from participants in the IT industry.

2022

Strategic priorities in terms of digitalization

Segezha Group implements a large-scale digital transformation program aimed at improving the efficiency and profitability of the business, reducing transaction and transaction costs, developing and maintaining brand attractiveness for IT specialists.

According to the group's 2022 annual report, the strategic priorities in the field of digitalization for it are as follows:

• Active development of its own IT developments and the use of domestic digital solutions in order to reduce dependence on foreign technology imports;
• Development and maintenance of a modern digital brand, which allows to increase the attractiveness of the company for its investors, employees and young people;
• Working with data: receiving, accumulation and filtering, improving reliability, analytics, creating an architecture of data sources, excluding a person from the data provider-intermediary section, creating a data policy;
• Software robotization of processes throughout the group;
• Centralized management of digital transformation processes within the framework of specialized management;
• Constantly searching, analyzing and selecting new digital technologies, followed by testing at different sections of the production cycle to identify and implement the most effective of them in business processes;
• Implementation of projects based on technologies that have already been tested and proven to be applicable in specific conditions;
• Launch of new enterprises in accordance with the Industry 4.0 paradigm;
• Unification of the IT landscape.

Creation of Segezha Digital Solutions

In November 2022, Segezha Group founded its IT company - Segezha Digital Solutions (Segezha Digital Solutions LLC). It will be engaged in centralized management of corporate information systems, analysis and implementation of information technologies, software development, search for business growth points through the introduction of digital solutions, automation of Segezha Group business processes.

Segezha Digital Solutions is registered in Kirov. In January 2023, the company received state accreditation from the Ministry of Digital Development of the Russian Federation. The staff included more than 160 specialists in SAP, "1C," CRM, RPA, infrastructure, digitalization and information security. Read more here.

IT passport of projects in Segezha Group

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