ALEKTA: Siberian experience of automation of HRM

TAdviser: How long does the ALEKTA company exist in the market in what development and deployment of products she is engaged?

Alexander Zhizhin: The ALEKTA company exists in the market of information technologies since 1992, from the moment of the conclusion of the agreement, the first in the history of the company, with Pokachevsky department of technological transport (afterwards JSC Oil Company Lukoil which was a part) on automation of accounting of employees, payroll, accounting of vehicle fleet, fuel and lubricants and the main nodes of the equipment, accounting and processing of waybills and preparation of documents for settlings with customers.

Today we surely specialize in development, implementation, maintenance and rendering consulting services in the field of ERP systems: own development of NORDIS/2, SAP and 1C. At the same time we make projects on software development to order, to implementation of integration solutions and providing outsourcing services based on the specified software products.

TAdviser:  What place in your practice is taken by personnel management process automation? What solutions are proposed by the company in this area?

Alexander Zhizhin: Practically all projects of automation of industrial enterprises based on NORDIS/2 include the implementing solutions "Personnel management". Often projects begin with them, or they are conducted in parallel with stages of process automation accounting, tax and other types of accounting. Process automation of personnel management occupies about 30-40% of amounts of works on implementing solutions of NORDIS/2 system. For the SAP solution HCM – 60-70% of the volume of services in development and deployment of solutions based on SAP products.

Today our company proposes solutions in the field of personnel management based on three software products: SAP HCM, "NORDIS/2: Personnel management" and "1C: Payroll and HR Management".

TAdviser: How did approach to automation of HRM processes change recently? What tasks came to the forefront? What solution of tasks to you seems perspective?

Alexander Zhizhin: For large enterprises and holdings to the forefront there were such tasks as unification, standardization and centralization for the purpose of business process optimization of personnel management and operational obtaining the consolidated information for acceptance of management decisions. As a method of the solution of these tasks the organization of the general service centers with transfer by it on outsourcing of processes of accounting of personnel and payroll is considered.

For many medium-sized enterprises, in our opinion, basic questions of process automation of personnel management are relevant: use of a single system, but not the set of applications and tables of Excel, correct setup of functionality of systems for compliance of payroll to rules of law and regulations of the enterprise.

In automation of HRM processes by the most perspective, in our opinion, there will be questions of personnel recruitment, assessment of its competences, advanced training and the systems of motivation of employees. The enterprises will begin to pay attention to questions of compliance of quality of the staff which is available for them to requirements of the enterprise more and more.

TAdviser: Among the projects implemented by ALEKTA there are implementations on hundreds and thousands of jobs. What do large enterprises when choosing a HRM system pay attention to? What difficulties are characteristic of implementation of HRM in the large companies? How they are overcome?

Alexander Zhizhin: Now during the choosing and implementation of a HRM system by the management of large enterprises the following demands are made: only necessary, the shortest terms, a minimum of costs, most by own efforts. When choosing external contractors qualification and experience of a project team attentively are considered.

IT specialists of the large companies try to minimize operating costs, support and integration of HRM systems with other systems of the company. They should select or a single technology platform, or to look for "golden mean" among the solutions, the best in the class. From other factors influencing the choice of a HRM system it is possible to call the following: compliance to the Russian legislation, popularity and reliability of supplier company, existence of successful implementations at the similar enterprises, a possibility of additional tuning of a system by own forces.

By our experience, there are two characteristic categories of difficulties when implementing large projects: methodical and organizational. The first is a finding of balance between requirements of unification and accounting of specifics of the enterprises of holding. The second – coordination of interaction of a great number of project participants and ensuring timely decision making during its implementation.

For adoption of timely solutions on questions of the project the regulating documents in which the organization structure of the project, a frame of responsibility of the persons entering a project team and an order of project management accurately register are developed and affirm. In them procedures of preparation, approval and decision making and also the procedure of identification and the conflict resolution of interests should be defined. Coordination and control of works should be exercised at two levels: on the project in general and for each enterprise.

The solution of other problems on the project, for example, training of a great number of users, migration and classification of huge amount of data from the historical systems, carrying out and reconciliation of control payrolls, we carry to technical issues which depend on professionalism of a project team. We are capable to solve practically any problems of automation of financial and economic activity of the enterprises of any scale and industry accessory.

TAdviser: Until recently ALEKTA was engaged, generally in control automation based on own development, NORDIS/2 system. In 2008 the company became the partner of SAP. Why you stopped the choice on this platform?

Alexander Zhizhin: Many large Russian companies, especially in the field of mineral extraction, had a requirement of an exit to the IPO and attraction of foreign investments into the business. For this purpose the companies needed to lead the reporting "to a uniform denominator", to be transparent for the foreign investor. The solution of this question is impossible without use of an information system which should be known and usual for the western investor.

The systems of the western suppliers, such as SAP, Oracle and Microsoft conform to such requirements. The large Russian companies also began to be guided by them when choosing the information platform. The SAP company is the world leader among solution providers for business and occupies more than 50% of this market, solutions of SAP are used by most mining companies of the world. Demand of the large companies for SAP solutions steadily grew in Russia therefore we made the decision to become the partner of SAP company for expansion of the business.

TAdviser: ALEKTA, the Novosibirsk company, has rich experience of automation of the enterprises of Siberia, but works also in other regions. Who your primary clients regarding automation of HRM – the large Russian enterprises with geographically distributed structure, branches of the western companies? In what their specifics?

Alexander Zhizhin: Yes, it is valid, it is not important for us where there is an enterprise. More our clients are the large Russian companies. If to speak about specifics of the large companies, then by our experience it one – the remaining elements of "subsistence economy" in business organizations, i.e. existence of a set of auxiliary and service structural divisions, child legal entities which make products and render services for the head company that it could perform the core activity.

Each of such divisions can be considered as separate small or medium-sized enterprise of the industry (autoservices, repair, power supply, a power supply, etc.). At each of them the features, the profile, the specifics. And the large-scale project needs to manage to be organized and implemented so that all as a result became widespread the requirements – from the end user of a system on places to the company executive who is the main customer of our solutions. And we are able to do it.

TAdviser: Whether the share of the companies of medium business is big among your clients? What HRM solutions do they aim to receive?

Alexander Zhizhin: At the moment the share of the companies of medium business among our clients is not big. In this market the large role is played by automation project cost. From the software products offered in the market it is possible to select products of only several main vendors interesting to the market of medium business. Generally is products of the Russian developers. But the western suppliers also do not lag behind. Recently more and more products which can be competitive in relation to Russian and that the most important, these products and solutions rely on world experience of work of the large companies began to appear.

Mid-scale businesses impose such main requirements as: 1. Low implementation cost and supports 2. The shortest terms of implementation 3. Easy adaptation of a system to rapidly changing conditions.

It is possible to tell that they are interested in the standard industry HRM solution in which all features of their business processes are considered and tunings of a system are in advance performed. Implementations of such solutions should be fast, qualitative and for fixed cost.

Our company offers for medium business standard HRM solutions based on two products: "NORDIS/2: Personnel management" and "1C: Payroll and HR Management". We monitor changes of the legislation and quickly we make changes to the solutions proposed by us.

TAdviser: ALEKTA took part in the large-scale project on SAP implementation of HCM in the SUEK company having the enterprises in different regions of Russia. What was a role of the company in the project? What problems were solved what amounts of works were executed? What factors it is possible to call key for success of this project?

Alexander Zhizhin: We were invited to take part in this project, considering that our company has a wide experience of successful implementation of large projects in the companies of the extracting industry and also existence of a necessary resource of the specialists certified on SAP HCM. We were connected to the project at a stage when the solution developed by MOLGA company at a stage of a pilot project needed to be replicated on other enterprises of SUEK.

Identification of differences of the enterprises of circulation from the solution implemented in the pilot and determination of methods of unification of business processes and calculations, including, at the enterprises of underground coal mining (mines) became our main objective. Replication of a system on 37 enterprises of SUEK became the second large block of tasks (during the project there took place restructuring and their quantity increased to 41).

In the project progress of replication of a system enormous amount of works was executed. During inspection of the enterprises more than 3,500 differences from the pilot solution which after the analysis and classification were grouped approximately in 45 blocks of questions were recorded. They were considered by the interregional task force (ITF) which specialists of regions and the Moscow office SUEK, experts-methodologists ALEKTA and MOLGA developers entered. About 80 working meetings were held. Certainly, what is required by the legislation was accepted. The rest was considered in terms of expediency and unification.

Together with SUEK platforms of implementation in Leninsk-Kuznetsky and Krasnoyarsk on which work of regional groups of implementation - consultants ALEKTA and the staff of SUEK was organized were defined. Work was conducted in three directions: data migration from the historical systems, user training, ensuring work of users in a system. A work progress was planned so that by the time of readiness of data in a system on accounting section users were trained and began to work in a system. 43 employee groups of personnel departments, OTIZ, timekeepers, accountants of settlement groups - only about 400 people were trained. After training each trainee checked whether he will be able to perform necessary operations in a system.

During trial operation each user performed three months all operations of a settlement period. We carried out reconciliations of results of payroll between SAP HCM and the historical systems for each of nearly 40 thousand people twice. In January, 2009 a system was put in commercial operation, the staff of the enterprises of SUEK received the salary for January calculated in the system of SAP.

Results of our general work was the fact that the SUEK company in the planned time could begin to exercise personnel management in the SAP HCM system according to uniform standards and techniques and also to receive all operational and reliable information, necessary for acceptance of management decisions.

Long-term experience of "MOLGA" in setup and completion of SAP HCM, methodology of inspection and maintaining big projects ALEKTA, clear vision of result and operational decision making for its achievement from the management of SUEK allowed to achieve success and to achieve all objects set by the management of holding for a project team.

TAdviser: One of the oldest and considerable clients of ALEKTA is the Lukoil company. What solutions are used in the company for automation of HRM processes?

Alexander Zhizhin: We really work with Lukoil company long ago – from the moment of foundation of our firm. At the enterprises of Lukoil the different HRM systems are used, but most the oil-producing and service enterprises use our solution – "NORDIS/2: Personnel management".

For today in Lukoil company the project of ISU "Personnel" on replication of the SAP solution HCM in the enterprises of the main production of Oil Production and Oil processing business segments is kept. We take active part in this project as our specialists well understand specifics of these enterprises and their qualification is confirmed with international certificates of SAP.

TAdviser: NORDIS/2 system was created initially for the enterprises which were a part Lukoil later. Whether a system has obviously expressed industry specialization regarding HRM functions?

Alexander Zhizhin: No. System module "NORDIS/2: Personnel management" it was initially developed so that it could be used at the enterprises of any industry. A system proved the suitability at the enterprises of Lukoil performing different types of productive activity: production and oil refining and gas, services of marine and land technology transport, operation of the electric networks and electric equipment, road and repair construction works, technological providing and complete set of the equipment, service of catering establishments, production of construction metalwork and construction materials, and others.

TAdviser: In what do you see advantages of use of SAP to automation of HRM and in what – advantages of NORDIS/2?

Alexander Zhizhin: Advantages of the SAP solution HCM are well-known. This solution accumulates world experience of automation of all business personnel management processes of a set of the companies of the different industries. Therefore it is trusted by foreign investors and large enterprises are guided by it. The SAP solution HCM is localized for Russia and supports changes of the legislation. In the Russian market there are enough partner companies of SAP which render implementation services and to maintenance.

Solution "NORDIS/2: Personnel management" supports all business personnel management processes which are demanded by the Russian companies. It allows to implement as centralized, and hostless systems of management and IT infrastructure, providing optimal balance between unification and specifics of structural divisions of the geographically distributed companies. Interaction and distribution of functions between users of a system well is suitable for the practice which developed at the Russian enterprises.

In the solution "NORDIS/2: Personnel management" there are all functional units, relevant for Russia, for example, accounting of work as a shift method, accounting and compensation of processing, a piece-work pay, awarding, compensation of drivers according to waybills. We developed a system, trying to minimize the number of the data entered manually. Especially it is noticeable in a time recording and awarding. For example, a system allows to regulate at the same time in one digit both the size of all fund of awarding of the enterprise, and a bonus level, to the charged each worker.

The price of implementation and support, update rate of NORDIS/2 system at change of the legislation are also competitive.

TAdviser: In what companies NORDIS/2 it was used for automation of HRM? What implementation projects of this system do you consider the most considerable?

Alexander Zhizhin: Practically in all companies with which we had to work regarding NORDIS/2 system implementation the module "Personnel management" was implemented. It enterprises of Lukoil, GAZPROM and SIBUR companies.

 We consider the most significant project of implementation of our system the project in LUKOIL-West Siberia LLC completed in 2004. It is characteristic the fact that this Society is the largest of subsidiaries of JSC Oil Company Lukoil. Within this project we covered in full functionality of NORDIS/2 58 system of the enterprises, more than 2000 jobs ensured functioning in a common information space. It is one of the largest in Russia successfully executed projects on automation of accounting, financial, tax, warehouse accounting and personnel management based on the Russian software.

TAdviser: Whether ALEKTA – setting of a system (technique) of personnel management is engaged in consulting services? What share of such services in implementation projects of HRM?

Alexander Zhizhin: Most often it is necessary to unify and standardize accounting and calculations in different structural divisions (enterprises) of the customer. We reveal specifics, we create recommendations for decision making about unification of business processes and to change of local regulations. Practically in each project there are such works.

Periodically to us order study of single questions and development of methodical materials. But we do not select such works as separate type of service.

TAdviser: Whether you feel the shortage of the qualified specialists capable it is qualitative to automate HRM functions, to participate in large HRM projects? Do you prefer to take in the company of young specialists and to train them (to train, pay certification) or to invite experienced specialists even if because of borders of the Siberian region (if there is such need)? What it is more profitable economically?

Alexander Zhizhin: No. Our company does not lack for qualified specialists. Today we created a big team of experienced and highly skilled analysts, methodologists, directors of tasks, software developers, testers and, of course, consultants for implementation. About 100 employees have international certificates in the different directions of the SAP solution ERP (20 of them on SAP HCM), 12 specialists have Certificates of professional accountants of IPB Russian Federation, 14 employees have Certificates according to solutions 1C, several employees have 2 and more higher educations and scientific degrees.

More we adhere to that position that qualified personnel for themselves needs to be trained. Therefore we practice set of young, ambitious and purposeful specialists of the leading universities of Western and Eastern Siberia (NSU, NGTU, TGU, etc.). Such children are able to do the main thing – they are able to work in constantly changing situation and to master new technologies!

For achievement of these purposes the company has all necessary. We work in the modern and spacious building with a total area about 8,000 sq.m. Here everything is created effectively to work. We have own Training center which trains our specialists and specialists of customers. With  SAP CIS there is a long-term agreement about training of specialists in the different directions of the software of SAP. Also training of specialists of 1C is conducted. Our company is a permanent sponsor of different scientific actions of NSU and the founder of grants for the most perspective students.

Our employees – the main property of the company!