Russian Copper Company (IBS Finance)

Project Implementation

Originally RMK announced an open competition on implementation of a uniform complex corporate information system. A number of the western and Russian IT service providers took part in tender, a large number of competitive offers arrived. A choice of RMK was made for benefit of IBS company. Having analyzed specifics of business processes of RMK, specialists of IBS offered the concept of the consecutive solution of a complex of IT tasks of RMK. "We advised to be limited for a start to the solution of the most essential – financial – questions and not to try to cover all complex of tasks at once, – Orlov Ilya, the director of the Metallurgy and Mechanical Engineering segment of department of corporate systems of management of IBS company tells. – Thus it was possible to close quickly the sharpest requirements and at the same time to give to the customer the chance without haste to analyze business processes of grinding of sight of their support by means of IT".

The platform of a new system selected the multivendor solution proposed by IBS company: automation of accounting and tax accounting at the enterprises is implemented on own product "IBS Finance" developed on the 1C: Enterprise 8.1 platform, and at the level of group the solution SAPSEM-BCS is responsible for consolidation of the reporting. � Such combination of software products is directed to minimization of cost and time of system implementation, – Kumov Sergey, the project director of the Metallurgy and Mechanical Engineering segment of department of corporate systems of management of IBS company explains. – The solution is focused on the companies with filial structure as allows to carry out replication on places at rather small costs due to parametrical setup of a system and standardization of rules of accounting and preparation of the reporting, management of cost accounting of finished product output and semi-finished products, the centralized control and management of execution of requirements of account policy, complete transparency for users of accounting model and standardization of rules of work with a system.

The approach offered IBS differs from traditional at which in such situation the company is limited to implementation of consolidation software, assigning to report generation to the enterprises which perform this work as different means, occasionally and with attraction of manual work. It is clear, that the popular traditional campaign has essential shortcomings. As the initial level of automation of the enterprises did not guarantee operational data collection, necessary for the reporting, there was a question of implementation of the corresponding IT solutions. However the existing infrastructure and level of IT qualification of personnel of the enterprise did not allow to make it in a short time. Therefore IBS suggested to standardize financial statements in all branches these data were guaranteed reliable and conformed to uniform corporate requirements. It could also be solved by different methods – for example by ERP system implementation. However IBS offered compromise option. "It assumed, – Ilya Orlov tells, – the easy solution which, on the one hand, allows to carry out tasks of financial management (to provide financial accounting at the enterprises according to requirements of group), and with another – does not demand implementation of the large-scale systems. Thus, having quickly solved essential tasks, it is possible to prepare RMK for large-scale IT projects which are coming the company further".

The solution "IBS Finance" is developed on the platform "by 1C: Enterprise 8.1" especially for the distributed holding structures. The set of the different enterprises is a part of RMK, on each of which historically there was the culture of financial accounting, specifics of account policy, the staff, excellent on skill level. "Quickly it is difficult to create the single accounting system in such situation, – Sergey Kumov argues. – It is necessary to develop a technique, account policy, to hold the training seminars for the working personnel and to conduct search of employees of required skill level, and it requires long time. It is necessary to consider also the level of readiness of the available IT infrastructure".

It should be noted that the boxed solution of 1C supports accomplishment of standard tasks in the field of financial accounting and the reporting. But in case of the large enterprise or group which are locating the chart of accounts, having the requirements for detailing, the box version should be finished seriously. Such projects provide development of additional functionality. It is clear, that in need of making changes (for example, in the chart of accounts or level of analytics) it is necessary to finish each of the systems working at the enterprises of group as everyone was created separately and has the unique features. Except that such scheme of work is very expensive on time and resources, human and financial, it also bears in itself risks of incorrect changes: quite often happens that, having improved some processes, the programmer brings dissonance in implementation of others. � Having executed some such projects on completion of functionality, we integrated the practices in single solution, – Ilya Orlov tells. – The configuration of this system excludes emergence of the described problems. The mechanism of economic transactions which allows to do the solution parametrically configured is built in a system. The company, locating an initial set of economic transactions and documents, creates the initial chart of accounts. Further in need of making changes it is possible to configure new economic transaction, without resorting to involvement of programmers, and using the system developed the setup device.

The solution allows to create the standard system configuration managed from the center. Settings are made in the center and automatically extend to all enterprises of holding. Thus, it is possible not to bring changes in account policy to the staff of the enterprises: a system gives the chance to work only on the set scenarios. Also powers of users are on a centralized basis configured. "This solution will allow us to facilitate significantly work of personnel of accounting at the enterprises, as much as possible to reduce an error probability at reflection of financial and economic activities, will provide the required level of accounting in the company, – the CIO of RMK Kuzmina Marina emphasizes. – Besides, there is an opportunity to unroll local installations of a system at the enterprises in the absence of communication channels of sufficient power.

It should be noted one more important nuance. The RMK group is multi-profile: it includes the mining and processing factories, metallurgical production, the trading companies and other enterprises providing activity of holding. Product cost and services of these divisions are calculated according to different schemes. Therefore essential plus of a system is the built-in designer of cost accounting which allows to configure parametrically any settlement scheme of cost value for any production".

Thus, within the created financial reporting system packets of reports on RAS form at the enterprises, then with data retrieveds transformational and konsolidatsiyeyny transactions are executed, and at the exit the consolidated statements at the level of holding is generated. Reports generation is supported by the IBS Finance system, further these data are consolidated in SAP SEM-BCS.

Organizationally regarding SEM-BCS SAP implementation the project was implemented rather easily as the staff of one service implementing a set of accurately outlined business processes was involved in it.

The implementation project "IBS Finansy" is more difficult, first of all from the organizational point of view, owing to its geographically-distributed structure, large volume of tasks and the number of the involved employees. The all-corporate IT project in scales of all group is connected with need of change management all 600-700 people of the financial block began to work according to the new scheme. Account policy of the enterprises differs therefore the project team had to develop new methodological solutions on accounting. In addition to the financial and economic block, from RMK the large number of specialists of different divisions of holding was involved in project implementation that to a certain extent complicated process of approval of project solutions. "It is serious changes for the group, – the director of economy and budgeting of RMK the Whitebait Tatyana supplements, – and the majority of problems carried rather not technology, but organizational character – for example regarding development of uniform methodological approaches upon transition from theoretical model to everyday practice of accounting and reporting".

Now forces of a project team of consultants of IBS and the staff of "Management of IT of RMK" complete an implementation stage at three pilot enterprises of holding: JSC Uralgidromed, Karabashmed Ltd, Kyshtym Medeelektrolitny Plant Ltd. Since November, 2009 till present there is a process of trial operation of the solution. The unified register of documents which are carried out on all group, the unified register of economic transactions, a unified comprehensive plan of accounts is created, all financial and economic activities are unified.

Specialists of RMK, having received necessary skills and having mastered methodology during these implementations, further are going to perform replication of the solution and on other enterprises of group. In general transition to use of a single corporate system, development and unification of accounting policies will allow to bring to qualitatively new level support of conducting accounting and tax accounting at all enterprises of group, the end-to-end cost accounting system will be implemented during creation of metallurgical products, and at the level of group control of financial flows will significantly improve.

[1]