The process of transformation at “Samruk-Energy” JSC is in full swing. The stage of development of the target model of future renovated company “Samruk-Energy" JSC is nearing completion in the first half year. Then the stage of planning and the stage of implementation of design decisions will begin. Key players in this work will be subsidiaries of holding company that are within the confines of transformation.
On May 19, the Transformation Team met for the first time with CEO of subsidiaries and affiliates, within this process, in order to discuss the progress of transformation program. The meeting was attended by CEO of "Ekibastuz SDPP-2" JSC, "Ekibastuz SDPP-1 named after B.Nurzhanov" LLP, "Bogatyr Komir" LLP, “Samruk Green Energy” LLP, as well as representatives of "Moynak HPP" JSC, "Shardarinsk HPP" JSC and "First wind power plant" LLP. Transformation team discussed the status of all control points of the Roadmap and responded to business issues.
Categorical procurement management involves ordering and unification of procurement categories - control points (CP) 6 and 10. At the moment, centralization project and the list of procurements’ categories which will give the maximum economic benefit with minimal risk are being developed. Adaptation of the new procurement model is expected to be completed by the end of June. Expected results for CP-7 - release of remainder of commodities and materials after projects and vacating storage spaces.
Unified handbook for 1st priority enterprise (materials, services and contractors) and 2nd priority enterprises (staff, articles and types of expenses, facilities under repair) will be developed as part of created data management office.
Benefits / Value of creating the DMS: the creation of a competence center for building expertise in data management and the determination of responsibilities for preparation of high-quality data required as a basis for further automation of business processes. The benefits of creating handbooks: filling in templates of business solutions with reference data in sufficient volume and quality to ensure the automation of corporate processes in a timely manner.
Transition to the target organizational structure and the new operating model will be performed within the framework of CP-9. Approaches to development of organizational structure and operating model of the Company's management:
• Increasing the degree of involvement of the Head office
• Centralization of supporting and corporate functions at the level of HO for implementation of synergies of:
• Sales and trading;
For the new operating model and organizational structure, BSG Group consultants took into account best practices benchmarking carried out in the framework of long-term development strategy.
As regards CP-11, diagnostics, development and introduction of a pilot project management system (UPMS) will be completed. The purpose of the project is to increase the efficiency of investments of the Fund's portfolio companies through development and implementation of a unified project management system in the Fund and Samruk-Energy (defined as a pilot asset) designed to improve the standardization and efficiency of management of the Fund portfolio projects.
As regards CP-12, production and financial modeling system will be introduced (ISP). Development and implementation of planning and modeling system of "Samruk-Kazyna" JSC and "Samruk-Energy" JSC (defined as a pilot asset), intended for production and financial modeling, setting and monitoring of short-term and long-term goals:
• Improving accuracy of forecasting of production and financial indicators of Samruk-Energy with possibility to set goals in respect of KPI;
• Standardization of the interaction of the Fund and Samruk-Energy in the process of setting and monitoring goals;
• Reducing financing costs, due to more precise liquidity planning;
• Control over the implementation of investment projects.
As for CP-13 there will be a transition of IT services to the infrastructure operator. This will allow reducing the budget funds (costs) for the operation of IT infrastructure, including its maintenance and repairs. In addition, this will provide fast scalability, high fault tolerance, secure IT infrastructure; Transparency and accountability of IT spending.
In respect of CP-14, the transition to the service model on provision of software licenses will allow reducing the budget expenditures for purchasing and technical support of corporate licensed software or total cost of ownership. In addition, it is flexible and quick licensing, minimization of legal risks, acceleration of business processes automation by obtaining ready and templates (semi-finished) of business solutions.
As regards CP-18, automated corporate processes will be introduced; this implies standardization and unification of enterprise’s process model; increasing the promptness, quality and efficiency of enterprise business processes, including through the creation of a single integrated information environment (space) on the basis of ERP-system.
As for CP-15, a budget for 2017 based on KPI tree will be drawn up. Indicators tree is formed on the basis of specific objectives and goals of an organization. Tree - a schematic representation of strategic indicators breaking down into the operational level to the actual control levers.
Basic principles of indicators tree formation:
• The tree includes only those indicators that help in decision-making on strategic / operational matters. There should not be indicators for the sake of indicators.
• The tree allows passing from the top-level financial indicators to the operational level with transparent and objective responsibility for the outcome;
• The tree has been designed to focus on the future. Even if currently the data for calculation are not available for all indicators, they are still included in the tree because they are important.
In respect of CP-19 - execution of the action plan for introduction of meritocracy in 2016 (including subsidiaries and affiliates), it is planned to:
• introduce rigorous competitive selection in hiring for administrative positions through the compulsory publication of vacancies on the sites of companies and selection of best candidates;
• introduce executive and administrative staff performance appraisal system;
• introduce job classification structure (grading);
Also CEO of SA proposed to create a new approach based not on “one window" principle but several. Thus each company will determine the list of responsible persons approved by the order - this will specify the requests on a bilateral basis.
Regular meetings of Transformation team with CEO of subsidiaries and affiliates create an effective platform of interaction of stakeholders involved in the implementation of “Samruk-Energy” JSC transformation program.