Sergiy Detyuk, Metinvest Digital: "Flexibility and adaptability are synonymous with modern IT service"
— Let's start our conversation with how did you come to IT?
— During my school years, the Spectrum computer was popular. At first, my friends and I were fascinated by games, and when they got bored, we began to write small programs in Basic for Spectrum. In part, I was lucky - in the cooperative where my father worked, there was a PC, and in non-working hours I could master it. Having figured out what's what, I even helped others when they had questions. In the third year of the Donetsk Technical University, he worked as a laboratory assistant at the department and was involved in maintaining the LAN. I soon realized that IT knowledge is valuable not in and of itself, but in a specific context. So, in the penultimate year I entered the second specialty "Economics and Finance" and received an education in two directions.
He started his career as a programmer at Ukravtodor. However, I realized pretty quickly that this was a bit out of my mind. I wanted to do something big. Then there was Ukrpodshipnik a holding that united many diverse organizations. In the corporate development division, as an information systems expert, I was responsible for the development of a program for the creation of corporate IP, its harmonization with existing systems and the consolidation of information flows. As a result, a set of automation solutions was implemented taking into account the requirements of the business.
— Probably, economic education help you?
— Certainly. Understanding economics and finance allowed them to speak the same language with business customers and better understand what can be offered to them in the context of IT.
— That is, the time was well spent? Today it is becoming fashionable to receive two education at once.
— Now the profile of work is constantly changing, the focus is changing, and you need to be flexible enough in terms of the constant development of new knowledge. And this is correct, because more and more values and opportunities are being created and will be created just at the junction of different areas of knowledge. At the same time, this in no way cancels a narrow professional career. If you are completely absorbed in something, do what you love, you will not have to work a single day. You can't say more precisely.
— Let's go back to 'Ukrpodshipnik'
— In two years, an IP development program was developed and many small corporate development management projects were done. We chose the SAP solution as a platform for automation, and after a long and deep training in the technologies of this vendor, I headed the project implementation team. But the crisis made its own adjustments: the management froze all projects. Since by that time I had already plunged into the topic, representatives of SAP offered to talk to ISTIL, which was looking for an IS head. They just separated from the DMZ and planned to implement their own IS. And I went to them as a project manager. Of course, I did not yet have real experience of working with SAP, and indeed very few people had it at that time in Ukraine.
— For Ukrpodshipnik, the choice of SAP was unusual for those times.
— It was more of a credit to the IT department: to create a case and explain its importance to management. After all, the implementation of SAP is a radical transformation of all business processes. But, unfortunately, we have not reached this stage. It should be noted that the management of the corporate development group was quite progressive. They helped define focus and direction. When choosing an IS, we evaluated SAP not as a standalone software product, but as a set of best practices and a guide to business management.
— At that time, the approach was popular to develop everything yourself.
— In most cases, yes. At the same time, Parus, Galaktika and other accounting and financial systems appeared.
— At ISTIL, did you continue to work on SAP?
— In ISTIL I has completed two projects. The first is IT separation and data migration. We have transferred all our information from the general DMZ system to the ISTIL platform. We also set up the processes and performed the integration between the two companies, since they had close production and logistics ties. The second project is the successful implementation of SAP. We managed not only to deploy an industry solution for metallurgy in a very short time, but also to complete a complete reengineering of the company's processes based on the implemented solution. In addition, I worked with a team, where in practice I gained experience in project management, interaction with employees and organization of the entire process.
— That is, you immersed yourself even more ...
— On the one hand, I immersed myself even more in the business context in order to understand what tasks, processes there are, what cannot be solved, etc. On the other hand, I had to learn project work, change management, independently select people and train them. The company's management implemented the best corporate governance practices and set clear requirements for the system, for tools, since it had an idea of what needs to be obtained as a result. In addition to the transformational role of the SAP Implementation Project Manager, I also served as the Chief Information Technology Officer.
— That is, it was also a transition to a new level ... What were the next steps in professional terms?
— The next step in his career was the position of the CIO of Dneprospetsstal a large plant with an IT department of about 150 people. Despite the complicated bureaucratic procedures, there was a large scale here. Under my leadership, the Service Desk was adjusted, IT processes were changed, the infrastructure was consolidated, and the data center was organized. In addition, one of my strategic tasks was a project to redesign the SAP system, including changes in business processes. He brought me even closer to interacting with business customers and managing organizational change.
Then there was new experience and new challenges within the energy holding DTEK, where I was involved in the reorganization of the IT function, its development and the formation of a service-oriented IT model. A separate IT vertical was created, expertise was collected from all mines, power plants, supplying companies, etc. The work format itself was very interesting. I think this was one of the turning points in my professional biography. I formed an IT strategy and defended it. To this end, he conducted an analysis, created a centralized team and advocated an approach to IT consolidation. As a result, the IT function was transformed into a separate area, which I headed as CIO. Then, comprehensive transformation programs were created and implemented. And in general it was a time of constant professional growth.
A lot has been done at DTEK, a tremendous effect has been obtained in the development of expertise, increasing the efficiency of processes, the quality of Service Desk services, and monitoring requests. We have effectively "leveled" IT as a service. Of course, they implemented large-scale solutions - the same SAP.
— How many people were there in DTEK's IT structure?
— About 300. But the tasks were also ambitious. It was necessary to actively immerse in business, participate in the processes of investment and strategic planning, understand the goals, what is necessary to achieve them, what scenarios could be, how to organize changes, etc.
— How many years have you worked at DTEK?
— Seven years. In a sense, it was my university plus graduate school. From there it was already possible to go into your own business, and, by the way, I had such an idea. The last couple of years of working there, I already wanted something more.It was then that the idea arose to create a separate unit that could enter enterprises at the SCM level. But at that time the company was not ready for this. The idea was implemented already in Metinvest, within the framework of a separate company that can work with other enterprises in the external market.
— That is, the idea of creating a separate structure for IT maintenance was implemented almost immediately?
— For this, a lot of preparatory work was done. First, the IT function was centralized and moved to a separate service center within Metinvest Business Service. And then in 2018, a separate IT company, Metinvest Digital, appeared. It was a new round of experience and knowledge, and with it a new layer of issues - strategic, legal, HR, trade union, etc. And, I confess, it was not easy to launch a company with a staff of more than 800 people and a budget of tens of millions of dollars.
— That is, in Metinvest Digital you have united all IT services? And the CIO of individual factories is not, as it was before?
— Yes, we have centralized the IT function within Metinvest Digital. We have account managers at each enterprise. Often these are former CIOs of enterprises, but with a significantly changed list of tasks. Now their priority is client development, solving emerging issues at the enterprise level, collecting needs, launching projects, etc.
— How did the employees react to this?
— Differently. As you know, people are not easy about change. Therefore, of course, things are not going as fast as we would like. But it is important that the movement is set in the right direction. We have formulated for ourselves three key roles that we must fulfill for the Group and for the market.
The first is operations, the role of a service provider for Metinvest Group, which is to support business activities. Here Metinvest Digital is responsible for the entire perimeter of IT services, including IT infrastructure, support and development of IT systems, Service Desk operation, information and cyber security, and user support. We monitor and control the quality of services provided on a daily, quarterly and annual basis according to SLA, COS, CSI metrics. For example, according to the results of an independent assessment, in 2019 the CSI rose by 10 points, to over 90, and the NPS index rose many times.
— This is the first role, and the second?
— The second is Solutions Delivery. As an IT business partner, we work with businesses and help build a portfolio of implementation and change projects. We have built an end-to-end process from the formation of needs to their design into projects with subsequent implementation and support for additional value for the business. At this level, our PMO carries out the development and implementation of projects within the framework of an approved roadmap with clear KPIs and resources, as well as change management according to the ADKAR methodology. And there are already such completed projects. For example, the implementation of an electronic procurement platform based on SAP Ariba at eight enterprises of the Group made it possible to optimize the procurement budget by 10%. On a Group scale, it is tens of millions of dollars. We have recently completed the largest project in Ukraine for the migration of IT infrastructure to Microsoft Azure, which will save Metinvest about $ 3 million in a ten-year perspective. The HR function is being transformed. The implementation of SAP SuccessFactors will allow the company to reduce costs in this area by $ 2 million in a five-year period. We completed the first stage of digital transformation of the sales function at the Swiss trading company MISA based on SAP Sales Cloud and SAP CPQ solutions. The list can be long. In addition, we built resource planning for our portfolio, implemented SAP and switched to accounting for all resources and a transparent calculation of the cost price for each project or service. This allows us to receive important analytics to improve our efficiency and quality of service delivery. Our value as a company lies in our understanding of the business and the ability to carry out complex large-scale projects.
— In fact, this is already a segment of integrators.
— In a sense, yes. But we have certain differences from them. Our integrators are more focused on hardware or software projects. We have accumulated colossal experience: in addition to SAP, we have implemented very unique solutions, for example, SAP Innovation Management.
Potential clients for us are large enterprises. Our value lies precisely in large, complex end-to-end solutions. We are now trying to develop our skills in working with the market, and therefore we are taking on small, highly specialized projects that involve a small number of our specialists.
— You mentioned that there are three roles.
— And the third role is Innovations. When interacting with business, we are increasingly faced with situations where not all the needs with which a business comes to us can be solved at the expense of ready-made solutions existing on the market. Especially when it comes to complex, specific production or business processes. This is what prompted us to create our own R&D | Co-Innovation Center. In fact, we created an internal, but at the same time open to external stakeholders, platform for rapid testing of innovations at the request of the business. The ecosystem we have created brings together our internal centers of expertise, vendors, developers, startups, etc. We pilot projects in so-called emerging technologies, where there are no ready-made solutions: artificial intelligence, machine learning, robotization, computer vision, and so on along the Gartner hype curve. This allows you to gain unique expertise and, in some cases, outpace customer requests.
— At the same time, business leaders have some illusion that everything is getting easier. For example, clouds have appeared everything there seems to be much clearer, everything is minimized, it turns into some kind of commodity. If earlier it was that the desktop computer is something separate, followed by special people, now anyone can bring their laptop or smartphone and work with it. All that is needed is, again, somewhere in the clouds, everything is done by itself, IT services are not needed in the enterprise.
— It all depends on the scale and specifics of the business. Small businesses with multiple IT solutions may not need dedicated IT staff. For medium-sized businesses, everything is not so simple and obvious. For a large company, it is definitely impossible to do without IT services. When it comes to the cost of downtime, scale factors come into play. I had experience when Microsoft released patch specifically for us as part of Premier support for Microsoft Windows in order to solve problems that arose in certain situations (configurations) and affected business processes. In addition, it should be borne in mind that a large business works with a huge amount of data, which imposes additional requirements on IT services. By the way, now we have one of our priorities – data governance and data mining.
— What is the intrinsic motivation of the business? For the IT department to become such an independent business unit that would not only consume a resource, but would make a profit?
— IT value creation is really on the agenda right now. It is important that the CIO at some point moves from regular systems administration and application management to understanding the business and strives to solve emerging problems from these positions. In fact, three issues come to the fore: security, operational continuity and, of course, the creation of additional business value. The latter is exactly what many owners and boards of directors expect from IT.
— Returning to Metinvest Digital, are there any other similar stories, say, in the global market, when the IT department is segmented into a separate company.
— In world practice, this is a fairly common approach when IT functions are centralized and separate IT companies are created. For example, in metallurgy, Tata Group and Posco have their own digital companies. In Ukraine, Metinvest Digital became the first such company. But now this trend has come to our country, and I think we will see how large Ukrainian holdings will create their own IT companies.
— How has the pandemic affected your business?
— We have been living and working in a new reality since March 2020. Working in a pandemic is a kind of exam for IT strategy to meet modern requirements and the ability to withstand the so-called VUCA world. Our new reality has once again proved that an IT strategy is not just a document approved by the board or supervisory board, but primarily systemic steps and investments in the development of complex IT infrastructure and information systems within the company. No one predicted that they might face a situation where in a very short time it would be necessary to transfer a huge number of employees to remote work. Metinvest Digital has passed this test - currently several thousand of the Group's employees work remotely. This is largely due to the previous steps the company has taken on its path to digital transformation.
— How have internal processes changed?
— Flexibility and agility are synonymous with modern IT. Thanks in large part to the move to Microsoft Azure that began last year, we were well prepared. Cloud technologies provide IT with more flexibility, allow it to react much faster to crises and challenges, and most importantly, to scale the infrastructure without significant capital investments. We were able to quickly redistribute the workload of our channels and servers, deploy and launch several new VPN servers, and provide secure remote access for employees to corporate resources and information systems. And all this in a very short time. Otherwise, all our internal processes have not changed significantly.
— What important projects have been completed recently, both internally and for external companies?
— Every year Metinvest Digital manages a portfolio of about 100 digital transformation projects. At the same time, a consistent principle of piloting and replication is used, and the perimeter for implementing solutions is dozens of manufacturing enterprises. In addition, every year we provide the implementation and execution of more than 400 business requests to improve the functionality of previously implemented IT systems. Several key strategic projects within the Group have been completed this year. The first is the digital transformation of the sales function. We have implemented, as I mentioned earlier, in the Swiss trading company MISA a system of interaction with customers based on SAP Sales Cloud and SAP CPQ solutions. At the same time, the first solution is the largest implementation in Ukraine, and the second was the first implementation of such a technology on the Ukrainian market. The second project that I would like to mention is the migration of the Group's data centers to the Microsoft Azure cloud platform. According to Microsoft, this is the largest such migration in Ukraine. We have migrated over 680 servers to the cloud and performed a seamless migration without interrupting any production or business processes of the company. A number of strategic projects are in the works: replicating the SAP Ariba solution in procurement, planning the movement of iron ore and metal products in the ports of Ukraine, the Data Governance development program, and others. Preparations for the launch of the Digital Quarry pilot project at the Ingulets GOK are nearing completion. It assumes full automation of the mining and transportation complex redistribution from the drilling stage to the crushing process. In fact, we are working on creating the first digital twin in Metinvest Group.
— Our traditional final question is what advice would you give a CIO? And considering that you have been a member of the jury of the BEST CIO project for many years what does a CIO need today to really be the best?
— There is no one-size-fits-all advice that would suit everyone for all occasions. Over the past few years, the role and tasks of the CIO have changed dramatically. Moreover, they will continue to change. Therefore, flexibility and adaptability come to the fore. You need to be open to new things, quickly respond to changes, constantly develop and gain new knowledge. In addition, it is important not to be afraid to try and experiment with new technologies, approaches, solutions at the junction of different functions and areas of knowledge. Most importantly, speak to customers in the language of the business, as modern IT has long since moved from a cost to a source of added value.