Digitalize it: why does Metinvest need its own IT company

Sergiy DETYUK, Chief Executive Officer of Metinvest Digital, IT Director of Metinvest Group

Digital transformation is vital for business to grow and compete. Despite the fact that metallurgy is quite conservative, digital technology for us is a tool to support business performance and create new competitive advantages. Without investment in the “figure” in a few years, we will begin to lag behind. Moreover, achieving strategic goals for the coming years is impossible without the proper use of digital technology.

Operating model of Metinvest is built on tight vertical integration between enterprises across the entire production chain. To ensure centralized management of them, we have created a single information space. It has about 30 enterprises in Ukraine and abroad, more than 30 thousand users. All enterprises are united in one network, a unified security system is in place, information systems for supporting all processes are centralized — be it logistics, procurement or industrial safety.

Such an extensive infrastructure can only be effectively managed if the expertise and management processes are unified. Since 2016, we began to consolidate the IT function, rebuilt the management processes and the model of providing IT services. At the same time, all the staff was gathered in a shared services center, which combines various service functions: accounting, treasury, etc. As a result: the processes of user service, quality control, change management, service level management are built.

To stay competitive, business needs to change: including understanding new opportunities and formulating requests for digital. To do this, at Metinvest, we created a digital office that manages business changes. Effective change, on the other hand, requires strong digital expertise. Digital partner that combines knowledge and experience in applying various technologies and flexible project management capabilities. To this end, the IT service is transforming into a company that will live by the rules of the digital market, more innovative, dynamic, customer-oriented — Metinvest Digital.

The centralization of the IT function and the creation of individual IT companies is a global trend for large holdings. For example, in the metallurgy, the Indian Tata Group and the Korean Posco created their digital companies. In Ukraine, companies that have only centralized their IT departments can be counted on the fingers, not to mention the separation into a separate company. Metinvest Digital is the first such IT company in the country.

By the end of the year, we will transfer all employees of the IT service to the new company. We will review the processes of personnel training and development, the motivation system. We plan to change the model of work and move on to product teams in projects. We will change and expand the organizational structure of the company, add new functions. We are going to create large hubs in Mariupol, Zaporizhye, Kryvyi Rih and Kyiv.

Metinvest Digital will continue to perform service functions and develop IT support. Our new priority is effective project work. Our task is not just to be a technical contractor, but to become a digital partner who will create added value for Metinvest in transformation projects. To do this, we will create an examination center, we will develop an ecosystem of partnerships with manufacturers and developers, conduct market analysis and research, develop a flexible project management function, build customer-oriented relationships with business, etc.

One example. Already, together with the financial department, we are working on a new idea for estimating stocks of bulk products in warehouses. While it is carried out by mathematical methods with a high error, which affects the value of stocks. If drones and specialized software are used to estimate stocks in warehouses, the accuracy of calculations will increase significantly. Savings can reach tens and hundreds of thousands of dollars. In this year's portfolio of projects we have only about a hundred of them this year, and there are many times more requests and potential opportunities.

In the coming years, Metinvest Digital will solve the problems of the Group, form even stronger expertise and plan to enter the foreign market.