1 july 2008
World’s best practices of SAP, GMCS and MOLGA in action: SUEK is implementing a human resource management system in just 6 months
The Siberian Coal Energy Company, SAP, world leader in the field of business management solutions and Russian IT consulting GMCS and MOLGA companies announce the first results of the project for the implementation of the human capital management information system at SUEK enterprises.

Suek has currently completed the implementation of a management system based on the SAP ERP Human Capital Management (SAP ERP HCM) solution at 12 mining, processing and auxiliary enterprises and continues replication in other subdivisions of the company. The basis of the works for the establishment of an automated HR system based on SAP at SUEK was the methodology developed by GMCS and basic project solutions created by MOLGA. The main particularities of the works were the rapid implementation of the pilot project at enterprises of the coal company in the Krasnoyarsk District, which took just 6 months/ including development of methodology, the wide geographical diffusion of SUEK enterprises and the scale of implementation. In total it is planned to auomate around 50 enterprises of the company in 8 regions of the country – Moscow, the Buryatia Republic, the Kemerovo Region, the Krasnoyarsk District, the Primorsk District, the Khabarovsk District, the Republic of Khakassia and the Chita Region.

SUEK today is a leading Russian fuel and energy company, the largest in the company and of the world's leaders in terms of coal production and supply, in the short-term perspective also one of the key suppliers of electric power. The company is one of the country's main employers – over 45 000 in 8 regions of Russia, the issues of increasing the efficiency of human resource management at SUEK enterprises, which are city-forming in many regions of our country, are of great importance in the company's overall strategy. The key goal of the project for SAP solution implementation, started in 2007 at SUEK enterprises in terms of HR, was to create a flexible personnel policy, complying to the company's business-requirements, to the best world practices of personnel management, and corresponding to Russian standards of health and safety at work.

The specialized solution SAP ERP Human Capital Management (SAP ERP HCM) was sel ected as the tool to solve this task and for the subsequent information support of the SUEK Hr strategy. The solution allows to synchronize and optimize all business processes of personnel management according to requirements of local legislation and business in Russia. Bit is easily integrated with existing corporate business systems and can be set up according to the client's specific demands. At the same time there is a possibility to constantly improve these processes at all stages. The criteria for the choice of this solution by the management of SUEK were the high productivity in terms of processing a large volume of information and functional possibilities of the SAP system, capable of maximally automating the work of SUEK HR departments in terms of recruitment and hiring employees, their training, development and social support, work organization and personnel motivation, as well as planning and optimizing the company's organization structure.

The SAP ERP HCM solution shall also allow the human resource management department of SUEK to work more closely and efficiently with head of other structural subdivisions, effectively line up strategic goals of management and personnel potential of the company, as well as offering the possibility to actually participate in reaching better economic efficiency of the company.

Application of the principles of centralized personnel policy, equally fair towards all enterprises of the coal company, which vary in the number of working personnel and forms of activity, required the development of a single system for the management o the company's personnel. Collaboration of GMCS and MOLGA, which are strategic SAP partners acknowledged with the SAP Service Partner status, was the basis of solving a difficult methodological task. The methodology, developed by GMCS in just 4 months and including all round analysis of existing business processes of personnel accounting, allowed to conduct their improvement and unification. GMCS consultants also developed recommendations for the optimization of activities of HR departments for enterprises of all types – open coal mining, repair and mechanical and loading and shipping SUEK enterprises, and MOLGA consultants successfully implemented the SAP HCM solution in 4.5 months.

"Thanks to the innovative system of GMCS, involving step-by-step approbation of the elements of the methodology, we were able to start works on the implementation of the new management system at our enterprises in parallel to solving the methodological task," notes Andrey Voyna, head of the SAP ERP HCM project at SUEK. "As a result of this unconventional approach and the use of standard MOLGA solutions during the project, a fully-featured human resource management system was launched based on the SAP solution at 12 enterprises of the pilot implementation zone just 6 months after project launch."

"We consider the possibility to quickly put the methodology into practice to be one of the key criteria of a project’s success. The project at SUEK – is a great example of a professionally developed methodology allows to sufficiently cut working times," said Boris Rapoport, vice-president of CompuLink Group, curator of the project fr om GMCS. "The methodology developed by GMCS specialists based on many years of project experience involves analysis, unification and optimization of the processes of personnel and payroll management and ensures quick implementation of SAP ERP HCM at enterprises of various industries." 

"Carrying out a project on such a tight schedule was only possible thanks to the experience and high skill of the implementation team, as well as the strict goal-oriented policy of the SUEK management. The aim of the project was not just to implement the information system, but also to create a new system of interaction between enterprises and employees within an enterprise. And we are proud that MOLGA basic solutions were the foundation for the human resource management system of SUEK that is being constructed today," said Vladimir Bredov, Head of Consulting at MOLGA.

"Success in competition depends less and less on material assets and more – on nonmaterial ones, such as company personnel. One of the main business resources is fast becoming the level of knowledge and expertise of employees. Efficiency of activities of HR subdivisions has significant effect on efficiency of the company in general," in turn, said Boris Volpe, Executive Director, SAP CIS. "SAP has significant experience in terms of development and implementation of solutions for personnel management across the globe. Today this experience is embodied in SAP solutions together with cutting edge technologies of personnel management, which will help SUEK further support its leading position both in Russia and the world."

As a result of the implementation of the pilot project of the SAP ERP HCM solution completed in December 2007, the labor intensity of payroll accounting was cut by 25 % thanks to the automation of the process of its calculation. Today payroll calculation for staff of SUEK enterprises, located in Moscow and the Krasnoyarsk Region, is completed on the 5th day after financial closing. Previously bookkeeping times equaled 11-12 days. The new possibility provided by the new system to obtain and analyze information on the existing personnel chart, head count, composition and categories of employees, as well as the movement of workers allows to significantly cut time needed to prepare corresponding documents and their transfer to the Work Safety Fund and the Pension Fund. The quality and precision of calculation of tax obligations towards the budget of the Krasnoyarsk Region was increased, SUEK being one of the main tax-payers in the region. The possibility of operational formation of reporting for state control authorities(Federal Migration Service, Pension Fund etc.) was also implemented. SUEK plans to complete works on the implementation of the SAP ERP HCM solution by January 1, 2009, as well as further develop the management system of the coal company.

About SUEK

Siberian Coal Energy Company (SUEK) is the largest coal society in Russia and the only domestic company that is part of the top 10 leading companies of the world coal market in terms of coal mining volumes. Affiliates and subsidiaries of SUEK are located in the Krasnoyarsk, Primorskiy and Khabarovsk Territories, the Irkutsk, Chita and Kemerovo Regions, Buryatia and Khakassia.
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