“Samruk-Energy” JSC | Integrated annual report
Business transformation – a course towards change!

Alexey Ogay

Managing Director for Business Transformation of “Samruk-Energy” JSC

The modern market changes rapidly and poses new challenges for business. The Company’s task is to timely pick up on long-term trends in the market in which it operates and take actions aimed at increasing the competitiveness and value of the Company.

For Samruk-Energy the reporting year was the year of defining the contours of the renewed Company based on the best international management practice. Main directions:

  • improving the company’s operating performance and increasing workforce productivity;
  • focus on core business, on strategic assets, disposal of non-core assets;
  • increasing the Company’s long-term value, realizing new opportunities for traditional sectors of the economy;
  • sustainable development and social responsibility of business.

“Samruk-Energy” JSC new operational model is aimed at introducing mechanisms of operational involvement and active management of subsidiaries. The key component in implementing Transformation program is people.

We are doing our utmost to reduce, standardize and “straighten up” business processes, eliminate overlapping and bureaucracy, provide the management of all levels with reliable and timely information for making effective management decisions. Automation is one of the tools to improve the efficiency of business processes. To this end, a new IT strategy was developed, which is aimed at staged construction of the Company’s digital energy platform.

Transformation program is well underway and is switching to the practical stage. The benefits and effect from implementing Transformation Program’s projects will greatly influence the effectiviness of the company’s investment and operational activities in the nearest years. I strongly believe that the competence and involvement of each employee will enable to acheive the Company’s strategic goals focuse on increasing its efficiency and competitiveness.

Key results of “Samruk-Energy” JSC Transformation program for 2016

Tasks set to the Shareholder of “Samruk-Energy” JSC for 2016 as part of Transformation program were successfully implemented by the Company.

 

KEY RESULTS

BENEFITS FOR THE COMPANY

Development of target management model

The new operating model of “Samruk-Energy” JSC was approved during the reporting year, which provides for a gradual transition from a strategic holding to an operating one. Upon completion of the  Program for sale (privatization) of the Company’s assets and taking into account the target ownership share of assets,   3 assets were allocated for operational management – “Ekibastuz SDPP-1” LLP, “Moynak HPP” JSC and “Shardarinsk HPP” JSC.

Updating of target organizational structure of the Head office

The new organizational structure of the Head Office was approved in autumn 2016. The competencies of all business lines have been significantly strengthened in the new organizational structure, in accordance with the developed target business processes, in particular, centralization of commercial function, the strengthening of project management function, the change in management of production and repairs. One of requirements for transition to the new organizational structure is introduction of a single approach to selection and deployment of staff based on the principle of meritocracy (Job matching).

Development of performance and KPI management system

The process of performance and KPI management was developed in 2016. 1st level KPI were set, the value tree was developed and cascading of KPI was conducted . KPI tree for 2017 was digitized in accordance with the approved Business Plan of the Company.

Reengineering and automation of business processes and management systems

The Company developed the process model of processes map, designed and harmonized 800 processes in ARIS system during the reporting period.  The reference models of “Samruk-Kazyna” JSC for corporate processes were applied as a basis in the development of processes.

Ensuring “quick wins”, the first results of special projects “Integrated Planning System”

In 2016, the created competence center “Energy Solutions center» LLP, which transferred all outsourcing functions of the group companies, including Office data management and Technical cal it support.

“Release of remainder of inventory after projects”. Remainder of inventories in the amount of  7,456 bln. tenge were identified following the results of taking inventory; of which, inventories for the amount of 4.9 bln. tenge were used and disposed in operations in 2015–2016.

“Creation of unified directories of I priority enterprises (materials, services, suppliers, customers)”. A unified directory with 87,000 unique records was created through processing primary 217,000 records.

Special project «Integrated Planning System» (IPS). This is a planning and modeling system (tool) designed to set goals for the medium term and to find the optimal scenario for the Company’s development through balancing production, technological, economic and financial indicators. A prototype was prepared on the basis of “Ekibastuz SDPP-1” LLP and all necessary preparatory work in order to provide the prototype with data and algorithms was performed.

MAIN RESULT OF TRANSFORMATION PROGRAM IMPLEMENTATION FOR 2016

The main result of Transformation Program implementation for 2016 is formation of projects portfolio which includes 12 corporate reference, 4 sector-based business processes and one project relating to organizational structure of the Company

 

SPONSORS

A Sponsor from among the Company’s executives was appointed for each project in order to ensure successful implementation of projects portfolio and assignment of responsibility.

“Samruk-Energy” JSC | Integrated annual report
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