One shouldn't go into digitalisation with 'eyes closed'

Outperforming a competitor is more important than staying in bear market

Digitalisation and automation are one of the main trends in the development of the Tatarstan industry. But they are most actively implemented by medium-sized and small enterprises related to services and telecommunications. Why is it so? Explaining this paradox, the head of Korib Group of Companies, Oleg Korobchenko, told an edifying anecdote for clarity. Two hunters in the forest are running away from a bear, but one suddenly stops to take off his rubber boots and change into sneakers. Another scolds him: “The bear is running at a speed of 60 km/h, you can not run away from it.” “It's not the bear I want to outrun, but you," his partner replied.

“Now we have such market — the main thing for us is to overtake the competitor," summed up the industrialist from Naberezhnye Chelny and deputy of the State Council of the Republic of Tatarstan, Oleg Korobchenko, making it clear that today the market has fangs and that if you stumble, you will be torn apart, quite bearishly.

Today, there are no free market niches left — there is fierce competition everywhere, says Korobchenko. But digitalisation is the very running shoes that will help you be faster and outrun your competitors. Whoever “runs faster” will earn more.

According to Korobchenko, enterprises in almost all segments should change into sneakers, as the movement to innovations will accelerate every year, although there are lagging industries.

“We are among the first to introduce digitalisation," he said. “Our partners and customers see how our trucks are repaired from entering the factory to leaving the gate. And, if you understand that you need to change an analogue TV to a digital one, then you are on the right track — start changing into sneakers.”

However, this process is going already quite actively. According to the Chamber of Commerce and Industry of the Republic of Tatarstan, about 90% of the heads of Tatarstan industrial organisations declare the introduction of innovations, and more than half of them are planning to expand the scope of their application. Most of them invest in big data technologies, computer engineering, and cybersecurity technologies.

A month has passed, but there is still no support programme

Meanwhile, big industry and entrepreneurship are again waiting for the Russian government to announce new support measures. The head of the Chamber of Commerce and Industry of the Republic of Tatarstan, Shamil Ageev, reminded that in his annual address Putin instructed the government to submit additional proposals to support small and medium-sized businesses within a month, including tax incentives, affordable loans, and expanding sales of products.

“The address was delivered on April 21, and today is already May 28! The deadline has passed, but there is no programme yet," he said with disappointment.

However, Tatarstan entrepreneurs haven't been sitting “idly by”. According to Shamil Ageev, shortly before the announcement of the address, the Chamber of Commerce and Industry of Tatarstan had developed 28 anti-crisis proposals for implementation by the federal government. The Tatarstan package of proposed state support measures was handed over to Rustam Minnikhanov, and from him, apparently, it was supposed to go to the ministry of economic development of Russia.

The head of the Chamber of Commerce and Industry of the Republic of Tatarstan did not specify the essence of all 28 proposals, but could not resist revealing one tempting idea. This is the idea of paying out entrepreneurial capital to start a business — similar to maternity capital at the birth of a child. In his vision, not everyone will have the opportunity to use it, but only those who work in rural areas. And also — entrepreneurs in the Far East. Besides, the business community is working to ensure that public services are available free of charge for any entrepreneur, regardless of their place of residence.

A 45% income tax? How come?

Shamil Ageev immediately tried to calm down the representatives of big businesses, who were rattled by the unpleasant initiative of the Russian Chamber of Commerce and Industry to increase the tax burden for the highest-paid employees of commercial enterprises to 45%. The head of the Chamber of Commerce and Industry of Russia, Sergey Katyrin, sent a letter with this initiative to First Deputy Chairperson of the Central Bank of Russia Sergey Shvetsov. According to the calculations of the Federal Chamber of Commerce and Industry, this measure will affect 1% of the highly-paid workers.

“How come?" director generals of the enterprises call me. I explain that this has to be done to exempt from taxes the workers with low wages (below 13,500 rubles a month — editor's note)," Ageev explained.

Timur Gumerov, the head of the Centre for the Implementation of Programmes for the Support and Development of Small and Medium-sized Businesses of the Republic of Tatarstan State Institution, told what is being done in the field of digitalisation of public services for businesses. For example, the electronic service 'My Subsidies' has been launched, which accelerates the issuance of subsidies. In addition to this, we have recently launched a chatbot that answers frequently asked questions in real time. Besides, the chatbot will remind you when to submit a report and how to prepare an application correctly.

“This is done so that entrepreneurs understand that the state works for you. I calmly give businessmen my cell phone number, because I understand: I'm your outsourced employee. My task is to make it so that if you decide to take a subsidy, you immediately think: “I need to call Timur. He will bring me to it," Gumerov demonstrated his openness.

Watch out, don't drown in the waves of digitalisation

Interestingly, the invited experts from Moscow tried to take the “rose-coloured glasses” around digitalisation off the audience: one shouldn't think of it as a miracle.

“Digitalisation is, of course, a serious potential in the competition, but at the same time, it is a significant expense," Maksim Andreev, the founder of the Kram company, immediately warned. “It requires investment costs, and if digitalisation goes wrong, you will not get a payback. On the contrary, you will get an additional financial burden on the company and “drown” it.

Digitalisation minimises the impact of human factor at operational level, at the level of workforce, but imposes serious requirements for management. They should understand where to implement digital technologies.

According to Andreev, digitalisation should be implemented at the enterprise selectively:

“You can't digitalise the entire production — it's expensive and inefficient. Many digitalisation projects have not paid off because businesses did not receive the necessary result from them, although they met the technical specification. The main advice — management should have a good understanding of where to implement digitalisation. To do this, it is necessary to understand the business processes, business environment, what you are falling behind in, and then you will be effective.”

Looking for places of losses

“If specifically, it is necessary to 'digitise' the 'places of losses'," Maksim Andreev pointed out. “This is where the company loses quality, customers, productivity, money. But the management should determine these places of losses.

Secondly, the losses should be counted in rubles, added his partner Alexander Marinenko. A strong trend in production is loss counting.

“A CEO receives a report on the results of the work, where not only the profit indicators are calculated, but also the losses. And the CEO must understand that if he works as he did yesterday, he will see how much he will lose again. And when the head of the company sees the calculation of losses every day, he immediately begins to move. It seems to me that these two features should be in every company," Marinenko advised.

Following the discussion, the experts identified two key areas of digitalisation in the industry. First, it is the digitalisation of planning, which is important in the context of the pandemic and reduces costs. Second, the digitalisation of communications with customers and consumers. If you are fighting for customer loyalty, digital technologies will help you understand who your customer is and what their needs are.