This is the view of Evgeny Scherbinin, CEO of Prime Source
President of Kazakhstan Kassym-Jomart Tokayev has placed digitalization among the state’s core priorities, noting that the nation must become competitive.
“At the same time, we must make broad use of advanced technologies and of digitalization. This is one of our main objectives,” the President said on 4 May at a session of the Senate of the Parliament of Kazakhstan.
Over the past few years, the digitalization of Kazakhstan’s economy has gone from a recommendation to a vital necessity. A month ago, on 11 April, the First Deputy Head of the Presidential Administration (now Chairman of the Senate of Parliament) Maulen Ashimbayev said: “In the post-crisis period, digitalization and the move of many areas online are inevitable. Businesses have started to rethink their internal processes and build flexibility; the emphasis is shifting towards digitalization and the development of a full-fledged online component in their operations. Large-scale digitalization and a review of past mistakes must also become a priority for the state apparatus in the period ahead. The President of the country has instructed that the Digital Kazakhstan state programme be revised and that the coming year be spent under the banner of digitalization.”
A great deal has been done in Kazakhstan in recent years to digitalize the economy. The state’s principal instrument here has been the Digital Kazakhstan programme. There are figures indicating that the economic effect of this state programme in 2018–2019 amounted to 600 billion tenge. These are aggregate figures for the public sector. But how do things stand in the quasi-public and private sectors?
Today the level of process digitalization at enterprises varies widely: mobile operators and banks are by default ahead of most companies. The reason is that the automated execution and recording of operations (transactions, loans, megabytes used) is part of these organizations’ business model.
In companies where market conditions allowed them to be suboptimal or even inefficient — expensive oil, state subsidies, monopoly status and the absence of any alternative for the customer — the level of digitalization remains low to this day. Many good and expensive software products that have been purchased are gathering dust on the shelf or creating the illusion of being in operation for audit purposes. It is telling that even at some technologically advanced banks the one line of business that has repeatedly been supported by the state — corporate lending — remains non-digital. This is evident from the numerous findings issued as a result of the asset quality review (AQR) carried out by the National Bank.
The difficulties we have faced over the past few months — the collapse in oil prices, another devaluation, the quarantine and the suspension of business operations — have made many take a fresh look at digitalization. First, top managers who previously did not trust new technologies have experienced first-hand what digitalization is and how enormous an effect it delivers. Second, the economic, reputational and even political risks posed by failures in IT systems have become obvious. Third, we are already witnessing a wave of job cuts at enterprises: some have announced cuts of 10% of their staff, others of as much as 40%. Clearly, these staff reductions will have to be offset by digitalizing and robotizing processes.
This combination of circumstances, together with the currently low level of automation, opens up genuinely large opportunities for enterprise digital transformation projects. Let me recall that digital transformation is when the use of technology does not merely automate, but makes it possible to change the business model of an enterprise or of its processes.
If we keep only what matters most, a successful digital project requires the following. First, a modern platform that makes it possible to integrate the accounting systems and to build automated business processes, analytics and channels for interacting with customers and employees. The platform brings together all existing systems and makes them work as one. Second, organizational change is required, with dedicated digital transformation teams being formed. The teams are staffed with representatives of the process owners (business, operations, finance and so on) and IT specialists. The teams must be given the ability to build and roll out new digital processes entirely on their own, working to an agile project methodology....