Digitalization of Industry in Russia and Kazakhstan: the Best Practices
Corresponding email: larisatash_88@mail.ru
Published at : 27 Dec 2022
Volume : IJtech
Vol 13, No 7 (2022)
DOI : https://doi.org/10.14716/ijtech.v13i7.6200
Babkin, A., Tashenova, L., Mamrayeva, D., Shkarupeta, Y., Pulyaeva, V., Leifei, C., 2022. Digitalization of Industry in Russia and Kazakhstan: the Best Practices. International Journal of Technology. Volume 13(7), pp. 1568-1577
| Aleksandr Babkin | Institute of Industrial Management, Economics and Trade, Peter the Great St. Petersburg Polytechnic University, Polytechnicheskaya Str., 29, St. Petersburg 195251, Russia |
| Larissa Tashenova | Faculty of Economics, Marketing Department, Institute for Digital Economy Research, Karaganda Buketov University, Universitetskaya Str., 28, Karaganda 100028, Kazakhstan |
| Dinara Mamrayeva | Faculty of Economics, Marketing Department, Institute for Digital Economy Research, Karaganda Buketov University, Universitetskaya Str., 28, Karaganda 100028, Kazakhstan |
| Yelena Shkarupeta | Department of Digital and Industrial Economics, Voronezh State Technical University, 20-letiia Oktiabria Str., 84, Voronezh 394071, Russia |
| Valentina Pulyaeva | Financial University under the Government of the Russian Federation, Leningradsky Prospekt, 49, Moscow 125993, Russia |
| Chen Leifei | Institute of Industrial Management, Economics and Trade, Peter the Great St. Petersburg Polytechnic University, Polytechnicheskaya Str., 29, St. Petersburg 195251, Russia |
The current transformation of
the economy, caused by the proactive implementation of the main provisions of
Industry 4.0, has largely been a critical factor for the digitalization of
industries of Russia and Kazakhstan. Every year, there is an increase in projects
in industrial production, described by high digital potential, primarily
because of the use of various information and communication technologies, and
secondly, due to companies' desire to ensure high-level competitiveness in both
national and foreign markets. This
scientific article aims to study the best practices in the digital
transformation of industrial enterprises in Russia and Kazakhstan. The following methods were applied:
methods of analysis, graphical interpretation, systematization, and content
analysis, which made it possible to achieve the objective and implement the
tasks provided for by the study. The
article discusses general areas
of digital transformation of industry in Russia and Kazakhstan, with a focus on
government programs aimed at supporting initiatives in this field the
companies-suppliers of I.T. services for the industrial sector and the main
areas of their activities are studied Specific features of digital solutions
offered by the companies for enterprises engaged in their activities in the
field of production (virtualization and robotization of production cycles,
telemetry, industrial analytics, predictive analytics and building of digital
production models, cloud solutions) are given.
Digital transformation of industry; Digital economy; Digital platforms; Digital solutions; Digital factories
Digital
transformations taking place in the current economic situation due to the
active formation of digital economies in different countries and regions of the
world have largely predetermined features of industrial development. At
present, the active introduction and use of various information and
communication technologies allow companies to form unique competitive
advantages.
Over recent years, the scientific literature has formed a pool of articles devoted to the problem under consideration. Thus, a number of authors especially highlight aspects related to changes in enterprise management in the digital economy (Bencsik, 2020), assessment of the impact of digitalization of industrial production on the overall economic development of the country (Zagloel et al., 2021; Rojko et al., 2020; Gnezdova et al., 2019).
Other researchers, in
turn, focus on issues related to the assessment of the digital potential not of
individual industrial enterprises but off complex integrated industrial
structures and systems (Babkin et al., 2020a; Babkin et al., 2019), system-forming innovation-active industrial clusters (Babkin et al., 2020b).
Another pool of papers is dedicated to the role of innovative programs (including regional ones) in the sustainable development of an industrial enterprise in the context of globalization and large-scale digital transformation of various industries and services (Burova et al., 2021; Nikolova et al., 2017a; Nikolova et al., 2017b; Rodionov & Rudskaya, 2017).
In
scientific articles, a significant emphasis is placed on the features of the
functioning of smart factories (Coumans, 2018),
their adaptation to specific production (depending on the algorithms used), as
well as on opportunities for using smart technologies in
the course
of constructing smart cities (Berawi, 2022).
It is also important to note that many studies highlight aspects of industrial
robotics (Sobolev, 2022; Barbosa et al., 2020).
and the need to use digital twins to reduce costs and accelerate information
processing and management decision-making (De Prada et al., 2022; Hyre et al., 2022; Mylonas et al., 2021; Schmitt et al.,
2020; Parri et al., 2018). Considering the reviewed
scientific directions, including those widely represented in scientometric
databases, one can conclude that the relevance of the theme of the scientific
article presented is beyond doubt.
This scientific article aims to study the best practices (examples of industrial enterprises implementing
digital solutions as well as the best examples of companies creating digital
products for the industry). In the digital transformation of industrial enterprises in Russia and
Kazakhstan (after this referred to as R.F. and R.K., respectively). The main tasks are defined as follows: reviewing
government and departmental programs regulating aspects of the formation and
development of digital economies in R.F. and R.K., identifying key areas and
target indicators of industrial digitalization in these countries; researching
the best practices in the digital transformation of industrial production in
Russia and Kazakhstan, identifying the leading companies that are key software
suppliers for industrial enterprises of R.F.; conducting a content analysis of
I.T. companies' websites, to describe the set and nature of digital solutions
for industry; studying the institutional component of industrial
transformations in R.K.; defining future areas for researching, with specific
features of the scientific problem under consideration to be taken into
account.
In
the course of the research, the following general scientific and specialized
methods were used: the method of analysis
for studying main trends in the digital transformation of the R.F. and R.K.
industries; the method of graphical
interpretation for visualizing trends and relationships existing in the
objects and phenomena under consideration (especially when highlighting
structural components of government programs for building and developing
digital economies); the method of
systematization, for concluding the studied scientific problems, applying
careful consideration of digitalization aspects to the R.F. and R.K. industrial
sectors; the method of content analysis,
for exploring the information array presented at official websites of
industrial enterprises, directly or indirectly related to the issues of digitalization.
So, according to
Figure 1, the general structure of the study includes seven key stages,
starting from the moment of identification of the problem (related to the study
of the most successful practices of digital transformation of industrial
enterprises in R.F. and R.K.). Setting the objective and the tasks of the work, and ending with analyzing features of industrial digitalization in
Russia and Kazakhstan, with subsequent separation of future research areas in
the framework of scientific problems considered.
The dynamic formation of digital economies has become the priority area
for many countries, including R.F. and R.K., the basis for the development of
which was global transformations in the field of industrial production.
Determined by introducing and using various information and communication
technologies, as well as understanding the role of digital tools for
accelerating all processes in the organization, strengthening the significance
of international business integration, simplifying production chains of
creating the final product with high added value, forming competitive
advantages in domestic and foreign markets. The best practices for implementing various
digital solutions by industrial enterprises in Russia and Kazakhstan are
considered in the example of individual industries and companies/universities
that create and implement digital solutions for industry.
3.1. Digital
Transformation of Russian Industry
Aspects related to industrial digitalization in the R.F. territory can
be found in the following regulatory documents reflecting key target
indicators, legal, regulatory norms, and rules, responsible persons, as well as
the description of events purposed at implementing main tasks in the field of
digital transformation of industrial production:
1.
National Program "Digital Economy of the Russian Federation"
(approved by the Presidential Council for Strategic Development and National
Projects, dated June 4, 2019, No. 7);
2.
the departmental project “Digital Industry” (developed by the Ministry
of Industry and Trade of Russia), the main areas of which are the following:
.creating a regulatory environment for the digital transformation of industry;
creation, integration, and development of platforms for the Governmental
Information System of Industry (GISP); the digital transformation of
manufacturing industries (Digital
Energy, 2022).
According to experts, by 2030, the demand of the manufacturing industry
for various information and communication technologies will have amounted to
about 587.5 billion rubles (currently, it is about 41.5 billion rubles) (Rudycheva, 2021a), which will largely determine
Russian IT companies' activity in the elaboration of respective digital
products.
Table 1 shows Russia's five largest providers of I.T. services, data
analysis solutions and B.I. solutions (including those for the industrial
sector) in 2020. It is important to note that most of them provide the full
range of I.T. services, mainly located in Moscow. The leaders in the context of
the categories under consideration are Lanit, GlowByte, and Digital Economy
League, respectively.
Table 1 TOP 5 largest
providers of I.T. services, data analysis solutions, and B.I. solutions in
Russia in 2020
|
Company name |
Revenue, thousand rubles |
City |
|
TOP 5 largest I.T. service providers |
||
|
Lanit |
92,271,563 |
Moscow |
|
Croc |
21,079,193 |
Moscow |
|
T1 Group (formerly Technoserv) |
18,131,113 |
Moscow |
|
Jet Infosystems |
17,439,001 |
Moscow |
|
Digital Economy League |
16,772,000 |
Moscow |
|
TOP 5 largest providers of data analysis solutions |
||
|
GlowByte |
6,961,000 |
Moscow |
|
Digital Economy League |
6,690,459 |
Moscow |
|
Croc |
1,752,816 |
Moscow |
|
Parma TG |
1,383,389 |
Moscow |
|
Korus Consulting |
944,406 |
Saint Petersburg |
|
TOP 5 largest suppliers of B.I. solutions |
||
|
Digital Economy League |
6,690,500 |
Moscow |
|
Croc |
1,752,800 |
Moscow |
|
Parma TG |
1,383,400 |
Moscow |
|
Korus Consulting Group |
944,400 |
Saint Petersburg |
|
RDTECH |
885,200 |
Moscow |
|
Note: compiled by the authors with the use of materials from information portals cnews.ru and tadviser.ru (Tadviser, 2022; CNews Analytics, 2021; Cnews, 2021). |
||
Table 2 reflects
key areas of activity and features of digital products developed by leading
companies in the Russian IT service market presented above.
It can be noted that I.T. companies mainly offer the following digital
products: cloud solutions, virtualization, and robotization of production
cycles, telemetry, industrial analytics, predictive analytics, and building of digital
production models. It should also be noted that many companies offer services
for developing customized information systems based on the customer’s
requirements, specific features of the products they produce, and the
enterprise's organizational structure.
Table 2 Activities of
companies providing I.T. services, data analysis solutions, and B.I. solutions
in the industrial sector
|
Company name |
Digital Solutions for Industry |
|
RDTECH |
Electronic
archive, technology consulting services, intelligent corporate security
center, development of the customized information system, regulatory and
information management systems, development of corporate portals. |
|
Korus Consulting Group |
Production
planning, SNLP, lifecycle management, MRO, Tool data management, IOT,
robotics, ERP, equipment monitoring, automated tool management, and
management service processes (based on the HUBEX IT platform). |
|
RDTECH |
Electronic
archive, technology consulting services, intelligent corporate security
center, development of the customized information system, regulatory and
information management systems, development of corporate portals. |
|
Croc |
Computing
infrastructure, software development, network solutions, business analytics,
content, and document management. Information security, implementation of
Russian ERP systems, cloud services, industrial analytics based on Big Data
etc. |
|
Company name |
Digital Solutions for Industry |
|
Digital Economy League |
Cloud solutions
and virtualization (including those based on VMware, Microsoft, IBM, BMC, and
Oracle), B.I. and Big Data, Data Mining, application integration, load
testing, custom software development, ERP, ECM systems, CPM, management
consulting. |
|
GlowByte |
Business
Intelligence, Advanced Analytics, Risk Management & Compliance, Customer
Experience, Operational CRM, and Process Intelligence. Analytics for
Industry, Customer Analytics and Marketing Automation, Financial
Intelligence, Corporate Data warehouses, and Retail Solutions. |
|
Group T1 (formerly Technoserv) |
Cold supply
systems (cold centers, precision air conditioning), modular data centers,
consulting on planning and development of I.T. infrastructure,
hyper-convergent infrastructure, workplace virtualization. Automation of Enterprise
and I.T. Service Management processes, predictive analytics, forecast of
technical condition of equipment, digital production model, control of
production processes, intelligent building, etc. |
|
Jet Infosystems |
Video
Analytics, telemetry (IIOT), digital labor protection laboratory,
optimization of technological processes (based on machine learning), etc. |
|
Note: compiled
with the use of materials from the companies' official websites. |
|
Table 3 shows the largest in Russia suppliers of I.T. solutions directly
for the industrial sector in 2020; among them are Softline Group, Croc, Jet
Infosystems, X-Holding, and Lanit.
Table 3 Main suppliers of digital solutions for industrial
enterprises in 2020
|
Company name
|
Revenue, thousand rubles |
City |
|
Softline Group |
13,327,268 |
Moscow, London |
|
Croc |
6,225,081 |
Moscow |
|
Jet Infosystems |
3,412,265 |
Moscow |
|
X-Holding |
3,267,313 |
Moscow |
|
Lanit |
2,812,184 |
Moscow |
|
Note: compiled
by the authors with the use of materials from the information portal cnews.ru (Rudycheva, 2021b). |
||
The total revenue
of the presented above companies from the supply of I.T. solutions for industry
in 2020 amounted to 29,044,111 thousand rubles which is 23.5 % more than
the same indicator in 2019. This confirms the increase in demand from industrial
enterprises for ICT tools (mainly ERP, PLM, MES, virtual testing, simulation
modeling, solutions for end-to-end integration and automation and
digitalization of industrial safety) as well as their awareness of the role of
introducing digitalization elements in various aspects of business activities
of industrial structures for ensuring the necessary level of competitiveness,
and creating competitive advantages.
Table 4 shows examples of Russian companies to have implemented various digital solutions in their activities.
Table 4 Examples of Russian industrial companies developing and implementing
digital technologies
|
No. |
Company name |
Region |
Nature of digital technology |
|
1 |
N.L. Dukhov All-Russian Research Institute of
Automation (VNIIA) |
Moscow |
The Prism System is the product for digital control
of all processes in small-scale and serial production. |
|
2 |
Peter the Great Saint Petersburg State Polytechnic
University |
Saint Petersburg |
“Factory of the Future” is a project on minimizing
the time of digital design, based on total mathematical modeling and
optimization technologies (the Time to Market principle) |
|
3 |
KAMAZ PJSC |
Moscow, Kazan, Naberezhnye Chelny |
“Digital Kamaz” is a large-scale project on
modernizing production and updating the product line by applying the new K5
platform (for example, KAMAZ-54901) |
|
4 |
Moscow Refinery Plant |
Moscow |
Digital twins of the catalytic cracking gasoline
hydrotreating unit |
|
5 |
Omsk Refinery Plant |
Omsk |
Primary oil refining units |
|
6 |
United Engine Corporation |
Moscow |
3D printing units of large-sized parts for
industrial gas turbine engines |
|
7 |
Sibur |
Moscow |
Augmented reality systems and life cycle management
of finished products |
|
8 |
NLMK Group |
Moscow |
BIM technologies in construction and reconstruction |
|
9 |
Tikhvin Railway Car Building Plant |
Tikhvin |
80 industrial robots for welding, painting parts,
etc. |
|
10 |
Rosatom National Corporation |
Moscow |
1. Smart
Helmets (personal protective equipment with the built-in situational
controller); 2. Information modeling technology; 3. Automated decision-making
systems based on artificial intelligence and Big Data technology; 4.
Introduction of uniform information security requirements; 5. Inspection of
enterprises in virtual reality; 6. Cross-platform software, etc. |
|
11 |
SAKHALIN ENERGY |
Yuzhno-Sakhalinsk |
Digital Workplace Twins |
|
Note: compiled
by the authors with the use of materials from the companies' official
websites. |
|||
It should be noted that, according to Dell Technologies' review, in
2020, about 85 % of Russian enterprises "accelerated implementation
of digital transformation programs.”
3.2. Digital transformation of
industry in Kazakhstan
On December 12, 2017, Resolution of the Government of the Republic of
Kazakhstan No. 827 approved the State Program “Digital Kazakhstan” (for
2018–2022), the objective of which was: “Accelerating the republic economy
development pace and improving the population's life quality through the use of
digital technologies in the medium term, as well as creating conditions for the
R.K. economy transition to the fundamentally new trajectory of development,
ensuring the creation of future digital economy in the long term” (Egov.kz, 2022). The Program included five key
areas: 1. digitalization of economic sectors (including the industrial sector);
2. transition to the digital state; 3. implementation of the digital Silk Road;
4. development of human capital; 5. creation of the innovation ecosystem (Digital Kazakhstan, 2022).
Thus, according to the Program, key areas of digitalization of the
country's industry are implementation projects execution: "Digital mines”
(at NAC Kazatomprom JSC); “Digital deposits” (mainly in the oil and gas industry;
moreover, the first project was successfully implemented in 2015, on the basis
of EmbaMunaiGas JSC in the Atrau Region); "Model digital factories” (at
seven large enterprises: Khimfarm JSC, Kentau Transformer Plant JSC, Eurasian
Foods JSC, AK Altynalmas JSC, Karlskrona LLP, Almaty Fan Plant LLP, Bal Textile
LLP), totally 49 projects for the overall amount of investment of 10.4 billion
tenges (about 0.022 billion U.S. dollars) (National
Bank of Kazakhstan, 2022). According to the data posted at the portal
uchet.kz, as of July 13, 2021, 25 projects worth 4.7 billion tenges (about 0.01
billion U.S. dollars) were completed (Uchet.kz,
2021).
In the context of the applied aspect, the experience of executing the
Digital Mine program in the territory of AK Altynalmas JSC, which implements
its activities in the Almaty Region, is interesting; this is an enterprise of
full geological, mining, and gold processing cycle. Mining is carried out at
nine country deposits (Altynalmas JSC, 2022);
the number of employees is 9,500 people; the car fleet is 120 units of mining
equipment. The company also actively introduces and implements the “Mine to
Mill” technology (integrated mining optimization strategy). Key areas of
implementation of the Digital Mine program at AK Altynalmas JSC are automation
of maintenance and repairs of stationary and self-propelled equipment (1.
formation of process flowchart for equipment; 2. transition to the “Equipment
Reliability Management” method; 3. implementation of the tool for improving MRO
planning quality and optimizing resources for MRO), automation of the gold
recovery factory (1. cloud-based Big Data analytics system based on artificial
intelligence; 2. implementation of the Production Process Management System
(MES)), automation of the mining and geological complex (1. implementation of
advanced solutions in the field of geological exploration and geology; 2.
implementation of shift-daily planning of mining operations; 3. automatic
collection and online display of information on the implementation of the
mining plan) (Altynalmas, 2022).
In general, even in 2018, the following
implemented measures in the field of industrial digitalization became the
“quick” start of the Program (State Program “Digital Kazakhstan”, 2022): ERG: Improving the mining sector efficiency and
developing the “Intellectual Quarry" program; Kazzinc LLP: implementation
of ERP resource planning information system; implementation of the “Intelligent
deposit” technology at the enterprises of Kazgermunaigas JSC; establishment of
the Institute of Industrial Automation and Digitalization (on the base of
Satbayev University, Almaty); Ust-Kamenogorsk Titanium-Magnesium Industrial
Complex JSC: the production balances formation and calculation system (the East
Kazakhstan Region); starting up seven digital model factories; commissioning
the “Digital Mine,” I.E.; the pilot project of the national industrial Internet
platform has been developed; Kazzinc LLP: “New Metallurgical Balance" and
implementation of the unified production database.
It is important to note that, according to the
action plan for the implementation of the Program, in the section
“Digitalization of economic sectors” (Task No. 1 “Digitalization of industry
and electric power industry”) for 2022,
the following are assigned as target indicators: increasing the share of
subsoil users' project documents in the information system of the competent
authority in the field of hydrocarbons up to 100%; increasing the share of oil
and gas companies using IIoT solutions (Industrial Internet of Things – online
oil metering devices) and integrated with the information system of the
competent authority in the field of oil up to 95%; increasing the share of
large- and medium-sized enterprises using digital technologies up to 11%;
increasing the share of sets of local automation systems to prevent disruption
of the stability of the power system (LAPNU) connected to the Centralized ECA
System (TSSPA) up to 100%.
By Resolution of the Government of the
Republic of Kazakhstan dated May 17, 2022 No. 311, Resolution of the Government
of the Republic of Kazakhstan dated December 12, 2017 No. 827 “On approval of
the State Program "Digital Kazakhstan" has lost its validity, though
key results obtained during its implementation, according to the analysis. are
of great importance for further digitalizing economic sectors, including
industry.
In 2021, Kazakhstan ranked 61 out of 130
countries in the Network Readiness Index ranking, scoring 52.17 points. The
country shows the highest indicators in the “People” component (54th place),
52nd place in the "Business" sub-component, reflecting the continued
ICT implementation by enterprises; slightly not-so-high indicators
for “Individuals" and "Government” – 61st place in both these
sub-components. In the indicator related to improving the pace of new
technologies implementation, R.K. ranks 84th, while in terms of expenses on
computer software, it ranks 114th.
For supporting key areas of digital
transformation, shaping the digital ecosystem, creating breakthrough I.T.
companies, attracting talented ICT specialists, and solving Tech tasks for
various business sectors, the Astana Hub technopark is successfully operating
in Kazakhstan, including the following regional development programs: incubation
of startup projects in the region (13 cities), development of regional partners
(15 cities), events of regional Community managers (129 events), cooperation
with the I.T. hub “Terricon Valley" (26 startup projects), Regional/Online
Incubation, Regional Agents. Also, on September 28–29, 2022, the International
Forum on Digital Technologies “Digital Bridge 2022" was held in Astana,
where issues of digital transformation of Kazakhstan’s economic sectors were
discussed in detail, including panel sessions and Keynote speeches of those
related to the digitalization of industrial production: “Unified Digital
Ecosystem: advantages and challenges”, "Robotics: areas and ways of
application,” “5G on Silk Road”, “Digital transformation of Tengizchevroil:
investing in people, business and technology”, “From the Internet of Things to
the Internet of Everything: drivers of implementation of the 4th Industrial
Revolution”, "Digital ecosystems: innovations or must-have leaders”,
“Transformation of the oil industry by the example of Karachaganak Petroleum
Operating B.V. New areas”, “Development of the web3.0 ecosystem and blockchain
technologies”. Events of this kind are the driver for developing the digital
economy and digitalization of the country's industry, no doubt about it.
The issues related to
the qualitative assessment of
digital transformation of industrial enterprises remain debatable, in particular: what indicators/set of indicators should
measure it, and what effect on all business processes of the company. It should
have how to affect aspects of forming competitive advantages in the active
development of digital economies. In the scientific literature and practice,
there is no single methodology / common scientific approach to
conducting research of this kind, so, in this regard, this issue remains open
as before.
Volatility This
research made it possible to identify areas of digital industrial
transformation by the example of a number of large enterprises (best practices) operating both in the
territory of the Russian Federation and in the Republic of Kazakhstan. In
general, it can be noted that the industrial sector of both countries is
focused on the active implementation of various ICT tools, while overall
modernization of the industry is closely linked to key objectives of state and
departmental programs for the development of digital economies. Further
research areas of the authors will be related to the study of specific features
of the functioning of cyber-physical systems and cross-platform solutions in
the activities of complex integrated structures – industrial clusters.
This research is partially funded by the Ministry of
Science and Higher Education of the Russian Federation under the strategic
academic leadership program "Priority 2030" (Agreement
075-15-2021-1333 dated September 30, 2021).
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