home Thyroid One comment on “Vertical integration of production as a key condition for modernizing the Russian economy.” Development of a quality management system for a vertically integrated oil company

One comment on “Vertical integration of production as a key condition for modernizing the Russian economy.” Development of a quality management system for a vertically integrated oil company

We will help you find effective solutions to key business problems!

Our mission is to improve the efficiency of enterprises using modern management technologies.

The Center for Consulting and Solutions "Argument" positions itself in the project integration market and offers enterprises of various industries and scales of activity a range of services (consulting, implementation of management information systems, integration and support of management information systems, training) aimed at creating and strengthening long-term market advantages for customers , increasing the efficiency of their work. These services include strategic and operational consulting (in particular, in the field of organizational development and financial management, marketing), IT consulting, implementation of enterprise management information systems, support of management information systems, training of enterprise personnel to use modern management systems, employee training financial, economic and personnel services. The result of the Center’s cooperation with the customer enterprise is not only consulting recommendations, but also an effectively working comprehensive solution - an enterprise management information system. Elements of such a solution may be, for example, various ERP systems, automated payment systems for subscribers (consumers), SCADA systems, process control systems, document management and work flow management systems, data warehouses, and other products. Specialists of the Argument Center, in collaboration with the Customer, develop the concept of the solution, design its structure and composition, carry out the optimal selection of suppliers and developers of individual components of the solution, organize and carry out work on reengineering of business processes and product integration, ensure the commissioning of the complete solution, support and staff training. We combine the best technologies and products into a single effective solution and create arguments for your success.

Advantages of the Center for Consulting and Solutions "Argument":

Qualified employees

The Argument Center employs more than 50 highly qualified specialists. The core of the team was made up of specialists with many years of experience in the largest domestic companies developing IT solutions, consulting companies, IT departments and financial and economic services of real sector enterprises. Among our specialists are candidates of sciences, MBAs, holders of qualification diplomas and certificates. Experienced experts have been involved in the CCR to conduct consulting work in the field of strategic management, operational management, and IT consulting. Professionals involved in commissioning and commissioning work with many years of experience in large integration projects, qualified experts in various software platforms for building corporate information systems. The preparation of enterprise specialists for the use of management information systems is carried out by certified consultants of the TsKR Training Center, who have extensive experience in the implementation, integration and maintenance of automated management systems. When implementing large regional projects, this team is supplemented by proven specialists from the regional partners of the Argument Center for Design and Development.

Effective technologies and solutions
Our principle is to combine the best products into a single solution using reliable and efficient work technologies. Our customer receives not only consulting recommendations, but a truly working unified management information system. When choosing a software product to automate an enterprise management system, we proceed from the logic of the project, which is dictated by the requirements, capabilities and interests of the customer enterprise. These advantages allow us to guarantee our customers obtaining the maximum effect from using the complex solutions we create in a short time and at an optimal cost level.

Integration with partners
Partnerships with global brands - providers of the best solutions in each of the areas affected by the integration project. Our partners include, in particular, SAP, Microsoft, Oracle, Documentum, Galaktika, the Academy of National Economy under the Government of the Russian Federation, the Moscow Aviation Institute (MAI), and the Moscow Technological University of Communications and Information (MTUSI).

Resource, technological base and infrastructure
We have the resource and technological base, developed infrastructure to provide a range of services offered and effective project integration. In order to provide the business community with a convenient discussion platform on management issues and innovations, the Center for Consulting and Solutions "Argument" together with partners is implementing a project to regularly hold a series of practical conferences in Russia and abroad under the general title "Modern technologies of enterprise management." We invite enterprise managers, leading specialists, experts, and anyone interested in increasing the efficiency of domestic companies through the optimal selection and use of management systems to participate in these forums. Together with the Moscow Aviation Institute, the Institute of Finance, Economics and Management of the CCR "Argument" opened a Corporate Training Center. The training center offers business education in various areas and in different formats.

The Argument Consulting and Solutions Center looks confidently into the future, having everything necessary to successfully fulfill its mission.

Interaction between the customer, vendor and system integrator in the process of implementing complex IT projects.
Mikhail Popov, Infobusiness.ru

Vendor- an organization or individual that is the bearer of a trademark.

A round table discussion at the CIO-World conference, dedicated to the problem of customer relations with vendors, allowed us to draw a completely logical conclusion. For productive interaction between the customer and the supplier directly, “over” the intermediary represented by the integrator, the help of another intermediary - a consultant - may be useful. But only this consultant should not be interested in selling anything other than his service.

Most IT projects involve three parties: the customer, the hardware or software manufacturer, and the intermediary between them represented by the integrator. The customer communicates with the integrator, the integrator communicates with the manufacturer, and these two circles of communication are isolated from each other. This is the case when implementing simple information systems, but if we're talking about For complex projects, the price of which starts from tens of thousands of dollars, implementation occurs as an “insulation breakdown”, and the customer can enter into direct interaction with the manufacturer.

According to Alexander Moskvin, head of the IT department of the Russian Federal Property Fund, there are two main reasons for working directly with a supplier: “Firstly, communication between the customer and the supplier is a way of influencing the intermediary - a distributor or integrator, and secondly, it is a way of influencing on the supplier himself. The vendor usually listens much more attentively to the end user than to the integrator if he tells him about his needs: why, for example, it is necessary to speed up delivery and make it not in twelve, but in eight weeks. Resolving such issues directly can be more effective than asking them through a chain of intermediaries.”

In addition, as a rule, integrators are only good at tasks that are similar to those that they have already solved before. In the case of fundamentally new tasks, direct interaction between the customer and the manufacturer may be the only way to overcome the temporary incompetence of the local integrator and will ultimately benefit him, allowing him to gain new experience. And then the presence of a regional representative office for a vendor can become an important competitive advantage.

IT Director of the Novosibirsk company “Top-Kniga” Sergei Plaksienko believes that it is necessary to communicate with the vendor on strategic issues, such as the presence of a service center in the region, maintenance of a regional warehouse, etc. At the same time, according to him, in Novosibirsk, only one of several well-known vendors has a full-fledged office where it is convenient for customers to contact. “We are not satisfied with communication through a local system integrator due to the quality of the latter’s services. I can only change the situation by communicating with the vendor, because I cannot influence the system integrator directly. It becomes a vicious circle,” he says.

Andrey Dubskikh, head of the information technology department at Protek, points to the role of the vendor as a guarantor of stability in the market: “Interaction with the equipment manufacturer is necessary because the quality of components and prices on the market vary greatly. You can agree with the supplier, for example, on the planned supply of equipment, determine price limits, budget, etc.” Andrey Dubskikh emphasizes that interaction with a vendor only makes sense if the company has a well-thought-out IT strategy. The main condition for its construction, in turn, is a business strategy, which organically includes issues of centralized IT financing. However, the last condition, according to Vladimir Ananyin, director of IT consulting at Borlas, is not met in 90% of cases: “Either the company’s management has vague ideas about the IT strategy, or different managers do not agree on development goals. And the development of relationships with suppliers, be they consultants, software or computer equipment suppliers, depends on this agreement. If the resource allocated for the development of information technology is not sufficiently specified and different departments are responsible for it, then a variety of scenarios may arise, including the “wild market” scenario, when the customer becomes the arena of disorderly competition between several suppliers (sometimes, however, he deliberately organizes such a struggle in order to achieve a price reduction or obtain other favorable conditions).”

Personal question

The interaction between the customer, vendor and system integrator during the implementation of complex IT projects is often accompanied by an interesting process, the presence of which the parties for some reason do not really like to admit. And without recognizing a phenomenon, it is difficult to fight it if it is harmful, and to use it for good if it is useful. We are talking about the migration of the most expensive component of information technology - competent employees.
By delivering new solutions and technologies, the vendor or system integrator trains the customer’s personnel. He becomes more competent, his value increases (usually faster than his salary), and the trained employee is already looking for where else to find use for his new knowledge and certificates. Sometimes this place turns out to be an integrator or even a representative office of a vendor, especially if they are central and the customer is peripheral. There is a phenomenon of erosion of (already) highly qualified personnel who want to gain new opportunities for themselves by moving to another job. There is also a reverse process, which has a rather painful effect on many system integrators. Following the completion of the project, the beloved and respected customer finds convincing means to attract the leading specialists of the working group to his staff. Each of the parties, naturally, has a negative attitude towards this process, but something else is interesting - how are they trying to manage it?

“Any member of the project team on the customer’s side will inevitably be stamped with brands that increase its market value,” confirms Vladimir Ananyin, director of IT consulting at Borlas. “We are very familiar with this problem; it always arises in large projects.” . As a preventative measure, Vladimir Ananyin advises including a “non-poaching” clause in the project team agreement and clearly indicating the roles of the performers. The project team agreement has the status of an annex to the contract and begins to be discussed with the customer either before the contract or in parallel with it. However, Vladimir emphasizes, “one cannot ignore the interests of real participants who are free to leave and get hired, and an employee may move not from the customer to the integrator or vice versa, but, for example, to a competitor. And here a lot depends on the client himself. While engaged in implementation, we could observe how the commissioning of the system was accompanied by serious work by the customer’s HR department, on the one hand, to promote personnel who were in the project team, and, on the other, to retire people from vacant positions.”

Mikhail Popov, business development manager at Sun Microsystems, attaches great importance to personnel rotation within the corporation, when employees are offered to work in different positions and specialties for several years. In his opinion, this allows them to better realize their potential. However, he also considers the transition of people between companies to be an almost inevitable phenomenon: “If you work with the technologies of one vendor, investing your time and abilities in them, you achieve a certain value in the market. You can increase your value by investing time and resources in another vendor's technology. And the transition is often due to this very reason - a person has realized himself in one direction and now wants to look at the world from a different angle. Any corporation cannot afford to exist for several years with one set of employees. She always needs “new blood.”

According to Andrey Zotov, Verysell vice president for strategic planning and corporate governance, both system integrators and enterprise IT services are “inflating” the personnel problem. According to him, “in world practice, an annual twenty percent renewal of IT service personnel is considered normal. Technologies and priorities change all the time, and the influx and outflow of specialists is considered a positive factor that should not be feared, but must be managed.”

And even seemingly ineffective actions towards personnel can have delayed positive effects. As an example, they cite the company SAP, which in the mid-90s in Russia was engaged in training specialists who left the company after training. The result was a large market of specialists who began to promote SAP with clients, which resulted in a sharp increase in sales.

“The first group of trained specialists always leaves, but you can learn from them what needs to be done so that specialists do not leave,” says Mikhail Elashkin. And the company’s willingness to invest money in training the employees it hires significantly expands the range of choices.

“We have someone to choose from because people know: we will teach. And this is also an added value, a reputation that allows us to choose the right personnel,” emphasizes Sergei Khmelnikov, IT manager at British Petroleum.

Of course, the customer’s desire alone is not always enough to work directly with the vendor. Mikhail Popov, Sun Microsystems manager for affiliate marketing programs, emphasizes that his company is primarily interested in large projects that are in line with the strategic direction of information technology development: “Issues regarding delivery times, product quality, prices are more within the competence of the distributor , and a certified integrator can handle simple tasks, for example, the task of automating a remote office with ten employees.” Obviously, implying that the vendor is a more long-term and unchangeable phenomenon in this world than the local integrator, Mikhail Popov argues that the decision about whether to work directly with the vendor, or whether the customer can do it on his own or with the forces of a system integrator, lies in both time in the area of estimating the total cost of the solution and risks depends on how far into the future the customer looks.

A difficult situation for a vendor is when the customer looks too far and has not only far-reaching plans for the development of its own IT infrastructure, but also wants to provide hardware and software manufacturers with partial financial guarantees for the effectiveness of the solutions they offer. “The key question is who will be held accountable if an IT investment turns out to be a failure if the solution does not deliver on what was promised. For such a formulation of the issue, the Russian market is still young, there are few companies that are ready to take responsibility for the solution (at the global level, such guarantees can be provided, for example, by IBM Global Services),” says Andrei Kelmanzon, head of the customer service of NK YUKOS. The criterion for the success of a project, according to him, may be the achievement of certain goals, for example, economic indicators, but not the implementation of the system as such. In other words, business acts as a criterion evaluator of implementation success.

Andrey Zotov, vice president for strategic planning and corporate governance at Verysell, considers a partner’s willingness to take on part of the implementation risks as a significant competitive advantage: “We were able to acquire several important clients only when we offered to take responsibility for half the cost of the project (and in some cases even more), while guaranteeing a certain time frame for implementation. So this is important when working with large customers.”

1. The demand for integration technologies is constantly growing. Just two years ago, the Russian customer had little idea what integration technologies were, and most often described them as a set of protocols for data transfer (FTP, HTTP) or data synchronization in various programs using APIs or built-in tools. Now comes the understanding of what end-to-end application integration tools are and their benefits. Large enterprises need to integrate dozens of applications, often realizing this at the time of transition from legacy, old systems to new ones. This problem of data migration from old systems can be solved by integrating old and new systems into a single complex.

However, in the future, people understand that data exchange is possible between any programs, and this will greatly simplify their work and, therefore, reduce overhead costs. Thus, application integration tasks develop into business tasks - reducing overhead costs when exchanging information, reducing the influence of the human factor when transferring data, using consistent information from different systems. All this increases the efficiency of business management and allows you to save investments already made in other systems by combining them into a single complex.

2. One of the main tasks is to build a transport environment between company branches. As a rule, large customers have many geographically distributed branches and need prompt exchange of information between them and the parent company. This is a complex task that requires an integrated approach. After all, it is not enough to connect all branches to a single network or to the Internet - such a connection will not guarantee the delivery of information and, especially, the efficiency and security of delivery. What is needed here is a system for guaranteed delivery of messages, and delivery must occur once (to ensure security) and in real time.

Small and medium-sized companies most often need to connect several different programs with each other in order to establish the exchange of information between functional departments, for example, the order receiving department, accounting department, warehouse, delivery department, etc.

3. Our solutions are based on the products of four companies - leaders in the integration products market, according to independent analytical companies. These are IBM, Tibco, Oracle and Microsoft. All their products have their own advantages, which we take into account when making recommendations to the customer:

Microsoft BizTalk is a convenient and widely used application integration tool;
Oracle BPEL Process Manager - an integration tool with native support for the BPEL business process execution language;
Tibco Rendezvous, Tibco EMS - message transmission systems for building a transport system; Tibco BusinessWorks is a powerful tool for executing business processes;
IBM Websphere is a broad set of tools for business process management and application integration, including a transport environment.

4. To connect the integration environment with various applications, special programs - adapters are used. The main difficulty in introducing integration technologies is the lack of adapters for domestically developed programs. Almost all Russian companies use domestic programs, so they have to develop adapters for such systems on their own. Of course, all manufacturers of integration platforms have provided special tools for developing adapters, but this still affects the timing of implementation of integration solutions.

There is often a way around this difficulty. Since most Russian developments use standard databases (for example, 1C:Enterprise works either with a file database or with Microsoft SQL), you can connect to the database directly, excluding the application itself. In the described example, you can work directly with the 1C:Enterprise database using an adapter for file data sources or for Microsoft SQL. But it is still more convenient to use special adapters for applications, in this case intended specifically for 1C.

1. The demand for integration technologies from Russian customers has not changed significantly recently. It, as always, depends on the characteristics of a particular project and the degree of automation of the customer’s business. Almost every software development project for large companies, in which all major business processes are already automated, contains integration elements. At the same time, there are no separate projects aimed exclusively at systems integration.

2. Speaking about integration projects, it is most convenient to classify them by type in accordance with the layers of the classical three-level system architecture: this is integration at the level of databases, application servers and client parts. The most common integration projects are at the level of application servers and databases, while integration at the level of client parts is carried out quite rarely and is associated mainly with Web applications that are built into the corporate portal.

If we talk about different categories of clients, then among small businesses integration at the database level is in greater demand, which allows for a fairly simple exchange of information between different software products. Medium and large companies, as a rule, order integration work at the application server level in order to provide support for new business processes.

3. Today, all leading manufacturers in the field of software development tools - Microsoft, Oracle, IBM and others - have integration tools in their arsenal. Therefore, for projects in which applications are integrated, the capabilities of software products already running in the system are usually used. For example, when implementing our electronic document management system at MTS, we integrated the electronic document management system with the company’s internal corporate portal and the technical support system for internal users using built-in Lotus Notes tools.

A technology that is quite in demand on the market is Web services. Currently, our specialists are implementing a project in which Web services developed on the Microsoft .NET platform are used to solve integration problems.

4. Modern integration tools have reached a fairly high technical level, and problems rarely arise when using them. Minor difficulties still arise when integrating applications developed on different platforms (NET - Java). However, I think that in the near future these difficulties will be overcome. At the same time, quite often customers have problems with application integration due to staff unpreparedness for the inevitable consequence of such projects - changes in existing business processes.

1. Demand has appeared and is growing rapidly. This is due to the fact that many enterprises and organizations have gone through the stage of “patchwork-piecemeal-focused” automation and are now concerned with the problems of increasing the operating efficiency of existing equipment and software. Integration precisely solves these problems - by eliminating repeated data entry, combining various systems into single business processes, reducing the cost of user training, etc.

2. Characteristic tasks at the moment are the organization of data exchange between various applications and information systems, as well as the creation of unified workplaces and access points based on portals. Gradually, there is a demand for more complex projects - the integration of various information systems to automate unified business processes. The complexity of the tasks depends on the size of the customer company - the larger the organization, the larger the “zoo” of software and equipment, and the more acute the problems of increasing efficiency, the more complex the solutions used.

3. CROC uses portal solutions Microsoft SharePoint Portal Server and IBM WebSphere Portal Server, integration products of the IBM MQ family, Microsoft BizTalk Server and MSMQ, business process automation systems from SourceCode (k2.Net), data integration tools from Informatica and Microsoft, etc. etc. The choice of a specific integration product is determined by a large number of factors, and there are no universal solutions.

4. Integration projects, as a rule, involve changes in the company’s business processes and affect several divisions of the customer. Therefore, difficulties usually arise from the need for careful planning and design of this intervention. Technological problems in such projects are secondary (of course, with the proper selection and application of integration products).

1. Over the past year, the demand for the implementation of integration solutions from Russian customers has increased and at the same time has undergone some changes. Companies want not only to solve current problems, but also to take into account business development prospects, understanding the role of IT infrastructure development in the development of the entire organization as a whole. Nowadays, business is becoming much more demanding of IT. If earlier, as a rule, a solution to a specific problem was required and it was enough to select it from those available on the market and implement it, now more often there are demands for automation of end-to-end business processes that affect many people and application systems involved in these processes. The level of specialists responsible for the development of IT infrastructure in companies has increased significantly. Customers strive to achieve real results from the use of IT.

2. Our clients are large companies in which IT is a powerful tool for business development, and this tool must work effectively. The main tasks that almost any client faces are the integration of data stored in various systems, as well as the automation of key business processes using infrastructure software. One of the important requirements when solving integration problems is operational control over ongoing processes and data flows transmitted between integrated systems. At the same time, it is increasingly required that this control be convenient for business and allow it to quickly respond to the current situation.

3. We primarily use solutions from BEA Systems, whose products are undoubtedly among the leaders in the infrastructure software market. Application server, integration and development tools, portal - products delivered under the WebLogic brand have received many prizes and awards from world experts. Today, BEA offers ready-to-use solutions for deploying service-oriented architecture - the AquaLogic family of cross-platform products. AquaLogic is a complete, optimized and unified platform for the successful implementation of SOA, including products for deploying and managing services, building business processes and applications, regardless of the systems, solutions and platforms already used by the client - J2EE, .NET, IBM, SAP , Oracle, etc.

4. The specificity of the implementation of integration technologies lies in the uniqueness of the complex of systems operated by the customer, in the presence of many project participants from both the customer and suppliers of the operated systems. Another very important point is the changing customer requirements. A fairly common situation is when, at intermediate stages of project implementation, the customer’s views change and requirements expand. Having seen the first benefits of integration, the customer puts forward new ideas, a new vision of goals and objectives. And here the benefits of BEA tools and technologies are realized, allowing you to quickly make changes and get clear results.

Konstantin Anisimov,
Director of Technical Marketing and Sales Support Department,
"Microtest" (http://www.microtest)

1. In the area of business application integration, there is good demand dynamics due to the fact that customers have become more flexible in the design of application infrastructure and do not strive to “cover” all business processes with one solution. Instead, large clients are increasingly seriously considering an IT landscape in which different business problems are solved by different applications with proper integration. This approach not only allows you to select the best-in-class IT solution for each business problem, but also often achieves significant cost savings.

2. The main task, characteristic of all projects, is to understand the specifics of the customer’s business, maximum customer focus, the desire to offer the customer the optimal solution that would combine compliance with the requirements of his business, ease of use, and opportunities for further development. A typical integration task of a large holding is the consolidation of financial information for the enterprises included in the holding. The task becomes more complicated if the holding’s enterprises implement different business applications from different vendors. However, we have a number of solutions to this problem using SAP and Cognos technologies.

It is too early to talk about the differences between integration projects for small and medium-sized business clients, since the number of such projects is small. But for us, every project is important and has its own specifics, regardless of the size of the business. The success of a project is often more influenced by such factors as the level of organizational maturity of the enterprise. The higher it is, the more interested the customer’s employees are in the speedy and successful implementation of the project, the more fruitful and interesting the joint work is.

3. In the practice of the Microtest company, the most popular integration solutions in the application area are built on the SAP NetWeaver and Cognos ReportNet platforms. In addition to application software, our company provides the construction of adequate computing infrastructure and data storage systems using solutions from Network Appliance, Sun Microsystems, HP, Hitachi. This multi-vendor nature allows for a flexible approach to customer needs, providing a comprehensive turnkey solution.

4. A certain problem is the weak formalization of business processes at Russian enterprises, which prevents the implementation of many effective IT solutions, in particular, ERP systems. In addition, the category of “pitfalls” includes cases when, during the implementation of a project, the customer’s imagination begins to work vigorously, and the project has to be rewritten almost anew. But, of course, such a fantasy is still better than the general reluctance to change that existed until recently. The IT market is growing and becoming more developed, and this is gratifying.

1. Demand for integration technologies is showing steady growth as the IT market grows. The share of services in integration projects is also increasing.

At the same time, demand has become more diffuse. In other words, if previously the customer was interested in any specific task, for example, building a data transmission network, creating a data processing center, introducing technical security tools, etc., today he is interested in a comprehensive project aimed at increasing the efficiency of core activities through implementation of modern technologies. And the customer will not start the project until it is clear to him what real financial benefit he will receive from implementation and in what time frame.

Almost all technologies that were previously offered by IT service providers are now in demand in the market. But the demand for integrated solutions in the field of automation, specialized industry technological solutions (SCADA systems, automated process control systems, service stations) has increased significantly.

2. The first and main task of the project that the customer sets for us is to increase the efficiency of his business. And the larger the client, the more pronounced this task becomes. For example, almost no one builds a network for the sake of a network anymore. While small enterprises still sometimes practice this, medium and large enterprises no longer do.

Most customers today have already implemented a number of information and technological systems. Therefore, their next task is to integrate all new systems with previously implemented ones. This means that we must clearly fit the system being built or modernized into the complex of systems and tasks that the customer already has.

Most large customers today work with one general contractor. The customer does not want to conduct a project simultaneously with 10-15 performers. He wants to have a company as a general contractor that will solve all the assigned tasks, provide a feasibility study for the project, and offer convenient schemes for attracting investments for the project. Today we include everything in the concept of “general contracting” - issues of project financing, management of subcontractors, system integration itself, and further issues of operation and support of implemented solutions.

3. We are a multi-vendor company; today we have signed about 20 partnership agreements with vendors, which allows us to offer the customer several solutions that meet their requirements for a specific project. Our partners are Alcatel, APC, Barco, Cisco Systems, Check Point, Computer Associates, Dell, Elteco, Emerson Process Management, Ericsson, IBM, General Electric, HP, Microsoft, MGE UPS Systems, Motorola, Nortel, RIT, Schneider Electric, Siemens, Symbol and others.

4. “Pitfalls” are encountered at almost every stage of an integration project. Errors during the project can negate the entire effect of IT implementation. Therefore, we take a responsible approach to the implementation of each stage of the project and organization of work. This applies to the choice of an integration solution, to interaction with equipment and software suppliers, to the organization of work with subcontractors, and to the development of project financing schemes. A clear understanding of the purpose of implementation, as well as knowledge of the customer’s business and the industry as a whole, allows you to avoid many problems. And, of course, you must have experience in leading large-scale integration projects.

1. To analyze the demand for integration solutions, you need to assess the situation in which many companies currently find themselves. On the one hand, patchwork automation and fragmented corporate applications are typical characteristics of information systems. On the other hand, constantly changing market conditions and business processes pose the task of IT departments to minimize the business response time to any external or internal changes.

A natural way out of this situation is to integrate the components of the information system so that it functions as a single organism that adapts to changes, providing transparent management of the enterprise’s business processes. The importance of creating such a unified information system is recognized by modern IT managers, as evidenced by the growing demand for various types of integration solutions. However, of course, the volume of the integration solutions market and its growth trends in Russia are still inferior to Western indicators.

2. The integration tasks of large customers can be classified depending on the IT strategy they use. The first type of integration problems arises for customers who have implemented complex business systems (in particular, the ERP class) or are in the process of implementation. The customer is faced with the fact that the new system, despite comprehensive automation, does not cover the entire application area, which leads to the emergence of integration problems with additional application systems external to it. A typical example is the integration of ERP and a telecom operator's billing system.

The second type of integration tasks is associated with the customer’s use of the best-of-breed approach, characterized by the implementation of specialized information systems that are most suitable for solving specific problems. Due to the fact that an enterprise’s business processes cover several application systems, the task of integrating them with each other arises. This type of integration tasks is quite widespread in the banking sector.

Medium- and small-sized companies face similar integration challenges, but they typically have fewer systems to integrate.

3. In integration projects, we use software products from leading companies in this area: Oracle (Fusion Middleware product line), IBM (WebSphere products), Microsoft (BizTalk Server). The choice of manufacturer and product for a specific project mainly depends on the requirements and nature of the integration, integrated applications, the IT infrastructure used by the customer, and the information system development strategy.

4. Industrial integration platforms are fairly new technologies, and not all the standards on which they are based have been finalized and adopted. This feature leads to the emergence of a number of technological risks in integration projects. Another important aspect: demonstrate to the customer the benefits of using an integration solution and show that these solutions are not in the nature of “utilities” for transferring data from one system to another, but are involved in managing the enterprise’s business processes and leading to an increase in their efficiency. To mitigate technological risks and demonstrate benefits, the Open Technologies company has a Competence Center, where we model parts of the customer’s IT infrastructure, right down to the installation of ERP system modules, and test our integration solutions on them.

1. The main trend is the growing demand for process-oriented developments (Business Process Management, BPM) and large-scale integration projects. Customers' expectations have increased significantly: it is no longer enough for them to receive any information from various resources - they require a generalized presentation of integrated information, allowing one request to receive consolidated data from several sources, including external ones, and perform a comprehensive analysis of it. In addition, an increasing number of customers prefer to build distributed storage facilities for integrated information. With this approach, instead of physically merging data from integrated resources, associated with complex, expensive and opaque procedures for exporting-importing and converting information, a formalized description of integration rules is created, according to which access directly to data in resources is organized.

2. All tasks can be conditionally divided into two groups: tasks of internal corporate integration and integration with the systems of external counterparties (partners, clients) - in relation to the company or organization. The first refers primarily to the creation of systems for integrating corporate applications within a separate organization. Under the second - integration systems between organizations that ensure secure information exchange with systems external to them. Thus, a unified information environment is created that covers the organization’s partners, suppliers and clients.

Depending on the object of integration, certain local tasks related to the regulatory, organizational, technological or information aspects of integration, as well as information security, come to the fore. For example, with interdepartmental integration, the issues of regulatory support for integration processes and the use of uniform terminology are particularly acute.

3. We should start with the fact that there are several types of integration:

data - the ETL (Extract Transform Load) tool class is used for this;
applications - carried out using EAI (Enterprise Application Integration) tools;
types of user access to applications (corporate portals, groupware);
based on executed business processes.

Nowadays, application integration is of particular interest to customers. The solutions developed in our company are based on products related to Oracle Fusion Middleware - the core of this platform can be called Oracle BPEL PM (Process Manager). BPEL's capabilities are best realized when it is integrated with other technologies within a single solution. Thus, we propose to use Oracle BPEL PM in conjunction with Oracle Workflow technology, integrated with our own ELAD development to automate business processes.

A full-fledged BPM solution must include a business process modeling tool. Casewise serves as such a tool in our solutions. All of FORS's own developments, in one way or another, also serve as a means of application integration. The direction of data integration has not been forgotten either - our specialists are already working on the project using Oracle Customer Data Hub.

4. Two categories of difficulties can be distinguished - organizational and technical. The first include the reluctance of resource owners to provide their data to other users, the lack of a unified informatization policy within the project (this problem arises when integrating resources of different owners), and the discrepancy in ideas about integration projects between the customer and the contractor (especially when moving to SOA). Technical problems often arise in the absence of uniform integration standards.

Sergei Romanov,
technical director, candidate of technical sciences,
Computer Mechanics (http://www.mechanics.ru)

1. Demand is quite stable and is associated with outsourcing of everything that the customer cannot do himself due to either a lack of specialists or the non-core nature of the work. Currently, the qualifications of the employees of customer companies are quite high, so the client turns to an integrator either to solve complex problems or to conduct a large project that requires certain resources, both in volume and in terms of qualification level. The need for integration and the benefits that the company receives are already obvious to everyone. New technologies that are popular in the West and the conveniences they provide are on the lips of top-level managers today, although they do not yet understand their prospects, the real benefits specifically for their business and the required amount of costs.

2. The first task is to identify needs and formulate requirements. This is a very important point, since the customer needs to be explained how to solve his problem and possible options, to convince him that there is no need to automate and integrate the “mess”. A clear mutual understanding and presentation of requirements in the form of a technical specification is fundamentally necessary - otherwise, at the end of the project it may turn out that not exactly what the customer expected was done. In other words, on the one hand, the customer’s expectations must be managed at the very beginning of the project, on the other hand, it is necessary to clearly understand the basic fundamental requirements of the customer and find ways to implement them. The second task is to fully agree on the vision of “how it should be” with the customer. Here you need an adequate approach to project management, you need to know who to ask what, with whom to coordinate and approve what, since the vision of how the business process should be organized often differs among senior management, line managers and local performers.

The customer needs to be explained in advance what difficulties he will encounter when implementing a new solution, what efforts and decisions will be required from him, what resistance to innovation can be expected from the staff of his company. You need to understand for yourself: is senior management ready to take a principled position on key issues?

For different categories of clients, the difference lies in the amount of work done. For medium and large clients, the timing and accuracy of calculating project costs are important, which can be difficult to calculate with an acceptable error. In addition, for these clients it is necessary to clearly build a scheme of interaction: on what issues to whom to contact, how and in what time frame these issues will be resolved.

3. In terms of technologies and solutions, we have everything standard: either we use the technologies of those vendors whose solutions are being implemented, or we are guided by the principle of minimal costs for both implementation and subsequent development of the implemented solution, taking into account the requirements for the medium term.

4. The first pitfall is an unclearly defined technical task. Here we have a standard dilemma: either we spell out in detail in the technical specifications everything that requires significant costs, or we don’t do this and have problems when delivering the solution to the customer, due to an ambiguous interpretation or incomplete description of the requirements. The second “pitfall” is that the client often imagines how everything should be in principle, and does not have a clear picture in detail: the organization of business processes, the necessary parameters and requirements for them, information flows, duties and responsibilities, delimitation of rights, etc. d. Often he thinks up something or changes something at the stage of project implementation, and this leads to missed deadlines and an increase in the cost of the project on the part of the contractor. The third pitfall is the untested nature of technologies or solutions, including those from a specific vendor. This becomes critical when, on the one hand, the performer has no experience and, therefore, knowledge of the problems that he may encounter, and on the other hand, he is pressed for deadlines and does not have time to simulate the situation. Here it is important to be able to identify and manage risks, minimizing them and competently justifying your position to the customer.

1. The demand for the development of integration projects is quite uniform, it is stable and predictable. As a rule, Russian companies operate many information systems that need to be integrated with each other. This is due to the fact that in the overwhelming majority of medium and large companies there is “piece-wise” automation, and very often, to solve current business problems, integration is carried out on the principle of “everyone with everyone”. In a number of cases, this was a necessary measure and temporarily allowed problems to be solved. But, growing like a snowball, such integration begins to bring only headaches and becomes a “stumbling block” when the company’s business begins to reach a new level. This is when the question of “correct” integration arises.

2. Our clients are representatives of medium and large businesses, since small businesses, as a rule, have one or two or three information systems and are quite able to cope with their integration on their own. For different categories of clients, integration tasks are not much different; only the scale matters. In large companies where several heterogeneous information systems are involved and used simultaneously, the main task of the integrator becomes the conceptual development of processes: how data is exchanged, what, where, in what format, in what period of time, for what event, what business logic is involved must be implemented. Often the customer himself imagines all these processes only in general terms; This leads to priority tasks that need to be solved before directly starting to integrate applications. This:

inspection of the customer's infrastructure;
survey and analysis of business processes affected by the integration solution;
identification and analysis of the list, volume and number of information objects transferred between integrated systems;
selection of preferred technologies and mechanisms for interaction with integrated systems;
development of technical specifications.

3. All of the above logically leads us to the next solution to the customer’s problems - we offer him a comprehensive transition to world-tested integration servers, with the help of which information systems can be integrated with each other according to the “star” type. This approach allows for flexibility when the landscape of information systems changes: for example, if one IS is replaced by another, it does not have to be reintegrated with each of the existing information systems. Today there are many integration platforms in the world, among which I would like to highlight Microsoft BizTalk Server and IBM WebSphere Business Integration.

4. Among the so-called “pitfalls” of integration, the first thing to note is that it is often necessary to integrate information systems at the moment when they are just being created or are radically changing, especially due to the reorganization of the customer’s business. In this case, you have to improvise and make changes directly during the integration project. The second point that causes difficulties during integration is when it is necessary to integrate unique or legacy information systems that support their own data format and are closed to interaction with external systems. And the third “stone” is “home-written” systems that do not have documentation, which is quite common in Russia.

1. One of the trends in the development of Russian business is the increased number of acquisitions and mergers. Accordingly, the demand for integration of applications to automate activities is constantly growing. The tasks of integrating various systems are included in the list of priority tasks that IT managers must solve. Customers use application integration to reduce risk by creating a single information space.

There are several fundamentally different approaches to integration processes. Firstly, this is integration at the level of business processes. Secondly, integration at the data level. Thirdly, this is integration at the level of collective work with content. Each approach uses its own technologies for solving integration problems. In the first case, this is SOA technology. When integrating at the data level, classic solutions are used to build data warehouses, which allow you to create a single version of corporate data. In the third case, these are solutions for building portals, when the user receives all the necessary information through a single entry point.

2. Typical integration tasks are all described in the previous paragraph. For small companies, this is the creation of portals for collaboration. For medium-sized ones - collecting raw or aggregated data from existing systems into a new system, creating portals.

In the case of large organizations, a lot depends on the client. There are two types of clients: enterprises with established infrastructure and standards, and companies after a merger (merger) with another company. The former need portal solutions, the latter - full integration at all levels.

3. In its projects, our company uses technologies and solutions from Oracle, IBM and Microsoft, which are among the leaders in the integration systems market.

4. It is necessary to determine the goals of integration and, during the pre-project survey, select the most suitable software for these purposes. In addition, the qualifications of the project team are important. If the above conditions are not met, the entire project will be a pitfall.

Mochalov D.S.

Keywords

DISINTEGRATION / COMPANY STRATEGY / TRANSACTION COSTS / OPPORTUNISTIC BEHAVIOR / COMPANY PERFORMANCE/company's strategy/ efficiency of company's performance

annotation scientific article on economics and economic sciences, author of the scientific work - Mochalov D.S.

The article collects and analyzes at a theoretical level factors that can both positively and negatively affect the performance of vertically integrated companies. The pros and cons of choosing a vertical integration strategy are substantiated with a systematization of the main approaches to the study of this problem. The difference in the performance of integrated and non-integrated companies is presented, which is a key point in considering the issue of the optimal path for the development of large companies. The central question of the study, based on the theory covered in this article, is the effectiveness of the existence of large vertically integrated companies in developing capital markets in modern conditions. Do such companies contribute to the best development of the entire economic system of developing countries, or do they slow down the transition to market relations in all industries? This work is due to the trend that has emerged in the last decade in developed capital markets towards the fragmentation of large vertically integrated structures into smaller segmental organizations. The performance of vertically integrated companies should be studied as a comparison of a single corporation and a number of independent businesses that are part of such a corporation. The simplest way of such analysis is to compare total costs and identify various types of savings, which is what the first researchers of this issue were inclined to do. A more complex level of analysis is to take into account the principal-agent problem, take into account technological types of savings and consider the activities of companies also from the perspective of minimizing risks in the context of existing legislation, which largely limits direct ways to reduce costs within one corporation. Finally, a way that can take into account all possible factors influencing the activities of companies is the analysis of financial indicators, including the analysis of specific values, which gives an answer about the relative total company performance efficiency. In this case, not only the traditional elements of the synergistic effect are taken into account, but also the financial aspects of vertical integration transactions that can lead to bankruptcy of the company are taken into account.

VERTICAL INTEGRATION: STRATEGIC BENEFITS AND ADVERSE EFFECTS

The paper contains highlighting and theoretical level analysis of the factors positively and negatively influencing profitability of vertically integrated and non-integrated companies. Advantages and disadvantages of choosing the strategy of vertical integration are proven along with systematization of main approaches to these item research. The difference of the efficiency between the integrated and non-integrated companies’ performance is considered, which is the key issue of the best way of large companies development. The central issue of the research, that is based on the theory highlighted in this paper, is the utility of the existence of large vertically integrated companies in emerging capital markets. Are such companies improving the whole economy of an emerging country or are they slowdown transition to market relations in all industries? This article was motivated by the trend in developed capital markets towards dividing large holding companies to small segmental units. The efficiency of vertically integrated companies’ performance should be studied through comparison the whole corporation and a set of detached businesses, that could be parts of integrated company. The simplest way of such analysis, which was used by the first researchers in this field, is to compare total costs and to depict different types of economies. On the more sophisticated level of analysis must be taken into account such issues as principal-agent problem, technological economies and risk level minimization under the conditions of legal restrictions, which limits costs saving between two branches of one company. The third approach to consider all influencing companies’ performance factors is the analysis of financial figures, especially the analysis of different ratios, that can show relative efficiency of companies. By doing such analysis not only traditional components of synergetic effect are taken into consideration, but also financial features of M&A deals that can lead to a bankruptcy are covered.

Text of scientific work on the topic “Vertical integration: strategic benefits and negative consequences”

VERTICAL INTEGRATION: STRATEGIC BENEFITS AND NEGATIVE CONSEQUENCES

Mochalov D.S.1_______

The performance of vertically integrated companies should be studied as a comparison of a single corporation and a number of independent businesses that are part of such a corporation. The simplest way of such analysis is to compare total costs and identify various types of savings, which is what the first researchers of this issue were inclined to do. A more complex level of analysis is to take into account the principal-agent problem, take into account technological types of savings and consider the activities of companies also from the perspective of minimizing risks in the context of existing legislation, which largely limits direct ways to reduce costs within one corporation. Finally, a way that can take into account all possible factors influencing the activities of companies is the analysis of financial indicators, including the analysis of specific values, which gives an answer about the relative overall performance of companies. In this case, not only the traditional elements of the synergistic effect are taken into account, but also the financial aspects of vertical integration transactions that can lead to bankruptcy of the company are taken into account.

Key words: disintegration, company strategy, transaction costs, opportunistic

behavior, company performance

Introduction

Vertical integration is almost always the result of a well-thought-out and well-developed company development strategy, within which one of the ways to increase the company's value is a merger and acquisition transaction. A company whose management plans to expand through vertical integration is faced with the question of which direction to carry out the integration: towards the beginning of the production chain or towards selling products to end consumers. The effectiveness of the transaction and, consequently, the entire merged company will largely depend on this decision, since for different companies the integration of production processes in one direction or another will take place with varying degrees of complexity (Danese, 2013). The more difficult it is to integrate, the greater the company's losses as a result of such a transaction, which means a decrease in the efficiency of the company as a whole.

In addition, in some cases, for a company that is already vertically integrated to some extent, there may be a question not only about further integration, but also about

1. Master of Economics, chief economist of the economic development department of Gas-Oil LLC.

disintegration as the most effective way of development. Thus, in the last decade in different countries there has been a tendency to fragment large companies, both private and public, with the separation of stages of the production process into independent organizations. this trend is welcomed by states, since disintegration should contribute to the emergence of competition in industries that have traditionally been considered monopolized. At the same time, the most effective scheme is currently recognized in which manufacturers compete with each other, improving the production process, reducing the cost and increasing the quality of the product (Zhang, 2013). the owner of the infrastructure should remain one specialized company, which will serve producers at uniform tariffs. At the infrastructure level, competition is unprofitable and the efficiency of competing companies will be low; one can even assume that such companies will be unprofitable due to the significant amount of capital costs that are necessary to create and maintain the infrastructure. the final link in delivering goods to the consumer, that is, distributors, do not play such a large role in pricing and creating quality products, so these companies can be either monopolies (or local monopolies) or compete with each other (Perez, 2007).

Companies that follow a development path using a vertical integration mechanism have a variety of options for making strategic decisions. Due to certain factors, a company may abandon vertical integration altogether if it considers the process too costly and the resulting effect too insignificant.

One of the key points that influence the performance of vertically integrated companies is the decision to integrate. It is about companies' desire to manage and reduce their risks, thereby increasing their value, gaining stability and ultimately increasing profitability. It is the desire to minimize the risks of interaction with counterparties that is one of the main goals of vertical integration, and for the ability to control supply chains and at the same time for the opportunity to reduce the identified risks, the company is willing to pay significant costs associated directly with the integration process itself. It is expected that in the future the combined effect of the merger and the reduction in costs will more than recoup the costs of the transaction itself.

Theoretical basis for choosing a company's development strategy depending on the degree of vertical integration

It is worth highlighting three main directions in the work of researchers studying vertical integration. These approaches allow us to take a completely different look at both the process of integration of companies and their activities, increasing the efficiency of which can serve as one of the most powerful incentives for integration. Within one approach, it is common to operate with the concept of costs and their reduction, for example, due to economies of scale (Whinston, 2001). With this approach, the effectiveness of vertical integration will be measured, firstly, by the reduction in production costs, and secondly, by the costs of vertical integration itself. reduction of production costs is possible primarily through process optimization, implementation of know-how that was obtained during the acquisition of the company, by reducing the total administrative costs of the two companies due to the elimination of duplicate positions. reducing costs within a vertically integrated company by obtaining cheaper raw materials from a company lower in the chain is impossible, since this is contrary to the law and can lead to serious problems for the company. Thus, the most high-profile criminal case on this issue recently was the case of Oboronservis OJSC, which sold assets to affiliated companies at reduced prices.

Another approach involves a more comprehensive consideration of the issue of the emergence of savings in a company depending on the degree of its vertical integration. In this approach

consideration of cost minimization for a vertically integrated company is included, and other types of savings, called technological ones, are also introduced (Cloodt, Hagedoorn, Kranenburg, 2006). This type includes all changes associated with the relatedness of the processes of two integrated blocks of the production chain, and they can be both positive and negative. First of all, such savings include the possibility of coordinating production processes, when careful planning within an integrated company allows one to free up significant funds through the company's working capital, that is, inventories in warehouses, which significantly increases the efficiency of the company's activities and its performance. coordination of actions allows the company to quickly respond to changes in the general situation in the economy, to respond to unfavorable (or favorable) conditions by regulating the production of products that serve as raw materials for the link in the production chain that is as close as possible to the final buyer for a specific integrated company. Also, technological savings include the geographical factor, which can be especially important in industries that require multi-stage processing of large quantities of raw materials, such as in the oil or metallurgical industries. Moreover, if in the oil industry relatively little unused waste is generated during processing, then in metallurgy the amount of waste rock can reach very significant volumes, therefore, in order to save on transportation, plants are built near fields, like the Magnitogorsk Iron and Steel Works, and in this case all the conditions arise for the creation vertically integrated company. A somewhat similar situation is developing in the electricity generating industry, when, if generating capacities are located close to the main consumers, generating, transmitting and selling energy companies can be integrated (for example, when creating the Lipetsk special economic zone, the company that owns the gas turbine power plant owns both distribution electricity and heating networks to all enterprises in the zone).

Finally, the third approach includes the results of the other two approaches and is based on the main financial and economic indicators of the company's performance after the vertical integration transaction, compared with the situation before the transaction or compared with the situation in which the transaction would not have taken place (Acemoglu, Aghion, Griffith , Zilibotti, 2010). This approach differs significantly from the other two in that it examines final result the company's performance, while the other two approaches look at intermediate steps, such as cost reduction, which then feed into the bottom line. This approach allows us to pay more attention not to the specific reasons for changes in the efficiency of companies, such as, for example, a reduction in costs for the purchase of raw materials due to the optimization of supply patterns after the acquisition of a supplier, but to the general picture of changes in the company after the transaction, which is the main result of integration. How the company behaves after the transaction may not depend directly on the individual elements and means by which efficiency is planned to be achieved. Thus, problems of a very different nature may arise. For example, a significant increase in the tax burden for the merged company and problems of financing activities, including securing loans to the acquired company. In addition, a significant deterioration in the performance of employees of the acquired company due to uncertainty, decreased motivation, simply a human factor, as well as the replacement of competent company personnel familiar with internal processes with new employees or employees of the acquiring company who need time to familiarize themselves with the business. processes of the acquired company. It is not possible to take into account all the described factors separately when studying the effectiveness of vertical integration, while an analysis of the company’s overall results allows us to display the whole picture of what is happening.

Vertical integration transactions are very complex, complex undertakings, which pose serious choices for companies when considering a development strategy in this area. considering all possible ways of development of the company and potential

social benefits from their choice, it is also necessary to take into account the maximum possible number of risks and negative consequences that vertical integration or disintegration can lead to. At different stages of a company's vertical integration, possible losses will vary both in nature and in size. For example, for a raw materials company acquiring its first processing asset, the costs and risks will be significantly different from the possible costs of a company that already has a degree of vertical integration and decides to acquire or expand its own distribution network.

The problem of strategic choice of the path for further development of the company in relation to vertical integration is associated primarily with assessing the excess of income from such a decision over the costs of its implementation or, what is the same, with assessing the direction of change in the value of the company. Will it rise or fall as a result of the vertical integration deal? When considering changes in the value of a company, it is necessary to separate the increase due to the acquisition of new assets, the size of which can be quite significant, from the actual change in value due to an assessment of growth prospects and future flows, as the basis for the increase in value.

We will consider the key points for making management decisions, namely the strategic benefits and costs of pursuing a policy of vertical integration/disintegration, in more detail.

Strategic Benefits of Vertical Integration

The strategic benefits and negative consequences (or, in other words, costs) of vertical integration are the main factor in assessing the company's proposed development strategy, just as in an investment project the planned return is compared with capital investments. the only difference is that the negative consequences can manifest themselves for a long period after the transaction. This aspect, as well as the high cost of vertical integration transactions, force the company's management to especially carefully weigh all the pros and cons when choosing vertical integration as a company development strategy.

In the scientific literature there are several different ways of describing the benefits and losses from vertical integration, depending on the plane in which one or another author considers the processes being described. The description can only be based on theoretical foundations, for example in terms of economies of scale and the monopsonist extracting more profits than perfect competition, and in terms of the problem of agency costs and opportunistic behavior (Chatterjee, 1991). Other authors approach this issue from a more practical point of view, saying that vertical integration makes it possible to establish cheaper and faster supply chains, which increases the efficiency of enterprises and allows the company to enter new markets and acquire assets. In this case, problems arise of a possible lack of competence in the new industry or industry segment in which the acquiring company is included and in which the acquired company is located, as well as personnel problems (Hortacsu, Syverson, 2007). Another very important aspect is the availability of funds to complete a vertical integration transaction, often provided by raising loans that need to be serviced. For a company, the debt burden can become prohibitively high, which can lead to the most severe consequences in the event of ill-considered actions, including bankruptcy of the company.

Some authors consider not only the efficiency of companies, but also social welfare in terms of creating competition where it makes sense to create it in place of natural monopolies (Kwoka, 2002). With this approach, new benefits and disadvantages arise that may have been missed when using previous approaches that consider vertical integration transactions from the perspective of the firm and its maximization.

cost.

The benefits and negative consequences of vertical integration can be viewed in many ways and arise at many different levels of consideration, which demonstrates how complex and complex an issue vertical integration is.

Let's consider different points of view on the benefits and costs of vertical integration. First, let’s focus on the benefits of companies’ actions in the field of vertical integration (the issue should be considered in this way, since vertical integration includes not only the process of merging companies itself, but also the process of separating independent “niche” companies from a vertically integrated structure, if such a separation entails benefits). Benefits as a result of vertical integration processes can arise both for companies (these are the benefits considered by most researchers) and for society, which can play a significant role in a situation where the company’s activities are extremely important for society and optimization of its activities promises significant benefits for all parties . An example of such companies are energy companies that produce, deliver and sell energy resources (electricity, gas, heat). In this case, the benefits to society from the efficient operation of electricity supply and generating companies are obvious: the higher the efficiency and lower the costs, the lower the energy tariffs (Kwoka, 2002).

In situations where public welfare is of great importance, the state can actively intervene in the policies of companies to develop them. One such example in our country is the reorganization of RAO UES, which was carried out to create competition and to reduce the overall level of tariffs for the population, as well as reduce the monopoly power of the company. The influence of state antimonopoly policy on the development of companies is one of the most interesting issues that imposes certain restrictions on the choice of companies' development strategy.

The benefit to society from the disintegration of natural monopolies is obvious, but is it beneficial for companies? The answer to this question is not as clear-cut as it might seem. on the one hand, if disintegration occurs not of the company’s own free will, but in connection with a directive from the state to take such a step, the results may be negative. Firstly, this is due to the fact that the disintegration initiative was not born in the company. This means that there is no detailed study of such a step and, as a rule, the management of newly formed companies will try to make them effective after the division, and not by acting in accordance with a pre-worked plan, which includes a carefully thought-out division of assets, a well-developed mechanism for interaction between newly formed companies, verified pricing system and more. When companies are separated, established connections are invariably broken, some production processes have to be rebuilt, and in the end, new personnel have to be partially hired to fill all positions. A similar situation will occur even if a company is separated, which was previously a subsidiary of a vertically integrated company, which means not only the control of the parent company, but also the distribution of financial flows in its favor, as well as, if necessary, assistance to the parent company. During disintegration, all of the listed processes disappear or change.

The listed problems of disintegration, although they look significant, are not fundamental from a theoretical point of view. All of these costs can be minimized both during and before the separation of companies through careful planning. What is more important for the company is that it will lose some of its assets, and its market monopoly power and ability to influence prices will also be reduced, which will invariably lead to a drop in the profits of the company that was split.

However, despite all the disadvantages described, the disintegration of companies can bring significant benefits. a vertically integrated company that has a monopolist in the market

or has serious market power (in an oligopoly situation), incentives for the effective development of the company, reducing costs, improving technology, building optimal business processes, and so on are reduced (Aeuah, 2001). This becomes possible due to the fact that such a company sets barriers to entry for competitors into the market, strengthening its position in the industry. However, if a company aims to grow and increase its value, it should consider whether it might be more effective to become less vertically integrated, focusing on the most efficient part of the business and allowing competition in other parts of the industry.

At the same time, those parts of the business that the vertically integrated company abandoned will most likely also develop more efficiently than before disintegration. the essence of this phenomenon is that, being vertically integrated, the company still makes the greatest efforts to develop the most efficient and profitable segment, spending comparatively less effort on the development of other segments.

A prime example is oil companies, for which the main business segment has always been production, followed by refining of petroleum products. Creating your own network of gas stations and retail sales of products is the least profitable business for oil companies, in the development of which, nevertheless, it is necessary to invest significant funds. It is no coincidence that many global oil companies are currently showing a tendency to sell their retail businesses.

One of the most frequently used schemes is a franchise, in which the company or individual entrepreneur purchasing the gas station not only operates under the company’s brand and purchases its fuel (this condition is almost always specified in agreements), but also fulfills a number of other conditions, including regulating prices and even in some cases report to the company on the results of product sales. Such a business structure allows the company to simultaneously maintain control over the retail sale of products, including in terms of setting prices, which is a key advantage, and also provides itself with the opportunity to sell manufactured products. At the same time, the company gets rid of low-profit businesses, assets and their maintenance costs, thereby increasing its efficiency indicators. This kind of scheme is somewhat similar to a holding company, which allows the entire system as a whole to operate more efficiently, since the new gas station owners make every effort to reduce their costs.

The benefits of disintegration have just been described in detail, but vertical integration, as a rule, is still considered a merger of companies, so next we will consider all the benefits from increasing the degree of vertical integration of the company.

One of the reasons for vertical integration is the attempt to achieve technological efficiency, that is, the ability to produce the same volume of output while consuming fewer resources (Arocena, 2008). This is not possible in all industries, but the presence of this opportunity can serve as a good incentive for vertical integration. This effect is not possible at all stages of production; it can only be observed at the stages of extraction-processing or primary processing-production of finished products.

An example of such savings is the metallurgical industry, where combining metal smelting with the production of rolled steel can significantly reduce energy costs by eliminating the need to reheat the steel before rolling it. Considering the cost of energy and the volumes of energy that must be spent for such production, the savings can be quite significant. A prerequisite for such savings is the technological compatibility of processes, which is why the phenomenon is called “technological efficiency” in the literature. It is precisely because of the necessary condition of technology compatibility with subsequent savings that this effect will be absent when integrated with the final product sales segment.

Another and one of the most important advantages of a vertically integrated company is the possession of market power, which makes it possible not only to establish

prices for final products (this is not always possible), but also allows minimizing the risks of incomplete purchase of manufactured products (Isaksen, Dreyer, 2000). such a step becomes obvious and necessary in a situation where there is one or several manufacturers in the industry, but many companies are engaged in selling products to end customers and this market segment becomes close to competitive. In such a situation, the manufacturer is unable to fully realize its potential as a monopolist and suffers losses in the form of lost profits. This is due to the fact that participants in the sales segment try to look for the cheapest suppliers, which, firstly, partially reduces barriers to entry into the industry, and secondly, they can choose substitute goods or enter into contracts with foreign manufacturers. However, it is worth making a reservation that such a development of events is only possible in an industry with a changing volume of output. from a theoretical point of view, with a fixed level of output, the demand for the product will also be fixed and the system will already be in a suboptimal position, when there will be no incentive for integration. Moreover, in the case of a u-shaped average cost curve, the lack of integration and the establishment of monopolistic prices can lead to an excess number of firms in the market, which, again, in itself leads to either the cessation of their existence or to integration (Barrera-Rey, 1995) .

strengthening of a company's monopoly power can also occur according to a more complex scheme: in the case of a manufacturer selling its products to buyers from different industries, in one of which demand is elastic, and in the other inelastic. In such a situation, the manufacturer has every opportunity to exercise price discrimination in the event of vertical integration. It is not even necessary to integrate forward in both industries to have leverage in both markets. To implement discrimination, it is enough to integrate “forward” only in industries with elastic demand. After this, price growth in a market with inelastic demand for raw materials will be achieved by increasing production volumes in a market with elastic demand, which will lead to an increase in demand for raw materials, as well as by concluding contracts for the supply of raw materials with manufacturers in a market with inelastic demand. Thus, the company achieves the withdrawal of the maximum amount of funds from the market in its favor and increases its profits. a mirror situation is possible when the selling company or the manufacturer of the final product performs vertical integration “backward”, that is, it acquires the manufacturer of raw materials to reduce the price of its purchase in the market as a whole. However, this scenario is more difficult to implement than a monopolist acquiring a buyer for its products (Pieri, Zaninotto, 2013).

One of the possible goals of vertical integration may be the creation of artificial barriers to entry into the industry. In fact, the final effect for the company when implementing such a task will be similar to the result of the situations described above, that is, the company’s monopoly position will be strengthened, which can increase the efficiency of its activities by increasing profits. However, when considering such benefits of vertical integration from the point of view of economic theory and the ability of the monopolist / monopsonist to dictate their terms, we should not forget that such a scenario is unlikely to be feasible due to the fact that in all countries with developed or developing capital markets There is antimonopoly legislation in force, which significantly limits or even makes transactions of this nature impossible. The work of the antimonopoly service is aimed at preserving competition and preventing price discrimination, therefore any major transactions must undergo special approval, which makes it almost impossible for companies to act in ways that would limit competition. For example, the Federal Antimonopoly Service prohibited OJSC Gazprombank from acquiring a 50.9% stake in MOESK due to its affiliation with OJSC Gazprom, which owns OJSC Mosenergo, TGC-1 and other generating companies, since the deal created preconditions for the creation of monopoly conditions in the market energy in the Moscow region.

The only possible vertical integration transactions that could lead to limited competition in the market are currently only possible in most countries

in a situation with natural monopolies, which already dominate the market or occupy it completely, which means that the acquisition of another company will not change anything. Therefore, in the case of natural monopolies, most often we are talking about a company that is already fully vertically integrated in its field, for which the purchase of a new company will most likely not be a further construction of vertical integration, but simply a takeover of a company in the segment of activity of which the company already operates.

However, here you can find your exceptions. Of the domestic companies in the early 2000s, vertical integration was carried out by such a large company as OJSC Gazprom. This may seem rather strange, since since the times of the USSR this company has united the entire gas industry of the country, from gas production and transportation, to partial processing and disposal, sales to end consumers within the country and for export. However, Gazprom began to buy out energy supply facilities in large cities. for example, in Moscow, all the largest hydroelectric power plants are currently owned by OJSC Gazprom. being the only gas supplier, the company has effectively become a monopolist in the heat production market in such a major metropolis as Moscow. This step was dictated by the fact that in the capital there were practically no heating capacities left that had not been converted to gas. Using its own raw materials, the company produces heat, which is a more marginal product than natural gas itself, even though prices for both products for both households and legal entities are set by the Federal Tariff Service. Having occupied this niche, the company ousted other players from the market, which allowed it to strengthen its position as a whole, as well as increase the efficiency of its own activities due to the fact that it occupied a new market segment through downward vertical integration.

Another example of a natural monopoly is Russian Railways, from which they have repeatedly wanted to separate a number of subsidiaries, each of them would be responsible for its own segment of transportation. It is worth noting that Russian Railways has not been a monopolist in the field of freight transportation for a long time, however, the entire infrastructure still belongs to a natural monopoly and independent carriers are charged for its use. This example is rather similar to the example of RAO UES, since in relation to this company a course has also been taken to attempt to disintegrate it. In the current conditions, it is impossible for either Russian Railways or the Unified Energy System of Russia to increase the degree of vertical integration, not because these companies do not see a similar development strategy for themselves, but because their capabilities are legally limited. Thus, although in theory vertical integration can be used by companies to discriminate on prices and increase their market power, in practice such situations are unlikely to be feasible. Even in the considered situation with the acquisition of heat-generating capacities by OJSC Gazprom, we are not talking about the company’s uncontrolled power in the market, since tariffs are set by the state.

It is precisely because there are restrictions on the part of the state to create monopolies that arguments about strengthening monopoly power through vertical integration may seem strange. Businessmen are more likely to point out among the main advantages of vertical integration the hedging of the risks of purchasing raw materials and marketing products when integrating “upward” and “downward,” respectively. However, from a theoretical point of view, such hedging does not protect the company from shocks in the economy, which equally affect all areas. On the contrary, when creating an artificially built system from the extraction of raw materials to the sale of products to end consumers, which is divorced from the market, some information about the market will be lost, which invariably leads to a decrease in the efficiency of the company.

Closer to reality, the advantage of vertical integration looks like the ability to make raw material prices more predictable for a manufacturer who plans vertical integration “backwards” by smoothing out price fluctuations by an affiliated seller. It also looks realistic to use vertical integration as a way to solve the agency problem when there are investments (shares) in another company in the same industry that can be acquired as part of a merger transaction.

One of the key advantages of predictable prices for raw materials, even for a short period of time, is the ability to more accurately plan your investment program, choosing the most profitable projects based on the funds available for their implementation. The solution to the agency problem through vertical integration is based on the fact that when a company is acquired, previously hidden information becomes available, and accordingly, managers have less freedom to act (Garcia, Moreaux, Reynaud, 2007). on the other hand, it is very likely that only a partial solution to the agency problem, since in order to communicate with an already acquired company, it is still necessary to attract a team of managers who, for some time, will have relatively greater freedom of action and decision-making capabilities. since during the transition period during the merger of companies and the integration of new divisions into the structure of the parent company, the mechanism of interaction and delegation of authority will not yet be established.

and finally, the most obvious benefit of vertical integration, which most authors write about, is cost reduction. Basically, cost reduction in the case of vertical integration refers to a reduction in transaction costs, mainly due to the absence of the need to negotiate with suppliers or buyers (depending on the direction in which vertical integration is carried out) on the terms of contracts (Adelman, 1955; Bhuyan, 2002) . Given the need for stable operation and the signing of long-term contracts, a significant amount of resources and time can be spent on coordinating all the details, and the contract will definitely not be more profitable than the production process within one enterprise. In fact, with vertical integration, in the most ideal version, all intermediary stages of the production process disappear. in other words, a company performing vertical integration moves away from the market and builds an internal, to some extent autonomous system of production activities. Also, cost savings can arise in cases of investing in specific assets that only a specific company has and for the effective use of which special conditions are required. Thus, VsMPO-AVisMA has unique equipment for stamping titanium products, the analogues of which are few throughout the world, which at one time made it possible to create profitable structures from VsMPO and the Berezniki titanium-magnesium plant, which mines the corresponding ore and smelts the blanks.

Whatever the specific benefits of the company from vertical integration, they all ultimately come down to an increase in the company’s profits, and therefore the efficiency of its activities. However, vertical integration also has a number of costs and disadvantages.

Negative consequences of vertical integration

Perhaps the main costs of vertical integration, which absolutely all companies face and which cannot be avoided, are the costs of the organization. These costs arise at the very early stages of preparing a transaction and cease to arise only after complete debugging of all processes of interaction with the acquired company, after complete completion of integration. The preparation of the transaction itself may take several years, following which the entire integration scheme will be worked out, partners will be selected - financial organizations that will provide financing for the transaction (in almost all situations, the company’s own funds may not be enough to make all payments, or the company does not consider it possible to receive them from circulation), a road map was drawn up, negotiations were held. Such costs can amount to a significant amount, which can be up to 5-10% of the cost of the transaction itself, which are not reimbursed in the event of refusal of integration at any of the preparatory stages.

Further, after the transaction, it is necessary to form a management team in the acquired company that will competently manage the enterprise, which is especially important during the transition period, when a number of business processes are being restructured and competent management actions come to the fore. accordingly, the more complex it is

the market segment that the company is trying to enter through vertical integration, the greater the responsibility falls on management and the greater the likelihood of making wrong decisions that can result in losses for the company. In addition, a good management team is quite expensive - taking into account all the bonuses that are necessarily included in their remuneration. Thus, the organization of the transaction itself requires large costs, which for some companies can significantly reduce the overall efficiency of integration (Peyrefitte, Golden, Brice Jr, 2002).

Very similar to the problem of organizing a transaction is the problem of coordinating the work of the structures of the new company, transferring and applying all the knowledge and technologies acquired together with the acquired company. The more specific the industry in which a company operates, and the more complex and extensive the process of collaboration and co-production, the more time, effort and expense is required to adapt technologies and correctly apply the acquired knowledge. What makes the situation worse is that when a company enters a new industry segment, it has no or very few specialists who are well versed in that segment. Therefore, sometimes you have to partially rely on the previous management team of the company. However, in this case, there is a risk of an agency problem, which, as was written above, vertical integration may not completely solve. The company's former employees should be interested in maintaining their jobs, but their vision of the business and situation may differ from the views of the management of the company that carried out the transaction, which will lead to opportunistic behavior that incurs costs (Rothaermel, Hitt, Jobe, 2006).

One of the features of vertical integration transactions is the high probability of borrowing funds to carry out the transaction. Since the cost of the acquired company can be very significant (in some cases even greater than the cost of the purchasing company), the costs of servicing such debt to banks are very significant. There are cases when a company did not receive the expected effect from integration and could not subsequently service the debt taken out to complete the transaction, which led to the bankruptcy of the company. Even if a company is able to service its debt, its debt burden may increase to such an extent that it may cause other difficulties. For example, increasing interest rates or refusing to issue other, even smaller loans. This was the fate that befell the home appliance maker Sunbeam Corporation in 2001, which was forced to file for bankruptcy, having huge assets as a result of acquisitions, but unable to bear the burden of debt. Thus, when planning a transaction, it is necessary to carefully consider the issue of its financing and subsequent repayment of debts. In addition, an increase in debt burden affects the company's performance indicators, since interest payments reduce the company's profits. Since net income and profitability ratios are key factors when studying the effectiveness of vertical integration, the effect of debt load may distort the effectiveness of vertical integration as such by the amount of debt servicing costs. Despite the fact that the transaction should be considered as a whole, with all the costs of its implementation, in the scientific literature there is not so often a mention of exactly this type of costs.

Conclusion

Thus, vertical integration is a complex process with a combination of benefits and disadvantages that may be unique to each individual case. Despite the fact that, in general, all of the listed benefits and costs will occur in vertical integration transactions, in each case there will be specific issues.

Vertically integrated companies, firstly, can gain an advantage over non-integrated competing companies due to the ability to achieve savings in the transition between production stages, increasing their market power, displacing competitors and receiving additional profits; and secondly, in some situations such

companies contribute to the emergence of an oligopoly or monopoly and gain the ability to dictate their terms to consumers.

At the same time, in modern conditions it becomes clear that even in industries that were traditionally considered either pure natural monopolies, or close to such, they can become competitive at least in some part of the business. The only issue or problem that arises when considering this approach is the use and operation of infrastructure, which creates a significant part of the capital intensity. Some works propose maintaining a natural monopoly in terms of transportation infrastructure and even maintaining local monopolies in the sales side of the business, while creating competition in production, as a way to solve this dilemma. However, it is not entirely clear whether such a business structure will be more efficient than existing vertically integrated companies.

Annotation. In the article, the author analyzes vertical integration as one of the most effective growth strategies for modern companies. The author examines in detail the types of vertical integration, substantiates the reasons for their use, as well as the advantages and disadvantages of each of them.
Keywords: strategy, vertical integration, growth strategies, market share, suppliers, consumers, products, distributors, market.

In the history of economics, the 50s of the 20th century are usually marked as the period of the emergence of vertical integration. Because at that time there were only monopolies, which in their essence were vertical integration. Today there are many definitions of “vertical integration” in modern scientific literature.

Others understand vertical integration as a method by which a company is able to create (integrate) its own input stages of the technological chain (backward integration) or its output stages (forward integration).

There is also such a definition as “vertical integration includes additional technological stages of product processing (subsequent or previous), by expanding the boundaries of the company.”

As the study showed, countries that used vertical integration were far ahead of others in numerous economic indicators.

It can definitely be said that vertical integration is considered one of the alternatives to a growth strategy, which is usually called an offensive strategy, i.e. it can be classified as a strategy that provides the company with external growth. Sometimes it is also called intersectoral integration.

This strategy is most profitable in economic segments with rapidly changing and rapidly developing technologies, when the products of a strategic business element or company are preparing to enter the market, the product or company is considered not yet mastered, therefore, in the life cycle of the product, they will be at the stage of development. In addition to the above, integration has the effect of increasing the reliability of supply or distribution, while reducing transaction costs.

The main criteria for choosing the type of vertical integration are:market share, growth rate, sales volume and revenue.

TO first The block should include situations in which conducting transactions within one company will be much more efficient than in cases where the company is not a single entity. Simply put, it is necessary to ensure that the costs of a manufactured product within the company are lower than the costs of purchasing this product on the market.

Second The group covers situations that are associated with an increase in financial performance.

But before undertaking vertical integration, a company must answer the question: will it worsen its current position by moving into new industries. Since new structural processes in a company can complicate control and management over them, they can also lead to increased costs.

Thanks to the scope of integration, it is possible to determine whether the company will carry out full or partial integration, or whether it will completely abandon integration.

Based on the direction of the company's movement, vertical integration is divided into the following types: reverse, it is also called “backward integration” and straight which is called “forward integration”. In addition to the above, there is also balanced integration(balanced integration), flowing in two directions at once, thereby combining reverse and direct.

Straight Vertical integration is the growth of a company by purchasing consumer businesses. This strategy is carried out when a company seeks to capture a larger market share, thereby achieving higher economies of scale. It is implemented by strengthening the control function through such structures that are located between the enterprise and the consumer of the product. Product distribution and sales systems are just such structures.

Therefore, direct integration is carried out by creating its own product distribution networks in order to ensure control over distribution channels. And this is due to the fact that the absence of such control can serve as the basis for the accumulation of inventories of goods that can lead production to partial or incomplete utilization, which can cause unstable product output and a lack of leverage to reduce final costs.

With the Internet growing “forward,” integration has gained widespread popularity. Most manufacturing companies create their own online stores, selling their products to consumers, thereby bypassing intermediaries.

As the analysis showed, and Forward integration is most effective if:there are few high-quality and affordable distributors in the industry; retail firms and distributors have fairly high profits; distributors are unreliable, too expensive and unable to meet the need that the company poses; there are expectations for significant industry growth; there are advantages in stable production and distribution; The company has enough capabilities and resources to manage the new business.

Vertical integration "backwards" expressed in the growth of the enterprise through the acquisition of a company or several companies acting as suppliers; it can also be realized through increased control over its own suppliers. The company uses such an integration strategy, trying to pursue a more effective policy in terms of cost savings, thereby maintaining a stable supply of resources.

The reverse integration strategy is useful when:current suppliers are too expensive or unreliable; there are only a few suppliers, mostly small ones; the industry is expanding quite rapidly; suppliers have high profits; the company has the necessary resources and capabilities when creating a new business.

Depending on who is the initiator vertical integration, it should be divided into: progressive when the supplier tries to establish control over consumers and regressive when the consumer tries to control the supplier.

Vertical integration is also divided into quasi-integration and full.

At full integration, the entire produced product, at a certain stage, without the involvement of any other party, moves to the next stage.

A to vaziintegration- this is a narrow vertical integration, which is possible in such forms as: joint ventures, strategic alliances, technology licenses, franchising, long-term contracts.

As the study showed, vertical integration has its advantages and disadvantages.

The main advantages of vertical integration include:cost reduction due to liquidated costs when purchasing on the market; improving the quality of supplies; the emergence of the possibility of acquisition through the integration of necessary resources; formation of a larger market share; improved coordination in the supply chain; provision of distribution channels; investments are facilitated (transitioned) into specialized assets (human and physical, site); the company has opportunities to acquire new competencies.

As for the disadvantages of vertical integration, these include, first of all: educationhigher costs, due to which the company may not manage new activities effectively; the emergence of distribution channels that lead to deterioration in product quality and reduced efficiency due to lack of competition; an increase in high investment and bureaucracy, which leads to a decrease in flexibility; identification of high potential for legal consequences due to size (whereby the organization is capable of becoming a monopolist); the formation of new competencies that may collide with old ones, leading to a disadvantage.

Thus, vertical integration helps an enterprise to improve its production potential and at the same time reduce costs, focus on quality in all areas of activity, maintaining and increasing profitability, applying a system of effective price discrimination. And most importantly, with the help of vertical integration, a barrier is created for new competitors to enter the market, which will allow the enterprise to monopolize the sales market.

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annotation scientific article on economics and economic sciences, author of the scientific work - Mochalov D.S.

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VERTICAL INTEGRATION: STRATEGIC BENEFITS AND ADVERSE EFFECTS

Text of scientific work on the topic “Vertical integration: strategic benefits and negative consequences”