Today on Prozorro, an auction was held for the procurement of services to implement an ERP-type business process automation system at SFE “Forests of Ukraine.”
As we warned, the auction price could differ significantly from the expected amount. Two participants registered: one offered a price close to the anticipated figure, the other — UAH 88 million, which is almost three times lower.
Both participants are well-known Ukrainian software developers.
The lower-priced proposal was submitted by the company Intelekt-Service (creators of ISpro, M.E.Doc, and other products). It is currently under review, and final decisions will be made based on its outcome.
Why is ERP important?
SFE “Forests of Ukraine” comprises over 1,500 forestries, nine regional branches, and 22,000 employees. The company manages nearly 7 million hectares of land and 250,000 fixed assets (vehicles, machinery, etc.).
Over 15 million documents are generated annually at the enterprise!
Meanwhile, the forestry enterprises incorporated into “Forests of Ukraine” have never had a unified system for data accounting, exchange, and organization.
The largest Ukrainian state‐owned companies (Ukrposhta, Ukrnafta, Ukrzaliznytsia) are already operating with ERP. In the forestry sector, such a system is being implemented for the first time!
Experience shows that, in its first year of operation, an ERP system optimizes company costs by 2–5% of turnover. For SFE “Forests of Ukraine,” this translates to at least UAH 500 million!
The funds invested in development and implementation will be recouped within the first year of operation. Thereafter, the company will only realize savings.
The implementation of ERP is a recommendation of the Accounting Chamber. The automated system, among other things, will facilitate the enterprise’s transition to International Financial Reporting Standards (IFRS).
ERP is the key to implementing investment projects—such as mechanized harvesting and the production of seedlings with a closed root system, among others.
All internal processes within the company will become more transparent. It will be far easier for regulatory bodies to conduct inspections and uncover legal violations. Concealing anything will be virtually impossible.
Through a personal electronic account, market participants will be able to monitor the execution of timber supply contracts and access any other information. Data collected by the system on the origin of timber will ensure compliance with the EU Deforestation Regulation (EUDR).
The project is planned for three years. The contractor must develop a system concept that meets all the requirements of SFE “Forests of Ukraine,” model the business processes, deploy and implement the system, and provide support and updates throughout the contract term. In addition, the contractor will conduct personnel training and test the solution in several branches. Finally, the system should be scaled to the company’s other units.