Severstal is one of Russia’s steel and mining giants. When the pandemic hit, the company closed its Moscow headquarters and other offices around the world and asked many of its 50,000 employees to work at home.

According to CIO Sergey Dunaev, Severstal overcame logistical challenges fairly quickly. “We provided 7,000 employees with computers, laptops – all the technology that provided them with a way to work,” he said.

Thanks to something Dunaev calls an “ERP culture,” Severstal employees easily adapted to the new normal. “The years of work with enterprise resource planning (ERP) systems and non-ERP solutions taught our people to collaborate remotely,” said Dunaev. The software fostered a virtual environment in which colleagues could analyze multiple dimensions of a problem – as well as dependencies and consequences. This cooperative, but digital, way of working made it easier for employees to work remotely.

“ERP Culture” Helped Steel Company Pivot Quickly

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"ERP Culture" Helped Steel Company Pivot Quickly

Severstal has used SAP ERP for the last nine years and employs 15 other SAP solutions that cover approximately 95 percent of its overall business processes. Working with SAP to undergo a digital transformation has enabled the company to more seamlessly handle disruptions.

“We changed years ago, and it helped us today to keep the usual speed and dynamics during COVID-19,” said Dunaev. Moreover, it has encouraged further digital investments. He added, “It was not a huge change, but a powerful push to keep moving ahead using different technologies and solutions.”

Resiliency has been an important benefit of digitization. “Without e-commerce technology, we would have felt this much worse,” said Dunaev. The company had already digitized things like electronic document interchange, supplier relationship management, and integrated planning. “This became a part of our ability to move ahead and keep the spirit of our usual business model at Severstal – it was kind of a business continuity tool,” he said.

As a result, Severstal seems to be in the recovery phase already. While demand from the automotive sector dipped at the start of lockdown, other sectors, like construction, picked up. Dunaev believes Severstal has been able to keep its financials relatively stable and expects the company to return to pre-pandemic figures in the next few quarters.

Moving forward, he thinks that COVID-19 will permanently impact the steel industry – encouraging technology adoption and evolution. “I’m pretty sure that remote services, like a collaboration platform, e-commerce, and augmented and virtual reality, will receive a powerful push in the steel sector,” he said.

He also believes that the nature of leadership will – and should – change. While employees adapted fairly easily to working remotely, they still suffered from stress. Caring for children and sick or elderly relatives took its toll, compounded by decreased communication with colleagues.

“My message for any business leader is that soft skills played an even more important role than ever – control and discipline gave way to empathy,” said Dunaev. Rather than being a chief or boss, leaders need to be more caring.

He thinks employees’ mindsets shifted as well. “The call of duty is now a greater motivation for employees than their labor contract clauses,” he said. And for manager-employee interactions in the future, relationships must take center stage.

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