Uzbekistan Goes Digital

How private and state entities can introduce digital technologies and avoid associated risks

Uzbekistan has already decided to speed up modernization in the state and private sectors as President Shavkat Mirziyoyev signed into law two documents: state program on five priority directions of Uzbekistan’s development and ‘Digital Uzbekistan – 2030’ concept. 

Currently, the republic has to transfer itself into the digital era fast and with minimal risks.

Finding meanings 

Before we talk about how Uzbekistan has to jump into digital, we have to understand why it stuck to analog technologies. The vast majority of Uzbekistan’s national economy including various industries and the agricultural sector is owned by the state. The state apparatus is not easy to change and the decision-making process takes a long time. Therefore, the digitalization of the state sector in Uzbekistan required examinations of all details and strong political will that was displayed in both above mentioned documents.

In contrast, the private sector is more mobile and holds less responsibility than the government. Those players in the private sector who introduced digital technologies in their business were absolutely confident why they are doing this. Such a business approach – minimal costs and maximal effect – showed big Uzbekistani retailers Korzinka, Marko, various restaurants, mobile operators, and other companies. They introduced 1С: Accounting, automated parts of their business processes in production, logistics and distribution. 

Will for Change

Is Uzbekistan ready for a new way of working? As system integrators say, you can’t be ready for digitalization. It is a common mistake to think that digital technologies and automation are just a replacement for old, ineffective approaches. When you introduce digital solutions you have to be prepared to change the whole model of your business.

Human beings are mistake-prone and all administrative stuff is just designed to control these mistakes and correct them. Often they are bureaucratic, inert and can’t properly adapt to market changes. And automation and digitalization should get the system up and running. It would let business owners control that process in real-time. 

Usually, the main driver of these changes is the decision of the shareholder or executive manager. That’s why the edict of President Mirziyoyev to start the digitalization of all economic segments is the absolutely right decision. As a tool, digital technologies may increase the transparency of whole industries and entities and let them see the situation as it is.

Digitalization needs a lot of investments and the state can’t just order businesses to implement it. However, the government can change the legal framework and facilitate this transformation. Businesses are objectively forced to change and become digital companies. 

«If we fail to do this work in the next two to three years, each year of delay would turn in loss of 10 years of progress,» President Mirziyoyev stated.

Learn from the mistakes of others

The deadline for the digitalization of 2030 is achievable if Uzbekistan does not repeat the mistakes of other states.

For example, you can’t introduce an ERP system before the transformation of the current business processes. Otherwise, the business owner will get the same data but digital instead of paper, which doesn’t make sense.

I hope Uzbekistan would be able to avoid this mistake and save a lot of money.

More digital – better business

In Russia and Kazakhstan, managers have a clear vision of what business process must look like. However, in Uzbekistan, it’s different because many Uzbek managers do not fully understand their responsibilities and can’t describe their tasks.

What standards of automation should local entities choose? There is no answer because there are no standards. Even successful cases of big companies show that digitalization requires a gradual approach. Because business processes are always tied closely to each other, system integrators face very scrupulous work and their services are not cheap.

However, if the current business process is incorrect, digital technologies won’t help. First of all, the company needs to fix this process and only then implement automation. In a classic scheme, the consultant reviews the company’s business processes and prepares its suggestions to transform them without halting production. After that, the road map of automation and digitalization might be developed.

When digitalization is implemented and complies with all requirements and rules, the human factor plays less of a role. As a result, the business owner is able to take the right decision for further development of his company.

For instance, currently, Uzbekistan is going to launch a new Tashkent metallurgic plant. This plant would be unique with no similar production sites in the CIS. Because it is just under construction it would be great to introduce these new algorithms right now and avoid «digitalization» once the plant is fully operated.

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