Dynamics Profile: Microsoft MVP navigates complexities of Russian ERP market

Author: Linda Rosencrance

For the past 11 years, first-time Microsoft Dynamics NAV MVP Alexander Ermakov has been working for Awara IT in St. Petersburg, Russia, an IT company that implements ERP solutions, including Dynamics, and provides business consulting services.

Awara supports international companies developing their businesses in Russia, in part by sharing its knowledge of local government requirements, says Ermakov, a senior consultant and partner at the company. For Microsoft, making inroads into the Russian ERP market has been full of challenges. The company is facing intense competition in the enterprise market from 1C, a local ERP provider, he says. Awara is a 1C partner as well as a Microsoft partner.

“Microsoft’s share of the ERP market in Russia is approximately 12 percent, but I think it will be growing in the small business segment,” Ermakov says. “Microsoft is working with us to develop an out-of-the-box solution to allow small business to use Dynamics NAV without huge expenditures for implementation.”


Favoring local offerings

Microsoft’s small ERP market share in Russia is due in part to the government’s policy of “import substitution,” or replacing foreign software products – primarily from the United States – with domestically produced products, Ermakov says. “They are trying to decrease imported software and increase usage of local software to help the local IT companies, which have very strong lobbies in Russia,” he says. In fact, Russian law requires that government agencies only implement the ERP systems of 1C and other local companies, he says. And although there is no law forcing private companies in Russia to implement ERP systems from local companies, the reality is that many large companies in Russia, including oil and gas firms, are partly owned by the government.

“This is one of the reasons Microsoft is focusing on the small business market in Russia,” Ermakov says. “In addition, Microsoft thinks that the small business market is a promising market worldwide, not only in Russia.” Despite the heavy competition in the ERP market, Microsoft is very active in Russia providing other products.

“Microsoft is everywhere in Russia in terms of its operating system – you have Windows everywhere,” he says. “We have very, very few Macs in general in Russia. Microsoft is planning to also build up data centers in Russia because we have restrictions for personal data protection [the data has to be stored inside Russia]. In general, Microsoft is very active in Russia with many products. But because Microsoft is feeling the pressure for enterprise companies, it’s focusing on small businesses.”


From Finance to IT and NAV

Ermakov, who received his MVP award in October 2016, started working with Dynamics NAV around 2006 when one of Awara’s customers, a global chain based in Finland, opened an office in Russia and wanted to implement the product.

“We were that company’s global partner for opening in Russia for legal services, outsourced accounting, recruitment, and other business consulting. Then we decided we could take over their IT as well and implement NAV,” he says. “However, we didn’t have any experience in NAV at that time. So we formed a team of professionals and I joined as a consultant. I learned NAV by myself by participating in projects and since that time I am a NAV guy.”

Ermakov came to IT and Dynamics NAV from finance. The fact that he has an accounting background and is still a certified auditor facilitated his transition from CFO of a Russian company that developed laser technologies to working with Dynamics NAV at Awara. “I think Dynamics NAV is the best ERP product to work with finance,” he says. “It is very light in terms of set up and it is very powerful in terms of finance. For a finance person it is a very convenient tool.” One of the most difficult areas of ERP implementation in Russia is localization and finance because Russian localization is one of the most complex in the world that Microsoft supports, according to Ermakov.

That’s because companies operating in Russia are required to perform accounting and taxation functions in accordance with Russian legislation. Consequently, part of Ermakov’s work at Awara revolves around ensuring that the different Microsoft ERP systems – he sometimes works on Dynamics AX projects – are in full compliance with Russian laws. Ermakov also does project implementations, participates in presales and marketing work, and helps to make administrative decisions.


Microsoft Is Finally Listening

Although Ermakov was not so active in the Dynamics NAV community at first, a couple years ago he realized that he had some unique knowledge that he could share with the community. So he started a blog, the Russian ERP Experience, began answering questions in the Dynamics NAV Community Forum, and ultimately became a forum moderator. He also presents local webinars and seminars and speaks at various conferences in Russia.

“I didn’t do it to become an MVP,” Ermakov says. “I thought I knew a lot and I needed to share what I knew.” But being an MVP – there are about 50 MVPs in Russia and Ermakov is the only MVP in the Business Solutions classification – gives him direct access to the people who are developing and managing the product.

“Initially I didn’t even think that being an MVP would bring that much value to me or to the business,” he says. “But now with this direct access we can discuss many things and share our vision of the market and how users see the product, and Microsoft listens.” The biggest problem with being an MVP, he says, is that it creates a disruption with a person’s social roles. Being an MVP means spending a significant amount of time learning new things, discussing new things, testing them, and then sharing knowledge.

“But on the other hand, you have other roles, social roles, to play,” he says. “I have kids and they expect me to be a good father and I have my wife who expects me to be a good husband. And then my friends are waiting for me in the bar to watch the football match and I have to be a good friend. It’s sort of impossible to play all those roles successfully at once. You need to sacrifice somewhere. So an MVP is someone who is able to solve those conflicts efficiently.”


Linda Rosencrance is a freelance writer and editor in the Boston area. She has written about information technology for more than a dozen years, covering topics such as data loss prevention, network management, mobile application development, big data, analytics, and ERP. Her articles have appeared in such publications and web sites as Computerworld, CIO magazine,  ITWorld, SecurityNewsDaily, TechNewsDaily, MSDynamicsworld.com and others. She has more than 20 years of experience as an investigative reporter, writing for many newspapers in the metropolitan Boston area. She is also the published author of five true-crime books.