Rostelecom, Russia’s national long-distance telecommunications operator, has completed the third stage of its budget management system development and implementation. As of now, the system covers all organizational units of the Company - Rostelecom’s Headquarters, regional branches and Regional Centers.

During the first stage, accomplished by the early 2004, with the assistance of Nevskaya Consulting Company (NKK) the budget management system methodology was developed including the financial structure, regulations for budget planning and execution as well as its performance control and analysis.

The second stage covered creation of the financial budgeting model by NKK with its further realizing in the information system on the basis of Oracle Financial Analyzer (OFA), which was implemented for Rostelecom’s Headquarters and branches in the middle 2004. As a result, the Company managed to finalize its 2005 budget within the same system and then promptly approve it.

The budgeting model, worked out in line with modular approach, provided for further development and improvement  - the information system could be expanded with new business units, operational activities or additional process steps. Among the blocks added to the model in the second half of 2004 there were as follows: budget performance analysis, forecast up to the end of the year, evaluation of possibilities to obtain the approved objectives taking into consideration actual deviations, budget adjustments and updating.

By the end of the third stage, completed just now, optimal combination of unified budgeting methodology in the Company as a whole and the features of planning in the individual branches and business units was achieved. NKK had developed pilot modules to support planning and matching of physical indicators and prices on each of the three levels of Rostelecom’s organizational structure.

Financial Director of Rostelecom Andrei Gaiduk commented: “Today the budget management system is of high efficiency and perfection, if we consider either methodology and planning and control procedures or information support at all levels of the Company’s organizational structure. The 2006 budget, which is being drawn up at the moment, will enable Rostelecom to use its resources in the most efficient way.”

According to General Director of NKK Vladislav Khominsky, “the budgeting system created in Rostelecom is a unique, because it’s a national operator with the most extensive telecoms infrastructure in Russia enabling the provision of technologically sophisticated services. There are a number of specialists across the country involved in the process of budget preparation and execution and there are a lot of difficulties connected with the budgeting process in such a large company, that is why we did our best to make the budget management system simple and convenient to use as well as transparent and efficient.”

Rostelecom’s budget management system based on OFA has won recognition from Oracle Corporation, which considers the implementation project very successful and underscores that it is the first in Russia of such vast scale.