Ukraine, Country of Opportunities

Artem Vorobiienko

We are discussing innovation transformation of companies, business environment and investment climate in Ukraine with Artem Vorobiienko, the Partner at Crowe Erfolg Ukraine.

Сrowe Erfolg Ukraine is a member of Crowe Global, the 8th largest audit and advisory company in the world operating in 130 countries. Destinations is studying how professional advisory services and expertise in different economic industries enable the company’s customers to obtain high-quality and timely business solutions.

–  How can a high-quality audit promote better business performance?

The main purpose of an audit is to express an opinion on the completeness and accuracy of the company’s financial statements being audited. Moreover, the auditor examines the company’s activities, business structure and processes, and quality of the corporate controls. It is very important to perceive audit not only as a tool to raise funds or comply with the creditors’ requirements, but also as a method for the company’s diagnostics. The audit allows determining the financial standing of the company, finding its weaknesses, risks and vulnerabilities in the business processes. One of the audit products is a document called a “management letter”. The document contains recommendations to the company’s owners and management. Although the management letter does not list all the comments by the independent auditor, they are extremely valuable to do correction work and develop corporate reformation plans.

– Which advisory and audit services are most relevant for the Ukrainian companies and foreign companies operating in Ukraine? Are packages of services for these customer groups different?

Crowe Erfolg Ukraine has a wide range of products in the area of professional business advisory services. The audit services constitute a considerable share in the service portfolio. The law obliging the medium-sized and large entities to carry out a compulsory annual audit entered into force at the beginning of 2019. It is one of the European practices, which has been adapted in the Ukrainian law. By the way, my colleagues from Crowe were members of the project group developing that law. Now business has one more reason for regular audits.

As for the demand for the services, the common mandatory services are traditionally sought: a compulsory audit, transfer pricing services etc. These services are relevant both for the foreign and Ukrainian companies. The foreign companies regularly request to assist in development of various business policies and regulations and to bring them into compliance with the Ukrainian law as well as to develop group policies. The Ukrainian business mostly sets sights on that at the later development stages. Luckily, there have been active grant programmes supporting small and medium-sized business for the last few years, owing to our foreign partners’ efforts, including the EBRD. Their main purpose is to help business be more efficient at earlier stages, to determine the optimum development vector and to prepare first-class lenders for future lending.

Another highly-sought service is assistance in development of business plans, financial modelling as well as development of investment proposals and support of agreements. Unfortunately, as the investment activity has slowed down, the frequency of Due Diligence has reduced (which used to be quite a popular service). However, the demand of the Ukrainian business for optimum financial resources of different parameters is always sustainable: someone raises funds for new investment projects, someone deals with the outcome of the poor financial planning by restructuring old debts.

More and more Ukrainian companies consider developing the management accounting and budget system as well as automating all the key corporate processes. Many entities bring their accounting system into compliance with the International Financial Reporting Standards. Given the global implementation of the BEPS rules, the companies keep ordering legal business restructuring.

Thus, while the foreign customers need audit services and regulatory works in the first place, the Ukrainian business uses the full range of professional services actively.

– What factors facilitate mitigation of business risks? Are there any efficient risk management strategies your company can offer to its customers?

One of the risk mitigation tools is high-quality management reports, efficient KPI system in different departments of the company and timely response to changes in the external and internal corporate environment. Also, the company must have the financial planning function that enables business to overcome the unexpected circumstances painlessly.

When all the above conditions are met by the company, many risks can be identified and mitigated in advance, which means they are controlled efficiently. Risk management is a constituent element of any company’s success. Our company offers development of such systems: it is always an exclusive service with the specific set of tools relevant for the certain business.

– How do you evaluate the Ukrainian business environment? Do the foreign companies find it comfortable to work here, and how attractive are the conditions for a foreign investor? How does your company assess these issues for the customers?

Unfortunately, I cannot say there is an economic boom in Ukraine now; the Ukrainian economy is growing very slowly. Foreign investors have recently been reducing their activity in Ukraine more and more: some of them limit the scope while others leave the market. However, it is not as bad as it might seem at first sight. New global players are entering our market, and many of the foreign investors in Ukraine continue their operations. It is difficult to describe the uniform conduct of an average foreign investor in Ukraine. This issue is always individual and depends on the parent company’s strategy. Ukraine demonstrates gradual growth in the Doing Business rating, so both direct and indirect business factors in Ukraine are positive. However, it takes time to actually feel that and to overcome the key challenges of the country: terminating the war and the political crisis and stabilising the economy. The issue of corruption in all the authorities is traditionally critical for the Ukrainian business community. All these things are an obstacle to entry of new foreign investors into Ukraine. However, we should remember that lots of foreign companies, which have adapted their business, survived several local, national crises and find Ukraine acceptable for their investment with account of the risk and profitability ratio, have been operating in Ukraine actively for many years. We must definitely acknowledge that Ukraine is a country of opportunities.

– Innovation is a matter of a new business strategy rather than new technologies. Could you define an innovation company?

I would say that innovation companies are the ones aware of the future trends and tendencies and responding in a timely manner, making necessary and efficient changes for the purpose of adaptation, able to adequately assess their labour (in terms of human resources), market and financial capabilities. The main indicator of the company’s innovation is continuous growth and leadership on its key markets. To my mind, you cannot be a leader today unless you are an innovation company: otherwise, leadership is a matter of time.

However, I must admit that innovation for the sake of innovation is the concept of R&D establishments. The task of business is to create an efficient combination of innovation and performance. When it comes to performance of the business, I mean financial results and/or market value of the business.

– The companies going along the path of changes must go beyond the stereotype thinking. How to cultivate generation of new ideas in business, and is it necessary when all the business models are efficient?

If the company has started cardinal changes, it demonstrates clearly that something has been going wrong. Often as a result of the stereotype thinking or “save and proven” operational methods. We must always remember that all the success and failure factors cannot be assessed. An accidental sequence of circumstances in business sometimes results in the erroneous opinion that the temporary situational success will persist. Even if the selected business model is efficient, which is confirmed in the course of time, you must carry out regular stress tests of your current and future plans, diversify the activity reasonably and make your business model resistant to risks, including political and macroeconomic ones.

– The present-day business environment is often ruled by innovation ideas and the ability to adapt to quick changes rather than capital. All these things change the role of a business leader. What traits does a successful top manager need to possess today?

A successful top manager is a visionary, who not only foresees the future, but also succeeds in forecasting the necessary form and time for his or her business and has an efficient team ready for continuous changes. A leader must feel the market, understand the consumer, establish and maintain sustainable ties with the consumer, know and apply innovation technologies to develop.

– What would you recommend to the Ukrainian companies trying to make their business succeed and the country prosper?

Success of your own business takes analysis of successful companies. You must understand the reasons for success and failure of your own and other business, be innovational and ready to implement changes promptly. Unfortunately, the things that are good for the company will not always facilitate prosperity of the country. The easiest way to help the country develop is to comply with the law, pay taxes and avoid corruption. You can participate in reformation of the country to the extent of your abilities and competences.

– What inspires your personal transformation? How often should you leave the comfort zone for the sake of professional upgrade?

I am inspired by lots of market leaders whose success is not a coincidence and has stood the test of time. Success is continuous struggle to overcome your weaknesses: laziness, incompetence, fears, and indecisiveness. If you still have not studied your market segment and have not succeeded, you and your team will have to work hard. The comfort zone is a conventional concept. You must be ready for changes and implement necessary business solutions efficiently, never stop at what you have achieved and never repose on your laurels; you must always be a step ahead of your competitors, be ready to change the direction of development dramatically when it is necessary, adhere to your principles, be honest to yourself, and always believe in success. If you manage to do these things and stay in the comfort zone, you are on the right track, and I am happy for you.


Risk management is a constituent element of any company’s success. 

you cannot be a leader today unless you are an innovation company: otherwise, leadership is a matter of time.


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