Covid, the war in Ukraine, disruptions to supply chains, the energy crisis, rapid inflation and the rise of Euribor, interruptions in electricity supply and other unexpected failures have brought the topics of crisis management, continuity and resilience to a very important place in the management's agendas. In addition, the regulatory changes of the next few years (implementation of the CER directive, amendment of the Law on Emergency Situations) are significantly expanding the roles and responsibilities of various parties in dealing with crisis situations.
We helped many organisations become more resilient and comply with the proposed legal changes. Under the leadership of the Directorate General of Structural Reform Support (DG Reform), of the Secretary of State, and the European Commission, we prepared a broad-based risk and crisis assessment model and tool aimed at local governments, which supports municipalities in meeting the new requirements of the Emergency Act. In addition, we conducted various crisis drills and helped improve the approach of several vital service providers in adapting to the changing regulatory framework for business continuity and crisis preparedness requirements.
In 2023, we started supporting the implementation of two important reforms in Estonia - the integration of primary care and the development and integration of spending reviews into the budgeting framework. The projects with a total cost of 1.3 million euros have been financed by the European Commission's Directorate-General for Structural Reform Support (DG Reform) and they help to establish the most optimal development direction and action plan for better integration of primary healthcare and social services as well as the process and methodical implementation of state budget spending reviews. The spending review project is carried out in cooperation with PwC Finland, as it includes not only the Estonian Ministry of Finance but also the Finnish Ministry of Finance.
As part of the projects, we map the current situation and problems in the respective fields, conduct an analysis of the best international practices, develop the most optimal future operating model with an action plan, and support the ministries in the implementation of reforms.
Thanks to long-term cooperation with Estonian public sector organisations, we have become well aware of the needs and plans for the development of the digital society. Wanting to apply this know-how even more widely, in 2023 we launched a new service line: digital government service offering, which is led by Kaidi-Kerli Kärner, Head of Digital Government Services.
In cooperation with Gofore, we completed several analysis projects of the eesti.ee digital gateway for entrepreneurs, including a follow-up analysis of the company's data card and a business event analysis of employee-related operations. Within these projects, we developed innovative digital solutions for the eesti.ee portal that support entrepreneurs in running their businesses. In order to develop solutions that are user-friendly and take into account the needs of entrepreneurs, more than 50 entrepreneurs were included in the analyses. Based on their needs and expectations, we developed interactive prototypes for future solutions. As a result of the analyses, suitable technical solutions were outlined, together with the analysis of the legal framework and the road map for the implementation of the future solution. In addition to providing analyses and developments to the Estonian public sector, we work closely with all offices of PwC's Central and Eastern Europe region to bring Estonian digital development experience to these countries as well as beyond.
Our goal is to build trust in society and solve important problems. We contributed to renewing the vision and strategic goals of PwC Estonia and took it upon ourselves to support our organisation and our clients in solving important problems with innovation management. Only through innovation can we stay relevant and best serve our customers. We do this in cooperation with capable technology partners such as Microsoft, Alteryx, Jedox to name a few. We are proud that PwC has been selected as Microsoft's 2023 partner in several categories. We want to bring this success and recognition to our Estonian customers as well.
In 2023, a scandal related to non-fulfillment of the biofuel requirement took place in the Estonian fuel market, which raised many questions among market participants. In the light of these news, we helped an international fuel company take a closer look at the mechanisms of the Estonian biofuels market and at state supervision.
During the course of the project, we clarified which market regulation acts are in force, who the related parties are and what are their roles, how the process of data provision on biofuel production and consumption works, and how biofuels and greenhouse gas statistics are traded. We also analysed the fuel market more broadly and prepared an interactive overview of vehicles registered in the country, sales and consumption of different types of fuel. The recommendations based on the analysis gave the fuel company the necessary input and certainty for further strategic activities.
Last year’s CFO survey revealed that 57% of Estonian enterprises plan to update their business management software systems. This year, we took a closer look at the level of satisfaction of Estonian CFOs and CEOs with the business management solutions used in companies, and the main reasons why existing solutions are sought to be updated or replaced.
The survey revealed that the most important challenges are related to the integration of systems and the adaptation of software to enterprise needs. More information about the survey results can be found on the PwC website (in Estonian).
Alteryx is a global leader in data analytics automation with whom PwC is honored to partner with. With Alteryx SaaS (software as a service), we can offer convenient and flexible solutions to our clients for the automation of complex data processing in various fields without acquiring an Alteryx license. For example, we developed an activity-based cost model in Alteryx SaaS for the Estonian Enterprise and Innovation Agency (Enterprise Estonia). We used several accounting statements as an input and developed a solution which provides a multidimensional costing information (including the cost of services) as an output. With Alteryx, it is possible to significantly reduce the workload of manual data processing and allocate more time and attention on data analysis.
At the request of the Ministry of Culture, we analysed how county libraries perform national coordination tasks and how it could be organized better than today.
Today's county library system has been functioning without large-scale changes for decades, but due to the change in the role of libraries in society, it is important to modernise the system, including assessing the need for new services and competencies.
During the analysis, the current situation and the principles of service performance were mapped, strengths, possible bottlenecks, development needs were identified, and a preliminary draft of a possible new model was created, which would sustainably support the creation of new competencies.
Due to major changes in the dynamics of railway freight transport and a significant decrease in freight volumes, the need to find an alternative solution to today's historical credit assessment practice emerged. In seeking an alternative, the practices of other EU member states were used as a base, after which joint discussions and workshops were held with the main market participants in the Estonian railway sector in order to find possible approaches or components of these approaches to adopt.
During the analysis, among other things, automated solution options and the availability and quality of the input data required for these were analysed. In addition, the analysis touched upon both current and planned investments in railway infrastructure and changes in dynamics between the shares of freight and passenger transport.
As a result of the project, recommendations and proposals were prepared to enhance the management of railway infrastructure and the sustainability of railway transport.
The Ministry of Finance is planning to amend the basic law on the state budget and related legislation with the goal of increasing the transparency and comprehensibility of the state budget. It was a great honor for us to contribute to the process and support the Ministry of Finance in developing changes and preparing the draft. We analysed and made proposals for utilising investments and investment subsidies in the state budget, for simplifying the activity-based state budget, and for organising the state budget strategy, and budget planning and reporting cycle.
Our experts were also represented at the discussions of the country's strategic management working group. In the framework of the work, we collected, among other things, important input from the top managers and representatives of the ministries and major state institutions in their jurisdiction, the chairman and members of the Finance Committee of the Parliament, the vice president of the Bank of Estonia and many other parties.
