Process Approach to Transport System Management in the

Conditions of Digitalization of Its Accounting Model

Sergei Shatrov

and Katerina Frolenkova

Belarusian State University of Transport, Gomel, Belarus

Keywords: Process management, digital economy, railway transport, business process.

Abstract: In modern conditions of economic development an increasing number of organizations face with new forms

of interaction, the need to transform traditional approaches to management, the introduction of new

technologies, including information. In many ways, the effectiveness of management decisions depends on

the chosen approach to managing the organization. In the conditions of the digitalization of society, the correct

construction and management of the organization's business process system takes an important place. The

article provides the issues with the implementation of the process approach to management in transport

organizations on the example of the Belarusian Railway, the issues of further digitalization of the industry,

taking into account the introduction of corporate-type information systems.

1 INTRODUCTION

Currently, more and more organizations are coming

to the conclusion that the maximum effect of business

management will be achieved not by dividing it into

separate functions, but by managing the entire set of

business processes that represent the actual activities

of the organization, using the experience of

introducing modern information technologies in

management. The development of information

technologies makes it possible to apply them more

and more actively in all spheres of public life, to

transform economic processes. Transport, occupying

a special place in the economic system of any

country, is also undergoing transformation as a result

of the emergence of new digital technologies. One of

the clearest examples is the trend of digitalization of

railway transport, which is expressed not only by the

introduction of new information technologies, but

also by the reengineering of existing business

processes of organizations.

In the context of growing competition and

digitalization of business and the global economy, rail

transport must respond to market changes and provide

services with high quality and maximum economic

efficiency. This is facilitated by the implementation

https://orcid.org/0000-0002-5210-5125

https://orcid.org/0000-0003-0060-7200

of a process approach to management in the railway

transport system of the Republic of Belarus. It is the

process approach that allows system to quickly get rid

of many shortcomings and solve pressing problems.

In their works, prominent researchers and

scientists of the 21st century in the field of

management J. Thompson, M. Porter, M. Hammer,

D. Champi, V. Scheer, K. Gein, D. Harrington

considered process management as the leading

concept for the implementation of activities by

organizations. They assumed that this concept would

allow the organization to be viewed as a system of

interrelated and interacting business processes, the

ultimate goal of which would be the creation of

products or services that have a certain value for

internal and external consumers. (

Scheer, 1999)

2 MATERIALS AND METHODS

Recently the concept of the “Digital Railway” is

being actively implemented in the railway transport

of the Republic of Belarus, which, being one of the

elements of the process of digitalization of the

economy, is focused on further improving the process

of providing services and raising the standard of

Shatrov, S. and Frolenkova, K.

Process Approach to Transport System Management in the Conditions of Digitalization of Its Accounting Model.

DOI: 10.5220/0011577700003527

In Proceedings of the 1st International Scientiﬁc and Practical Conference on Transport: Logistics, Construction, Maintenance, Management (TLC2M 2022), pages 59-64

ISBN: 978-989-758-606-4

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

living. This concept is closely related to the country's

policy in the field of development of digital

technologies in railway transport. The creation of a

digital railway is not only the introduction of digital

technologies, but also physical and organizational

transformations of the infrastructure.

The development of modern technologies is the

driving force behind the transformation of society and

the economy, as the basis of its well-being. This trend

is especially clear in the field of transport. The

expansion of digital technologies in transport,

logistics, and the economy of the state as a whole is

the driving force that allows us to achieve economic

growth and the well-being of society. The trend of

recent years has been the digitalization of the railway

transport of the Republic of Belarus, as the basic core

of the intellectual transformation of the transport

sector of the economy. In this regard, the Belarusian

Railway has developed tools (corresponding to

national legislation and international transport law),

which have been practically tested in the organization

of freight traffic within the republic and in

international traffic.

Railway transport is a complex production

system, it is the most important transport complex of

the country, providing more than 60% of cargo

turnover and 30% of passenger traffic in Belarus. To

date, a functional approach to management is being

implemented here, however, as part of our research,

we propose to transform this approach into a process

approach with the identification of certain railway

business processes and the development of a

methodology for their accounting within an

automated system. Note that the process approach is

a special approach to the management, analysis and

functioning of an organization, including the study of

the relationship of business processes not only at the

level of the internal environment, but also when

interacting with external factors. In this case, a

business process can be defined as a chain consisting

of sequential, related and continuous operations, the

implementation of which requires the diversion of

enterprise resources in order to obtain measurable

results that satisfy the needs of both internal and

external consumers.

Since the technological process of the railway is

quite specific, therefore, the same function can be an

internal process that is part of larger processes and

business processes, and if it is implemented

externally, it can be presented as a business process.

The value result of the execution of these processes is

transport products (works, services) that meet the

needs of customers. At the same time, each individual

process at the output should have a result that is

important for the execution of the next process.

Rail transport can act both as a means of

transportation designed to meet the needs of

individuals and legal entities in the transportation of

passengers and cargo, and also as a type of business

aimed at making a profit from its activities as part of

a number of operations related to the provision of the

transportation process. The transportation process,

which is the main activity for railway transport, is a

set of transport operations aimed at the spatial

movement of passengers and cargo.

A characteristic feature of the railway transport of

the Republic of Belarus is the presence of two

approaches to the management system: territorial and

functional. The purpose of the territorial approach is

to ensure the process of transportation in the regions,

implemented through the railway departments. The

purpose of the functional approach is the qualitative

performance of each of the functions of railway

transport. However, the implementation of the

process approach is currently quite difficult, since the

railway system of business processes has not been

fully built yet.

In total, the processes and sub-processes carried

out by railway transport enterprises form a single

technological process of transportation. It should be

noted that the transportation process is not the only

business process of railway transport, so it would be

inappropriate to evaluate only its effectiveness, as

well as evaluate the effectiveness of any individual

technological operation. It is necessary to evaluate

operations, functions, procedures, processes, business

processes that are aimed at fulfilling the tasks set by

the management (organization of freight

transportation, ticket sales, rolling stock repairs), in

order to organize the coordinated work of functional

units and line managers to achieve a unified business-

goals. Depending on how well the management of

operations, functions, procedures, processes, business

processes was organized, the effectiveness of the

implementation of the activities of the entire railway

system, the further development of this business, as

well as the preservation of competitive advantages in

the market will depend.

The procedure for identifying business processes

in any organization is a rather labor-intensive and

complex process, therefore, in order to simplify it,

when documenting business processes, certain

requirements must be followed:

− identification of the business process and the

definition of everything related to it, and all

those involved in achieving its effectiveness;

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− establishing a consumer either within the

company or outside it of the product (service)

obtained as a result of activities within the

business process;

− the boundaries of the business process are

determined not by technological or functional

principles, but by the requests of the consumer-

client;

− the key and most important figures in

determining the boundaries of business

processes are not engineers and technologists,

but managers and economists (Shatrov, 2018).

According to the above requirements, when

forming a process approach in the railway transport

of the Republic of Belarus, its own special

classification of business processes is applied.

(figure 1).

Figure 1: Railway business-process classification.

At present, the process approach in the railway

transport system of the Republic of Belarus is mainly

related to the description of production processes

carried out by structural divisions (branches), and is

implemented through the Concept of applying lean

manufacturing technologies, QMS standards of the

ISO 9001 series. However, it should be noted that a

formalized approach or document , which would

determine the business processes within the

framework of the activities of the railway transport of

the Republic of Belarus does not exist.

Attention should be paid to the fact that the

functionality of process management in the railway

transport system has not yet been fully implemented.

The uniqueness of the process approach lies in its

categories as “business process”, “sub-process” and

“operation”, which are closely interconnected.

However, here we note that a separate sub-process

does not have an implementation, but can only

function in the aggregate of a business process, which

is subsequently implemented. From this we can

conclude that only expanding the horizons of

replicating the process approach, competently

building a system of business processes and

managing them, taking into account all the subtleties

of subprocesses and operations, will allow railway

enterprises to increase the effectiveness of using its

funds, maximizing all their capabilities.

To implement the concept of process management

of an organization, the concept of business process

management is currently used, which considers

business processes as special enterprise resources that

continuously adapt to constant changes, and relies on

such principles as the clarity and visibility of business

processes in an organization due to their modeling

using formal notations, using software, modeling,

simulation, monitoring and analysis of business

processes, the ability to dynamically rebuild business

process models by participants and software systems

(Shim, 2014). Confirmation of the “progressiveness”

of business process management as an approach to

managing organizations is also confirmed by the fact

that the need to implement the process approach is

one of the principles of the ISO 9001 standards.

Many researchers suppose one of the main

directions of transformation in terms of improving

process management in the digital economy is the use

of domestic and foreign more advanced technical

solutions, not only and not so much in the field of

automation of accounting processes, but in the field

of management. In many enterprises, this is done

unconsciously when implementing integrated

enterprise information systems with advanced

analytics. The effect of the digitalization of the

activities of the railway will not be complete if the

practical work at all levels of management does not

use the capabilities of modern information

technologies. It should be noted that, despite the

availability of technical capabilities, there are often a

number of reasons that impede accelerated

development: the absence or contradiction with the

current legislation, the unpreparedness of staff and

management for the rapid development of IT, etc.

When managing processes and improving them, it

is necessary to have tools for their improvement, one

of the key requirements of which is the formation and

functioning of a unified information environment and

the ability for users to work together with the same

information objects. Thereby the most effective tool

for improving the company's business processes is

information system.

The railway transport of the Republic of Belarus

has its own organizational structure, terminology and

approach to cost reflection. All this predetermined the

need to formalize business processes within the

association. Nowadays there is no document which

would regulate the system of business processes of

Railway business-process

classification

main business-processes

supporting business-processes

providing business-processes

management and development

business-processes

Process Approach to Transport System Management in the Conditions of Digitalization of Its Accounting Model

the railway. Although there is an information system

that contributes to the speedy transition to process

management.

The Unified Corporate Integrated Financial and

Resource Management System (UC IFRMS) is a

corporate-type information system currently

operating in the railway transport of the Republic of

Belarus, which introduction contributed to the

transition from a functional management approach to

a process one. The system belongs to the class of ERP

systems, has extensive functionality, is built on a

modular basis and already includes a set of business

process schemes that can be rebuilt to the needs of a

particular structural unit, includes a set of software

solutions designed to automate accounting, financial,

management accounting , as well as realizing the

information support of management processes. The

capabilities of the system make it possible to carry out

a variety of control and analytical activities, reflect

and process standard business transactions, generate

the necessary reports, which in the future will allow

making effective management decisions. One of the

main advantages of the system is the ability to

integrate all the information generated in the

structural subdivisions (branches) of the Belarusian

Railways into a single information space, which will

allow the management and employees of enterprises

to make management decisions more quickly, and the

modular principle of construction will ensure

efficiency, safety and the efficiency of processing

incoming information about ongoing business

processes.

US IFRMS allows users to quickly receive

information on all railway organizations, and due to

the developed control modes, already at the stage of

filling out spreadsheets, eliminate the possibility of

errors. UC IFRMS is based on SAP platform. The

models that make up its basis have been worked out

for years, therefore, we consider it scientifically

reasonable to conclude that it has already

implemented the proven most effective experience in

implementing a process approach to managing

transport systems. Therefore, an important task of

adapting UC IFRMS to the national legal features and

technology of transportation and financing of railway

transport is to fill it with structured accounting

information based on the developed system of

primary documents and registration of data on costs

at their places of origin.

Accounting for the railway transport of the

Republic of Belarus is based on a financial model that

involves the formation of financial reporting.

Although currently financial reporting does not make

it possible to build and manage business processes, so

the management accounting system must be rebuilt or

built in a new way. The existing model of

management accounting is based on the registration

of costs by processes, revenues are not clearly

expressed, and therefore it is difficult to correlate

them with the costs that caused these revenues.

Therefore, UC IFRMS allows you to reflect typical

business processes so that there is no additional

burden on an accountant or economist, to receive

detailed information on business processes, so that it

becomes possible to rebuild them on the basis of

accounting data.

Thus, in the context of digitalization of the

accounting system of the railway transport of the

Republic of Belarus, electronic forms of data

presentation are replacing paper media, and thus form

a new concept – “digital event” – the moment of a

business transaction, which is automatically reflected

in the system registers. In this regard, there is a

problem of the need to move from filling out the

primary documentation in the form in which it is

carried out now, to the registration of primary

transactions according to the new opportunities of the

developing digital economy. In further, when

analyzing the flow of information received by the

management of the railway from structural divisions,

the top manager will have the opportunity to highlight

data, identify bottlenecks in the operation of

particular enterprises and make management

decisions by building a “digital track” for each of the

business processes. The detailing of business

processes is caused in order to highlight the “digital

tracks”, and thereby gain the ability to track, manage

and control costs.

Thus, an active transition to process management

in the railway transport of the Republic of Belarus is

carried out through UC IFRMS and the quality

management system (ISO 9001:2015), which allows

railway to change the traditional functional approach

to management to a process one, and implement a

new process management accounting that will allow

enterprise to build a system business process

management in such a way as to evaluate the effect of

each process. However, this system must first be built

to adequately reflect the results in the existing modern

information and analytical system. If an organization

does not rethink its actions, then imposing new

technology on them will lead nowhere. As soon as

this system is built, it will be possible to determine

the costs for each of the processes (Shatrov, 2018).

In order to assess the effectiveness of the railway

as adequately as possible, it is necessary to build a

management system that would cover all processes

without exception, which will require the formation

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of a cumbersome and information-intensive

accounting system, including the use of a specific

methodology, the basic basis of which would be key

performance indicators (a system of process

parameters, necessary to assess the level of efficiency

of this process at any stage) (Efimova, 2020), which,

within the framework of the railway transport system,

include, for example, the volume of traffic, the

average daily mileage of a locomotive, the cost of one

repair, etc.

Of course, the digitalization of the railway

accounting model, carried out as part of the

implementation of an integrated corporate

information system, should receive a scientific

assessment in order to create an adaptive information

support for management that can adjust to changing

needs, using the tools of modern technologies and

modern data processing methods to achieve the

strategic goal – “creation of a digital railway”.

Taking into account the fairly wide use of the

process approach in the railway transport of the

Republic of Belarus, currently an information

environment has been created which allows

transforming traditional management accounting into

process accounting, which will be part of modern

management accounting built on actuarial models of

analytics and contactless monitoring of the activities

of structural elements and business processes.

3 RESULTS AND DISCUSSION

The currently available set of processes and

information content are insufficient for making

effective management decisions, since they do not

describe all the processes carried out at the enterprise

and do not provide complete information for the

decision-making process. The reports, configured in

each of the modules, have a narrow range and do not

reflect information about the ongoing business

process as a whole, but only cover a certain part of it.

Each of the reports does not perform analysis as such,

it selects data and forms it into a tabular view. On the

basis of the data obtained, the head of the enterprise

cannot assess the operation of the enterprise on-line

without the involvement of several specialists, as well

as carry out short-term and long-term planning of the

financial and economic activities of the enterprise.

Further modernization of the accounting model,

taking into account the capabilities of digital

technologies, will, in particular, increase the speed

and expand the completeness of the provision of

information necessary for making management

decisions at all levels of railway management, update

the data, the efficiency of their processing, form

adaptive models for managing the main business

processes, determining the efficiency of the entire

transport system as a whole.

The next step should be the introduction of

information systems that provide support for

managerial decision-making through the analysis of

large amounts of data and the transition to more

advanced information and control systems that can

independently form control actions based on

cognitive technologies that form elements of artificial

intelligence. For example, at the first stages, the

program can be trained to recognize the objectivity of

the use of certain objects used for a particular type of

repair, and subsequently link the consumption of

these assets with their automatic delivery based on

repair plans determined taking into account the

expected traffic volumes and financial capabilities of

the enterprise. This example proves that the

digitalization of accounting technologies helps to

optimize the planning and quality of management

decisions, increase the attractiveness and availability

of services, as well as the productivity of personnel,

embed the railway business in the developing

landscape of the “digital economy” in the country and

the world, save material and labor resources, and etc.

4 CONCLUSIONS

Thus, the process approach in the context of

digitalization of the economy in the railway transport

of the Republic of Belarus is implemented through

UC IFRMS, the quality management system and the

development of the concept of lean production.

Although, the potential of process management and

the capabilities of the implemented information

system is not fully disclosed. In the context of further

digitalization of the railway economy, in order to

identify, describe, regulate and effectively manage

business processes, it is advisable to develop

methods, regulations, instructions and regulations

regarding process management, as well as consider

the possibilities of business process reengineering.

However, for the development of reengineering, it is

necessary to build models of existing business

processes.

REFERENCES

Scheer, A. V., 1999. Business Processes. Basic concepts.

Theory. Methods. p. 173.

Process Approach to Transport System Management in the Conditions of Digitalization of Its Accounting Model

Andersen, Bj., 2007. Business Process Improvement

Toolbox. 2007. p. 296.

Shatrov, S. L., 2018. Process approach in the analytical

assessment of the efficiency of transport systems.

Journal Accounting and Analysis. 9 (261). pp. 14-22.

Shatrov, S. L., Lipatova, O. V., Keizer, I. A., 2017.

Outsourcing of business processes of transport systems.

p. 203.

Shim, J. K., Siegel, J. G., 2014. Dictionary of Accounting

Terms. p. 537.

Shatrov, S. L., Frolenkova, E. O., Kuznetsova, N. S., 2018.

Accounting and information system for ensuring

process management in railway transport organizations.

Bulletin of Polotsk State University. 14, pp. 129-133.

Efimova, O. V., Baboshin, E. B., Zagurskaya, S. G., 2020.

Process management and digital transformations in the

transport business. p. 222.

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