IMPROVING THE MANAGEMENT SYSTEM OF AN EDTECH COMPANY: A McKINSEY 7S DIAGNOSIS AND AI-DRIVEN RECOMMENDATIONS (EVIDENCE FROM KAZAKHSTAN)

Abstract

Fast-growing information technology companies routinely outgrow the management systems that once made them successful. This paper examines that transition in a Kazakhstani EdTech firm, Darmen Holding LLP, a software-as-a-service provider serving schools, colleges and regional education authorities under a business-to-government model. Between 2023 and the first half of 2025 the company's gross margin collapsed from 59 % to 41 % while headcount remained unchanged at 46 employees and the product line expanded to five platforms. We diagnose the causes using the McKinsey 7S framework supported by horizontal, vertical and ratio analysis of financial statements. The diagnosis localises the failure in two subsystems - Structure and Systems - and shows that the margin erosion is managerial rather than market-driven: demand from budget-funded customers remained stable throughout. We then propose a programme of measures built around a single principle: scaling through technology instead of headcount. The programme combines a shift to a product-matrix structure, artificial-intelligence-assisted coding, review and first-line support, automation of management accounting, and a development fund financed from retained profit. Each measure is screened for applicability against infrastructure risks characteristic of the Kazakhstani IT sector, including internet and power outages. Under the baseline scenario the programme restores gross margin to 52 % and lifts revenue to 1,836 million tenge by 2030, against 1,400 million under the inertial scenario. The contribution of the paper is threefold: the 7S model is adapted to a B2G EdTech context; digitalisation measures are tied explicitly to financial constraints; and an infrastructure-risk screen is proposed as a selection criterion for management interventions.