IT's Heavyweight Adopter

The

Indian engineering industry, including the transport equipment segment, is

estimated at around Rs 1.2 tn. The share of heavy engineering is about 80% of

the value, while rest was contributed by light engineering sector. The Heavy

Engineering Industry comprises capital goods/machinery and equipment and can be

broadly classified into electrical machinery and equipment and non-electrical

machinery and equipment segments.

Majority

of players in the heavy engineering industry have well defined markets catering

to specific sector(s) and are technology driven. Turnkey engineering capacity is

also limited to a few domestic entities such as BHEL, ABB, L&T, Alsthom, and

competition in this segment is also expected to be limited. The heavy

engineering sector is driven primarily by technology. This, coupled with the

fact that the initial investment required for heavy engineering/capital goods

manufacturing facilities is relatively high, creates a relatively high entry

barrier.

Heavy

engineering companies have therefore been one of the earliest adopters of

technology among traditional industries in India.

One of

the most important business parameters for heavy engineering companies is

competitive delivery time. Today most of the leaders in the space have cut down

delivery time by significant margins, thanks to huge deployment of IT in core

business processes.

Most

implementations in Heavy Enginnering happen in a discrete fashion in the

different manufacturing units. All companies have gone for ERP deployments

today. Incidentally, many of them have deployed SAP predominantly.

Interestingly, L&T is running multiple ERP systems depending on the

requirement of the unit while BHEL deployed SAP in four units, while the other

units have ERP systems based on Oracle's RDBMS. Today, companies in this

industry are also looking at upgrading their ERP policies. Primavera is widely

used in large houses like BHEL and L&T for project management.

In

areas like design and engineering, most of the programming and application

development work is done in-house. Interestingly, companies have chosen to adopt

a decentralized approach towards application development and deployment. BHEL

has gone ahead with a decentralized DR policy as well. The company has made its

DR system resistant to fire and flood only and not earthquake, as it does not

have a warehouse setup. This is also reflective of the trend in the sector.

Heavy

engineering powerhouses have also gone in for e-procurement. While some of the

players carry out their entire procurement operation online, some like BHEL have

made its procurement partially online and partially offline. Companies are also

looking at technologies like MPLS to help centralize their networks.

IT has

played a dominant role in the growth of the heavy engineering sector from its

early days and would continue to do so as IT departments gear up to move newer

technologies to fuel growth and take on competition.

Bhaswati Chakravorty





bhaswatic@cybermedia.co.in