Pharma: Matrix Laboratories - Catalyst for Consolidation

Much of the IT adoption at Matrix Laboratories is determined by
the nature of its business as well as its business dynamics in the last few
months. With R&D facilities near Hyderabad and manufacturing near
Vishakpatnam, Matrix is involved in the manufacture of Active Pharmaceutical
Ingredients (APIs) and Solid Oral Dosage Forms. While till a couple of months
back, Matrix was still one of the few domestic pharma companies amongst MNCs,
the status has now changed with the US-based generic pharma company, Mylan
Laboratories, acquiring up to 71.5% stake in Matrix.

Consolidation has become the primary reason for the increased
activity in Matrix on the IT adoption front in recent times. Be it server
consolidation, data center consolidation or even ERP consolidation, this seems
to be the flavor of the season sweeping across the company. The fact that Mylan
is coming with its separate, disparate IT systems is definitely influencing much
of this consolidation phase, admits Srirama Murthy M, DGM-Systems, Matrix
Laboratories. Also the fact that being involved in bulk drug manufacture
involves direct customer sales, and a consolidated IT environment helps in
making manageability simpler, adds Murthy.

The Mylan acquisition of Matrix implies not just ERP
consolidation, but the need to standardize by conforming to global norms. Since
Matrix was running on SAP ERP while Mylan had some in-house ERP, there was the
need to consolidate both operations into one platform; the decision was to close
on SAP and Murthy informs that Mylan is currently moving in that direction.
Subsequently, as the two enterprises consolidate, the merged entity also plans
to implemented Business Intelligence and data warehousing tools from SAP.
"In two months time, the consolidated entity will go live on SAP and we
will also implement BI tools," informs Murthy.

	'Time in reporting of outbreak of diseases from remotest areas has dramatically reduced'
	-Srirama Murthy M DGM-Systems, Matrix Laboratories

While consolidating on SAP will help back-end integration of the
two companies, plans are also afoot to have a common data center. This data
center will have blade servers running most of the non-ERP applications like
messaging and the likes. Since scalability is becoming a crucial issue for the
merged entity, the decision has been taken to also go in for IBM p-series
servers as well as storage solutions from EMC. Scalability is important since
even prior to getting acquired by Mylan, the company has been growing
inorganically through acquisitions of Concord Biotech, DocPharma, Mchem Group
and Explora amongst others.

Murthy admits that retention of IT talent has become a major
challenge for Matrix. "Everyone wants to join the IT vendors and in recent
times we have lost 40 members from our team." Subsequently, the company has
seriously looked at third party outsourcing; areas like facilities management,
server administration, security management, ERP support have been outsourced to
NetSol, the company that has become a part of IBM now.

Rajneesh De

rajneeshd@cybermedia.co.in