Smart Business

Afew years ago, enterprise applications brought with them the promise of

putting an end to all the problems faced by businesses, improving efficiency,

cutting costs and more. Instead of tales of such magical transformation, what

one got was a nugget of information–one-third of all enterprise applications

fail. Then, with the dot-com bust, the ‘e’ word lost its charm. Now, with

the fresh wave of interest in enterprise applications, we decided to explore how

enterprises are reacting to the changing information technology landscape. The

Dataquest-Satyam CIO Meet in Chennai deliberated on the topic, ‘Enterprise

Applications–Hottest eBusiness Apps’. On the panel were Ford Information

Technology Services India executive director Balu Srinivasan,

Stanchart-Grindlays head (information systems) Dilip Sadarangani, Orchid

Pharmaceuticals GM (IT) NC Raghu Ram, Frost & Sullivan marketing consultant

Anand Rangachary, Dataquest group editor Prasanto K Roy (also the moderator of

the discussion), Ashok Leyland manager (IT) V Thyagarajan and Satyam Computer

Services head (sales) V Krishnan. Excerpts from the discussion:

Infrastructure



V Thyagarajan (Ashok Leyland): We have a data center at our Ennore

factory that used to be powered by large servers. We also have a wide area

network (WAN) that links all our plants across the country. Around 40 outlets

are connected through VSATs. So far, we have invested Rs 40 crore on our IT

infrastructure, which comprises hardware and software solutions including our

own in house ERP and CRM solutions. It took approximately 18 months to implement

these enterprise solutions across our locations in India.

NC Raghu Ram (Orchid Pharmaceuticals): We started operations in 1994.

In a short span of time, we have become the fourth largest manufacturer of the

antibiotic–cepahalosporin. We have grown from Rs 400 million in 1994 - 95 to

Rs 4200 million in 2001-02. Our SAP implementation went live in April 2002.

Orchid is probably one of the few companies in the world, which took the big

bang approach and has implemented all the modules of SAP in 22 locations in one

shot. We have hybrid networks connecting various locations in India. On the

server side, we have HP machines running UNIX. We also have a B2B2C portal

called healthorchid.com.

Balu Srinivasan (Ford): As far as Ford is concerned, we have implemented

MFG-PRO across various locations. However, over the years we have reengineered

the solution and customized it to suit our requirements. The enterprise strategy

of Ford has a twin aim - To build good capacities to manage MFG-PRO and to bring

a high degree of standardization in the IT infrastructure.

Dilip Sadarangani (Stanchart-Grindlays): Being in the service industry, we

developed a lot of surround systems to take care of the unique country specific

functions. Since our core banking systems are based in Singapore, we developed

these surround systems to take care of activities like credit cards, loans

processing and other transactions that call for local solutions. Our ultimate

goal is to e-enable all the systems across the board.

Prasanto K Roy (Dataquest): Given that the last year has been tough for the

IT industry, have there been significant changes in enterprise deployment?

V Krishnan (Satyam Computers): With enterprises pruning IT spend, the last

year has indeed been challenging. But this does not mean that nobody is

investing in IT either. Customers are particular about selecting vendors who are

focussed and have domain expertise. We have therefore realigned our processes on

key vertical segments. Today, a company has to be a business enabler and should

offer a clear value proposition for the solutions it implements. The business

drivers in various verticals are different. As companies recover from the

recession, there is a growing realization that e-biz apps add significant value

to the enterprise.

Anand Rangachary (Frost & Sullivan): We are currently conducting a joint

study with Nasscom on the e-biz opportunities across APAC in 13 countries.

Preliminary findings have revealed that IT investments in banking and

communication segments in India have dropped over the last year. The good news

is that a lot of SMEs have started looking at enterprise applications as key

growth enablers. In other APAC markets like Singapore and Australia, there is

lot of stress on business intelligence applications. Business intelligence is an

area that is picking up worldwide. Meanwhile, the retail industry is looking up,

where there is a lot of scope for merchandising management solutions. The

pharmaceutical industry is also seeing lot of action, but right now, the pharma

market is buying only ERP. This is because other business applications like CRM

and SCM are not suitable for the pharma industry in their present form. For

instance, CRM focuses on a standard set of details from a vast customer base,

while pharma companies need a CRM that can derive vast details from a specific

set of customers like doctors etc.

Ford: The key emphasis at Ford in the last year has been on consolidating and

enhancing our IT assets. For instance, we have fine-tuned our enterprise

solutions with an aim to hasten user adoption. What we have found from our

experience is that enterprise applications have to be constantly upgraded and as

a result, educating the users at appropriate time intervals is very important.

To this end, we have put in place a Process Technology Group (PTG). The group

takes care of the functional issues a user faces and updates the process

changes. Another significant initiative we have taken over the year relates to

the migration of legacy systems to ERP, SCM and CRM solutions. We are in the

process of implementing a CRM solution called Everest.

Stanchart: One of the big initiatives we have embarked on last year is to

encorporate some of the best IT practices into our Indian operations. The

initiative, called IS outsourcing, involves customizing some of the best IT

solutions practiced in Stanchart worldwide to suit Indian customers.

Measures and returns



Orchid: In most ERP implementations, the easiest and the most visible

return would be the savings on the inventory. Any subsequent investment on IT

would be on the saving an enterprise derives from managing the inventory, post

ERP. Since we went live only recently, it will take us at least a year to

quantify our IT investments.

Satyam: I think companies look at cost savings and simplified processes from

an enterprise rollout. For instance, HLL which has implemented a slew of eBiz

applications has cut down on the gestation time involved in stock taking and the

products that reach the distributors are updated on the same day on the

database. The key determinant here is that the company has to be clear

about the eBiz implementation and should aim for cost saving, time saving and

better integration with its stake holders. We believe more than RoI in revenue

terms, the actual measure is the business benefits coming out of the enterprise

implementation.

Frost & Sullivan: If we trace the evolution of e-business, it has three

stages. Stage one is the basic activity level where the implementation is

planned on one particular activity, say cost cutting. The next level of activity

is the business process enhancement in which rollouts like CRM and SCM happen

and broad base the enterprise’s external interface. The third stage is at a

higher plane, where the organization goes through the maturity path and actually

starts leveraging the benefits of the IT processes. I think India is in the

first level. The primary driver for eBiz implementations is the cost savings and

logical extensions like CRM will happen by early 2003.

Ashok Leyland: I think for companies, which already have a decent IT setup,

the main mandate is the integration of the IT resources they have. For instance,

different units of the businesses should integrate into one database. And

information retrieval will then become simple. I think this integration will be

the ultimate measure for any IT investment. 

Ford: The actual measure or quantification of business applications depends

on the kind of change management it ushers in. For instance, if the company’s

telecom link is down, the purpose behind the solution gets defeated. Hence, it

is mandatory to have the right kind of basic infrastructure. For instance at

Ford, we cannot release a car from the assembly line if our link is down as all

the information is stored online and there are no manual records. 

Role of the CIO




Stanchart-Grindlays:
The traditional role of a technology head in any

organization is fast changing. CIOs who are putting in place an e-business

initiative are change enablers who usher in complete organizational

transformation. Hence the IS head should have a strong business focus.

Satyam: The trend is changing. The CIO today is increasingly playing the role

of a business technology head. The CIO is the key driver who plays the role as

the facilitator in the entire change management process an enterprise solution

implementation brings in.

Ford: When applications like ERP came in, the CIO became a chief sourcing

officer (CSO). Particularly in the last two years, the need for business savvy

CIOs has become crucial. Also, the CIO today should have strong networking

skills. For instance, a company needs a CIO as well as a CTO who has to function

concurrently and drive the enterprise initiatives.

Stanchart-Grindlays: Today, the CIO should think creatively and choose the

right solutions that fit the primary business. For this, a huge solution is not

the only solution. Even small applications aimed at automating certain processes

will do well. For instance, for us, phone banking is one major application

through which a lot of customers interact on any given day. Any phone banking

query involves a lot of preliminary authentication like the card/account number,

last transaction etc. But for every query, the clerk has to open different

screens and it takes time for each screen to open and the query to be verified.

We wrote a small program and integrated the whole process and now all the user

details comes in one screen.

G SHRIKANTH in Chennai