Splashes of IT Sparkles

While India makes an indelible mark globally in the gems and
jewelry market year after year, it is the technology that is going hand in hand
to consolidate the success story. Emerging from relatively humble beginnings of
a small and unorganized sector in the 1950s and 60s, the industry is well on its
way to become a technology savvy corporate entity.

With the domestic market peaking $10 bn (4% of the total global
market) in 2006-07 and the exports touching $15 bn (which is 18% of India's
total exports), the industry seems all set to roll.

Not to mention the rising growth charts of the industry that are
pushing up the IT spends, too. With the IT spend only growing by leaps and
bounds, the gem and jewelry sector is poised to become the hot sparkling
destination for the technology vendors.

Nagaraj Bhargava, SAP's vice president, Marketing and Sales
Operation, associates the huge boom in the retail as one of the primary drivers
for use of technology by the industry. "With world-class retail players
entering jewelry retail in India, customers are changing their buying habits,
and so gem and jewel retailers are placing an emphasis on producing a consistent
and high-quality customer service experience."

Eastern Software Systems(ESS), offering IT products and services
primarily to SMBs, while taking in the retail factor, also includes the
manufacturing and export side. Director of ESS, Sanjay Agarwala says,
"Firstly, it is the retail side which is most visible to the public, and
the other is the manufacturing and export side, which is driving the use of
technology."

The retail industry has matured tremendously, and is now more
process driven, standardized and most importantly, brand and quality assurance
matters more than anything else, adds Agarwala.

And this, of course, is being driven by customer maturity to a
great extent, he says. With customers becoming more mobile than ever before, the
loyalty to family jewelers is fading and the brand is becoming increasingly
significant.

"He is willing to pay slightly more, provided he is assured
of quality, as one may not find his family jeweler everywhere," explains
Agarwala. India accounts for about 20% of total consumption of gems and jewelry
products, which by far is the largest.

This is where technology comes into the picture. As the industry
matures, taking a call on delivering better services to customers is becoming
top priority.

Technology is not just restricted to designing anymore-managing
processes, controlling supply chain, quality assurance, export documentation,
inventory management, production control, managing accounts are key areas where
technology is core to driving business for many players in the vertical.

Bhargava says, "IT adoption in jewelry is just picking up.
Players are realizing the value of an integrated IT application. What is driving
adoption is competition and the need to be organized." He points out that
two years back, only the traditional jewelers dominated the business across the
country. "Today, we have retailers jumping into the bandwagon," he
says. Hence, the traditional businesses are looking at IT to deal with
competition and manage expansion plans.

Points Laabh Jeweller's CEO, Vipin Sharma, "IT has become
an integral part of our entire business approach. We have the IT architecture
but as we diversify our activities, it just becomes a matter of strengthening
the infrastructure more and scaling up the hardware, applications and the
bandwidth."

Laabh Jewellers plans to get a good grip on technology as it
draws its expansion roadmap. Laabh Jewellers went for an ERP from ESS and
managing the supply chain, primarily, was a daunting task until it decided to go
in for an ERP-based solution. Kama Jewellers too went in for the ERP from ESS.
Kama Jeweller's CFO, Pradip Shah, points out that as volumes grew, there was a
need to align manufacturing package with the financial package. "That's
what drove us to hunt for an ERP," says Shah.

Another case in point is the Surat-based Venus Jewels, which has
been one of the early adopters of technology. "We have adopted information
technology tools since 1987 and its early application at an early stage allowed
our business to be more transparent, flexible, and controlled," says Anil D
Shah, partner, Venus Jewel.

"We have achieved complete IT Governance in all aspects of
business leading to integration and transparency in all business
operations," says Anil Shah. He points out that the company's IT
infrastructure runs in a redundant mode at all levels ie, from manufacturing to
final sales.

"We have a substantial amount of investment in IT,
throughout our business model, right from manufacturing to sales; the entire
business profile has changed making it more easy, comfortable and flexible for
the customers to buy diamonds," he says.

Also, in 2007, the company hosted its website on its in-house
web server to help customers access real time inventory with fast, easy and safe
transactions.

The indispensability of technology to business requirements is
the story for the Gitanjali Group too, which started way back in 1966.
Considered as one of the earliest diamond houses in India, the Group covers many
popular brands like D'damas, Nakashtra, Asmi, Sanghini, Damas Solitaire.

The brand is looking at pocketing heavy investments in upgrading
its IT infrastructure. Sam George, CTO says, "Currently, we are using
native tools, which are basic to any business; however, we have initiated a Gap
Study for ERP implementation."

The group felt the need to go the IT way as it realized the
increasing need to have the customer voice in sync with the business voice.
Gitanjali business is conducted at over 1,000 locations in the country.

George feels, "As the country makes huge progress in the
retail segment, the jewelry industry is taking note of the change, as it
prepares to gradually adapt to the changing environment."

Industry agrees, IT adoption drivers are primarily going to be
the realization that companies need to serve customers better, and the necessity
to move with the current trends.

"IT adoption in jewelry is just picking up. Players are realizing the value of an integrated IT application. What is driving adoption is competition and the need to be organized"		"Firstly, it is the retail side which is most visible to the public, and the other is the manufacturing and export side, which is driving the use of technology"
-Nagaraj Bhargava, SAP's vice president, Marketing and Sales Operation		-Sanjay Agarwala, director, ESS

Two crucial areas where, in the vertical needs to improve is
bringing down the production time, which currently is 60 days on an average, and
integration of business, says Anup Varma, Oracle India's regional sales
director, mid-market technology sales. Varma says that these directly effect a
company's brand image and consequently their customer relations.

The organized sector comprises a very small 3% of close to 3.5
lakh players in the industry. This is the precursor to the IT trends in the gems
and jewelry vertical. "It is imperative for the industry to reach out to
the remaining 97% in order to come closer to the customers," says Varma.

"While the growth and trends of the industry are pushing
contours to expand like never before and the potential is huge, it is only the
periphery that we have managed to scratch," says Varma.

"We have adopted information technology tools since 1987 and its early application at an early stage allowed our business to be more transparent, flexible and controlled"		"It is imperative for the industry to reach out to the remaining 97% in order to come closer to the customers"
-Anil D Shah, partner, Venus Jewel		-Anup Varma, Oracle India's regional sales director, mid-market technology sales

On a positive note Bhargava adds, "In the next one or two
years, with global jewel retailers setting shop in India, I see a lot of IT
adoption. This will drive local players also to adopt IT to compete and
differentiate in the market."

While the potential is enormous, there is still time before the
thought that "buying jewelry is not just buying a piece of precious gem,
gets deeply entrenched in the unorganized sector." How fast this vast
unorganized gang joins the organized sector, poses a huge challenge for the
technology providers and facilitators, and the industry as a whole.

Urvashi Kaul

urvashik@cybermedia.co.in