The Addiction Continues

Hyderabad-based Vazir Sultan Tobacco Industries (VST) has been a silent but
leading player in tobacco manufacturing. It controls a large market share in
southern India, with well known brands such as Charminar and Charms. Accountant
turned CIO, Ratnakar Nemani, a key force in the organization, has made possible
what many believed was quite impossibleinsourcing IT.

The business process of the organization runs on SAP while the HR process has
been built in-houseknown as the people information and payroll system (PIPS).
The company has also been using farmers inventory management suite (FIMS),
another in-house product, to keep updates on their huge tobacco purchases. Says
Nemani, "In the current year some processes have been automated for applications
such as PIPS and FIMS, leading to zero transit time in certain process and
process removals such as bank reconciliations and avoiding data duplication.

Under the SAP consultancy services, the company offers money back assurance
in implementation cost and also facilitates services such as rollouts, upgrades,
enhancements, offshore and onsite support including audits.

Challenges

As the CIO of a tobacco manufacturing company, Nemanis first challenge came
to convert IT into a revenue generating unit (RGU) while providing services
outside the SAP, IT facilities management, and selling PIPS and FIMS products.

At this juncture, we wait and watch the market to overcome the cloud barriers	Ratnakar Nemani, CIO, VST Industries

One of the initiatives taken by Nemani was to identify the investments made
in IT and the kind of RoIs that were reaped. An identification and evaluation
made it possible for him to check for any efficiencies that could impact
strategic businesses.

"IT needs have to be aligned with the plans of the company," says Nemani. A
detailed examination by the company sometime back saw that the total outsourcing
of services were well aligned with VST needs and they offered benefits such as
contemporary technology as well the the kind of technical expertise required.

Benchmarking is the bottomline for the company. Nemani believes the
importance of benchmarking and calculating the percentage of the IT spend
vis-a-vis the overall turnover of the company. Apart from being able to generate
revenues it also adds value to employee skills and their trust in the company

Going Virtual

In the current year, VST Industries has planned to enhance their business
processes giving tangible benefits apart from running IT as an RGU. Nemani has
been a strong supporter and promoter of proven technologies. Virtualization of
desktops (Thin Clients) was successfully initiated under his guidance in May
2005. This led to tangible benefits in capital expenditure while the company saw
a 40% reduction in operating expenditure in the form of less power consumption,
reduced manpower, enhancement of security levels, and its contribution towards
green IT.

The company is intently looking at cloud. Says Nemani, "Cloud gives benefits
such as multi-tenancy, massive scalability, elasticity, pay as you go (shift
from capex to opex) and self-provisioning of resources. However, at the same
time there are barriers and hindrances for cloud models such as privacy,
reliability, connectivity, openness, interoperability, and finally security
leading to governance issues. At this juncture, we wait and watch the market for
barriers to overcome."

PC Suraj

surajp@cybermedia.co.in