The Addiction Continues

DQI Bureau
New Update

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.


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