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Issue of October 2002 
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Case Study Special: ABB’s SAP consolidation and uniform messaging
Consolidating processes for timely information

Because of the diverse nature of its business operations, ABB India just could not continue using its legacy applications and error-prone communications system. So it redesigned its WAN, increased capacities, consolidated processes and installed a uniform messaging system. All this has helped immensely in providing timely information that's required for critical business decisions. by Akhtar Pasha

Asea Brown Boveri Ltd., India (ABB), a Rs 1,060 crore company, has a presence in manufacturing, process and consumer industries; utilities, oil & gas, and infrastructure. There are several business divisions within ABB and these units were using courier and fax for day-to-day communications—a time consuming and error-prone process. The company had also outgrown its legacy accounting application. The consolidation of SAP centrally has helped bring down the cost of implementing ERP, and streamlined accounting procedures. By using Lotus Notes, ABB India has gained a uniform mailing system that has replaced the tedious paper trails of the early days.

ABB decided to go in for a Wide Area Network around 1984 - 85 and the project began in 1987. To begin with, the WAN connected seven locations including two in Bangalore—ABB's headquarters at Sona Towers and Peenya; two in Mumbai at Andheri and Worli; and three at Maneja, Nashik and Delhi respectively. 64 Kbps leased lines were used to link all these locations.

In a Nutshell
  • The Company:
    ABB India is a 51 percent subsidiary of ABB Ltd, Zurich. It provides solutions for industries as diverse as power, pulp & paper, metals, cement, mining, consumer industries, chemicals, petrochemicals, refineries and automobiles.
  • The Problem:
    ABB could not cope with its manual communications systems (courier/fax) which was error-prone. Another problem was the high implementation cost of SAP.
  • The Solution:
    ABB set up a WAN and consolidated its servers to a single location, Bangalore. This helped in reducing the cost of implementing SAP. It replaced the old mode of communications with Lotus Notes messaging.
  • The benefits:
    ABB has eliminated paper errors, improved financial accounting and reduced the cost of implementing SAP. Server consolidation has lead to cost savings and made IS management easier.

Click on image for larger view

While rolling out the SAP and Lotus Notes applications, ABB decided to consolidate its servers at a central location: Bangalore. By doing this it hoped to reduce implementation costs and set up a more robust WAN. The ABB network team comprising fifty-two engineers used Cisco WAN routers, Compaq Proliant 1850 servers (PIII 550 MHz with 512 MB RAM) and HP NetServers (PIII) for the implementation. A Check Point firewall was deployed at the gateway. There are six VSAT links providing backup for the leased line connections.

ABB consolidated Lotus Notes and SAP on a single IBM Netfinity (x-Series) server. This enabled it to streamline its accounting procedures, reduce communication costs and make maintenance and upgrades an easier task.

ABB's WAN had links with capacities varying between 9.6 Kbps and 64 Kbps. When the WAN was first set up in 1987, the cost of a 64 Kbps link for a distance greater than 500 kilometers was close to Rs 14 lakh per year. In 1988, ABB felt the need for a corporate mailing system and decided to use Lotus Notes. But the existing bandwidth was insufficient for using Notes.

In 1995, ABB's corporate office in Zurich directed its Indian subsidiary to roll out SAP at all its locations. SAP was chosen because the product was well supported in India and was also a worldwide ERP standard. As a rule, before any application can be used for ABB's operations, permission must be obtained from the corporate office in Zurich. Before the implementation of SAP across the country, all locations were operating on OLFA (Online Financial Accounting System), a legacy accounting application.

"SAP is not a bandwidth hungry application unlike Lotus Notes. The Notes design was based on a hub and spoke topology where the central server (hub) located in Bangalore was connected to the branch offices (spokes). The cost of the SAP implementation was another reason for consolidating our IS infrastructure," says P.V. Kanagalekar, General Manager-Information Systems, ABB Ltd.

The IS consolidation project began in 2000. For server consolidation to work with satisfactory response times, a 2 Mbps link was required. Considering the economics, a 2 Mbps star topology was rejected on the grounds of being too expensive. The WAN was redesigned in early 2001 as a distributed star network and today the ABB network has 2 Mbps links to all major locations. However, 64K pipes continue to be used at a few locations where supplementary bandwidth is not required. And some locations (Kolkata and Hyderabad) are being considered for a link upgrade from 64 Kbps to 2 Mbps.

ABB has an international link from Bangalore to Singapore on Frame Relay with 1 MB Committed Information Rate (CIR). This link connects ABB India to ABB locations worldwide. Singapore is the Asia Pacific hub and all Asian countries are connected to it. This point of connect is referred to in ABB as 'Country edge' and it is managed by ABB's Network Competence Centre (NCC) in Sweden.

While redesigning the WAN in 2001, ABB standardized on Cisco routers. Kanagalekar says, "As per corporate network guidelines we are using Cisco equipment. The in-country WAN operates on EIGRP (Enhanced Interior Gateway Routing Protocol), Cisco's proprietary protocol for routing. RAD is the preferred vendor for modems."
ABB has used 92 servers from vendors like Compaq, HP and IBM running Windows NT. These are now being migrated to Windows 2000. In all ABB has used 32 Cisco routers for 56 WAN and six VSAT links. BSNL and MTNL provided the leased lines while HECL provided VSAT services for six links.

ABB uses star and mesh topology in six major locations for effective backup connectivity. These are connected by 2 Mbps links and also have backup 64 Kbps links.

"In case these links fail, we have VSATs connecting directly to the data centre at Bangalore. The VSAT links have re-locatable bandwidth that can be used elsewhere depending on the situation of links at those locations. Some locations use ISDN dial-up to the nearest VSAT location. Offices in Bangalore will be on our ISDN link to the data centre itself. We also have redundant links of 64 Kbps at a few locations," says Kanagalekar.

ABB has a stringent worldwide IT security policy with well-documented rules available in the form of a Lotus Notes Database. The rulebook is available to all registered users. The company has an Internet gateway at Bangalore providing HTTP access to users. This gateway is protected with a Check Point firewall with policies reviewed and scanned every month by the ABB Corporate Security team at Zurich as well as the Indian team.

The IDC has access restrictions and has two levels of Access controls. The data and information to all users are either on SAP or in Lotus Notes databases/messages for which the user requires access permission. These can be accessed through IDs that are allotted to individual employees after formal approval. In addition ABB also follows the GSD331 standard for security.

Consolidating SAP on a central location has brought all processes on one platform, hence reporting financial data is easier and information is available to the user and controllers online in real-time. All locations now have a uniform mailing system—Lotus Notes. This effort has resulted in providing timely and relevant information to users who need to take decisions on business issues. An application enabled through Lotus Notes provides online chat, helps share information and reduces communication costs.

The IT Services department of ABB Ltd. recently began outsourcing its IS requirement to IBM Global Services India. With this decision, IBM India has acquired 45 people from ABB's IS team and they have become IBM employees.

IBM India takes responsibility for the quality, performance and delivery of ABB's IT services. This includes handling ABB's IT infrastructure and applications; managing and operating the data centre; providing end-user support, overall network management, disaster recovery services and technical support of business applications. Through this outsourcing partnership with IBM India, ABB Ltd. will be able to concentrate on its core businesses and gain operational efficiencies.

ABB intends to implement VoIP in future. Says Kanagalekar, "We spend approximately Rs 5 - 6 crore per annum on inter and intra office communications. We are looking at different ways to reduce our communications costs. Currently we are evaluating the prospects of implementing a VoIP solution--an alternate and cheaper way to
communicate. We are talking to Cisco and Nortel for the VoIP implementation."

Bharati and Reliance have also announced that they will be offering VoIP solutions connecting land lines to mobile connections and vice-versa by end 2002.

"It will be a good option as we will save on equipment cost, but these service providers need to have a presence in all parts of the country. We will finalize our VoIP deployment by November 2002," informs Kanagalekar.

Akhtar Pasha can be reached at

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