ERP for a pharma SME

For timely and accurate information

SME pharmaceutical company Sanofi Synthelabo (India) Ltd. was growing its business and wanted the right information at the right time and in a proper format. It deployed Navision as an ERP, and performed integrated business management functions to derive maximum business benefits. by Soutiman Das Gupta

The needs felt at Sanofi Synthelabo (India) Ltd. (SSIL) were no different than those felt by any other growing company in India. It needed useful information to make the right management decision. In other words, the business managers wanted the right information, at the right time, in the right format, and in an easy manner. These would help them make accurate and timely business decisions.

After thorough evaluation of available solutions, SSIL chose to deploy Navision. And ever since the solution was deployed, the business managers at the company have been able to receive relevant information at the shortest possible time. SSIL has also been been able to optimally minimize inputs in terms of man hours, and maximize output in terms of business strategy and revenue.

Pre-ERP scenario

SSIL is a subsidiary of Sanofi Synthelabo, which is one of the top 20 pharmaceutical companies in the world, and is present in more than 100 countries. The company, set up in India in 1997 is headquartered in Mumbai with four regional offices, more than 200 employees, and a turnover of around Rs 70 crore. The pharmaceutical products are distributed through a network of 18 C&F (Clearing and Forwarding) agents.

Before deploying Navision, the company operated a joint venture with a leading Indian pharmaceutical company. SSIL's joint venture partner supported a number of SSIL's business functions like Finance, Purchase, Sales, and Customer Administration. But in spite of the partnership, SSIL felt that since business was growing, it was important to develop the resources in-house.

Evolution into ERP

"The decision to deploy ERP came as a part of a natural evolution. There was no particular critical point. In today's world it is a basic business need, explained Milind Khamkar, IT Manager. "It brings a lot of the vital business functions on one platform and creates an integrated environment. "

Although Navision is not essentially an ERP, Khamkar feels that it's not really the term that matters. "What matters is the capabilities that the solution provides to the organization. The solution is centered on finance, and that makes it vital for the business," said Khamkar.

Choosing the solution

SSIL evaluated solution offerings from Navision and two other companies. Khamkar felt that he had to relate the solution to the size of his company. And since SSIL is in the SME sector, he did not consider solutions from the bigger players because those offerings were different in terms of complexity, time to implement, and the ratio of cost versus real needs.

"What worked in favor of Navision was the flexibility of the product. This minimized the need for customization. The user-friendly nature of the product made it easy to implement. The support we were promised was also impressive," said Jerome Saillant, Head of Finance, SSIL.

SSIL began to evaluate the available solutions in November 2002. The implementation process for Navision began in April 2003 in the Mumbai Head Office, and the company went live on June 01, 2003. The amount of time spent on training was minimal, mainly because the product had GUIs similar to an MS-Excel sheet.

The solution runs on Compaq and HP ProLiant servers.

Success factors

The company set up a team of four people from the finance department who were involved in the project. The team along with consultant Blue Star Infotech Limited made a very tight plan that was continuously revised. Planning for certain internal company functions were however handled solely by the SSIL team.

The plan made a clear definition of who had to perform what, and where. Work was equally distributed among personnel and teams.

Yogesh Bhalerao, Marketing Manager, Blue Star Infotech Limited said, "The SSIL team and we made a daily roadmap in terms of deliverables, roles, and responsibilities on both sides. We had regular meetings which were monitored, and the most useful suggestions were implemented."

"Our user base was very adaptable to change and there was a heavy commitment from the senior management. Both these were vital for the project's success," explained Khamkar.

He added, "I have observed and learnt from our affiliate companies that one of the key success factors for a successful ERP is the level of acceptance by users. If the product is complicated, the acceptance level will generally be low and personnel will feel that the management has been harsh on them. But with this solution, our users instantly felt that it would make work easier." This view is also endorsed by Saillant.

Company's benefits

With the use of Navision, the finance department found it simple to get relevant and up-to-date information. This allowed the department to close their books in time every month and create reports.

"So now, the finance department is not just a producer of data. It adds value to the business by being an analyzer of data. It analyzes the capacities and abilities of the company," said Saillant.

Khamkar also talked about the benefits of using Navision. "The IT team saves a lot of time in administration and support because the product is technically sound, stable, and scalable. In addition to Navision, we use a packaged SCM solution, which is integrated with Navision without any issues."

Wisdom gained

"When you deploy an ERP or make changes in an existing ERP system, it's a unique opportunity to look at your business processes in detail. And this allowed us to re-design our business processes into a more efficient model," explained Khamkar. "Just because you are used to doing things in a particular way, you sometimes don't realize that there may be a better way to perform those tasks."

"A good way to ensure success of any such ERP implementation is to convince the users to view the change as an opportunity, rather than a constraint. They should be made to realize that the tool will help them do more valuable work in an easy manner for the company," said Saillant.

The fixed asset module

The company felt that the fixed asset module of the solution was the only area, which was not very straightforward. "The systems and logic were straightforward and easy to understand, but one needed to spend more time to understand how the fixed asset module worked. It should ideally have been a bit simpler. But once the logic is comprehended, it does not get in the way of operations," said Saillant.

ROI

Khamkar felt that the need to measure ROI did not come in the picture because it was a 'do or die' situation. The company 'had' to deploy a well-performing ERP or else it would lose out on business.

"Besides, the solution is not very intensive in terms of cost and manpower," stated Saillant.

The Future

Over the next few months, SSIL wants to stabilize the solution. The next step may be to use newer modules of Navision. In the long term, along with organizational growth, the company may consider solutions from the bigger ERP players.

The company is on a growth curve with new products and greater sales coverage in the pipeline. A technology review is conducted every year and the company will duly decide on upgrade and update issues.

Soutiman Das Gupta can be reached at soutimand@networkmagazineindia.com