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Enterprise Wide Applications
From deployment to usage
In addition to investments in ERP, this year has seen a sudden
increase in spending on network administration. RFID has begun causing a stir.
By Deepali Gupta
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Scaling up our CRM and SRM systems enables us to bring
in additional vendors on to the network and give them easy access to the
latest information
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On an average, companies are likely to spend Rs 80 lakh on
Enterprise Wide Applications (EWAs) in 2005-06, according to Infrastructure
Strategies 2005.
In the upcoming year, companies in pharmaceuticals & chemicals and manufacturing
will spend the most on ERP. The BFSI players are investing in Business Intelligence.
Finally, despite the lack of established RFID standards, the first stirrings
of interest in this technology have manifested.
ERP Dominates
| From deployment to usage
A major part of the spending
on ERP will be on maintenance and additional functions. Investment in
network administration tools appears to be rising. While business intelligence
is slow to take off, interest is building around RFID.
Power pill
Don't invest in new technology
until all users are actively utilising existing EWA applications. Spend
on training and resource management.
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44 percent of respondents will spend on ERP by adding functionality
and optimising existing systems. Kinetic Communications has an in-house system.
The IT team ensured that internal functions were being catered to. Lately, the
team's efforts have been focussed on extended modules such as a Dealership Management
System that connects Kinetic's core system to its dealers online. It captures
dealer issues, such as warrantee claims and places them in a central database.
Captured information is analysed and processed to supply replacements and generate
invoices. Defect recording and analysis is queued to modify product plan, issue
tickets for stocks stored and intimate changes to dealers. "The aim is
to address the entire value chain," says Sanjeev Kumar, Chief Operating
Officer IT Solutions, Kinetic Communications.
Finishing touches
Mani Mulki, GM Information Systems, Godrej, says, "IT is all about improving
quality of service. The IT environment and culture has to be developed for business
initiatives that will benefit the business and its partners." Over the
last year, we have seen a number of companies invest in modules such as e-business,
CRM/SRM and SCM. 25 percent of respondents will invest in e-business solutions,
26 percent in CRM and 16 percent in SCM.
- Approximately 10 percent of an organisation's
IT budget will be spent on EWAs.
- 62 percent have spent and another 40 percent
will be spending on infrastructure management tools
- 25 percent of the organisations are exploring
RFID as a business solution
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CRM and SRM systems have worked well for many. Take the case
of Hero Honda, which rolled out a CRM system to 100 dealers, and an SRM application
to over 80 vendors. According to S R Balasubramanian, VP Information Systems,
Hero Honda Motors, it intends to scale that up to 550 dealers and 125 vendors
by the end of this financial year. "It gives them easy access to the latest
information and carrying out transactions is easier," he adds.
First time around
A number of medium enterprises are going in for fresh deployments of ERP.
The choice of ERP here is governed by client requirements. SMEs that have dispersed
branches have seen advantages in centralisation. However, for many the lack
of connectivity is a roadblock to a complete implementation.
Network management
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S R Balasubramanian
VP Information Systems,
Hero Honda Motors
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62 percent of respondents have already spent and another 40
percent will spend on infrastructure management tools during this fiscal.
Some ERP applications come with management tools that report on the performance
and capacity planning of systems.
At Hero Honda, S R Balasubramanian and his team use Tivoli NetView to monitor
and manage 27 critical links and 200 network devices. "We also use "Live-Reorg"
enterprise tool (from Quest) for the online re-organisation of our database
elements on SAP R/3 and SAP's Solution Manager for generating online reports
from the SAP system for performance management and capacity planning,"
says Balasubramanian.
Radio Frequency Identification
61 companies intend to implement RFID. Ironically, the popularity of the technology
is not in the manufacturing or the FMCG segment as you would expect. It is the
services sector that's bitten. 7 percent of those who intend to invest in RFID
this fiscal already have fully operational implementations.
RFID as a technology has existed for over 30 years. The technology can address
tracking requirements of companies, and the mandate to put RFID tags on products
that get exported to giants such as Walmart is spurring interest in this technology.
An RFID standard is conspicuous by its absence and completed projects are proprietary
deployments in closed surroundings to track objects in storage. "EAN has
been pushing the government to delicence the UHF band on which RFID works globally,"
says Ravi Mathur, CEO, EAN India.
An important factor that will contribute to exporters taking
to RFID according to Mathur is that RFID tags can be used to communicate information
about a product to anyone in the world over the Net. Mathur expects RFID usage
to touch a trillion tags globally by 2015. He admits that Proof of Concept deployments
are as far as we have got in India.
RFID pilots
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The RFID pilot is a learning experience, we will be
ready when RFID becomes a valuable technology
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Pantaloons, one of India's largest retail chains has been
experimenting with RFID. "This is not a mission critical version, we are
trying it on a small section of our value products," says Chinar Deshpande,
CIO, Pantaloons. He continues, "The project is a learning experience, we
will be ready when RFID becomes a valuable technology." A total of 1,000
shirts and trousers are tagged at the factory, and at the various stages the
product goes through in the warehouse. The solution has cost Pantaloons approximately
Rs 30 lakh according to Deshpande. Eventually the company wants to extend the
solution to the shelf level. As of now it is infeasible.
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Chinar Deshpande,
CIO, Pantaloons |
- Implement modules that open relevant parts
of the system to partners, who will be more prompt and the organisation
will have a certain level of automated communications
- RFID is a handy technology for asset tracking
- Appropriate RFID tags for the pharma industry
are still being developed. Wait a while before deciding to invest extensively,
but you may want to initiate a pilot so you are familiar with the technology
and ready for an eventual roll out
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The first challenge the team faced was that since no one has
a full-scale deployment there was no prior learning or guidelines for the team.
There were conflicts with data reconciliation at the backend. "That was
the objective of the exercise," says Deshpande, "we wanted to learn
and sort out the problem that could occur if we were to deploy RFID." An
important realisation that Deshpande pointed out was that the business process
needs to be re-engineered if RFID was to be functional. The team will have to
establish what data to put on the available 5 KB of memory on the tag.
Other applications
37 percent of respondents have indicated that they will invest
in data warehousing and business intelligence.
The fast movers and large IT investors such as private banks,
telecom companies, a handful of FMCG companies and retail chains have invested
in BI in the past. These companies will continue to invest in the technology.
For the rest, adoption promises to be slow.
The penetration of GIS is low with only 10 percent using it
according to IS 2005. The technology is useful only for companies with widespread
coverage. This typically includes logistics and transport services. GIS is most
used in the oil and power segment.
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The big picture
Technology is not static
 Bhaskar
Ghose, MD, IndusInd Bank, talks to Deepali Gupta about IT's
contribution to the bank's ability to cope with changing times
You started using IT in 1994 (with Internet banking)
at a time when it was not on the agenda of most Indian banks. How did
you deal with teething problems?
The new private-sector banks that were given licences
in the 'liberalised' era were expected to operate in an automated environment
right from beginning. After starting on a standalone basis at our couple
of branches, IndusInd put all its operations on a centralised core-banking
platform.
As for Internet banking, the Internet itself was a new
concept at the time. Its usage ten years ago cannot be compared with its
present form, anyway. You may recall that only a handful of institutions-primarily
educational entities such as the IITs and the NCST-were regularly using
e-mail and the Web during that period (1994-97).
With the help of such institutions and with IndiaWorld,
we targeted NRI customers through a Content Management initiative using
our bank's portal. Initially, information on product offerings was disseminated
over the Internet. Later, customer requests for chequebooks and ATM cards
were collected online.
Through core banking, the identity of each customer
across the bank's branches was uniquely maintained, regardless of the
nature of facilities used by the said customer. Details of all customers,
along with their transactional data, were available at a central location.
This facilitated improved levels of MIS and DSS (Decision Support Systems).
Inter-branch reconciliation was automatically effected.
During that time, Internet connectivity did not update
the core banking system in real-time. Customers could make balance enquiries
only through a secondary server. Connectivity with our branches was done
through VSATs, and we experienced periodic difficulties with response
time. However, at no stage was there any gap between transactions and
their updation in the centralised database, as our centralised End of
Day process could not be initialised unless all our branches were connected
to the central system.
Did technology make the merger with Ashok Leyland
Finance easier?
With both organisations extensively using technology
before the merger, technology helped smoothen the merger. A related advantage
was that the product lines of the two institutions did not overlap. Instead,
they complemented each other.
Issues such as business process-related changes for
some of the products had to be addressed.
Has the CRM module that came with your core banking
system affected cross-selling policies?
CRM is not a full-fledged module available with all
core banking solutions. Our own core banking software facilitates a 'single
view' of a customer across products and channels. It also generates customer-wise
business volume statistics.
For CRM, we use add-on products. Since the product lines
of the erstwhile Ashok Leyland Finance and those of the erstwhile IndusInd
Bank complemented each other, the merger has offered cross-selling opportunities
for the combined entity. We have started with deposit products and the
sale of third-party products, and will soon begin the process of selling
the finance company's asset products to the Bank's customers and vice
versa.
We get trend analyses from our core banking application,
by being able to analyse historical data across our transaction channels.
Our decision to enter ATM-sharing arrangements with peer banks such as
UTI Bank and Corporation Bank was based on trend analysis. Several other
products such as speed remittance are also based on trend data.
Choosing locations for off-site ATMs and implementing
loan products such as Doctor Plus and personal loans are examples of products
created because our core analytical system showed popular trends.
Do you plan on investing further in technology? What
are the expectations you have from IT in the future for the bank?
Yes, we do plan to continue investing in IT. Technology
remains an integral part of our business. And as technology itself is
not static, we need to upgrade technology in line with the constant changes
that occur in this area. Our business aspirations invariably necessitate
investments in technology. Our customer demands and business growth have
invariably been serviced with periodic technology upgrades.
We are confident that technology will continue to help
us ramp up business volumes while keeping operational costs low.
| Technology is not static
Technology helped smoothen
the merger of Ashok Leyland Finance and IndusInd Bank. The combined
entity is taking advantage of the complementary product lines of
the former entities to cross-sell deposit and third-party products.
Power Pill
Technology is not static.
Customer demands and business growth are invariably serviced with
periodic technology upgrades.
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Deepali Gupta can be reached at deepali@networkmagazineindia.com
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