Global transformation powered by IT
Crompton Greaves has used IT to propel its growth on a global
scale. The company has overcome the limitations of its earlier systems and surged
ahead by revamping its technology infrastructure for better business benefits.
Kumar Dawada and Soutiman Das Gupta report
electrical engineering major Crompton Greaves Ltd (CGL), IT is a part of business
strategy. It has overcome the limitations of its earlier IT infrastructure and
uses its ERP, product lifecycle management (PLM) and business intelligence (BI)
tools in tandem to help it grow as a future global leader in the electrical
Business At CGL
70 percent of CGLs business comes from the sale of products such as transformers
and switchgears. The rest of its business comes from consumer products such
as fans, lights and pumps.
Says Debanjan Datta, the companys General Manager for IT, CGL was
very IT-savvy from the beginning. It was one of the first five companies in
India in 1998 to implement SAP. We had a VSAT network with 50-odd nationwide
locations, including 16 factories, 16 branch offices, regional offices and service
However, despite the companys strong push in the area of business development
and growth, the focus on IT implementation was not very strong. This led to
a situation where the ERP system and other IT assets were under-utilised, and
the business did not receive the optimal value from IT.
Tweaking the ERP system for improved performance took some doing. SAP had been
implemented on multiple servers at various CGL locations. For instance, the
switchgear manufacturing and distribution unit in Nashik had a dedicated SAP
server, and the transformer division had a dedicated and separate SAP server
as well, so the company had to work with distributed systems for its different
business groups. As a result, each business division or group had its
own version of the truth. It was difficult to establish the credibility of any
report or bit of information, whether it was related to total purchases or total
sales collection, recalls Datta.
The main requirement from the IT infrastructure at CGL was to get the right
information, not necessarily in real-time but within a reasonable time-frame.
The information also had to be credible so that it would be accepted by different
business users. It was necessary for the company to develop a robust data warehouse
system having stringent data quality and data integrity guidelines. The idea
was to collate business information during the non-working hours so that credible
business information could be extracted and presented within 24 hours.
Practical & Tactical
In 2003, CGL revamped its IT strategy to focus on making the infrastructure
more simple, practical and tactical. Its earlier Web site was not integrated
with SAP, so care was taken to ensure that the revamped one could exchange information
with the ERP system. The front-end user interface was developed using Java.
CGL also discovered that its nationwide dealers spent more time dealing with
the company rather than focussing on customers. This prompted it to create a
dealer portal to enable them to place orders at night or whenever convenient.
The portal gave dealers access to order status. Currently, around 1,000
dealers are using the portal, and CGL gets business of around Rs 15 crore on
average per month from this interface, reveals Datta.
Spicing Up The Site
Instead of choosing a technology-based company to create its Web site, CGL hired
advertising agency Mudra for the job. The idea was not only to make the site
look more attractive but give it a professional and business touch as well.
CGL felt that Mudra would have its finger on the public pulse, and know what
the public wanted to see on a Web site. The main requirement from the site was
to ensure a good first contact with a prospective customer. Keeping this in
mind, the Web site was designed to include a limited set of services and products.
If a customer has any technical or commercial query, he can contact the company
by phone or send an e-mail; the concerned business head then responds. Instead
of a push model we have implemented a pull model. Our Web site provides the
bare minimum of necessary information. When the customer feels the need for
more information he can always contact us, explains Datta.
The top management at CGL made a wish-list which called for a PLM solution that
had to be implemented and integrated with the ERP in the transformer division.
The company manufactures two types of transformers. The first is a small distribution
transformer which is available off-the-shelf or can be manufactured within 10
days. The second is the high-end power transformer which takes between 6 to
12 months to manufacture.
There are also processes which involve lengthy negotiation, tendering, bidding
and technical presentations since the power sector, both in India and abroad,
is regulated by governments. Design-related queries that are raised during the
manufacture of high-end power transformers are complex and unique for each product.
The company therefore decided to deploy a PLM solution from Teamcenter to keep
track of every stage of the product lifecycle from initial customer interaction
to stages such as tendering, bidding, technical design and confirmation of purchase
order. It is integrated with the ERP so that the company can procure and deliver
the product on time.
The PLM solution has reduced the product lifecycle. It has also cut the time
taken to create technical designswhat used to take a month or more earlier
now takes seven to ten days.
Moving To BI
The management also felt the need to implement a BI solution. After reviewing
many BI products and solutions, it found that Cognos solution had more
merit than any other. Being an engineering company it was necessary that the
BI solution should be easy to use and have queries and commands in plain English;
Datta was aware that if people were not comfortable using the BI solution its
utility would be lost.
In order to use BI, it is necessary to ensure the integrity and reliability
of the data warehouse. Only then can accurate and real-time analysis be done
and questions such as Who is our most profitable customer? be answered.
CGL had previously implemented SAP on six servers, but now runs the application
on a single central server. This server handles the information needs of all
its business divisions. The main data centre will be hosted in Mumbai. A backup
data centre will be built outside Maharashtra to ensure that its data is not
affected by environmental or political upheavals.
The company had two major hurdles to overcome. The first was handling change
management issues, the second was ensuring that SAP and other implementations
were acceptable to users. Since the use of IT brings in new processes and workflows
which have an impact on the discretionary and decision-making powers of many
users, the IT team involved the business heads of various departments in the
planning and implementation stages in order to avoid discontent.
An Acquisition Later
The company recently acquired the Belgium-based Pauwels
Group, another transformer company.
By doing so, CGL has added assets worth Rs 1,800 crore to its existing
The company recently acquired the Belgium-based Pauwels Group,
another transformer company. By doing so, CGL has added assets worth Rs 1,800
crore to its existing 2,200 crore. After the acquisition, the companys
transformer manufacturing activities account for more that 50 percent of its
The aim now is to integrate the companys businesses in India and Belgium
and consolidate the IT infrastructures of the two entities. We are also
looking at global VPN connectivity and will start implementing SAP in Pauwels
by early 2006, says Datta.
With its PLM and BI solutions in place, and the acquisition of Pauwels, Crompton
Greaves hopes to evolve into a global player in the transformer business.