Zurich headquartered, ABB (Asea Brown Boveri), is one such leading company with a global presence, dealing in power and automation technologies, which recognised the power of IT as early as the 70's and 80's in driving strong market growth. The company's India operation consists of five manufacturing locations and 20 marketing offices across the country.

The Information Technology R&D center at Bangalore is one of the largest and first R & D center outside of Europe and USA to focus on software development and industrial information technology (Industrial IT). The center’s mission is to develop high quality software for the ABB Group and play a key role in the development and deployment of Industrial IT.

Tryst with IT
Says ABB, General Manager, Information Systems, Prakash V. Kanagalekar, "Though IT was leveraged since 70's, it was only in the early 80's, did we take a proactive approach towards full scale IT implementation. We started with a focus on finance and materials management through our legacy application spread across the enterprise." Presently, the company’s single ERP system runs on Windows 2000 platform with Oracle (8i) as the database.

In recent times, the company is connected through a wide area network of leased lines and dedicated VSAT links which has provided them with high speed connectivity, increased bandwidth and 98% uptime, dissolving geographical distances and creating a virtual matrix of a highly networked world.

The company is networked together through a state-of-the-art Lotus Notes (LN) network and presently has over 1600 users in India. Lotus Network is used by the organization across a wide range of functions from performing ordinary tasks such as mailing, hosting databases or conference room booking trackers to complex functions like creating and maintaining the company’s intranet and website.

On a global scale, the company has deployed standard software applications in areas like finance and accounting, HR, etc. The finance tool, Abacus is the standard financial reporting system used across ABB worldwide.

Says Kanagalekar, " This is a global reporting package is accessible from all the key locations to facilitate decentralization of work processes and prompt reporting of accounting information. It provides a pre-configured standardized format for all accounting and data entries and hence, eliminates any ambiguities involved in logging information and time delays thus ensuring transparency".

ABB has also implemented on global scale, Business Management Information System (MIS), which allows the management to review all key parameters on a daily basis and facilitate timely and effective management decisions.

In addition, the company's HR functions are also fully automated with certain primary operations such as leave administration and performance appraisals being completely IT driven. The HR function also maintains an HR specific intranet portal called ‘PeopleNet’, which provides up-to-date information on HR related activities, career opportunities etc.

Besides, ABB has implemented one of the most advanced intranet platforms to facilitate internal communications, provide databases, and promote e-learning allowing the effective dissemination of critical information and knowledge. Information kiosks are installed at all key locations to keep all employees duly informed and ensure a smooth internal communication.

While these implementations are on global scale, India specific operations are also completely automated. Says Kanagalekar, " We have successfully implemented Employee Self-Service (ESS) initiatives by seamlessly integrating our India specific ERP solutions SAP R/3 which covers HR operations in tune with our global solutions such as Abacus".

Zeroing in on SAP R/3

So when did the management felt the need to go in for an enterprisewide solution? How did they finalize on SAP R/3 solutions? Explains Kanagalekar, " For a company with a global presence, large manufacturing base and countrywide network of offices, it was very difficult to manage our growing business and functional processes across all the locations. A development of planning report used to take nearly six weeks to six months to be completed. Besides, our legacy application were not integrated".

He adds, " The changing business environment required strong, robust and time-tested ERP systems to increase operational efficiency and both top and bottom line growth".

The selection team of the company, which included people from the business management with domain expertise and also from the core IT department discussed with their senior management on the need for an efficient enterprise wide solution and the critical issues involved.

Says Kanagalekar, " There are several buy-ins involved which are critical for any enterprise solutions on such large-scale investment and implementation. First of all, we had to identify the business objective and be convinced on the business benefits. We had to take into account the financial factors such as the cost of expertise, implementation and also our past experience in handling such applications".

The team evaluated nearly seven plus ERPs of several vendors available at that point of time and evaluated other companies' IT initiatives and how people managed the business processes. The team also visited ABB's operations in other countries and to understand their IT management so that their IT vision matched with that of ABB's global management.

Says Kanagalekar, " We finally zeroed in on SAP R/3 solutions based on several criteria and one of them was that SAP had hands-on experience in implementation in similar scenarios. Besides, the integrated SAP modules, when hosted on a centralised high availability server, provides a common platform for updating, adding and deleting the data and managing the key administrative processes."

He adds, " The key advantage as we saw was that it reduced duplication of the processes thereby saving time and resources. In addition, the centralised server facilitates real-time updation of information."

The other clincher was when it came to implementing HR solutions, most of the applications did not comply with the local/ country-specific rules and regulations in matters such as tax computing. Whereas SAP module has a very India specific solution SAP R/3 - V4.6b termed India Payroll Management.

Implementation phase
The company started their first roll out of SAP R/3 V3.1h in May 1998 and partnered with IBM. Another core team was formed by ABB by picking up domain experts from different disciplines and was trained by SAP India experts.

" Our senior management gave the team unflinching support and most of the change management issues were discussed at length and all the operational flexibility was given to the implementation team", reminisces Prakash.

A good co-ordination between the two team saw to it that the first phase of the SAP R/3 implementation went live at Nasik in January 1999. Explains Kanagalekar, " We choose Nasik for our pilot site as that production site is small and most of the ABB's processes are represented. Being a small unit, we wanted to try it as a test project and see how acceptable the solution was. We wanted it to get stabilized for sometime and then go ahead with the implementation at other sites".

The first roll out was started at Delhi site with just the core team from ABB and the unit went live by April 1999 in a very short period of time. Encouraged, the company saw the roll out of SAP solutions at their Baroda unit in January 2000. This time, the implementation team was split into smaller teams and simultaneously 3-4 projects were rolled out across different locations. As a result, ABB's Chennai unit went live in June 2000 and in October 2000, Kolkota unit went live.

The last leg of their implementation was at Bangalore, which was rolled out in April 2002. The reason for the delay as Kanagalekar attributes, is that Bangalore site is one of their largest units that has critical complexities in product, project and service business. It warranted a very careful and informed handling of the SAP project.

However, it was at the Bangalore unit where the SAP HR solution- India Payroll management- went live in May 2000 within a short span of 10 weeks and was first in the series. According to Kanagalekar, this was the most challenging phase of the whole implementation as the product India Payroll Management was still in its beta phase. Both the team from SAP (India) and ABB's core team worked hard to reach the deadline.

Says Kanagalekar, " All our units are now live SAP solutions including corporate and marketing sites across the country and all our application are compatible with all the sites. The high-point of the implementation was that we saw multiple roll out across multiple sites in minimum time".

Key Benefits
Explains Kanagalekar, "SAP implementation has smoothened operational processes, minimised duplication, and made information readily available. Though it is too early to put a number on ROI-TCO percentage, the implementations have garnered considerable reduction of costs and increase in operational efficiencies by about 15-20%. Our revenues for Y2000 was around 850 crores and 1050 crores for Y2001, which says it all".

He adds, " Presently, we have over 900 SAP users and have successfully created a highly integrated network of IT-savvy employees. Another significant benefit of the SAP module is that redundancies are built into the system configuration thus ensuring sufficient back up of data".

In a nutshell, some of the key benefits include:

• Standardization of processes and reduced duplication across diverse functions like production, logistics, Finance, HR etc.
• Real-time availability of information to facilitate speedy decision.
• Accuracy & integrity of information – in-built system of checks eliminates flaws
• Tracking of errors at every level and easy identification saves time
• Detailed & systematic reporting systems
• Reduces costs through the streamlining of business processes and procedures
• Facilitates control mechanisms through sophisticated checks & balances

Future road-map
Says Kanagalekar, " Now that SAP is implemented across the company, our objective is to optimize and maximize the benefits to the company. We would like IT to play a greater role in our supply management , shop floor processes and smoothen the interface with the front-end and management processes. However, in course of time, we will upgrade SAP to keep pace with the market".

In order to optimise the performance of its vast and intricate IT infrastructure and remain at the leading edge of technology, ABB has recently entered into a strategic partnership with IBM to outsource its information system services. This partnership, according to Kanagalekar, would be leveraged to maximize the benefits of outsourcing and remain at the forefront of technology.

"On the customer front, we have made good progress on developing our e-commerce business, especially with our channel partners. We would like this business to grow at a significant pace as it offers a win-win proposition and greatly helps curtail non-value-added overheads. Further, the recently set up global R&D center in Bangalore has shown excellent progress and we shall build on this platform by increasing its scope and volume", he adds.

All the IT initiatives are aimed at providing a secure and reliable system to empower ABB's managers with real time access to information and support decision making process, wherever they may be in the world. Information any time, anywhere forms their bottomline and this plug-and-play approach will considerably enhance their productivity and efficiency.