IT helps GSK to achieve production efficiency by 40%

In 2003, GSK was formed by the integration of Glaxo and SmithKline Beecham. Since these were totally different companies in all ways, it required a long time to achieve some synergy between the two. S Suresh, general manager-IT, GSK India elaborates on how IT has played an important role in achieving this integration S Suresh, general manager-IT, GSK India.

How did you face the merger between Glaxo and SmithKline Beecham in India?

The new entity faced a lot of hiccups to synergize the two disparate business models. IT has played the pivotal role in achieving a dynamic and authentic consummation of the two. While Glaxo had a total decentralized model of functioning, everything in SmithKline Beecham (SKB) was centralized. Even the IT systems in the two were disparate-while Glaxo was running on Unix and had an ERP from JD Edwards, SKB was on Windows NT with BPCS from SSA Global as their ERP. Therefore, in the last two years the primary driver behind automation was to achieve an organizational integration.

How has the IT implementation this year impacted the synergy between the two former entities?

The main mantra for IT implementation in 2004 was to herald a phase of consolidation to bolster the integration process going on for the last few years. We have decided to extend the ERP towards having countrywide connectivity. Also we have decided to go for one ERP system in MFG/Pro. Some other IT projects aimed to provide a fillip to the integration process are setting up of an intranet, having an HRMS solution in place and most importantly a Sales Force Automation tool to connect 2000 medical representatives and 500 managers who are perennially on the field.

How could HRMS or Sales Force Automation solutions provide impetus to the integration process for GSK?

The biggest qualitative benefit derived from the HRMS solution is that it would give a new thrust to employee bonding between the two earlier companies and that would play a key role in the integration. It would also result in optimization of work through different parameters like how to reduce time to fill up forms, introduce concepts like workforce management, and even automating the salary disbursement process. This is vitally crucial for establishing synergy between two totally disparate organizations where IT could play a key role in molding the changing mindsets of people.

With investments already made to the tune of Rs 5 crore y-o-y and likely to continue in 2004, how has GSK been justifying the spend based on quantitative parameters like RoI?

The best result to see whether the integration has worked cannot be counted in terms of RoI. Instead, one should check the cost incurred individually by the two entities and their production efficiency prior to the merger and then see whether the production efficiency of the new entity following the IT implementation is greater than the sum total of the two, even if the costs do not come down. GSK wins on both these counts-while production efficiency has increased by 10 to 40%, even cost reduction has been in double digits. Besides, even direct cost benefits were accrued by reduction in infrastructure, as the total number of servers and printers were pruned down, wherever it was felt that redundancy itself was redundant.