Doctoring a pharma revolution!

MUMBAI, INDIA: Even as Nicholas Piramal continues to gain a strong foothold in the global pharma space with its acquisitions, it’s keeping a firm footing on its IT reserves and consistently on the lookout to streamline its modules to meet with its fast paced growth. Arun Phadke, Vice President, Information Technology, Nicholas Piramal India Limited spoke to Cybermedia News to share more on the company’s mandate for the year 2008. Excerpts from the interview:

CMN: Could you tell us on the expenditure of NPIL in the year 2007 and elucidate on the IT (Information Technology) platforms that your company has employed over the years?

Arun Phadke: See, we have certain limitations as per the company policy to divulge the details of investment.

I come from a FMCG (Fast Moving Consumer Goods) background and worked with Colgate-Palmolive, dealing with the Asia Pacific and working on a SAP/ERP platform for 10 years and when I joined here, one thing was clear; the pharma sector by that time had begun investing in IT.

CMN: If you could point of the IT implementation of NPIL and how you have gone about streamlining your efforts?

Arun Phadke: If you look at the FMCG industry in India, it started adopted ERP (Enterprise Resource Planning) around 1995 and that followed in other sectors as well. In pharma, we had Wockhardt moving onto SAP around the year 2001 and that was the general trend and Nicholas Piramal started moving to ERP in around 2003 and implemented it in October 2004 and that time the main vision was to have ERP across the country. In the year 2005-06, Nicholas started acquiring companies abroad and the important thing was to keep your IT on par with the global standards. We decided that we will have SAP/ERP as our backbone and build modules based on business requirements. Then we started looking at what we would add on. Around the year 2003, we started picking the best of what we had and incorporated ERP/SAP as the path, supply chain was on i2. However, these were disparate systems and as we move forward it would be a challenge to have multiple platforms and there were challenges in supply chain too. It was zigzag and it has its own costs that we had to bear. When we evaluated that, we said it was un-economical and we needed to have a solution to get the best out of the supply chain.

CMN: So what was the outcome which happened?

Arun Phadke: Last year, we decided that we would do away with the zigzag systems. The system flows through SAP and we have discontinued i2 and so wherever there was disparity, we have streamlined it. By doing this we are trying to curtail disparity.

CMN: Challenges in pharma sector are immense. If one compares that with a sector such as FMCG, where are the main obstacles?

Arun Phadke: Let’s look at this—today if I want to know my consumer, I don’t have a direct methodology to gain that number in pharma. Compare that with FMCG--in Colgate when I earlier worked, I provided a solution at Asia pacific where sitting at the office, I would know how many of my products are selling on any particular street and say on the first of every month, I would know what products sold, at what pace and can then create a trend and have a tailor-made solutions for my products.

Take the case of pharma industry now, the stockists are not exclusive and distribution is controlled by stockists. Again, we can’t sell our products as it is not allowed. What we do is that the staff in our sales and marketing division visits the doctor and tell him about our products. In pharma, I would not know what caused the sale of my products and I don’t have a matrix to measure it. It’s not a commodity like toothpaste, soap or a detergent but a medicine and this situation is slightly tricky. The sales primarily depend on the doctor who prescribes the medicine. To top that, there are regulatory requirements which are prevalent across the world. That’s the reason there is not direct promotion, all we can do is influence our products to the doctor and then the person would go and purchase. That’s the catch.

CMN: So what’s the solution now?

Arun Phadke: What we have done is in a territory like say Mumbai, the credit for the sales is given to the entire team. That’s not the case in a FMCG Company where the sales guy would have a physical boundary and a place like Mumbai is given to 10 zones and performance in that zones earns him his incentive, which is not the case here.



CMN: How do you monitor your salesman?

Arun Phadke: There is no question of monitoring.

CMN: But how do you ensure that your sales force meets the right doctor?

Arun Phadke: Yes, here is a difference between a FMCG enterprise and a Pharma company. In a FMCG company, there is only one salesperson for all products and in pharma –there are divisions such as therapeutics, asthma etc and these divisions would have their own set of field force. The sales person representing asthma division must have a thorough knowledge of the products of the division that he represents and you may often find that one particular doctor is visited by 3-4 salesmen of the same company.

Because of this the sales force is huge in pharma companies. In FMCG there would 300-400 salesmen while in pharma it would be about 2000-3000 and because of this the sales force automation is a challenge. Pharma industries are under regulations and follow it very strictly compared to FMCG and there are strict quality regulations.

CMN: So how does NPIL go about doing its IT implementation?

Arun Phadke: Nicholas is fortunate to have a leadership of Ajay Piramal who is very IT savvy. We acquired a company in UK which has IT systems over 20 years old and this year we are implementing SAP in it. Also, wherever we have acquired companies across the world, the corporate data center has remained in India.



CMN: Could you elaborate this point a bit further?

Arun Phadke: If you look at our activities last year, we had two major projects that were initiated. We had an acquisition in the United States and we moved the server and systems into India and brought the costs down. The same thing was done in Canada too. Thus, we have a single window operation and we would know what is happening in Canada or in the United States sitting in India. Another thing is that we have same mailing system across the entire gamut. Do away from local support and bring them to India. This year we are doing in the UK which would be a major project.

CMN: How big is the size of your team here?

Arun Phadke: Here we have 40 people and I don’t have an IT person in the sites.

CMN: Why is that so?

Arun Phadke: Our landscape is on SAP and one can access system from anywhere. In the process of implementation, we just need production support and before acquiring company, the first task is to take IT system and bring in here. Our team is small compared to the spread that we have. First thing we do, bring it into India as stated before.

CMN: In the year 2008, what would you want to hear from the vendor side?

Arun Phadke: From the vendors, I would say that –if you can reduce the cost of IT to the orgn, it adds a lot to the bottom-line of the company. Take the case of telecom sector, 10 years the cell phone was about 30,000 and today is just 1000 rupees. The communication cost was Rs. 30 odd years ago and today it is 30 paisa and in SAP the cost was huge and today it has come down considerably. We want more mileage from lower cost.

CMN: How has the appreciation of the rupee vis-à-vis the dollar affected your operations and is it the right time for companies to accrue IT products?

Arun Phadke: The prices of the products in India are different from that in the dollar market. If you look at the licensing cost, for example- for Oracle database in UK for licensing compared to India is different. There are special prices and earlier it was the same. As India became a superpower, the IT products and vendors have attractive pricing and investments are happening in the country and the costs are lower than the dollar market. If I am doing the billing in dollar, then it’s a loss but I have not based my model on that. What we do is purchase the licensing in India but the deployment can be anywhere in the world. We are already in the beneficial mode.

CMN: How does the New Year auger for NPIL?

Arun Phadke: Nicholas Piramal as you know is growing by acquisition and scalability of this landscape is already set. I don’t keep on adding people as we can manage by the people we have who are our biggest asset. If I acquire a 1000 crore company, I may add a single person (am just giving you an example) which is just too insignificant.