Advertisment

V-Guard's date with High-Voltage ERP

author-image
CIOL Bureau
Updated On
New Update

KERALA: There’s many a slip between the cup and the lip, the fish and the hook, the coconut and the boat and also between the switch and the finger. Deciding something is only one square of the grid, seeing it through is what takes a lot of mental, physical and organizational electricity.

Advertisment

Something similar to what Robin Joy experienced. This CIO at the electronic and electricals major, V-Guard Industries Limited, juggled a lot of connections when he implemented SAP ECC in partnership with IBM Global Solutions and HP. From license cost calculations, stack choices, six-month legacy overhauls, avoiding buck-passing games, to reeling in people across supply chain, finance functions to IT; he has got top-of-the-pole view of a major ERP transition. More as we find in this interview below:

You had a robust in-house system. What was the final straw on this well-traveled camel’s back?

Like most companies from our league, the legacy system was running reasonable well. It was integrated to some extent and yet lacked some features. All the gaps became glaringly visible as we started growing as a company. Competition had jumped on to the bandwagon of ERP much earlier than we did.   From a Rs. 300 to 400 crore company, we had started growing at a clip of 35 to 40 per cent YoY. Last financial year, we clocked Rs.1000 crore.  With this growth, IT infrastructure and enablement had to come in. We needed to embrace a technology that is capable that’s why we went to SAP.

Advertisment

Why SAP? Did you not consider other options, specially the other big vendors?

We did. Evaluating other two big players was part of our exercise, before we zeroed down on to SAP. We compared how well a product would fit into our company and its strategy. How these companies came and talked to us was also important. Years back, SAP was considered to be the product for only large enterprises, but a lot had changed now. Our evaluation team, including the IT one, found a better happiness quotient with SAP, than the other big ERP major.

Incidentally, one of this other big ERP majors have been pumping up a lot of noise on how SAP’s license cost tree is not transparent as its own one during sales meetings. What was your feeling?

Advertisment

Before this ERP deployment, I have implemented five ERP products in my earlier stints. One of them included SAP’s big rival too. Having gone into enough implementations, I would say that though its rivals have parts of preference in capabilities here and there, I like SAP as an integrated product. In fact many rivals lack major cost definitions, database costs, hardware costs and other splits. While going in for an ERP, license cost is a major decision, and so are other elements. We talked to IBM for the implementation partner role. We could negotiate on the overall combination at a reasonable price. HP was also able to bring the total cost lower than competitive offerings. So, when we ultimately weighed in all options, including a cost-effective hardware from HP, which by the way is also adequate for SAP level designs, we got a good set up.

Did this layered cone work better for you than the vanilla servings many big vendors are offering as a complete stack?



{#PageBreak#}

Advertisment

There are upsides and downsides to both. Support issues may fare better with a single stack and to add to that, there is no risk of buck-passing. Strong functional knowledge of our team, assured us though that management of many pieces would not be an issue. IBM could be convinced that HP hardware would not derail the process in any way. The whole implementation exercise was brilliantly masterminded by IBM so there was no thought of stack vs. pieces.

That meant a smooth migration?

It’s the best migration experience for me so far. We kicked off in September 2011 and went live in February 2012. We closed our accounts in March pretty smoothly. IBM gave a lot of importance to this project, not only on the functional areas but also in follow-up due diligence and the level of involvement shown. There were no delays, and timelines were rigorously adhered to. I also gained a lot from our team’s capabilities. We could prepare a great team in a few months, with people drawn from other in-house departments like supply chain or finance. Top management gave full empowerment and that helped a lot.

Advertisment

What did they expect though? Can you give some comparison highlights on business dashboards?

Every legacy system is as strong and durable as the person who designed it. It was history already at our company. There was no proper cost and profit analysis, no planned maintenance, as most of this was being done on excel sheets and not in real time. Inventory information was not clear, systems were not tightly integrated. For us, getting real cost of production at Rupee level was critical. Previously a lot of subjective element came in. Now everything is changing. Sales-module availability is now a reality. Credit control has become very strong. Everything; purchase control, tax documentation, statutory duties’ records, has become easy. I think we will see a lot of ROI in the next four or five months.