V-Guard's date with high-voltage ERP

Publication: CIOL
Date- July 22, 2012
Link- http://www.ciol.com/Enterprise/News-Reports/V-Guards-date-with-High-Voltage-ERP/164484/0/

Overview- This coverage is a result of the case study discussion with Pratima from CIOL and Robin Joy, CIO,
V-Guard Industries Ltd.

Creating a spark is part of his job description. Let's see how much CIO Robin Joy rewired when he decided to
plug in SAP ECC. And why he prefers SAP to 'the other one'

KERALA: Theres 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. 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:

1. You had a robust in-house system. What was the final straw on this well-traveled camels 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 thats why we went to SAP.

2. 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.

3. Incidentally, one of this other big ERP majors have been pumping up a lot of noise on how
SAPs license cost tree is not transparent as its own one during sales meetings. What was your
feeling?
Before this ERP deployment, I have implemented five ERP products in my earlier stints. One of them included
SAPs 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.

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

5. That meant a smooth migration?
Its 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 teams 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.

6. 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.