Daikin Scouts For BI Tool To Expand SAP Benefits

by Hinesh Jethwani    May 21, 2004

Daikin Shriram Air-conditioning Ltd. (a joint venture between Daikin Industries and Siddharth Shriram Group) is all set to enter the second phase of its ambitious automation project - adding a Business Intelligence (BI) module to its existing SAP ERP structure.

Speaking to CXOtoday, Anand Sengupta, head of information technology, Daikin Shriram Air-conditioning, said, “Our ERP infrastructure is already in place across 16 locations, courtesy SAP 4.6b, bringing us to the next level of automation - optimizing the ERP and building on top of it. We are looking out for a BI software, and will start evaluating the different options available soon. Also, an upgrade to SAP 4.7 is lined up, which will cause an OS platform switch from Windows NT 4.0 to Windows 2003 by the year end.”

Detailing the need of structuring an ERP system, Sengupta explained, “The primary reason for purchasing SAP was to ensure easy, free flowing access of information for the senior management. The decision was need focused and we had no secondary source of information when we first started in the year 2000. The management didn’t want any run of the mill customized ERP system, and therefore, SAP became the primary source of information. Our business process blueprints were based on SAP processes, and the implementation was unique, as we had no legacy experience to fall back on.”

So what exactly is Sengupta looking for when Daikin goes BI shopping? He replied, “The BI tool will supplement our endeavor of optimizing our ERP system, and leveraging maximum benefits from it. The BI tool should give us our moneys worth, and most importantly, integrate with our existing SAP structure. In addition to standard reporting functions, the solution should be able to deliver strong reporting analysis benefits.”

Sengupta had an unusual tale to tell about the most critical stage in any investment - the ROI calculation phase. “ROI calculation for the ERP was not done properly, as SAP was considered to be a part of the initial expense incurred in setting up our basic infrastructure. We started the implementation exactly a year after Daikin had setup shop in India, and we were up and running on SAP by 2002. The setup cost included hardware expenses as well, and we have done about two years of accounting on SAP. Legacy makes it much easier to calculate an ROI, which was unavailable in our case. However, according to my estimates, we should breakeven by next year,” he explained.

So what advice does Sengupta offer to other CIOs who are building an ERP structure from scratch, without any legacy platform to stand on? He replied, “Startups should stick to standard SAP implementation, and minimum customization should be done. Otherwise, maintenance and reporting become difficult, with the customized system becoming a new variant of SAP. A standard SAP solution built with best practices, and keeping in mind the legal requirements of the country, should be the best fit for a beginner. Finally, hardware choices should justify ERP usage. As we have only 35 users working on SAP, our server requirements fit in perfectly with HP’s offering. Unix based IBM servers are justified only when huge databases and intensive applications are involved.”

Sengupta concluded with a last word of caution: “The most important factor in an ERP implementation phase is the ’human’ factor. The human mindset is by nature difficult to change, and organizational behavior should be carefully analyzed before jumping into the ERP bandwagon.”

Tags: Daikin