Hindalco's Rs 18 Crore ERP Reaches ROI Point

by Hinesh Jethwani    Apr 27, 2004

Hindalco’s ERP project has finally entered the last crucial leg - the ROI evaluation stage - for which Accenture has been assigned the determinative task of evaluating the business value delivered by the whopping Rs 18 crore exercise.

Speaking to CXOtoday, Sanjeev Goel, VP-IT, Hindalco, said, “We have spent approximately Rs 18 crore in this project over the last one and a half years. The ERP is currently being used by more than 2,000 users spread over 5 different locations in the country. By mid June, 13 more locations are expected to go live. We started off with a pilot project for our manufacturing plants at Renukoot, Renusagar, Silvassa and Delhi based sales office and warehouse, and now plan on executing branch rollouts through the country.”

To provide remote connectivity, Hindalco uses PAMA / Ku-Band VSAT’s, with alternate leased lines supplementing the bandwidth. At any given time, there are about 1200 concurrent users running the ERP, powered by Oracle’s e-business suite. For payroll however, Hindalco has opted for a custom designed system for its 1500 employees, as Goel reasoned, “Standard packages available in the market simply do not suit our requirements.”

The e-business suite provides modules such as Sales and Marketing, Finance and Accounting, and Materials and Management.

Detailing the intricacies of the investment, Goel said, “We spent Rs 3 crore on IBM’s RISC-based servers, Rs 2 crore on high end switching solutions from Enterasys, Rs 2 crore on VSAT’s and leased lines, and another Rs 3-4 crore on Oracle e-business suite and Maximo (a strategic asset management solution by MRO).”

Hindalco has 1500 desktops for office work, all running in a Windows environment. Linux is currently being used sparingly, in only non-critical applications like proxy servers.

The primary focus for Hindalco remains the optimization of its ERP, which has prompted an extensive ROI study. Although small audits have already been carried out by the company, substantial benefits will be revealed only after Accenture finishes an exhaustive auditing process, which will begin in August.

With powerful baseline benchmarks in place, Hindalco is definitely giving the ERP a run for its money. “Considering that we went live in September, it is a little premature to understand the extent of success, as any ERP takes at least 8-10 months to settle down.”

Elaborating the auditing process with an example, Goel said, “Our receivables management module - which displays information on payments received from customers - is now completely revolutionized through an Auto Lockbox feature. It allows us to directly obtain information from a bank, through which our maximum payments come in. We are in the process of extending this application to allow the Lockbox to obtain payment information from all banks in the future, so that application of payments can be done automatically.”

Detailing future IT plans of Hindalco, Goel said, “We are planning to add a comprehensive HR system that will include training and other modules, and a treasury management system within this financial year.”

Tags: Hindalco