SSA Global ERP Aids Growth Of QRG Enterprise
This is a classic example of how a robust information management system has helped a company to not only support its core business activities but also managed to facilitate the smooth growth curve of the organization.
QRG Enterprise (formally known as Havell’s Group of Industries) and one of the largest Indian electrical product companies had deployed SSA Baan ERP in the year 1999. Vivek Khanna, GM - IT, Havells India Limited, speaks exclusively to CXOtoday about the benefits that the company still reaps from the IT investment made.
QRG Enterprise (formally known as Havell’s Group of Industries) is one of the largest Indian electrical product companies, manufacturing products ranging from building circuit protection equipment, industrial switchgear, cables and wires, energy meters, modular switches, fans, lighting products and bath fittings.
The company has 11 manufacturing facilities in 6 states, 50 marketing offices across the country with products being sold in all over India and exported to more than 40 countries. QRG marketing network comprises stock depot (in 20 states), 1000 dealers and over 25,000 retail outlets in India.
Picture Before ERP
Prior to October 1999, QRG stressed upon in-house development and customized application. The plants and depots were operating on different applications, for instance distribution, manufacturing, invoice procedures were FoxPro based and supply chain management and material resource planning were Excel based. For functioning of a single factory and one HQ it was sufficient but where multiple offices, factory, depots across the country operations was concerned they were not expedient.
Why SSA Baan ERP?
The company realized to achieve its vision it was imperative to have in place a robust information system. Big organizations with wide networks are prone to face certain key challenges like, manufacturing plant and depots working on offline connectivity, crucial information not reaching on time to HQ affecting decision making process adversely.
The objective was to develop an IT system supporting core activities of business rather than just being IT centric.
Says Khanna, “We had evaluated vendors such as SAP, MFG Pro, Ramco Marshal, JD Edward. However, SSA Global ERP was chosen as it has a strong manufacturing model and at that time (1998-99) its implementation time was less as compared to others.”
Benefits Accrued Till Date
Revealing the benefits of the ERP, Khanna said, “In the very first year after implementation our sales order execution time was reduced from 2-3 weeks to 24 hrs.
Another significant benefit was that though there was an increase of 50% in sales in the year 2000-01, there was no corresponding increase for stocks. The stock levels decreased from 76 days to 49 days.”
Continuing further he recalled, “In the following years we could achieve easy deployment in new acquisitions/factories/depots in addition to online availability of information across 11 factories, 33 depots/branches. The ERP has also increased efficiency at all levels by eliminating duplicate work with the help of integration of all data available across the organization.”
Prior to the implementation of the ERP solution, the company’s gross turnover was Rs 150 crore but within a span of 5 years, QRG Enterprise crossed a turnover of Rs 700 crore. The company credits the implementation of SSA Global solution that has helped to facilitate this growth smoothly.
Length and Breadth of ERP Implementation
The project was initiated in January 1999 when senior QRG enterprise Management and Cambridge Technology Partners met in Delhi. The application officially went live in October 1999. The core team for package implementation comprised of a project driver including ED finance, functional heads, a complete IT Team and an implementation partner i.e. Cambridge Technology Partners.
The team commenced their work with re-structuring and redesigning of the IT setup including the functioning and role assumed.
At the time of implementation, only 10 sites were live but after the execution 20 depots went live by the team effort without any help from other sources. Standard Electricals Ltd., part of QRG Enterprise implemented the ERP solution in the year 2000 at their plant at Jalandhar, Punjab and within a span of three months time, it was operational across 12 depots.
On the same pattern, SSA Global ERP was implemented in the newly acquired co. M/s Duke Arnics Electronics Ltd at their plant in Hyderabad within 2 months time.
“We had implemented 8 sites simultaneously and it took around 6 months to make the first site live and thereafter, in the interval of 15 days the next two sites were also made live and by December 1 all sites were live. On December 31, we had left the complete working over the legacy system,” recalled Khanna.
According to Khanna, the company has around 700 named users. The ERP resides on Oracle 8i.
Today the IT team handles approximately 50 sites taking care of point-to-point connectivity over RF Link, leases lines, Dial-up (ISDN and PSDN line) and some are working through Internet with the help of Citrix .
TCO and ROI
Speaking about the TCO, Khanna said, “When we started we had a 50 user concurrent license (as on date it is 150 nos) and our total cost of hardware, plus software and implementation costs worked out to Rs 100 lakh.”
“The running cost that comprises of AMC cost of hardware, software and inter-connectivity cost of locations i.e. cost of leased lines / ISDN in between the offices / factories, is reducing day by day. When we started we were spread across eight locations, however, today we have a WAN of 44 locations,” added Khanna.
Talking about the ROI, he continued, “ROI from these type of investments cannot be derived objectively. It is subjective, and it can be viewed from the significant benefits that we derived.”
The strong commitment and concern of the core team comprising of ED (Finance), project manager and functional heads resulted in the successful ERP implementation at QRG Enterprise. According to the company, the learning approach and positive attitude towards new skills of organization helped to make this implementation effective. Further, the presence of a strong IT division resulted in the speedy implementation of the solution while fulfilling future requirements of QRG Enterprises.