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HCL Tech’s crystal ball

Predicting the future is a dicey endeavour at best. Here is a company that's using its ERP system to improve its forecasting, says Abhinav Singh

Managing account receivables has become easy as information is now available as per requirements rather than at the end of the month as was the case in the old system. Ranjeet Bhargava Chief Information Officer HCL Technologies

The company’s Tally and Oracle-based in-house systems were unable to cope with its business volumes and islands of information had been created containing data from different sources spread across the globe. Ranjeet Bhargava, chief information officer, HCL Technologies, explains, “Since the information was available only at the macro level in a disintegrated form, it became a hindrance in taking business decisions. There were delays in collating information and it was difficult to drill down to the micro-level information. There was a lack of accurate and timely information. If the account receivables were high, we could not drill down into the specifics of which customer or which invoice [was the culprit].” Finance-related information was not available to the operations team. Planning for the future was conducted based on assumptions rather than facts. The need for an unified environment with a homogeneous, standardised application led to HCL Technologies’ search for an ERP solution.

Zeroing in on the right software

The company evaluated ERP packages from three vendors and after much thought it zeroed in on SAP R/3 version 4.6B for the implementation (it later migrated to the SAP R/3 4.7 enterprise version). HCL Technologies wanted an ERP package, that would help it manage information more efficiently. For instance, it wanted its people in operations to start managing projects based upon comprehensive information and trends rather than on incomplete information tidbits. The company also wanted to make detailed information available to the regulatory compliance team and internal users faster than it was doing prior to the implementation.

Bhargava says, “The SAP product provided the best fit to our processes and requirements and we found that its modules integrated smoothly with our internal systems. We also found the ERP package to be bandwidth friendly as it consumed the least amount of bandwidth [among the solutions evaluated], thereby helping us trim our bandwidth costs.” It was also found that the SAP R/3 package was scalable and in case of further growth on part of HCL Technologies’ operations, it was well suited to cater to that eventuality as well.

A big-bang implementation

The exercise kick started in August 2001 and the package went live in April 2002. The implementation team had about 25 people— mainly people from HCL Technologies. The implementation was carried out by HCL Technologies itself as the company has a SAP practice. Six modules were implemented these being finance and control, materials management, sales and distribution, project systems, HR including payroll and employee self-service. All these modules were rolled out simultaneously.

Bhargava says, “Rolling out all the modules at the same time was quite a challenge. Generally people are occupied on a daily-basis and to bring about any change without disturbing their daily routine was hard to accomplish.” All the processes were studied thoroughly by the implementation team.

Fast, flexible and ready to roll

Deploying an ERP system has helped HCL Technologies stay fast, flexible and well informed, aiding its managers in making quick, informed decisions while keeping tight control over all aspects of operations from projects to finance and encompassing human resources. SAP R/3 has helped the company standardise and integrate all its processes across all locations the world over. Information for strategic planning is now available on a real-time basis. Data regarding areas such as monitoring resource utilisation and profitability of projects is available on time. All statutory reporting needs are being met with less effort. As a result, operations managers have access to the required information and figures for managing day-to-day operations, with the ability to drill down to the lowest level in any area that needs to be analysed. Productivity has gone up with the teams now empowered with timely and accurate data despite the fact that they spend less time and effort in procuring and collating information.

Bhargava explains, “The SAP R/3 implementation helped us move all our back-end operations to India as there is complete integration of information. This has helped us reduce costs, as we have been able to centralise our activities. It is easier for our team to make accurate assumptions as far as our revenue projections are concerned. Managing account receivables has become easy as information is now available as per requirements rather than at the end of the month as was the case in the old system.”

Improved resource management

HCL Technologies has also benefited from better resource management and the company can locate skill-sets required for a particular project with ease. Bhargava explains, “We regularly require people with specific skill-sets and some people are on the bench. The system has helped us search for particular skill-sets in a short time and allocate [the benched employees] to projects in the shortest possible time.” Project evaluation and performance auditing are now possible helping the company maintain transparency across its global operations.

The implementation at a glance
The company	HCL Technologies is one of India's leading IT services and product engineering companies providing software solutions and services to companies across the globe.
Solution implemented	Initially, SAP R/3 4.6B was implemented. The company later migrated to SAP R/3 4.7.
Total cost of the implementation	$1 million (including the cost of the ERP package, training, hardware and software)
Modules implemented	Finance and Control, Materials Management, Sales and Distribution, Project Systems, HR including Payroll and the Employee Self-service module.
No of Users	300 users
Servers	Three databases are hosted on an E-3500 Sun Enterprise Server with 4 CPUs and 2 GB of RAM. Two Application servers run on a Sun Enterprise 450 server with dual CPUs and 2 GB of RAM.
Operating System	Sun Solaris
Database	Oracle 9i

abhinav@expresscomputeronline.com