Sunday, February 8, 2009

Strategies in Economic Downturn

I had an opportunity to attend Oracle Executive Summit. The prevailing theme was what to do during the current Economic Downturn. 

Each of the presentations by Oracle executives had the same (obvious) message: invest more in IT; The Upturn is coming soon; you will be ready for the upturn when it comes.

However, it is serious problem on hand for everyone in our sphere. For the students, campus jobs will be hard to come by. For the institute, more student applications for our programmes is expected as a result of the first reason. For the Institute, more applications are expected for our faculty positions. For the Institute, mobilizing funds from the Indutrry will be challenging as they have put a stop on the discretionary spending.

I will rephrase the advise from Oracle summit for the students: invest in education so that you are ready to grab the opportunity when the industry offers.

For the Institute it is opportunity to acquire faculty talent during the economic downturn. More important is to develop and retain the talent when competing forces claim the talent during the economic upturn.

The economic downturn has already brought some benefits. As the steel and cement prices mellow, the construction of the campus will be be somewhat cheaper.

1 comment:

gaurav santhalia said...

As per "THE HINDU"

Three ways to leverage ERP during slowdown
D. Murali

Chennai: In what ways can enterprises leverage their ERP (enterprise resource planning) systems during a period of economic crisis such as what is currently experienced? When I pose this question to Mr Ranjan Das, Managing Director, SAP, Indian Subcontinent (, soon after his completing a Chennai marathon, along with his team, on February 15, 2009 morning, he has a positive answer – that there are three ways enterprises can leverage ERP and other enterprise applications in today’s environment.

Enterprises are asking for solutions that will allow them to adjust and respond to the current economic crisis, Mr Das observes. “These solutions should be quick to implement and provide an immediate return on investment.”

He adds that some of the capabilities that enterprises are asking for are as follows:

• Manage cash, liquidity and financial risk better.

• Manage the workforce through rapid change.

• Accelerate savings in procurement.

• Better business planning and consolidation.

• Cost savings through superior energy data management.

• Quicker decision-making ability.

• Cost saving through optimisation of IT (information technology).

Secondly, enterprises are also automating the way they comply with government regulations such as SEBI Clause 49, SOX, J-SOX, etc, explains Mr Das. “It’s not possible for companies to guarantee compliance and superior governance through manual means.”

Finally, some enterprises are using the downturn to craft a long-term IT strategy and build a robust, open, and standards-based IT platform for operational excellence and growth, he continues.

“They are building a 3- to 5-year IT roadmap which is aligned with their corporate and business objectives. These enterprises are consolidating and upgrading the disparate and -- sometimes outdated -- IT systems to a common platform. Wherever possible, they are standardising the common processes and adopting best practices.”

ERP forms the foundation of such a platform, notes Mr Das, during the course of a subsequent email interaction with Business Line. “Enterprises are able to dedicate resources and executive time to these projects because of the downturn. The benefits of such consolidation and standardisation are both immediate and long-term. The improvement in operational efficiency results in immediate cost savings.”

In the longer run, he foresees, such an open, flexible platform will allow companies to adopt new business models and extend into new businesses easily and cost-effectively. “It also expedites the post-merger integration process for companies who grow through mergers and acquisitions.”

Excerpts from the interview.

How do managers cope with the excessive information that ERP systems can flood them with?

Most enterprises do have a lot of data, but not enough actionable information. ERP systems are flooded with terabytes of transactional data (e.g., A/R, A/P, G/L entries, Payroll, etc.). But, companies do not have enough information that can be leveraged to make the right business decisions.

The problem is exacerbated by the fact that these mountains of data are spread across disparate systems across the enterprise in different formats and in varying degrees of accuracy. As a result, companies spend a lot of time in collecting data from various sources, verifying the accuracy, collating the same, and then creating actionable insights.

Business intelligence (BI) tools help ERP systems generate the ‘right information’ at the ‘right time,’ enabling users to make ‘right decisions.’ If ERP is the heart of any IT landscape, then BI can be thought of as the brain that helps enterprises make the right business decisions.

These tools present the appropriate data from the underlying sources (both ERP and other systems) – along with the right analytical ability including simulation capabilities – to managers across all levels of the organisation so that they can make informed decisions in real time.

Your observations on how the Indian public sector organisations are adopting ERP in their operations.

Government and public services entities in India are automating their processes and expanding their capabilities to meet the demands from citizens and corporations. I’ve seen these entities adopt ERP and other enterprise applications in the following ways:

Improve operational efficiency: These enterprises are automating as many of their internal processes, such as finance, human resource, supply chain, customer relationship management, etc., to make their operations more efficient and agile.

Achieve greater transparency: Government and public sector entities are being forced to be more transparent in their operations, and they are looking to adopt capabilities such as segregation of duty, delegation of financial authority, access and audit trails for compliance reporting, etc.

Increase stakeholder trust: I’ve seen increased focus on superior governance and on infrastructure security and data privacy.

What are the advantages that SMEs see in ERP?

Indian SMEs (small and medium enterprises) see the value in automating and optimising their business processes. They understand that through automation they derive scalability and improve operational effectiveness.

In the current economic scenario, companies cannot achieve sustainability without operational excellence and scalability. ERP and other enterprise applications allow companies to automate and optimise their business processes. SMEs also seek to make timely decisions based on facts and data. As a result, they are asking for decision-making and analytical tools.

SMEs are looking to incorporate best practices as well. These best practices could be generic ones or specific to their industry or even micro-vertical. Pre-configured best practices are in high demand from Indian SMEs.

Finally, SMEs are looking for low total cost of ownership (TCO), fast implementations, quick return on investment and long-term investment protection.

Can you paint a picture of how ERP will be like 5-10 years later?

To answer this question, we first need to understand how businesses will operate 5-10 years from now. Everyday technology is rapidly changing and will have changed a lot by 2015 and ERP systems will follow the same trend. The traditional notion today of the ERP that you need to run a business will really be fundamentally altered.

‘Externally Aware’ ERP – Compared to a few years ago, all of us are lot more ‘externally aware.’ ERP systems will also become ‘externally aware’ in 5-10 years time. As a business manager, I’d like my ERP system to be completely integrated with external events with the intelligence to guide me on the potential ramifications of these events.

For example, an ERP system should be able to notice that the RBI has bumped up interest rates and re-compute all my capital expenditures based on that rate-hike so that we can figure out if we should cancel a construction project or buy spare inventory. It should be able to watch for weather problems in the Pacific to know the container ship took a detour to get around a typhoon so it’ll be five days late getting to India. Furthermore, if there’s a railroad strike, it should alert you that your containers will arrive a month late.

Mobile ERP – We live in a borderless and mobile world and are connected 24x7 with a myriad of smart mobile devices. Over the next few years, I see a stronger marriage between ERP systems and mobile devices. Sitting on a beach in Goa, I will be able to see exactly how my business is performing and make business decisions.

Business-driven ERP – IT departments in most companies have done a good job of building the ERP system as the foundation for the enterprise. Going ahead, I see business users having greater say in and the ability to shape ERP systems.

Through some very simple tools, users will be able to pull data from different sources within and outside the enterprise and assemble together a report, do a what-if analysis, or even construct a business process. This simplicity will replace things that were done manually or accomplished over a long cycle by IT because of the complexity of development.

Putting it all together, ERP will become more inclusive, powerful and seamless.



Mr Ranjan Das, a graduate in Computer Science and Engineering from the Massachusetts Institute of Technology and an MBA from Harvard Business School, relocated to Mumbai in July 2007 from SAP’s offices in Silicon Valley in the US. At SAP Labs in the US, he co-founded the business unit for xApps, the first packaged composite business applications in the industry. He also led all go-to-market functions at SAP Americas for strategic new solutions such as SAP NetWeaver, Duet; on-demand eSourcing; and solutions in the area of Governance, Risk, and Compliance (GRC). Prior to joining SAP, Mr Das was the founder and CEO of Patkai Networks Inc., a Silicon Valley-based venture capital-funded software startup company. Earlier, he held a variety of roles at Oracle Corporation in Redwood Shores, California. He started his career as a software engineer at InterSystems Corporation and Kenan Systems, Inc., both based in Cambridge, Massachusetts.