PROPOSAL

ERP RAPID DEPLOYMENT SOLUTIONS

FOR
SAHARA INDIA

A BUSINESS CASE




KARAN GUPTA
13810039
DOMS IIT ROORKEE

TABLE OF CONTENTS

1. Introduction
1.1 Project Name
1.2 Project Team
1.3 Project Description
2. Background
2.1 The Industry
2.2 The Current Scenario
2.3 Problem Definition
2.4 Why to Implement ERP
3. Defining Measurable Organizational Values
3.1 Quantifying MOVs
4. Cost Benefit Analysis
5. Evaluation of Alternatives
6. Recommendation







1. INTRODUCTION
1.1 Project Name
Implementation of Enterprise Resources Planning Rapid Deployment Solution
in Sahara INDIA Ltd. Q shop Project.
1.2 Project Team
The team consist of basically
1. Steering committee: The members of this particular committee includes
Project Director, Executive Sponsor, and Customer Representatives.
2. Project Manager
3. Consultants
4. Technical Members
5. Change Managers
6. Operation team which include people like Inventory Managers
7. Financial Consultants
1.3 Project Description
The project is about implementation of Enterprise Resources Planning Rapid
Deployment Solution in Sahara INDIA Ltd. Q shop Project.
Technology has given consumers the ability to quickly and easily find the
products they want. If one retailer doesnt have the items they need, customers
have no problems placing orders with competitors. This makes inventory
management an essential part of retaining patrons.
Supply chains are becoming increasingly complex, as they now span multiple
channels that need to be fully integrated to maintain accurate assessments of
inventories. Purchases made from smartphones are often returned to physical
store fronts, making it necessary for each section of the supply chain to be
incorporated into the larger system. With an accurate assessment of where
merchandise is located and in what quantities, businesses can improve order
fulfilment strategies and reduce waste.
ERP is the solution to help company in revisiting the business model for poor
logistics and distribution compounded by weak consumer sentiment in a slowing
economy.











2. BACKGROUND
2.1 The Industry
India is the fifth largest retail destination globally. The Indian retail industry has
experienced tremendous growth over the last decade with a significant shift
towards organised retailing format and development taking place not just in
major cities and metros, but also in Tier II and Tier III cities. The overall retail
market in India is likely to reach Rs 47 trillion (US$ 792.84 billion) by FY 17.
The Indian retail market, currently estimated at around US$ 490 billion, is
project to grow at a compound annual growth rate (CAGR) of 6 per cent to reach
US$ 865 billion by 2023. Food and grocery is the largest category within the retail
sector with 60 per cent share followed by the apparel and mobile segment.
India has about one million online retailers small and large which sell their
products through various e-commerce portals. The online retail industry in the
country touched US$ 12.6 billion in 2013, according to a recent report by the
Internet and Mobile Association of India (IAMAI).
2.2 Current Scenario
Sahara Q Shop is a mega quality consumer merchandise retail business from
Sahara India Pariwar. Its aim is to provide pure, and adulteration-free products
to the esteemed citizens of the country.
Sahara Q Shop supply chain is a mega effort by Sahara group by which people of
India would get high quality products of their daily needs at their doorstep, even
in small cities. The whole distribution process in Q Shop strives to optimise the
entire supply chain process to ensure timely delivery to the customer at
minimum cost. Q Shop supply chain covers everything from product
development, inventory planning, sourcing, production, logistics, warehousing
and delivery at customers' end.
Our 305 Q Shop warehouses are well connected with national and state
highways, will cover pan-India customers and are capable of keeping stocks to
serve their customers in minimum delivery lead time at the customer's house.

2.3 Problem Definition
Sahara Q shop has been facing difficulty in managing their inventory from the
beginning of venture. They have never been able to forecast of quantities of
different products that needed to be ordered on time. The biggest problem
they face is the stock out of their most sold SKUs. And they havent been able
to replenish the stock in time. Thats why to be not able to deliver their order
in time causing customer dissatisfaction.
Company is currently focusing on increasing their SKUs in the market whereas
they should consider giving inventory management a greater priority. The
answer to inventory problem is Enterprise Resources Planning Rapid
Deployment Solution. The implementation of a ERP along with automated
data collection will likely give you increases in accuracy, reduction in labour
costs (provided the labour required to maintain the system is less than the
labour saved on the warehouse floor), and a greater ability to service the
customer by reducing cycle times.

2.4 Why to Implement Enterprise Resources Planning Rapid Deployment
Solution
With the changing scenario, the ERP implementation and use will have a major
influence on the growth of the Indian retail industry. Initially a system to
control movement and storage of materials within a warehouse, the role of
ERP is expanding to including light manufacturing, transportation
management, order management, and complete accounting systems.
With Indian retail sector is growing exponentially it has become a necessity to
become the best. It has become difficult to ignore the benefits of ERP difficult.
So it has become important for Sahara to implement ERP in its warehouses.















3. DEFINING MEASURABLE ORGANISATIONAL VALUES (MOVs)
By implementing ERP, the company wants to improve its monitoring mechanism
for inventory in its Supply Chain mechanism. Now breaking down the benefits
of implementing ERP:

1. Scalability: An ERP system is easily scalable. That means adding new
functionality to the system as the business needs change is easy. This could
mean easy management of new processes, departments, and more.
2. Improved reporting: Much of the inefficiency in operational work stems from
improper reporting. With an ERP system, this possibility is eliminated as
reporting follows an automated template system, allowing various departments
to access information seamlessly.
3. Data quality: As compared with manual record-keeping or other traditional
approaches, an ERP system improves data quality by improving the underlying
processes. As a result, better business decisions can be reached.
4. Lower cost of operations: An ERP system introduces fundamental innovations
in managing resources, which eliminates delays and thus reduces cost of
operations. For instance, use of mobility allows real-time collection of data,
which is indispensable to lowering costs.
5. Better CRM: A direct benefit of using a good ERP system is improved customer
relations as a result of better business processes.
6. Business analytics: Having high-quality data allows businesses to use the power
of intelligent analytics tools to arrive at better business decisions. In fact, many
good ERP systems have built-in analytics functionality to allow easier data
analysis.
7. Improved data access: Controlling data access properly is always a challenge in
organizations. With an ERP system, this challenge is overcome with the use of
advanced user management and access control.
8. Better supply chain: Having the right ERP system in place means improved
procurement, inventory, demand forecasting, etc., essentially improving the
entire supply chain and making it more responsive.
9. Regulatory compliance: Having the system in control means organizations can
better comply with regulations. Further, the most important and recurring
regulatory requirements can be built right into the system.
10. Reduced complexity: Perhaps the most elegant argument in the favor of ERP
systems is that they reduce the complexity of a business and introduce a neatly
designed system of workflows. This makes the entire human resource chain
more efficient.



3.1 Quantifying MOVs
In order to calculate whether the project is successful or not it was very essential
to find out a quantified targets which will be achieved with the help of this
project .So in this case we have calculated the measurable organisational value
for a period of 5 years and have formulated certain targets which the project is
supposed to meet at the end of 1year to become a successful project.
The company's top objectives
Improve visibility and efficiency across the supply chain Company has been
able to grow at a very high rate in last year. Also made a Guinness book world
record by opening more than 400 stores in 1 day. Company target to continue
growth future years.
Integrate sales and distribution with warehouse operations Company has
305 warehouses in 285 different locations. Company needs ERP software to run
Supply Chain more efficiently. POS implementation increases flow of
information between distribution and warehouses. The target is to increase the
flow the enterprise information by 70%. Improved relationships with suppliers
and partners, thanks to integrated sales, distribution, and materials
management
Reduce inventory levels to improve turnover rate, quality and cut costs ERP
will reduce the inventory by optimizing asset performance and utilization in
warehouse and distribution centre. ERP provides current cost data through cost
centre and profit centre analysis which help in reducing costs and hence deliver
a superior quality. Benefits expected from implementation of ERP is 25% faster
inventory turnover ratio by the end of year.
Process data faster to increase order fulfilment rate ERP implementation
will lead to increase in on-time deliveries and order fulfilment rates, improving
customer satisfaction. Software will result in accelerated data processing and
enabled real-time reporting. Expected benefits expected is the increase in order
fulfilment to 90%.

















4. COST BENEFITS
The following table shows the total cost and benefits of ownership of the ERP
system:
YEAR Year 1 Year 2 Year 3 Year 4 Year 5
Total
Cost
$200K $220K $242K $266K $290K
Increased
Revenue
$324K $435K $640K $810K $990K

In the above analysis, we have assumed that the initial cost of hardware
installation is $150,000 and the maintenance cost is $10,000 in year 1 and
increasing at rate of 10% per annum for 5 years. Similarly, the one-time software
installation cost is $60,000 and maintenance cost is 10% of software cost also
increasing at the rate of 10 % per annum.
The revenue generated is from Faster Inventory turnover ratio, faster order
fulfilment rate, faster access to enterprise information, increased brand
presence and awareness, and improved customer satisfaction is estimated to be
$324,000 over the year 1 and increasing at the rate of 30 % per annum.
So, The Net present Value of all the cash Flows comes out to be $ 1.9 million,
which is much more than the initial investment.


5. EVALUATION OF ALTERNATIVES
There are different ERP service providers:
1. NetSuite ERP It is a complete cloud based ERP solution that integrate
with inventory, warehouse management, accounting, customer
management. Ideal for business managing inventory and distribution
centres.
Key Benefits
Accelerate the order-to cash process by 50%+.
Slash financial close by over 50%.
Drive better, faster decision-making with real-time data and reporting,
and personalized dashboards.
Improve workforce productivity with anytime, anywhere access.
Lower cost of ownership by eliminating upfront and ongoing IT
expenditures, and delivering automatic product upgrades.
Cost of NetSuite ERP - $200,000 but the price will increase by $1,200/person
as number of outlet increases.
2. EPICOR With extensive functionality for inventory, accounting, EPICOR
deliver a fully integrated web based software. Cost of EPICOR ERP will vary
around $180,000 to $300,000.
3. Oracle - Oracle's proven cloud solutions can help you grow smarter,
empower your teams, and maximize the value of your IT investment.
Founded on modern best practice, Oracle ERP Cloud delivers flexible
cloud solutions that support automated and standardized global business
processes. The results are increased agility, insightful decision-making,
greater productivity, lower costs, and an enhanced ability to innovate
all enabling you to drive business success. Oracle ERP will cost around
$350,000. Extra capabilities will cost more.
4. SAP - SAP ERP consists of several modules, including utilities for marketing
and sales, field service, product design and development, production and
inventory control, human resources, finance and accounting. SAP ERP
collects and combines data from the separate modules to provide the
company or organization with enterprise resource planning. SAP ERP will
cost around $250,000.
5. Microsoft - Microsoft Dynamics ERP applications are designed to help
customers: Connect the entire supply chain. Make current financial data
and reports accessible for business planning and regulatory compliance.
Automate repetitious and routine functions so that employees can focus
on more critical tasks. Minimize the cost and complexity of administering
salaries, benefits, recruiting, and performance management. Provide
greater visibility into key performance factors, such as profitability and
potential issues. Meet industry-specific needs with functionality for
vertical business processes. Microsoft ERP will required functionality will
cost more than $500,000.
6. Sage - Sage 300 ERP is a Windows based range of ERP software, available
with a variety of database back ends. This can run under a Windows
environment and has an option of being hosted by Sage. Sage 300 ERP has
the following modules/features: Multi-Company and Global Operations
Management, Customer Relationship Management, Intelligence
Reporting, Accounts Payable, Accounts Receivable, Inventory Control,
Purchase Orders, (Sales) Order Entry, Intercompany Transactions. Sage
ERP will cost $2600 per user. So total cost will increase as number of
outlet increases.


















6. RECOMMENDATION
As per the above discussion, the Sahara Q shop should go for ERP
implementation as the return on investments for ERP is too high to be
ignored. For the implementation of ERP, it should go with the solution
offered by SAP ERP Rapid Development Solution as it covers more options
and is suitable with respect to our needs.