Neelkanth Drugs Pvt. Ltd.

Case StudyPresented –
Tapomoy Das
Anjula Singh.
Fahid Latheef
Nidhi singh
Rupal Goyal
Ashish Bastia
Vidushi
Lokesh
Shreya Tripath
Soumya Ramakrishnani
Aditya Malpani (Group -3)
 Factual Data
No of –
• Retail Stores – 47
• Chemists 1300 – Growth Rate of 30%
DISTRIBUTION
planning to increase by 2,50,000 stock aided by Information
1500 (2013) PRODUCTS System
NETWORK keeping units
• Stockists - 70,000

TURNOVER
Widespread distribution REACH
25,044 unique STOCK
In 2011: US$ 26.61
in Delhi and U.P. and products KEEPING UNITS
million
planning expansion in
By 2013 : US$ 38.56
Punjab
million
Reckitt Benckiser Group plc (RB), is a British multinational consumer goods company.

Incorporated in 2000, promoted by G.L. Sharma and V.P. Saini.

Leading distributor in Delhi, having a distribution network of 95% .

Company became ISO 9001:2000 certified in Jan 2007; maintained CRISIL

rating of SME2.

deepest range of experience in healthcare, supplies over-the-counter, generic

and branded drugs such as capsules, tablets, gels, soft gel, vaccines, ointments,
creams, liquids.
 NEELKANTH DRUGS
TIMELINE 2010-2011
2007-2009 Cloud Computing was
suggested due to huge IT
Expenditure
1998-2001
• IT Expenditure – 80,000 –
1,00,000 • 50 new systems were
• Increased Operational introduced
• Reduced HR • IBM Server
Efficiency – 25% - 100%
Requirements • 3 Application Servers
• 1 Data Server
• WLAN Introduced
2012
2002-2004 Standalone Systems
• Centralization were used with no
and Integration of integration with
modules
2005-2006 other departments
• Easy Sol Software • Automatic bill
installed generation reduced time
• Telephone from 8 hours to 30 mins
Systems replaced • Electronic Interaction
Manual Systems between manufacturers
Organizational Context
What was proposed & What happened

• below CBT Analysis influenced the management to go for a more

niche technology for upgradation of IT Dept.
What was proposed?
Primary: - Since the company had incurred huge capital and
operational IT expenditures, after much deliberation, the decision
was made to adopt cloud computing technology.
(Reason: - Cloud technology10 could help an organization to leverage
computing resources without investing in the infrastructure.)

Secondary: -
In addition to that they had planned to also shift the hardware to the
cloud in the next phase.
What happened?
Barcode Scanning problem
From the first transactions, the new program was unable to read some
barcodes to generate an invoice.
 Unexpected Network Outage
The following day, the network refused to support the store’s
processes, and “Network Down” was declared.
Lack of Communications/Compatibility between third parties
Due to lack of proper compatibility among NDPL, the cloud provider
and the Internet provider, NDPL faced communication issue.
How it could have been prevented?
NDPL took the path of ERP based on cloud and it was a failure. There
would have been two possible ways of doing the same.

Licensed based ERP:- The installation would have required a lump

sum at first, but at the same time it will come up with reliable
features from reputed vendors.

Cloud Based ERP implementation:- If they preferred with the cloud

based ERP implementation one thing they could have ensured is that
platforms shared by the internet provider and the cloud vendor must
be same.
 Sales & Cost Analysis
2000

Sales Revenue
1500

1000

500
Sales Revenue
Million INR

Linear (Sales Revenue)

-500
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Year
 IT Financials

3,000,000 Cost on Hardware Cost on Software

2,500,000

2,000,000
COST IN INR

1,500,000

1,000,000

500,000

-
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
YEAR

IT FINANCIALS
Learning
Check whether the problem is fixable or not-
Instead of completely dumping the program, modification could have
been done.
Proper testing-
NDPL went live with the ERP-on-cloud without serious and repeated
testing.
Expect Extended timelines and plan accordingly-
Statistics show that 59% of ERP projects end up taking longer to
implement than originally projected.
Doing proper Research and Information Gathering
Learning(Cont…)
Setting Realistic Budget Expectations-
Though ERP can be a very powerful tool for business but with that
comes increased cost of implementation.

Setting the stages and project Timelines –

Setting and charting out the schedule plays an important role when it
comes to ERP or any other changes.

End-Users Involvement, Proper Training and Maintenance Plan are

prerequisites to prevent any uncertainties.
Why happened? How can you measure the
success or failure?
Inability to predict the specific requirement /Lack of Exposure
The cloud vendor who had provided the computing software to NDPL
had limited experience (i.e., in the garment sector only) and had failed
to gauge the requirements of the pharmaceutical industry.

Connectivity Issue
Since the cloud provider and the Internet provider were two separate
entities, connectivity issues resulted, which in turn affected the round-
the-clock availability of the software.
How can you measure the success or failure?
As the final verdict was to revert to the previous arrangement of
purchasing software instead of opting cloud, this clearly indicates a
failure of the aforementioned initiative.
Metric to measure Success/Failure
Uptime of the ERP system which includes application uptime,
network downtime, response time etc.
Infrastructure requirements were not studied well.
Data compatibility should have been studied before the proceedings.
Lack of user awareness and customer dissatisfaction.
Vendor lock in.
Timely reconciliation of books
Data accuracy and integrity checks and occurrences
Porter's five forces analysis
Threat Of
Entry
(Low)

Competition
Supplier Buying
Power Enjoyed Power
First mover
(Low) (Low)
advantage

Threat Of
Substitute
(Few)