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IT Enabled Enterprise

S. Ramanathan
Leveraging IT at Different Levels

Strategic
support at
top

Decision
support for
Managers

Operational support for


business procedures
Expanding Role of IS

1990s-
Electronic Business
2000s

1980s – 90s Strategic and End user support

Decision Support
1970s -80s

1960s – 70s Management Reporting

1950s – 60s Data Processing


Data as a Resource
Value to the organization
Need for storing and maintenance of data
Associated investment
Data view of the organization
Increasing information content in products
Information as product
ERP View of Business
WHAT IS ERP?
The techniques and concepts
employed for the integrated
management of business as a
whole from the viewpoint of the
effective use of management
resources
What is new about
ERP?
That is what is called on-line
integrated system

Is ERP old wine in


new bottle?
FUNCTIONAL
ORGANIZATION
-Dysfunctional divide

Materials Manufacturing Finance Marketing

Leveraging functional specialization at the cost of


organizational goal/ customer focus?
Business Process Model
Fulfill Order – Expanded

Order receipt  Order Processing 


Production PlanningMaterial Planning
Purchase Order Release Work Order
release Production Monitoring 
Warehousing Despatch Instructions 
Billing Accounts Receivable
WHY ERP?
All processes are customer focused
Everybody in the value chain is fully
informed about the process
Single repository or information and
hence non redundancy
Updates across functions maintaining
consistency
Information access across functions
Main Benefits of ERP: Accountability
Responsibility
Communication
What can you expect from
ERP?
To enable improved business processes
 Cycle time reduction
 Increased business agility
 On-time delivery
 Inventory reduction
 Order fulfillment improvement
 Increased flexibility
 Improved supplier performance
 Reduction in quality costs
 Improved resource utility
 Better customer satisfaction
What more can you expect
from ERP?
To provide flexible, integrated, real-
time decision support

 Improved information accuracy


 Better decision making capability
Still More
To support business growth requirements
 Multiple product lines
 Multiple languages
 Multiple currencies

To eliminate limitation of legacy systems


 Fragmentation of data and processing
 inflexibility to change
 obsolete technologies
Generic Solution Issues
Rigidity of architecture may not permit all
customizations
Would a generic solution kill the specific
processes that provide competitive advantage to
us?
Proprietary software only for those processes 
integration issues
Can every company afford the cost of the
product / customization?
How do you address diversity across regions? –
common vs local information
ERP Implementation
Organization of
Implementation Team
Steering Committee

Project Management

Technical Support Team

Work Team
Steering Committee
Responsible for monitoring the progress of the project
Head: Top management representative
enjoys management trust
Leadership Quality
Authority
Clout in the company
Consultant Liaison
Vendor representative
Duties
 Approval of budgets
 Resource allocation
 Establishing reporting and monitoring mechanism
 Resolution of problems
 Mid course correction
Project Management Team
Responsible for administering the project
Members: Leader of the consultant team
Head of Steering Committee
Vendor representative
Duties: Monitoring implementation
Assessing Quantity and Quality
Ensure co-operation between consultants and
in-house team
Ensure transfer of knowledge from consultants to in-
house team
Work Team
Actual performers of task
Consultants and in-house team
Choose the consultants with good understanding
of the package and implementation experience
Depute the staff, who are the best, know the
processes of the company well
Requirements: Team spirit
Communication skills
Patience and Perseverance
Self confidence
Technical Support Team
From EDP
Responsible for data migration
back-up
recovery
infrastructure
performance tuning
networking
Implementation Steps
1. Project planning
2. Evaluating the As-is situation
3. Modeling the To-be situation
4. Reengineering
5. Finalizing infrastructure
6. Product configuration
7. Formation of implementation team
8. Preparation of implementation plan
9. Gap Analysis
10. Customization
11. Data migration
12. Test runs
13. User Training
14. Parallel run
15. User sign-off
16. Go live
17. User documentation
18. Post implementation support
19. Performance monitoring
Project Planning
Resource allocation
Roles and Responsibilities
Time schedules
Contingency planning
Method of monitoring progress and review
Control measures

done by a committee headed by normally the CIO


or Head of Operations
Evaluating the As-is Situation

In this step one needs to thoroughly


understand what existing business
processes the organization is following to
transact its business.
Modeling the To-be Situation

Decide on what we want a business


process to finally look like.
Techniques of benchmarking to ensure
that the target set are comparable to
best in the industry.
Benchmarking can be done on various
aspects of the business like cost ,
quality , lead time, service , etc.
Reengineering
To achieve the new business process
reengineer the existing processes in such a
manner that
 The business process cycle time is reduced
significantly
 The number of decision points are reduced to the
bare minimum
 The flow of information is streamlined i/e. there is no
unnecessary to-and fro flow of information between
departments.
Impact on roles and responsibilities, staff
Finalizing Infrastructure
Decision on ERP product
Decision on consultant
Installing requisite hardware and network
Configuration

Create prototype of to-be model


Test the prototype
Explain to the user changes in processes
to suit the ERP product
Formation of Implementation Team
Knowledgeable users from all functions
IT team
Consultants
Identification of Project Leader and
Module Leaders
Preparation of Implementation Plan
Detailed plan covering total implementation process
CPM, PERT charts
Should cover
 Training of the project team
 Mapping of business processes on to the software
 Function wise implementation
 Customization
 Uploading of data
 Test runs
 Parallel run
 Crossover
Gap analysis
User requirements that cannot be mapped
directly on the product form a basis of gap
analysis.
All such uncovered requirements are
complied into a gap analysis report
Gap Analysis – Contd.
Gaps classified into three heads
1. Gaps which can be taken care of with little
programming. – addressed by project team
2. Gaps which are involved extensive programming
efforts and hence require extra resources –
escalated to steering committee for additional
resources
3. Gaps which can not be taken care of in the system –
escalated to steering committee for change of
process
Customization
Draw up the customization needs
Hand over to the respective functional
teams
Data Migration
With customization in place , the system is now
ready to receive the master and transaction data
from the existing system.
Programmed transfer of data takes place from
the existing system to new system.
Trial runs and thorough check are a must to
ensure maintenance of data integrity in master
data transfer process
Test Runs
To check customization and master data transfer
Real case scenarios
Extreme case scenarios
System overloads
Multiple users log
Invalid data entry
Trying to break restricted access
Based on results changes are incorporated
User Training
Parallel with test run
Based on user need: training requirement for different
functions / roles
Form groups of users with similar functional need and
learning ability
Contents
 Logging in and logging out
 Overview of the system
 In-depth education of the user’s module
 Navigating through the various menu paths
 Test transactions
Parallel Run

Business transactions both through the


existing as well as the new system.
Mismatches highlighted – addressed by
the implementation team
User Sign-off
User approval that
 If the parallel run is the satisfactory and error
–free
 errors that have come up have been resolved
Migration to new system –
Go Live!
User Documentation
User Documentation includes the details on how
to carry out the various transactions .
Specific to user function
Avoids technical details
Post implementation Support
Creation of help desk
Ensure that enough employees are trained to
handle the problems that might crop up
Ensure enough technical expertise within the
company to make necessary changes as and
when required
Change control procedure
Monitoring issue resolution cycles
Monitoring patches / releases / upgrades and
their utility to the organization
Performance Monitoring and
Tuning
Close monitoring by IT after change-over
for performance issues
Database tuning and other administrative
activities
Objective: to provide best performance to
users
Technical Issues
Server – Size and No. Functionalities expected:

Operating System Expandability

Data base Flexibility

No. of concurrent users Performance

Disaster control Industry standard

Recovery procedures Stability


For ERP to succeed
 clarity of expectations from ERP
 top management commitment
 reasonable scope
 adequate resources
 the right product
 the right people for implementation
 Participation of end users
 proper communication within the organization
 steering committee and strong leader
 balanced team
 good training
 sound and appropriate Implementation methodology
 good monitoring and review mechanism
Customer Relationship
Management
Customer Relationship
Management (CRM)
Customers Fall Between System / Departme
Cracks
Service Sales Accounting Delivery
Barriers To Success
71% of salesperson time is not spent in
selling
Prospecting
14%
Waiting/Traveling
With
Customers 32%
15%

Service
Calls
5% "Admin-I-strivia”
34%

Source : Fenemore Group,


Culpepper Letter, 7/97
SUCCESS IN TODAY’S
MARKET
Keep
Customers

Customer Knowledge
Base
Know Win
Customers Customers

Consistent, Enterprise-Wide Customer Experience


CUSTOMER’S EXPERIENCE
IS YOUR BRAND
Keep
Customers

Know Win
Customers Customers

Customer = Product Process


+
Experience Satisfaction Satisfaction
CUSTOMER KNOWLEDGE
BASE
Purchase history
Support needs
Preferences
Order and agreement status
Vital customer statistic
Management reports
Agents and reps
Customer direct access
Integration with phone system
Closing the Loop
Ide TeleBusiness
n tify
Marketing L ea d
s

y
Management

teg
a
Str
Shared

Close Deals
Marketing,
n
Pla

Sales, and Field Sales


Customer Service
Data and Processes
As
se

Sales / Service
ss

Management
Re

mer
su

us to
eC
lts

erv Support Rep


S

Field Service
What is CRM?
Enhancing the experience of customers
Identifying, and capturing information on
customers
Unified view of customer across the
enterprise
What is CRM?
a multifaceted process, mediated by a set
of information technologies, that focuses on
creating two-way exchanges with
customers so that firms have an intimate
knowledge of their needs, wants, and
buying patterns. – Wikipedia definition
CRM helps companies understand, as well
as anticipate, the needs of current and
potential customers
Goal of CRM
providing services and products that are
exactly what your customers want
offering better customer service
cross selling products more effectively
helping sales staff close deals faster
retaining existing customers and
discovering new ones
Different Aspects of CRM
Customer facing operations
Back-office operations
Collection of metrics
Components of CRM
1. People Management
2. Lead Management
3. Sales Force Automation
4. Customer Service
5. Marketing
6. Workflow Automation
7. Business Reporting
8. Analytics
People Management
Effective use of people in the right place at
the right time
Matching people skills to job profiles
Identification of development needs
Development strategy
Lead Management
Tracking and distribution of sales leads
Comprehensive study of customer
purchase patterns and the identification of
potential sales leads.
Making customized forms
Mailing lists
Sales Force Automation
Forecasting
Tracking potential interactions
Opportunity management
 specific opportunity the company belongs to
 salespersons working on it
 Assignment of revenue credits to different salesman
 Stage of the process
 Potential for closing
 Final results
 Competitive information
Contact management: info about individuals in the customer organization.
 Organization charts
 Contact behaviour characteristics
Account Management: info on individual corporate accounts.
Partnership relationship management
Sales processing
Customer Service and Support
Call centre management
Online help facilities
Internal help desk
Expert systems
Marketing Automation (Customer
facing)
Online catalog
Campaign management
Surveys
Contest management
Distribution of marketing materials
Email marketing
Customer intelligence
 Gathering customer data
 Analyzing data
 Formulating strategy
 Action
Workflow Automation
Routing out paperwork
Filling of forms
Integration of people and processes
Business Reporting
Real-time status reports
Summary reports
Forecasts
Capability to export to other systems
Storage of historical data for future
reference
Analytics
Study of market trends
Ability to convert data into diagrams
Dashboards
CHANGES IN CUSTOMER
EXPECTATIONS
Web Attract
C (Marketing)
u
s E-mail Shop
t (Sales / Inventory)
o
m Voice/Phone
e Buy
(E-Commerce)
r Chat
V Help
i Fax (Support)
e
w Fix-it
Partners (Field Service)

Consistent, personalized service is key to success


Companies must align around the customer
What is Customer Relationship
Management?

Customer
Support
Help Desk
WWW Post
Fax
Customer or
Prospect Cell Field
email nel
Telephone Chan Service
Sales & ut ion
trib
Marketing Dis
Quality
CRM Applications
Hosted vs. on-premise
Integrated vs. module
Hosted / On-demand CRM
Suitable for medium sized companies
Preferable for organizations with little internal IT support
Good choice for standard processes
Quick and easy implementation
Economical
Third party software enhancement tools
Issues
 Integration with back-office systems
 Upgrades could be tricky in the absence of internal IT support
 Issue of handing over sensitive data to third party host
 scalability
Successful example: salesforce.com
Even traditional players like Siebel and RightNow have created hosted CRM
soultions
Only 12% of the market expected to be on on-demand CRM even by 2009 –
AMR Research
CRM – Industry Leaders
Oracle: Rich functionality, good support, integration with
enterprise system
Salesforce: extremely flexible, adaptable and can be
changed to suit organization needs
RightNow : Economical, limited modules, shorter
timeframe for implementation
Siebel: both premises and hosted solutions; usable
across different sizes of units, customizable to suit
industry needs; known for its simplicity and functionality
SAP: huge range of functions; capability to execute in a
variety of platforms such as laptops and PDAs,
customizable, easy to use
How to achieve CRM
optimization
Identifying CRM goals
Integrate business processes with the CRM solution
Chosen solution should fit the objectives
Phased implementation: start with a pilot
Customer focus: should address current problems of the customer;
should not be inflexible to meet customer needs
Data consolidation: data should be collected beforehand, assessed
for its quality and made available to the CRM system
Change incorporation
Holistic approach: an integrated view of the customer should be
provided to the entire organization
CRM consultants; bring outside resources, if needed
Employee involvement: customer facing employees should actively
get involved in this implementation
Guidelines for Choosing the Right
CRM Software
Should support the specific business processes of the
company
Should be of perceived use to marketing and sales
functions – not the mechanics aspects, but the customer
relationship aspects
Should provide an understanding of learn customer
preferences and thus contribute to customer retention
Analytical capabilities
Limited customization
Ability to store and track all relevant information
Ease of customization
Organizational Alignment
Involvement of the users in the selection process
Incentives for sharing information
Addressing redundancy apprehensions of
frontline workers
Ability of the organization to absorb change
Clarity of expectations and IT department’s
capability to fulfill them
Avoid
 Information overload
 Adding features without value
CRM Trends
Analytical CRM: close working of analysts with
customer / customer data to understands what
contributes to highest customer satisfaction
Mobile CRM: anywhere access
CRM Integrated with enterprise systems
Integration of CRM with Internet search engine:
The moment customer profile is entered related
entries are fetched (eg) Dynamics CRM
Vertical CRM: specifically catering to a particular
sector (eg) legal, financial sectors
Outsourcing CRM
Supply Chain Management (SCM)
SCM – Sub Processes
Demand Planning

Supply Planning

Demand Fulfillment
What do the SCM products
address?- Demand Planning

Long term

Intermediate term

Short term
What do the SCM products
address? - Supply Planning
Long term planning
Inventory management
Distribution planning
Collaborative procurement
Transportation Planning
Supply allocation
What do the SCM products
address?- Demand Fulfillment
Order capturing
Customer verification
Due date confirmation
Order status monitoring
Tracking of order backlog
Despatch
Communication with customer
Tracking with delivery provider
Benefits of e-SCM
•Scalability: 24*7 availability
Capability to handle multiple requests

•Reduced interaction cost:


Quick and economical search
Reduced cost of coordination
Aggregate purchasing
Easy comparison shopping
Reduced ‘maverick’ spending
Benefits of e-SCM – Contd.

• Level Play: No entry barrier

• Economy: Sourcing at globally


competitive prices
Substitution of inventory
with information
E-SCM improves supplier
performance

Free Flow of Communication


Transparency

Accountability

Improved supplier performance


ERP the chain within - Prerequisite

Supplier ERP Customer

SCM
Criteria for choosing an SCM
product
 Seamless integration with ERP
 Transparency
 Simplicity: Ease of use and connectivity
 Alerts for deviation
 Scalability
Do not attempt 100% requirement
in the first instance. Prioritize and
Caution: implement in phases
Pitfalls in implementing SCM
Integration with ERP
Resistance to share information
Security
Cooperation of employees
Cooperation of suppliers
Maintaining credibility with users
Lethargic implementation –‘taking its own course’
Legal requirements
Service demand
Factors for successful SCM
implementation
Top management commitment
E-business culture
Technical infrastructure
Development of critical skill sets
Mechanism to measure success
Mid-course correction
Industry Exchanges

Seller Controlled: Well understood products


Strong brand awareness
Dell, Microsoft, Cisco
Buyer Controlled: Strong buyer
Other Intermediaries
Aggregators: Combined purchasing power
Buyasone.com

Neutral parties: seekandsource.com


ExchangeNext.com
Evaluating Supply Chain
Set parameters

Monitor improvement

Compare against benchmark


Supply Chain – Parameters for
Evaluation
... the agreement between
the desired and the
confirmed delivery date
... the % of orders delivered
without defects caused by
logistics
delivery
... the ability to provide
reliability ... information regarding
delivery order status
availability ...
delivery
lead time ...
delivery
... the agreement between the
confirmed delivery date and
quality ...
the actual delivery date
delivery
flexibility ...
information
... the time between
quality ...
placing the order
and its delivery

... the ability to meet customer change requests


for an existing order
Parameters for evaluation –
PMG Study
Delivery Performance to Request:
% of orders fulfilled on or before due date
Production Flexibility/Material Availability:
# days reqd. to achieve 20% unplanned
increase
Total Supply Chain Cost:
as % of sale
Cash-to-Cash Cycle:
# days between payment for raw material
to receipt for product
PMG Study Results
(Best / Median)
Sample Size: 110 Duration: 2 years
Delivery Prodn. Supply Cash-to-
Perfor- Flexibi- Chain Cash
mance lity Cost Cycle
Electron. 94.3/72.6 4.3/30 4/8.3 28.7/75.1
CG 97.6/81.2 8.3/42 4.9/9.2 24.7/66.6
Defence 97/68.9 10/30 4.3/10.2 18.5/67.6
Pharma 99/79 6/30 3.9/11.2 33.4/91.2
Telecom 93.9/77 2.6/25.5 3.3/8.3 44.4/100.2
Cost reduction due to e-SCM –
Study by Goldman Sachs
(1999)
Aerospace 11%
Chemicals 10%
Coal 2%
Communications 5%-15%
Computers 11%-20%
Electronics 29%-39%
Food 3%-5%
Forest Products 15%-25%
Transport 20%
Healthcare 5%
Life Sciences 12%-19%
Metallurgy 22%
Media 10%-15%
Oil&Gas 5%-15%
Paper 10%
Reverse Auctions
Refining buyer specifications
Initial screening of suppliers
Vendor development, if needed
Initial process can take upto 4 month for
special items and 2 – 4 weeks for commodity
items
Suppliers bid against one another by bringing
down the price
Auction parameters: operating price, reserve
price, lot structuring, rules of auction
Auction kept open for a brief period: 2 –6 hrs
Reverse Auction - Benefits
Buyer side:
 Most competitive price
 Cycle time reduction in negotiation
 Access to a larger base of vendors
 Objectivity in evaluation
 Transparency in negotiation
Seller Side:
 Access to new customers
 No geographic constraint
 Transparency
 Certainty of volume
 Service of auctioneer is free to supplier
Reverse Auctions – Providers
Freemarkets
01 markets
Razorfinish
Ariba
Commerce One
Trade2Gain
Revenue Model for Reverse
Auctions

Subscription
Fixed fee for each auction
Volume based fees
Variable fee on transaction
Variable fee on savings
Reverse Auctions - Concerns
Under bidding
Quotes open
Data Security
Handling overseas bids- differences in levies
Addressed by
 pre-qualification of suppliers
 authentication by id and Password
 data encryption
 masking of supplier identities
 allowances in software for varied levies
CASE STUDIES
Inventory Reduction
Success Stories
Mahindra & Mahindra:
by 20 –50 days; 30% savings
Hindustan Lever:
from 45 days to less than 5 days; 35%
savings
LG Electronics:
by 30 days; savings of about Rs. 4.7
crores
Reverse Auction Case Studies
• SmithKleine Beechem - 17 – 20% savings in
direct materials

• HLL – 35% savings in electrical wiring


contract for personal products division

• Maruti – 40% savings in conversion from


diesel to CNG for 17 forklift trucks
Reverse Auction Case Studies
– Contd.
L & T Group, Chennai
 Procurement of desktop computers for the entire country
 9 suppliers participated
 17% saving over off-line negotiated price
Mohan Meakins
 Procurement of crown
 8 suppliers
 Auction value: Rs. 2.31 crores
 Savings = 4% over last P.O.
 Saving in the next auction = Rs. 1 crore
Both of these are auctions by Commerce One
Reverse Auction Case Studies
– Contd.
Telco
 Total e-sourcing : Rs. 400 crores
 Savings: 15%
Carrier Aircon
 Savings: 18%

These are Freemarkets


clients
Case Study: Bharath Forge
First dynamic on-line auction to liquidate
359 MT of metal stock lying unused for
over 3 years
Market maker got 6 bidders in 4 days
Payment within 24 hours
Very low transaction cost
Expected price realization
Case Study:

Automotive

Client Hindustan Motors


Category Automotive Hindustan Motors saved
Sub Category Lubricants over Rs. 40 lacs on a
Suppliers 11
Number of Bids 39 Rs. 1.81 crores deal for a
Current price Rs. 1.81 crores
Reserve Price Rs. 1.71 crores savings of 24% !
Lowest Price Rs. 1.30 crores In addition to cycle time
Savings Rs. 0.41 crores
Savings % 24% reduction and a completely
Start Time 8/10/2001 7:00 PM
End Time 8/10/2001 8:20 PM transparent process.
Case Study:

Freight

Client Blue Star


Category International Freight Blue Star saved over
Sub Category Inbound Freight $77000 on a $ 640000
Suppliers 7
Number of Bids 23 deal for a savings
Current price $ 640139 of 12 %! In addition to
Reserve Price $ 600000
Lowest Price $ 562500 discovering new suppliers,
Savings $ 77639 cycle time reduction and a
Savings % 12.12%
Start Time 8/23/2001 4:00 PM transparent process.
End Time 8/24/2001 2:20 PM
Case Study:

Commodities

Client BILT
Category Chemicals BILT saved over
Sub Category Oxidized Starch 21% on the cost of
Suppliers 13
Number of Bids 25 Oxidized Starch .. In
Current price Rs. 1.09 crores 40 minutes flat, besides
Reserve Price Rs. 1.05 crores
Lowest Price Rs. 0.90 crores discovering new suppliers
Savings Rs. 0.24 crores and reducing cycle time of
Savings % 21%
Start Time 9/27/2001 12:30 PM negotiations.
End Time 9/27/2001 1:50 PM
E-SCM at Ford
Access for suppliers to Ford’s ERP
Transparency in stock status, Production /
Delivery requirement
RFQs, POs, Schedules are all electronic
Web enabled payment and instantaneous
credit through ICICI payment gateway
Supplier account information available on-
line to suppliers
Case Study –
Larsen & Toubro
Limited – Electrical
Business Group
(EBG)
Company Overview
Products: Low Tension industrial
switchgear, switch boards, petrol
dispensing pumps
100 distinct products; 1500 product codes
Turn over: Rs. 750 crore
1995: Management Concerns
Inability of legacy system to respond to
dynamically changing market conditions
Difficulty in managing and enhancing mainframe
based applications
Dwindling support from central IT organization
due to lack of trained manpower
Lack of integration between manufacturing,
marketing and accounting systems, resulting in
data integrity and responsiveness problems
Solution – the EBG way
Formation of a cross functional task force
 To look at business requirements
 To locate resources for future
 To evaluate ERP options
Organization wide debate on ERP policy
 Scope and implementation
Each business group was given autonomy in
selection and implementation
No corporate subsidy for implementation
ERP implementation
1996 Nov.: ERP evaluation started
1997 Sep.: SAP was selected
1998 Feb.: Project kick-off
Implementation partner: Pricewaterhouse
Cooper
15 member PWC team responsible for training,
project management, documentation and
implementation
50 member L&T team for hardware selection,
system installations, programming,
administration, end-user training, testing,
networking and help desk
1999 Apr.: All modules implemented
Cost of the project: Rs. 10 crores
Benefits of ERP
Cycle time reduction from four to five months to
three months
On-line information access across organization
Paperless organization
Transparency
Unified enterprise
Visibility of stock across nationwide operation
Elimination of redundant activities
SCM initiative
Objective: improve business efficiency
increase revenue
2000 Feb.: Selection of mySAP.com
Implementation in 29 days! (because all
critical elements were in place)
75 staff trained in different areas of the
application
Investment: Rs. 50 lakhs
System Details
Internet link: 512 Kbps
Servers: Compaq Proliant (Pentium II/III)
– three application servers
Operating System: Microsoft Windows NT
Database: Informix
Firewall: Checkpoint
EBG - Electrical Sector
Network Connectivity with :

400 Stockists 28 Regional /


(E-enabled) Branch Offices

600 Vendors 9 Godowns


(E-enabled)
4 Factories
www.LNTEBG.com

e s i n ce
Liv 000
r c h 2
18t Ma
h
B2B Purchase Queries
for Vendors
Purchase Orders Login & Authentication

Goods Receipts Selection Criteria :


From date -- To date
Document number
Accounts Details Material
Plant
Purchase Order (PO) Query
Orders with schedules
Orders awaiting invoice
Closed Orders

Summary : PO number, date, material code, description,


rate, qty supplied, qty pending, delivery schedule

Full PO : by clicking PO number in summary


Goods Receipt (GR) Query
Cleared GRs
GRs pending for quantity check
GRs awaiting inspection

Summary : GR number, date, PO ref., challan ref., qty


supplied, accepted, rejected, VQR

Rejection Details : by clicking on quality lot number


Accounts Query
Open invoices
Paid invoices

Bill number, date, PO ref., due date, amount, invoice


errors (if any), cheque details for cleared invoices
WE BUY, YOU QUOTE
Status
as on Nov ‘01

% of Total

E-enabled Vendors 600 70%

Value of dealings Rs 135 Crores 90%

PO prints avoided 25000 nos/year 77%

GR prints avoided 75000 sets/year 73%


Benefits, as perceived by L &
T
Data available 7 x 24 hours on-line
Reduced vendor visits and phone calls for
queries on POs, schedules, GRs, payments etc.
Order processing which took 4 days is done
instantaneously
Reduced vendor’s time and expense
Improved utility of employees needed to attend to
vendor queries
Reduced paper work at both ends
ROI on ERP and SCM: 2 years
E-Business Models
What is E-Business?
Ability to deliver products, services,
information, payments via networks
How Does It Alter Business
Business Process: electronic networks
Structure: data driven
Supply chain: possibility of total
connectivity; seamless connectivity
Market: instantaneous global access
Competition: level play
Advantages of E-Business
Reach new markets
Create new products / services
Build customer loyalty
Achieve competitive advantage
All these at low cost
Impact of E-Business
Transparency with customers and
suppliers
Price is not an important determinant in a
market
Changes in the role and function of
financial institutions / services
If E-Business were so great,
why did we not do business that
way before?
Massive growth of internet
Downsizing Flat organizational strictures  empowerment at
junior levels
Recognition of need to strengthen supply chain to sustain business
Outsourcing of business processes
Breaking of the functional barriers  cross-functional business
processes
Confidentiality and protectionism giving way to communication and
transparency
Increasing competition  pressure on margins
Inevitability of globalization
Customer aggression: demand for higher quality, higher
performance, higher service, lower cost and customized product /
service and delivery
E-Business – need for survival
So let us all jump into E-
Business bandwagon; It is easy
Not true
 Setting web site is easy, but how do you make prospects come to the
site?
 Low hits, business fails; high hits, site fails and so also business
 To Set up web site no great investment is needed; but to run a business,
as simple web site is not sufficient. High traffic portals may be
expensive to create, maintain
 Once my web site is ready, I do not need to market my products /
services -- Who would market your web site?
 Everyone is doing it; so I should do it – Everyone is doing it; so I may not
benefit by it
 Old rules of marketing would die with e-business: is it true?
 Can all products be sold online?
 How easy is it to retain customer loyalty in e-business scenario?
 Click and portal would kill brick and mortar?
 Size does not matter in online business?
 Middleman is out?
There have been several fads
all the way as IT developed; Is
E-Business another?
Cost: Internet is cost effective
Economy: built not on brick and mortar but on
ideas
Higher margins
Better customer service; human intervention is
minimized
Scalability
Reduced interaction cost
Productivity gains; repetitive tasks move to the
machine
Would These Factors Make E-
Business a Success / Failure?
E- Business presupposes / enables collaboration
E-Business presupposes / enables transparency
E-Business will make ideas more profitable than products
In E-Business control will shift to customer – is that true
and if it is true, would it survive as a healthy business
model?
E-Business will leverage customization, while traditional
business would leverage standardization
 Are there spaces for e-business to leverage standardization
and traditional business to leverage customization?
 Which model would win? Why?
E-Business is not Free from
Issues
Security: Still we are advised to be cautious while giving
our credit card numbers on the Internet
Data integrity: How do we protect our data in a
networked environment?
Scalability: There are limits to scalability in e-business
too
Are electronic markets perfect?
Fulfillment problems
Customer relationship problems
There are some products people would not buy online
Will transparency lead to corporate vulnerability?
If E-Business was such a sound
model, why was there a dot com
bust? What are the lessons?
Value Chain and E- Business
Concept of value chain
Does it get altered in E-business
scenario? How
If there is a change, is it for better?
Alternately, where does the e-business fit
in value chain?
E- Business Models
Business to Business (B2B):
 Between manufacturers, whole sellers and
retailers
 High transaction value; low volume
 Secure payment and privacy concerns
Business to Consumer (B2C):
 Direct sale of products / services to consumers
 Large volume, low value transactions
How would Internet Change
Organizational Functions?
Marketing
Customer Service
Manufacturing
HR
Finance
Advantages of Using Internet
Doing business faster
Close to customer
Immediacy of response
Paper-free environment
Level play
Superior customer service
Cost-effective sales promotion
Is the trend towards e-
business?
More and more people would move to on-line
purchases
What is your prediction of future ratio of
traditional vs. online business?
Why would people prefer Internet
 Convenient
 Easy
 Fast
 Anonymous
 Fun
E-Business Concerns
Does anonymity provide convenience or create
apprehension among users about genuineness of
transaction?
Security: Hackers were unknown in traditional
business
How do we ensure that our web site would be
accessed by interested searchers? – metatags
Currency of web site is a must in e-business
Privacy concerns
Window surfing – pay to surf – would customers
accept?
Ease of change: customer loyalty is the casualty.
Losing a customer is a click away

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