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Bajaj Electricals’ IT investment may touch Rs 19 cr

Nagesh M Joshi

Bajaj Electricals Limited (BEL) may allocate up to 0.5% of its revenue toward IT investment during the next financial year. The company's CIO Pratap S Gharge informed this in an interview

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If BEL achieves its preset revenue targets, this percentage may translate to Rs 19 crore toward IT investment in 2011-12. Reportedly, Bajaj Electricals is said to be aiming at closing the current fiscal year i.e. 2010-11 with Rs 2,800 crore in revenue. The target set for the year 2012-13 is Rs 5,000 crore. Assuming that it achieves these targets, the revenue estimate for 2011-12 could be Rs 3,900 crore. Half a percentage of this value would indicate an IT investment of about Rs 19.5 crore.

Bajaj Electricals' IT investment plan for 2011-12 will include a project called Theory of Constraints (ToC), unified communications, document management, mobility, and software upgrades.

 

Theory of Constraints

The ToC project, as under BEL’s IT investment plan for the next year, is being modeled on optimized production technology concepts introduced by the Israeli physicist turned management guru Dr Eliyahu M Goldratt. In his novel titled The Goal, Dr Goldratt proposes that an organization, by focusing on constraints in a process, can improve and optimize the process to achieve the desired goals.

Through ToC, Bajaj Electricals intends to improve various standard operating procedures in its supply chain ― from procurement to channel distribution.

 

Optimizing supply chain

The ToC project, as under the IT investment plan, will have an enterprise-wide impact on BEL’s consumer focusing business units (BUs). These BUs are appliances, fans, lighting, and Morphy Richards (India distribution of the UK-based brand).

“ToC will help us optimize our supply and distribution processes and thus achieve a leaner inventory,” said Gharge. “This project will change the way we carry out our business. We want to reduce the inventory levels and costs without compromising on product availability at the retail counters.”

Bajaj Electricals (BEL) has six central warehouses, six depots managed by C&F agents, and 19 branch offices in the country. It has a direct employee-presence in 36 Indian towns. It has about 1,300 employees including 300 people in three manufacturing plants. It also has a network of 260 service centers through the ASP (Authorized Service Provider) model. The IT investments are being planned to bring process improvements for most of these aspects of the enterprise.

 

Other projects

The other IT investments of Bajaj Electricals (BEL) will go into unified communications, document management, mobility, and software upgrades.

BEL completed the implementation of SMILE project last year wherein it deployed Oracle E-business ERP, Oracle Siebel CRM, Oracle Demantra, and Oracle Business Intelligence. Next year, its IT investments will go into upgrading some of these applications. The company will move from Oracle E-Business 12.0.6 to Oracle E-Business 12.1.1. It will upgrade Siebel 8.0 to 8.1 and Demantra 7.2 to 7.6, as part of its IT investment plan.

Finally, BEL also intends to port its sales order capture tool to mobile platform. The project will cover all 19 branch locations as part of its IT investment plan next year. “The sales order capture modules for our consumer-focused groups will be ported to a mobile platform,” said Gharge. “This IT investment will further help us close the delays in reporting.”