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Aegis Logistics’ IT spending to be Rs 5 cr in 2011-12

Nagesh M Joshi, Senior Associate Editor

The IT spending of specialty logistics player, Aegis Logistics, for the year 2011-12 is expected to be Rs 5 crore according to the company’s IT head, M K Mittal.

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M K Mittal

“Since we are in a business expansion phase, our IT spending plan for 2011-12 will have to meet two requirements—supporting the business expansion, and integrating the IT systems and processes of our newly-acquired business with those of the existing group,” says Mittal.

The business case

Aegis specializes in the distribution of oil, gas and chemicals. It has four oil terminals across Mumbai, Pipavav (Gujarat) and Kochi (Kerala), and is planning to set up one more in Haldia (West Bengal). It plans to invest approximately Rs 400 crore in building one and expanding another oil terminal complex in the near future.

Late last year the company acquired Shell Gas (LPG) India, a gas importer and marketer. The acquired entity, which has now become its subsidiary, has been renamed Aegis Gas (LPG) Pvt Ltd (AGPL).

Aegis Logistics has a network of 70 gas stations in India. It plans to add 230 by 2013-14. Mittal says its IT spending plan for 2011-12 will be aimed at supporting such a rapidly expanding business.

IT spending plan

Aegis deployed SAP ECC 6.0 ERP this year. “The SAP ERP currently covers only the parent company’s (Aegis Logistics’) business processes,” Mittal informs. “Through the IT spending plan of 2011-12, we will expand the ERP coverage to the business processes of our subsidiary (AGPL).”

Aegis also intends to deploy a BI application under its IT spending plan next year. “Speed of operations is the most important element in any LSP’s (logistic service provider’s) business,” Mittal explains. “Two critical factors which impact speed are just-in-time delivery and accuracy in demand forecasting. BI can help us meet both these requirements.”

Mittal informs that the company will evaluate the offerings of major BI vendors, including IBM, Oracle and SAP, before commencing the project in April 2011 under its IT spending plan.

Lastly, Aegis Logistics’ IT spending plan includes the implementation of a video conferencing solution at its Chembur and Lower Parel branches in Mumbai. “Mumbai being an important logistics hub, our business heads and directors are required to travel extensively within the city,” says Mittal. “Deploying video conferencing can cut down travel time and costs, and also speed up important business decisions—one of the key objectives of our IT spending plan for 2011-12.”