FEBRUARY 1, 2004
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Q&A Frank Pallone
US's best-known Congressman in India airs his views on his country's outsourcing angst—and on India's trade prospects.


India's Education Edge
Can India sell itself as a globally competitive source of education? Given the cost differences, it's not an absurd question.

More Net Specials
Business Today,  January 18, 2004
 
 
BT SPECIAL
The Wired 20
Twenty organisations that have used the power of IT and the internet to their benefit, and ours.

In these enlightened times, almost every company boasts wired supply chains, online processes, and intelligent networks. The Wired 20 is a sampling of such companies and organisations (we have included government departments and educational institutions) with one key difference: these are entities that have deployed it to significant material benefit or are doing so to innovatively address existing problems. That explains the diversity of the listing. There's a film distribution company that hopes to beam the latest blockbusters to theatres in remote areas, a government department that may well be the country's most successful e-commerce business, and a pharma company that is experimenting with a PDA-enabled field force. There are also the usual suspects whose usage of it is more traditional. Still, as the instance of a paint maker whose acquisitions may have been partially funded by it investments shows, 'traditional' has some scope.

Adlabs' Shetty: He has an instant solution to piracy

Magic Lantern Redux
ADLABS Digital distributor

Can it combat motion pic piracy? Manmohan Shetty, the Chairman and Managing Director of Adlabs Films, thinks so. In April, the company promoted a joint venture with Mukta Arts, Mukta Adlabs Digital Exhibition. This company hopes to connect 400 smaller towns across India through satellite to facilitate the digital distribution of Bollywood blockbusters. The idea is to release motion pics in small towns on the same day they are released in the metros. The adventitious (some would say, main) benefit: a reduction in distribution costs by 90 per cent. "We plan to introduce satellite uplinking to theatres in remote towns across India," explains Shetty. "We'll beam them the latest blockbusters." Then, there's Adlabs' offline strategy: converting motion pics into digital format. The advantage: traditional prints cost around Rs 60,000, one reason why most motion pics are released only across 300 theatres in large cities; digital ones cost Rs 2,700 and can be displayed in theatres willing to incur an one-time infrastructure cost of Rs 15 lakh. Today, some 75 theatres across small towns in Maharashtra, Gujarat, Chattisgarh, Madhya Pradesh, West Bengal, and Uttar Pradesh have signed on for the digital experience. May their tribe increase.

Asian Paints' Choksi: IT helped us do it

Money From IT
ASIAN PAINTS
The united colours of connectivity

Most people are aware that Asian Paints is one of the 10 largest decorative paints companies in the world. As many are sure to know that acquisition has formed the basis of the company's global gambit. Here's the nub: it may have made everything possible. Not convinced? "We needed to unlock capital from existing businesses to fund growth," says Manish Choksi, VP (it & Strategic Planning). "The focus was on leveraging technology to increase efficiency." Choksi claims that a large part of the Rs 366.4-crore operating cash flow Asian Paints has generated over the past three years can be attributed to its Rs 90-crore investment in it. Today, the Rs 2,042-crore company handles 1.2 million online invoices and 3,000 GB of data every year, boasts over 100 VSATs, and has deployed 120 Cisco routers. Its ERP solution helps it close monthly accounts in four days flat, down from the 20 it used to take earlier. And the supply chain management one has enabled it to turn over its inventory nine times a year (as against four earlier). "We would now like to extend our connectivity outside the organisation so that all stakeholders can benefit from the extended enterprise," says Ashwin Dani, Vice Chairman, Asian Paints. Way to go.

Connecting BITS
BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE
Networked campus

Users@BITS: Reason to smile

On January 7, 2004, the largest backbone network in an educational institute in India went live. The constituents: 20 km of cable, 4,000 access points, a high-redundancy three-tier network architecture, long-range ethernet, wireless 802.11b access in some areas, bleeding-edge network security and advanced routing technologies. No, this isn't at any of the IITs, it is at the Birla Institute of Technology & Science. BITS is, arguably, one of the five best engineering schools in India, but until a year ago it was struggling with outdated it infrastructure. Then the institute and the bits Alumni Association embarked on a project to set up a gigabit network backbone. "The hallmark of an intelligent society is the ability to organise something substantial," says Vivek Paul, Vice Chairman, Wipro, and an alumnus of bits who was involved in the project. Size isn't the same as quality and Professor L.K. Maheshwari, Director, bits, Pilani Campus, hopes "the network will improve our quality of education". If the one-year project spearheaded by Wipro and Cisco with design expertise from alumni and student interns is any indication, it already has.

Rangu Salgame, President, India & SAARC: Top dog

Internet Surfer
CISCO INDIA
Infrastructure-block maker/user

It companies love to talk about eating their own dog food. The now defunct eCompany magazine once had Oracle's Larry Ellison on the cover with the requisite line about dog food for an article on how the company saved over $1 billion by using its own technology. So, it's no surprise to this writer when Shailesh Naik, the Managing Director of Cisco Asia-Pacific Internet Business Solutions Group, resorts to the canine metaphor to explain his company's use of technology. That's evident in Cisco's Delhi HQ, which boasts a 802.11 WI-FI network; most employees tote laptops connected to the internal network. All Cisco-Cisco calls from anywhere to India and vice versa is through Cisco IP phones over the company's network. And the laptops of most employees are configured with softphones that serve as mirrors of the individual's office extension-the company is waiting for India's antiquated regulations concerning voice calls over the internet to change to start using this. Somehow dog food seems an inadequate description; this is the equivalent of a seven-course meal for canines.

Wired? Not Quite
EAST INDIA HOTELS
Wireless hospitality

EIH Chairman Biki Oberoi: Wireless is the way to go

Providing wireless internet access to guests isn't all there is to the wired status of the Oberoi hotels, although the chain was the first in India to do so. "Offering high-speed internet access is becoming a must for any top drawer hotel," explains Indrani Ghosh, Vice President (Information Technology), East India Hotels, "and when we decided to upgrade our systems a few years ago, we saw that wireless was the emerging trend and would be the most sensible way to go." Most processes at the chain that spends between 2 per cent and 3 per cent of its turnover (Rs 383.3 crore in 2002-03) on it are online, its centralised reservation system (a first, again, for an Indian chain and this was implemented way back in 1999) doubles up as a customer relationship management (CRM) one, and the individual hotels, independent booking agents, and the chain's contact centre all feed into and off the reservation system. "This helps us maximise our yields by offering differing room rates and schemes much like the way airlines do." Indeed, EIH's contact centre experience has been successful enough for the company to partner with India's National Association of Software and Service Companies and offer its expertise in establishing and managing call centres to companies wishing to set up call centres in India. Bravo!

ERNET's Rai: Wired education

Connecting Academia
Educational and Research Network (ERNET)
Internet Protocol pioneer

It isn't history that fetches ERNET, an autonomous society that operates under the aegis of the Ministry of Information Technology, a place on this list: The Wired 20 is immune to the fact that ERNET was the country's first real Internet Service Provider (ISP). Nor is it scale, although the entity founded in 1986, to connect India's premier educational and research institutions has come a long way since: today, it serves close to 500 educational institutions and boasts 13 nodes across the country, and a dedicated C-band satellite centre in Bangalore. What does is its initiative to become the ultimate educational aid by convincing universities and colleges in India and in other parts of the world to share resources over what will be the mother of all networks. And what does is the fact that ERNET is building India's first Internet Protocol Version 6.0 (IP v.6) network. "We have to do this because the number of IP addresses we can offer through old protocols is limited," explains Gulshan Rai, Executive Director, ERNET. "There are thousands of new subscribers (read: students) who join our member institutions every year; we have to provide each an e-mail address and a webpage." And a window to the world.

HDFC Bank's Ram: IT is an integral part of banking

Banking On IT
HDFC BANK
Smart user

C.N. Ram, the 46-year old head of information technology at HDFC Bank, was the company's fourth employee. That stands to reason. "Technology will remain an integral part of our business, not just a support function," says Aditya Puri, Managing Director, HDFC Bank. Over its lifetime, the bank has spent Rs 600 crore on it. The results show: HDFC Bank adds 3,000 customers a day and 74 out of every 100 transactions it handles do not involve a branch. IT@HDFC Bank isn't just about retail. The bank's ENet facility allows companies and their suppliers to link their respective enterprise resource planning and supply chain management solutions to HDFC Bank. As far back as 1997, the bank launched a similar offering for stock exchanges and now handles over 65 per cent of daily settlement transactions across India's bourses. And it is involved in the Reserve Bank of India's Real Time Gross Settlement process. "IT isn't an option any more," says Ram. "If we don't have it, we cannot work." Hear, hear!

HLL's Mohan: Wired supply chain wielder

The Ultimate Supply Chain
HINDUSTAN LEVER LIMITED
Reachus Maximus

It seems only apt that the company with the widest distribution reach in India, HLL-IT services, directly and indirectly, some 4 million outlets-have the smartest supply chain. RSNet (Redistribution Stockists Net), is one part of it. This connects 3,500 stockists in 1,200 towns who account for 80 per cent of the company's sales. The benefit: HLL can take orders on a continuous replenishment system. The other part is Suppliers Net, which links the company to all major suppliers, again facilitating smart ordering on a continuous replenishment system. "These have given us a capability to respond to customer needs through daily replenishment (that's the buzzword here) ," says K.G. Mohan, General Manager (IT), HLL.

IT Is It
ICICI BANK
Look Ma, no branches

ICICI Bank's Vohra: An embeded IT-budget is it

That isn't really true; at last count ICICI bank boasted some 450 branches. Still, there's overwhelming numerical evidence of the bank's branch-neutral strategy. Of the 32 products the bank offers to retail customers, 28 can be availed online; over 5 million of ICICI Bank's 6 million retail banking customers have registered for internet banking; 50 per cent of all retail banking transactions are conducted over ATMs; and there are 150,000 registered users for the bank's SMS service. There's more: in partnership with Reliance Infocomm, the bank has launched mobile banking services on a java-enabled phone. "We don't have an it budget as such," says Pravir Vohra, Head (Retail Technology Group), ICICI Bank. "It is embedded in the business plan of each business." The Gods, it is evident, are smiling on ICICI Bank: given that customers can book pooja offerings for the presiding deities at Tirupati, Sidhi Vinayak, Vaishnodevi, and countless other shrines, that isn't surprising.

Indian Railways: Steel, copper and fibre come together

E-biz #1
INDIAN RAILWAYS
Wired! Wired!! Wired!!!

India's most successful e-commerce business doesn't make too much noise about the fact. In its first year of operation, ending August 2003, it registered revenues of around Rs 53 crore. The site, www.irctc.co.in, is run by the Indian Railways Catering and Tourism Corporation (IRCTC), and allows visitors to book railway tickets online. The world's largest employer, Indian Railways-it employs close to 15 lakh people-is also the second largest spender on it among government departments (the Department of Telecommunications is #1). A senior Rail Ministry officer boasts that Indian Railways and its subsidiaries are equipped with the latest hardware and software. And many of its processes, like the recently launched Freight Operations Information System, are online. Attribute that to the Centre for Railway Information Systems (CRIS), a nodal organisation that handles all of the Railways' infotech needs. And no, an IPO isn't in the offing.

The Online Organisation
INFOSYS TECHNOLOGIES
The 7 per cent solution

Infosys' Gopalkrishnan: An ancillary benefits of being wired

It shouldn't surprise anyone that Infosys Technologies spends between 6 per cent and 8 per cent (the average, 7 per cent, explains the sub-head) of its annual turnover on wiring up its innards. After all, there's nothing out of place about a company in the business to spend Rs 225 crore on it (there it is, that dog food thing again). ''As purveyors of technology, it is imperative that we provide the latest for our employees,'' says Kris Gopalkrishnan, Deputy Managing Director, Infosys. ''Our employees work at the cutting edge of technology and have to be abreast of what is happening globally.'' Truth be told, the bulk of Infosys' it spend goes into hardware to meet its growing number of employees (20,000-odd at last count). And it spends a mere 0.5 per cent of turnover on information systems (is); the comparative figure is 2 per cent for its global peers. Gopalkrishnan attributes this to the cost-efficiency of the Indian programmer. ''Internationally if a pc costs, say, $1,000 (Rs 46,000), the background software support costs almost as much; in India software support infrastructure comes at a fraction of the cost.'' Today, close to 90 per cent of Infosys' process-from leave applications to training to purchase requisitions-are online. ''Being wired is a key competitive edge,'' explains Gopalkrishnan. Nothing, it is evident, works as well as saying, we've been there, done that.

LG's Bose: IT is about cost consciousness

Cost-effective Communicator
LG ELECTRONICS INDIA
IT for cost-control

LG's Infotech backbone is probably comparable to that of other consumer durables companies of similar size and vintage. What differentiates the company, arguably, is the emphasis on cost. LG has 40 branches, as many stocking points, and around 60 remote area offices (RAOs) across the country. These are connected through a point-to-point Virtual Private Network (VPN), with a VSAT back-up. VPN isn't exactly cheap, so the company will soon shift to a national long-distance link with a VPN back-up for all nodes except the RAOs. "All contact points except the RAOs will get much higher bandwidth and a speed that is 20-30 per cent higher than that offered by the VPN for much lower cost," says Arindam Bose, Head (IT), LG. Earlier, to reduce internal communication costs across the offices, LG had moved to an instant messenger that rode on its internal network. Every bit counts.

Wired auto
MARUTI
IT-in-manufacturing benchmark

A MUL dealership: Wired to the plant

Somewhere in the depths of Maruti's sprawling plant in Gurgaon (no Korean cars allowed, please), sits a nondescript two-storey building. Inside the building is a huge server farm. This network (Maruti's 'extranet') connects each and every one of Maruti's 450 unique dealers, a network of over 300 suppliers, Maruti HQ in central Delhi, Suzuki HQ in Hamamatsu, Japan, and, international dealers in Europe and West Asia. Current wisdom has it that real-time information holds the key to manufacturing efficiency. Maruti's experience is testimony to that. In the past few months, the company has increased production from 1,500 to 2,000 cars every day with the gains coming from manufacturing efficiencies that in turn, arise from instantaneous flow of information from suppliers to company to dealers and vice versa. That's something

Piramal's Chawla: Maintaining a record of firsts

Pharma Pioneer
NICHOLAS PIRAMAL
The connected pharmaceutical firm

We were the first in the business to deploy an enterprise resource planning solution, the first to build a business intelligence warehouse, and the first to adopt online distribution planning." That's Harish Chawla, the Head of it at Nicholas Piramal, proudly reeling off his company's achievements. Well, the reason the company makes this list is another first: Nicholas Piramal may well be the first Indian pharma company to adopt field-force automation. No, this isn't about an army of Aibos selling the company's products to doctors, it is about a pilot project that involves internet-enabled-PDA-toting medical reps. As you read this, some 100 of the company's reps are out there, toting PDAs through which they can access information on sales, account receivables, and inventory positions. The benefit: it reduces cycle times that can go as high as 15 days to next to nothing. Next step: PDAs for all 2,000 employees. Wired? You bet.

E Is For Exchange
NSE
The modern stock exchange

NSE.IT's Naralkar: A veritable money multiplier

The National Stock Exchange is today the third largest stock exchange in the world (in terms of volumes traded) after NYSE and NASDAQ. The exchange handles just under 2 million trades a day. The secret of this success? Technology. NSE was the first exchange in India to offer comprehensive online trading solutions to members. First it empanelled a clutch of it vendors to offer connectivity solutions to members and their main clients. Then, when demand zoomed, it set up an IT arm of its own, NSE.IT. Apart from looking after the technology requirements of the exchange, this arm offers services to other exchanges, mutual funds, banks, and just about anyone else. The exchange itself spends around Rs 50 crore on it every year. It's return on investment. "How do you calculate RoI for something that grows the business itself?" asks Satish Naralkar, the Head of NSE.IT. Touche!

Reliance's Mukesh Ambani: Reaching out to desktops too

Face-time Fundamentals
RELIANCE INDUSTRIES
Desktop displays

Like other large companies of its ilk, reliance industries uses technology to reach out to its 30,000 employees and its suppliers and vendors, accelerate speed of decision making, and improve process efficiencies (including an initiative to use GPS-enabled trucks to find out just where shipments of supplies and products are at any point in time). What's impressive, however, is the sheer scale of it all and the novelty of having a feature-laden desktop. The scale, first: some 600 terabytes (the equivalent of the storage capacity of 9 million CDs) of information resides on the Reliance network, spread across almost 25,000 desktops, 2,000 routers connected to datacentres in Mumbai and Bangalore through dedicated 2.5 GBPS lines that can be scaled up to 10 GBPS. From his desktop, an employee can host audio- and video-conference calls, access the company's knowledge management portal (called Gyan Mandir, or temple of knowledge in Hindi), and benefit from a multi-cast facility that allows the company broadcast training sessions and messages from the chairman and senior execs direct to desktop. That's nifty.

B.S. Nagesh: Everything is IT

In The Detail
SHOPPERS' STOP
Wired retail

Retail is a complicated business," starts Shoppers' Stop Customer Care Associate and Managing Director & CEO B.S. Nagesh. "You deal with one customer out of one square foot, sell one stock keeping unit, and create one moment of misery, delight, or magic." The man isn't done yet. "It is important for retail companies to be fully supported by technology because you create millions of such moments of misery, delight, or magic." Well, Shoppers' Stop, one of India's few profitable retail establishments (2002-03 profits: Rs 14 lakh), has done just that. Over the past five years, it has invested Rs 22 crore in technology and this year it will burn Rs 6 crore (and Rs 5 crore every year from next), not chump change for a Rs 300 crore retailer. The company uses it for just about anything: merchandise management, sales analysis and warehouse replenishment. The piece de resistance: a BconnectB suite from Siemens that connects 110 vendors (supplying 80 per cent of the company's merchandise) and allows them to add, remove, or shift their products across the chain's 13 stores in nine cities. Complex, maybe; efficient, definitely.

SSKI's Shah: IT helped him go retail

Dotcom Survivor
SSKI
The connected brokerage

Circa 1997, Mumbai's S.S. Kantilal Ishwarlal Securities was just another traditional brokerage that saw the internet as a way to reach out to retail customers (at that time, a mere 10 per cent of its business came from retail investors). "We saw the retail investor as the future in a country with a 27 per cent savings rate," says Tarun Shah, CEO. So, the company invested some Rs 20 crore in wiring itself up, a little more on maintenance, and launched a retail brand Sharekhan. Alas, the dotcom bubble burst and SSKI found itself scrambling to balance its online investments with offline revenues. It decided to press on: today, it services 30 per cent of its retail investors online; is connected to banks and depositories to facilitate real-time transactions; and has 150 Sharekhan Shops across 80 cities in perennial chat mode with the central trading room. Today, 75 per cent of the brokerage's business comes from retail investors. This cat roared.

Satellite Trucking
TRANSPORT CORPORATION OF INDIA
GPS pioneer

TCI's Agarwal: Keeping track with IT

When you handle Rs 35,000 crore worth of traffic by road as TCI does, it helps to know where your trucks are. So, Vineet Agarwal, tci's Executive Director decided to try an IT tool called avl (Automatic Vehicle Location) on 80 trucks. AVL comprises a GPS (Global Positioning System) receiver, a GSM modem, and an antenna, all installed in the truck. TCI's control centre at Gurgaon was provided with a GIS (Geographical Information System) software. The GPS receiver bounces signals off geo-stationary satellites to infer the co-ordinates and the velocity of the truck. Along with the time, this information is transmitted by the GSM modem as an SMS to the control centre. Over the next 18 months, Agarwal plans to install the system on all 650 company owned trucks. That's a start.

F.Q. Kolman, President, UTI MF: His e-investment
paid off

Two-Letter Tool For Three-Letter Trust
UTI
Efficient implementor

First UTI made a hash of things (and how). Then, under a new Chairman, it turned around smartly. As this closer look at the institution reveals, purely in terms of efficiency-gain, UTI wins the top-prize for effective deployment of it on the investor services front. A sampling: the time taken to allot or encash units has come down from anything between 15 days and 30 days to one day; average office space across cities has, from 5,000 square feet to 2,000; the annual phone bill, by Rs 1 crore; and unit holders can now conduct business from any UTI Investor Services office (earlier, they could do this only from the office where the unit had been issued). All this is courtesy a Rs 42-crore investment in linking investor services offices across 57 locations to the institution's headquarters in Mumbai's Bandra Kurla Complex and its registrar located on the outskirts of the city. This information infrastructure services some 10 million investors. Happy investors, may we add.

 

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