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How a CIO increased his project budget by 50 percent

Debarati Roy and Gunjan Trivedi | Nov. 30, 2012
Anil Khopkar, Vice President (MIS), Bajaj Auto, convinced his management to clear not one but two budgets in a single year.

Thanks to his approach and homework, Khopkar got an 'in-principle' approval to his budgeting plan, including the Rs 80 lakh ERP upgrade project. But little did he know at the point that the project would require more of his persuasive skills before it took off.

Case Study Highlights

The virtualization add-on project required Khopkar to ask his management to change the cash outflow plan. Now, instead of a Rs 80 lakh investment, he needed Rs 1.2 crore.

How to create the stratergies around your annual budget to get in management buy-in.

Round 2: The Rs 40 lakh Add-on

While Khopkar keeps his overall IT strategy intact, he always ensures that his execution plans are more dynamic. This helps him introduce changes to his IT plans and keep aligned to the business. "I am in constant talks with the lines-of-business heads to understand what end users need, what their pain areas are, and what developments they are planning in the coming year or two. I couple it with constant updates in the technology domain. Merging the two helps us address the pain points in the business and support organizational expansion," he says.

It was during one such conversation with his team that Khopkar realized that their original plan to add a server base for the core databases might not provide the long term benefits they had perceived. Based on test environment investigations, they realized that the new server base would create two new challenges: The first was provisioning and scale issues, and the second was the high cost of annual maintenance contract (AMCs). At about 30 percent of the cost of the servers, the opex costs the AMCs added were high. And once Bajaj Auto adopted the spare service parts planning and distribution system and the employee portal module, those costs would rise even higher.

Evidently, their project execution strategy needed a quick but significant turnaround. Khopkar decided to replace the 17 servers that ran various modules of SAP R/3 4.7 and its relational databases with two very high-end IBM Power6 series machines, which were launched around the time, running virtual servers on its AIX platform.

It was a bold move on multiple counts. First, in the automobile sector, completely running core, mission-critical applications in a virtualized environment was unheard of. Second, virtualization meant buying two new servers and Bajaj Auto's hardware refresh cycle was about a year-and-a-half away. Third, re-stacking the execution plan would require significant remodeling which would require Khopkar to go back to his management to not only get their approval but also change the cash outflow plan. Now, instead of a Rs 80 lakh investment, he would need Rs 1.2 crore. Even a veteran like Khopkar knew it isn't going to be a cakewalk.


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