Niranjan Bhalivade was a worried man. The frown lines on his forehead got deeper as he hunched over his laptop to read an e-mail from Tamal Saha, SVP, sales and marketing, at CEAT.
The e-mail--marked to the MD and LOB heads of the company--was Bhalivade's worst nightmare. Saha had written about the company's snail-paced ERP and how it was beginning to gnaw at CEAT's profits. As the CIO of the company, Bhalivade wasn't thrilled.
During the company's monthly closure, the slow ERP delayed dealer billings. Saha notified that even though they had orders, some of the dealers missed their slab discounts. Discounts are given based on the invoicing done by the dealers. In slab discounts, the off take of particular SKU's or product categories are important. If the invoicing is not done on time, the dealers will miss the slab numbers and would get less discounts on the product which they could sell in the market. This would result in serious issues with these trade partners and loss of business. And the frontline sales team had to bear the cross.
As he reached the end of the e-mail, Bhalivade slumped heavily on his swivel chair and groaned in frustration. Once again the problem had reared its ugly head. A couple of months back, during the company's quarterly closing in March, invoice processing, billing, and report execution took a very long time. On an average, over 3,700 invoices were generated in a day. At month end, the number swelled to 7,300. Due to system performance issues it took about 7-10 minutes for a single invoice to get through. And a large number of invoices at monthly and quarterly closures only aggravated the problem.
"The average daily billing is Rs 14 crore, making every hour critical for business. Hence, the risk of revenue loss increases at the quarter or year end. The sales staff would stay up after hours to complete the billing. Despite that, reports would get ready only the next day," says Bhalivade. And this inefficiency pushed the sales team over the edge.
The tyre manufacturer also ran 148 discount schemes which are executed for 4,000 customers in more than 900 SKUs. The discount execution process took nothing less than 72 hours.
This had a huge impact on business. Even a one hour delay during quarter or year end could lead to losses to the tune of Rs 6-8 crore. Apart from the potential revenue loss, CEAT was losing 775 man days a year. And this was when all the systems were working at 100 percent load.
As CEAT's dawdling ERP began to eat into the company's profits, Bhalivade knew he had to do something--and fast.
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