May 18
Corporate IT Gives Wings to LTCEL’s Growth Ambitions
Corporate IT Gives Wings to LTCEL’s Growth Ambitions
Information Technology (IT) is supposed to enable business, not hinder its ability to function as it should. It is supposed to partner with it to solve complex issues and offer insights for timely and accurate decision making and fuel growth. For nearly seventeen years the Oracle Financials ERP that L&T Construction Equipment Limited (LTCEL) ran had served the company well by allowing it to do just that - automate key business processes and give users the desired visibility into the daily operations so that they could take timely decisions. And it all worked just fine, until the business realised that things could be better.

LTCEL which operates as a wholly-owned subsidiary of L&T, manufactures and sells construction equipment. From high pressure hydraulic components and systems to earthmoving equipment, it offers all that businesses engaged in the sector could ask for and need. With the infrastructure sector especially the road construction segment witnessing renewed activity last year, the business hoped for an eventful 2018 (and beyond) but had little idea that the Oracle package at the heart of its IT setup didn’t quite cut it.

The Oracle Financials Suite deployed in 2001 had run its course and was not able to fully cater to LTCEL’s growing needs. L&T’s Corporate IT (CIT) team knew this. The team which had helped speed things up at L&T Construction & Mining Machinery Business (CMB) last year by implementing SAP HANA, knew that keeping the Oracle package on was a drain on LTCEL not just operationally but also in terms of the costs – over the years it had become increasingly dearer to run the suite since AMC fee and support costs had become unreasonably high.

Team CIT brought up its concerns to LTCEL management and recommended that it move to a more comprehensive suite of applications. After much education and deliberation on the ways in which a change could address the growth challenge, a decision was made to implement SAP. Interestingly, of all the L&T businesses, only LTCEL ran an Oracle suite while the rest had been standardised on SAP environments.

After taking in inputs from LTCEL business users, the Corporate IT team prepared a scope document and floated a request for proposal (RFP) for its various implementation partners. Nearly all the respondents came back with identical quotes and similar timelines that of 5-6 months. LTCEL couldn’t possibly accept anything later than March 31, 2018, for the simple reason that by April 2018 it was contractually bound to renew the AMC, something it wanted to avoid at all cost. The new ERP had to be up and running come April. Additionally, the quotations sent in by the respondents far exceeded LTCEL’s budget for the deployment. Nearly by 4X. 
 
Seeing as how no vendor was willing to make any concessions on the implementation timeline or costs, Corporate IT stepped up to the plate and accepted the challenge.
 
A core team comprising various stakeholders including a large number of business users from LTCEL, Corporate IT and LTI which was roped in as technology implementation partner for the project was formed. Going into the project, several discussions were held and the Corporate IT team came up with a detailed implementation plan and a timeline – that factored the Oracle AMC renewal date – was created. The project plan consisted implementation of SAP ERP - ECC 6.0 EHP8 on HANA Database along with six SAP modules viz. Production Planning, Quality Management, Materials Management, Sales & Distribution, Finance & Control and Document Management System. The Quality Management and Document Management modules were recommended especially by the Corporate IT team to lend added insights into the manufacturing set up at LTCEL.  

The team formally kicked off the project on December 6, 2017, at a meeting in which all the stakeholders were present.

Typically, IT projects, especially big-ticket deployments like ERP involve changes and it is not uncommon for the project scope to change mid-way or shortly after kick-off but rarely do projects ever witness requests that double the entire effort. Shortly after the project kick-off, the management at LTCEL made a request that altered the project scope completely. It insisted that that the project team keep two separate individual systems, one for LTCEL Machinery Works and one for LTCEL Hydraulic Works and do so within the cost and timelines agreed upon earlier.

LTCEL wanted to keep the two units separate in terms of their IT since it felt it would offer greater operational control over the two. While the request doubled Corporate IT’s efforts and the work of everyone involved in the project, the teams successfully delivered the two systems with all the promised features and functionalities as per the original timeline and cost.

The project went live on April 4, 2018. Besides the agreed upon deliverables, Corporate IT also delivered 70 mobile applications (developed on FIORI platform) for enhancing the user experience and productivity of LTCEL end users. Additionally, a new generation chatbot was created to help business users adapt to the new ERP. Typically, in new ERP deployments it’s often a struggle for end-users to adapt to the system as they unaware of the new transaction codes. The chatbot, built like a personal assistant for users, helps by responding to user queries and getting them acquainted with the system.
   
While it’s still early days for the system, the management at LTCEL appears pleased with the way things have gone thus far. Mr. Arvind Garg, Executive Vice President & Head - Construction & Mining Machinery Business, says that the timely deployment has saved the business a substantial sum of money which it would have had to pay to Oracle otherwise and that the robust system, powered by HANA, SAP’s in-memory database platform is far more efficient than the previous one.

Mr. Keshav Kumar, Chief Executive, LTCEL, and Mr. S.R. Subramanian EVP & Head - Industrial Machinery & Products have also endorsed the successful completion of the project and appreciated the efforts put in by Corporate IT, LTCEL business users and local IT members who worked on the project along with Corporate IT for successfully deploying the ERP package.

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