by Alan Joch
Rapid deployment of new enterprise systems helps Spartan Engineering Industries manage rapid growth.
Location: Mumbai, India
Industry: Industrial manufacturing
Revenue: US$17.5 million
Oracle products: Oracle E-Business Suite applications, including financials, purchasing, discrete manufacturing, inventory management, telesales, service contracts, and field service
Length of tenure: Eight years
Education: BE, Father Agnel; MBA, S.P. Jain Institute of Management & Research; Accelerated Development Program, Wharton School of Business
It’s ironic but true—just because a company is growing quickly doesn’t necessarily mean that it’s also successful. Without the right business processes and IT infrastructure in place to handle exploding sales, a hot company may be plagued by quality-control problems; poor customer service; or the inability to accurately manage finances, suppliers, and other vital resources. The key is staying a step ahead of growth challenges with business systems that can efficiently scale to meet the needs of a dynamic organization.
This is a fact of business life that Vikram Mehta understands well. As managing director of Spartan Engineering Industries, a Mumbai, India, manufacturer and supplier of construction machinery and equipment, he has seen the company’s sales skyrocket from US$1 million to US$17.5 million in just eight years. An end isn’t in sight. He and his senior staff believe that there’s an opportunity for Spartan to reach US$200 million by 2025.
“We are seeing many business opportunities for enhancing revenue, expanding our product portfolio, and promoting our company’s brand,” Mehta says.
But success hasn’t blinded him to the challenges that, if not managed successfully, could derail these growth plans. Topping the list is the natural volatility in the local economy and the swings in the value of the rupee. Economic uncertainties like these require comprehensive control of financials and all other aspects of Spartan’s business.
So to capitalize on the region’s business opportunities and address some fundamental business challenges, Spartan’s management traded in the company’s outdated spreadsheets and legacy business processes for a new implementation of Oracle E-Business Suite. And thanks to a rapid deployment methodology aided by Oracle Business Accelerators, Spartan achieved this important upgrade fast enough to keep its business on an upward trajectory.
“We streamlined financial, inventory, and manufacturing management and reduced supplier invoicing time,” Mehta says. “Now we can respond to customer service requests significantly faster.”Time for a Change
The new implementation enabled Spartan’s internal processes to catch up with the company’s growing business. Established in 1971, Spartan is one of India’s fastest-growing construction equipment manufacturing companies, thanks to products and services ranging from bar cutting and bending machines, hoists, rope-suspended platforms, and tower cranes to technical consulting, machinery leasing, and postsales services. Spartan now operates two manufacturing plants on the outskirts of Mumbai and seven sales and service centers across India.
But Spartan’s management gradually realized that a continuing reliance on spreadsheets and outdated reporting systems would only exacerbate problems that had already surfaced, including key business data that was inaccurate, outdated, and redundant, and the inability of interdepartmental systems to work together effectively.
We streamlined financial, inventory, and manufacturing management and reduced supplier invoicing time. now we can respond to customer service requests significantly faster.”
“We realized that we needed to move to a comprehensive enterprise resource planning [ERP] system for a number of reasons,” Mehta explains. “We were seeing increasing difficulties in tracking raw materials, spare parts, and various machinery components. We also had to cope with delays in updating our accounting records due to complexities in gathering data from widespread locations. In finances and other areas, we were experiencing an excessive duplication of time, effort, and cost in gathering data and generating reports, which made it difficult for managers to make decisions on the latest information.”
So Spartan’s senior managers developed a short list of what they needed to grow and thrive in the years ahead. First, they wanted to consolidate business-critical ERP information from two machinery manufacturing facilities and seven sales and service centers. Another priority was replacing the legacy finance system that had reached its end of life and automating the manual recording of inventory, purchasing, and manufacturing data. Next, Spartan’s staff wanted to manage sales and marketing information for more than 10,000 machinery products in an integrated system, rather than on disparate spreadsheets. Ensuring that ERP, sales, and customer data is consistent enough to eliminate disagreements about which datasource is the most accurate was an important goal. Finally, the managers sought to implement international best practices for ERP and customer relationship management (CRM) processes.
Spartan’s management enlisted the help of Nishnaat Management Consultants, a company experienced in deploying ERP systems, to scope out the project, develop an implementation roadmap, oversee the implementation of the system, facilitate change management, and oversee business process reengineering.
Together, Spartan and Nishnaat evaluated a number of potential ERP solutions against the list of project goals and eventually chose Oracle E-Business Suite. “Spartan chose Oracle because it fits our requirements better than its competitors,” says Kamran Moosa, consulting partner at Nishnaat Management Consultants. “Oracle also enabled us to help Spartan adopt international best practices for ERP and CRM procedures across locations and to enhance its customer service processes. Based on our requirements for the next five years, we could see that Oracle’s applications were a better choice for infrastructure, scalability, costs, and vendor support.”
Spartan’s Oracle E-Business Suitedeployment includes Oracle Financials to eliminate the dependency on an antiquated accounting system. Oracle Purchasing,Oracle Discrete Manufacturing,and Oracle Inventory Management are all helping ensure that Spartan’s operations run efficiently and cost effectively while also meeting growth demands.On the Fast Track
But moving to Oracle E-Business Suite wasn’t the only goal. Spartan’s management also wanted to make the transition as quickly as possible to reduce the impact on business operations. To do this, leadership selected Oracle Business Accelerators, a set of preconfigured industry best practices and a hosted configuration tool that are designed to dramatically reduce implementation discovery, configuration, and testing time. Oracle Business Accelerators can compress implementation project timelines and mitigate costly project scope creep.
For additional help, Spartan hired Chain-Sys, an Oracle Specialized Partner, to implement Oracle E-Business Suite and provide postimplementation support. The partner also managed the deployment of Oracle Business Accelerators. “Oracle Business Accelerators offers a rapid-deployment methodology for a world-class ERP for enterprises whose goal is to get a new system up and running very quickly,” says Austin Davis, vice president at Chain-Sys.
The teamwork and resources of Oracle Business Accelerators helped Spartan meet one of its prime initial objectives—it completed the full implementation within five months. Other similar projects that didn’t use Oracle Business Accelerators could have taken eight months or more, Moosa says.Overcoming Challenges
Going into the implementation and during the five months of hands-on work, Spartan staff compiled a list of best practices that helped ensure the project’s success. First, Mehta designated a senior manager to “own” the project and take responsibility for it on a day-to-day basis. This executive worked closely with representatives from Nishnaat and Chain-Sys and had the power to make decisions without having to consult with others. “This sped the decision-making process and kept the project on track,” Mehta says.
The move from legacy systems under a tight deadline presented some additional challenges for Spartan. First, the company’s underlying business processes required reengineering. “Spartan’s business kept growing so fast that the company didn’t have time to reevaluate its processes on an ongoing basis,” says Divyesh Muni, the project head and an executive at Nishnaat Management Consultants. “So in many cases we had to redefine the business processes to make the company more efficient.”
Another issue when transitioning from legacy systems is moving existing data from a large collection of spreadsheets, business applications, and data repositories into the new environment. To help, Chain-Sys provided its appLOAD Suite, a data conversion tool designed for Oracle E-Business Suite. It accepts data input in spreadsheet and XML formats or directly from a database. The solution performs prevalidation, cleansing, and correction capabilities before loading the data into Oracle E-Business Suite. The tool also cleanses and validates the data for the ERP system and enables organizations to configure the necessary internal rules for business processes, governance, and legal requirements. “appLOAD Suite is designed explicitly for rapid deployment by getting all the data from legacy environments into my new system,” Davis says.
Before data loading can take place, organizations need to assess their data requirements, including what legacy data will be relevant going forward. “Many customers say, ‘I want all my data,’” Davis explains. “But people need to understand that their ERP is a transactional system, not a repository of historical information. So we try to educate organizations about what their new system is going to deliver based on the functionality that Oracle E-Business Suite offers.”
The answer starts with legal considerations, such as what data by law the organization is required to keep on hand. “Once you answer that question, it becomes easy to determine how much data from the legacy environment will need to be brought into the new transactional environment,” says Davis.
We now have a system that can serve the present needs of our business and also scale for the continuing expansion we expect to see in the years ahead.”
Extensive upfront analysis of the legacy systems also played a key role in achieving Spartan’s project goals. “We had done a long and detailed business process study before the Oracle E-Business Suite implementation even started,” says Nishnaat’s Muni. “We had done a thorough scoping exercise and a thorough business process study so that when Chain-Sys came in we could discuss every individual process in detail. Doing a lot of homework before the implementation is essential for success.”Counting the Benefits
Spartan and its consultants scheduled the implementation to be completed by the beginning of March to give the company a month to become comfortable with the new system before the start of its new fiscal year on April 1.
With a single, organizationwide information repository and interdepartmental integration, Spartan has seen a number of important business benefits. It can now respond significantly faster to customer service requests for construction equipment by integrating customers’ contact, purchasing, and service histories, eliminating the need to call customers for more information.
In addition, the solution has enhanced managers’ decision-making by providing a consolidated view of sales cycles, including the status of each sale and the performance of individual employees.
Spartan’s finance department can now complete month-end financial processes in 24 hours, rather than spending at least a week consolidating and checking disparate accounting information. Managers also have greater visibility into the status of raw and semiprocessed materials with its outside vendor.
Executives can also see the entire history of the equipment it sells and leases for improved after-sales support. Sales operations also benefit. “Now, my sales manager can generate a quotation and hand it over to the customer on the spot, not as a follow-up after the meeting,” Mehta says.A Long-Term Plan
With Oracle E-Business Suite as a foundation, Spartan can now continue its hyper-growth phase without fear that its underlying operations won’t meet the demands of a larger company. “We now have a system that can serve the present needs of our business and also scale for the continuing expansion we expect to see in the years ahead,” Mehta says.
Photography by Shutterstock