By David A. Kelly
Doing business in India takes understanding where opportunities are and how India has changed in recent years. Continued economic growth means a strong need for enterprise applications and IT infrastructure. Industry experts indicate that enterprise resource planning (ERP) is the dominant type of enterprise application purchased in India, followed by customer relationship management and supply chain management.
India was everywhere at the Davos World Economic Forum earlier this year, as Indian executives and government officials used the event to promote India's position as the fastest-growing democratic economy in the world. Beyond its borders, the country is sometimes seen as an immense and exotic land. For many consumers, it's also the voice on the other end of the phone when they call technical support for their computers, telephones, or television sets.
Revenue: US$2.5B in FY05 and FY06
Oracle products: Oracle E-Business Suite, including Financials, Procurement, Process Manufacturing, Oracle India localizations; Oracle Discoverer; Oracle9i Real Application Clusters, Import, Export, and Insurance Add-Ons for India; Oracle's PeopleSoft Human Capital Management; Oracle Consulting
Other products and services: Accenture consulting services; IBM AIX 5.3 operating system; IBM p570 servers; IBM TotalStorage DS8100
LG Electronics India Ltd.
Oracle products: Oracle E-Business Suite, Oracle Business Intelligence, Oracle Customer Relationship Management, Oracle Partitioning, and Oracle Database
Revenue: US$16 billion
Oracle products: JD Edwards EnterpriseOne, including Sales and Distribution, Manufacturing, Finance, and HR
Other products and services: IBM eServer i840 with OS/400; Citrix/Windows TS; Intel servers on a Citrix server farm; IBM WebSphere; MIMIX online replication implemented for high availability; Create!form solutions implemented for output management; hybrid WAN consisting of leased lines, VSATs, virtual private network (VPN), RF links, dial-up connection using PSTN and CDMA mobiles
But call centers are far from the only area that Indian businesses are focused on. Businesspeople who are paying attention know that India's best years are still ahead, and opportunities are there for the taking.
"For the last three or four years, India has definitely been more than just outsourcing—there is great potential for local business," says Raj Ganesan, director, Hackett Group, a global benchmarking and consulting company. "It's a huge market—in fact the middle-income group of Indians is larger than the comparable population in the U.S.—it's more than 100 million people and growing fast. There's a lot of business opportunity and growth there."
For example, take Hindalco Industries, the 44-year-old flagship company of the Aditya Birla Group—itself one of the oldest organizations in India, having been founded in 1857 as a cotton trading operation. Hindalco is a vertically integrated manufacturer, extracting bauxite from mines, transforming raw materials into primary metals, and fabricating them into everything from rolled products, extrusions, and foil to alloy wheels for cars. Hindalco's product portfolio consists of more than 50,000 finished goods. Like many businesses in India, one of Hindalco's biggest business challenges is managing exploding growth. To help with that challenge, Hindalco turned to Oracle E-Business Suite in 2003. "When we started the project to convert our business applications to Oracle E-Business Suite five years ago, Hindalco was a [US]$500 million company. Now we've grown to $2.5 billion and our plan is to become a $5 billion company by 2010," says Sanjeev Goel, senior vice president of information technology for Hindalco. "We've been growing very fast, both organically and inorganically. In addition, we've been highly successful with good profit margins."
The results are spectacular: "We've gotten nearly 30 to 50 percent cycle time improvements since migrating to Oracle E-Business Suite," says Goel. "Production and sales have gone up by nearly 18 to 20 percent, but our inventory has come down—we've reduced our outbound inventory by about $12.47 million, while our inbound maintenance, repair, and operations [MRO] inventory has been reduced by about $1.69 million."
These types of results have not only made shareholders happy, they've also caught the attention of many of the world's leading technology companies, such as Oracle.
"India has become a significant market for Oracle over the years. The size of the economy, the size of the population base, and the recent trends of sustained economic growth mean that the consumption and need for IT will increase significantly over the next 10 to 30 years," says Krishan Dhawan, managing director of Oracle India, a wholly owned subsidiary of Oracle Corporation. Seeing the potential, Oracle has made a big investment in India, staffing the subsidiary with the largest number of Oracle employees outside of the U.S., most of whom are engaged in global development and support roles. However, seeing the market potential, the number of market-facing employees has increased significantly over the past couple of years. "Our focus at Oracle India is on serving the broad domestic markets that are already growing quite significantly, including government, financial services, telecommunications, and general industry," adds Dhawan.
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