ERP-A success story
MindTree needed an ERP to pull it all together for growth in their projects .It’s CIO knew the trick. Mr.Sudhir Kumar Reddy the speed lover initiated the ERP software. To him speed thrills, even though he left his 12 value 1000 cc Triumph at US, the love for speed made the project a big success. When Mr.Reddy returned to India to join the 1,150 crore organization in 2005 for the implementation of its first ERP his aim was to pull the organization closer together and to take the company in the right direction, as fast as possible.
It’s a spark in the company management that brought the idea of an ERP, to reduce the chores of manual processes and spreadsheets. And that is how Mr.Reddy and team was introduced into the role of ERP development. They have been rolling a module a month for nearly 2 years. This collective effort under a good leadership made the project mPower a success.mPower gave MindTree almost real-time visibility to all of its resource utilization and profitability of every project.
Story of mPower : ( ERP)
Within two years of implementation it increased its resource utilization by around 3.5percent and accuracy of sales forecast data by 95 percent. MindTree one of the fastest growing IT and R&D services in India and globally. The growth of the company since 1999 when it was founded is exponential. Its no exaggeration MindTree crosses $100 million revenues in April-2006, and broke a record among Indian IT companies. It grabbed a 40-percent growth in project handled every year.
But the unpredicted growth brought problems as well with it. It became very tough for the management to handle the operations of the company even with 20 standalone systems with Oracle at one end and Microsoft Excel at other end. Business managers found it very hard to keep track of growing complexity and diverse operation of the company. Initially it calculated its cost of services manually and it lacked an integrated technology. And because of the same reason they couldn’t accurately measure their monthly growth. At this point what MindTree needed was a project -centric automation of processes.
Another serious issue the company management facing was the costing of projects on the monthly basis. This is a very crucial task because the process depends on several factors, like staff’s role, whether he is offshore or onsite, his absence, how many hours he was into the particular project, his travel costs etc. And making a final billing sheet needs checking a hundred spreadsheets, and thus the process is tiring and time consuming. This created a hurdle for the project managers to know how much their client owe in a given month. If revenues of a month cannot be calculated at the end of the month itself it becomes difficult to plan the system.
What was needed at this point, says Krishnakumar Natarajan, CEO of MindTree, was a system that could give them “billing, gross margins, financial parameters, and the amount of unused talent every month-end. In the services business, if you have people who are unbilled, it’s a loss forever.”
By 2004 MindTree management realized the need to go beyond spreadsheets and to move into something more effective, ERP software. They chose to begin with two very critical processes, Order-to-cash (OTC) and project planning. And phase two will be automating the payroll process and third phase include bringing in customer relation management (CRM).Crucially Mr.Reddy chose to remove project planning module from the first phase. Even though it’s tough to implement OTC will yield maximum benefits on completion, and according to him company needed strong examples at that time.
By April 2006 OTC was completely automated. This enabled MindTree to integrate the time staff spent on a project with billing. This made a huge difference to invoicing and billing processes. With this revenues of the month can be calculated easily with three days, even if there is a huge growth in the number of projects.
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