Complete supply-value chain is affected due to 3G delay

Lupin, headquartered in Mumbai, India, is a research
focused company with a state-of-the-art R&D center in Pune, and is a leading
global player in the manufacture of various high-end drugs. Besides, Lupin has
also gained a strong reputation as a provider of international quality
pharmaceuticals at affordable prices. Lupin's mission is to become a
transnational pharmaceutical company through the development and introduction of
a wide portfolio of branded and generic products in the key markets. Bearing
this strongly in mind, Mumbai based S Ramesh, CIO and president, finance and
planning and CFO, Lupin talks about the technological limitations in India, and
subsequent ICT solutions that Lupin is looking to implement in the near future.
Excerpts

Being a global company with constantly emerging technology, what is the
percentage loss of investment due to the delay in 3G?

The fact remains that the delay in 3G will impact business in terms of
speed, since we are a global company. India lags behind in new technology
implementations compared to our concerns abroad, and so this in turn affects the
progress in India.

For the time being, VPN is being used for data transfer; and we are trying to
get into the wireless space to track secondary sales for inventories and
documents. Wireless technology would help us better monitor sales. Thus,
PDA-held data transfer is being considered as an option for our sales team in
order to draw out the utilization plans for inventories.

Thus, the complete supply-value chain gets affected due to the delay in 3G,
which is very critical in the pharmaceutical industry. In terms of working
capital, there is a 23-25% loss due to the 3G delay.

There are lots of other technology solutions like cloud computing and
wireless options that require less bandwidth and provide a better output. Are
you looking at any of these?

For the new technologies, especially cloud computing, we are looking at
specific service providers who can provide better technology which fits into our
existing infrastructure and is cost effective also. We get proposals from time
to time, but will look at the overall value proposition and not only at the
advantages involved.

With increased options come increased risks. How do you cope with the
growing security issues in your organization?

We use a host of solutions that include encryption as well as a host of file
services. There is a strict security protocol followed in our organization,
which is a differentiated security policy across divisions. Thus, depending on
how critical the department's activities are to the company, the higher the
security provision. Basically, there are three kinds of access—broadband,
dial-up (which has been phased out), and Wi-Fi, which is very important for us.

For the pharmaceutical industry, in particular, any forward-looking
technology that you have an eye on?

RFID is definitely one major solution we are looking at, as it is important for
packing e-pedigree. Today people want to be able to identify between real and
counterfeit products, with so many cases of fraud. We have also upgraded SAP in
the last six months, and plan to organize a platform for various embedded
services like satellite programs, end to end supply chain, and a database to
enable analytical work. Typically, we spend one and a half per cent of our total
turnover on IT solutions, a figure which will increase by a few points this
year.

With the existing IT infrastructure, seamless connectivity is always a
nagging concern. How do you cope with this?

Bandwidth should be faster; now there are too many connectivity and speed
issues-3G will thus solve these problems. We have however upgraded our hardware
in the meanwhile, and most of the infrastructure has been outsourced to the IT
help desk or IBM, who manage the connectivity and network issues, thereby
ensuring 24x7 uptime. However, there is a need to improve on this as well.

It has often been said that 'more the merrier'. Can this be applied to
your vendors for IT solutions? Or do you believe that one-on-one is a better
policy?

Yes, we are looking to consolidate, as previously we used half a dozen
vendors for infrastructure maintenance in vain. Today we have a single vendor,
which is IBM; and our SAP is implemented by Mahindra (Bristlecone). The
advantage of a single vendor is also making the latest technology available in
terms of speed and cost. A single vendor is also more stringent, more efficient,
provides more uptime availability, is cost effective, and meets the future needs
as well.

How much of your yearly spend is allocated towards improving IT solutions
in Lupin? Can you highlight some of your landmark achievements in this respect
till date?

There have been no major changes in our IT budget in the last year. However,
we have implemented SAP and better satellite services like SEM solutions, which
would help in business intelligence and making solutions more robust. We were
the first to update SAP in the country, and are currently using version 6, with
plans to upgrade to something higher soon.

With mobile CRM becoming a buzzword in the medical industry today, do you
see yourself implementing it?

That is on the anvil. However, we are taking things one step at a time, and
have given ourselves a three-year roadmap for its full implementation.

Do you believe that outsourcing can sweeten the IT pill? Please elaborate.

Yes, outsourcing will sweeten the IT pill as it will provide for more
specialization, which in turn would lead to more customers as well as a better
utilization of capacities and other infrastructures. Services offered will also
be better in terms of specialization and cost, as they would be spread over a
much larger volume.

What are the major challenges that you face as a CIO in your organization?
Give a brief sketch of how these problems have diversified over the years.

Attrition was one of the biggest challenges, though numbers have come down
drastically today. We have to evaluate the pros and cons for new technology
options. In this regard, we are more constrained by the outside environment than
the internal infrastructure, the former of which cannot support our systems,
with the minimal choice available at present. Thus, bandwidth and infrastructure
are the two biggest setbacks that we are facing in IT in our organization today.

Beryl M

berylm@cybermedia.co.in