T-Sony to E-Sony

Sony India was set up as a fully owned subsidiary of Sony

Corp. in 1995. During the first three years of operations, it laid emphasis on

setting up an infrastructure for both manufacturing and sales and distribution

of its products in India. It set up a factory in Dharuhera, near Delhi, and

direct sales offices in the four metros–Delhi, Mumbai, Calcutta, and Chennai.

Today, it has a network of 13 outlets, 33 distributors, and 1,475 dealers across

the country. In 1998 it added a development centre in Bangalore.

This was also a time when the Internet was kicking up a storm

of change among traditional companies world over. And Sony was not to be left

out. Soon the direction from Sony Japan was to move from being a traditional

Sony (T-Sony) to become e-Sony. All sales companies were asked to prepare a blue

print for e-transformation. In the new regime, 10 percent of all sales revenues

would be earned through e-business. Top of the line and niche digital products

were to be sold via e-commerce channels. And anything with the "e"

prefix was to be given topmost priority.

Implementing this transformation, with the limited

communications infrastructure in India, was not an easy job. However, Sony India

lived up to the task. Its SAP R3 ERP implementation, in fact, became a pointer

to other implementations in Sony worldwide.

The Transition

A year and a half back, Sony India had LANs with dBase

processing the inventories and all these figures collated at the headquarter by

bringing them together through Sprintmail at the month-end. On the

communications front, the company experienced a nightmare using leased-lines. A

complete re-haul of both IT and communications infrastructure was needed at that

point. The pre-requisites were, one, to have all functions and business units of

the company networked and, two, a stable IT backend system to process critical

data.

It chose IBM India to implement the entire project. The

reason: IBM provided a single point service for hardware, software, networking,

and systems integration. The solution that was offered was SAP R3 implementation

on a VSAT network. It chose VSAT because of its earlier bad experience with

leased-lines.

The company went for a 64 Kbps SCPC DAMA VSAT backbone

connecting its headquarters Delhi with Mumbai, Bangalore, Chennai, and Calcutta

in a hub-spoke topology. Its warehouses in cities like Chandigarh and Cochin

were connected on 32 Kbps links. The VSAT service provider chosen for the

project was HECL. The 64 Kbps backbone was configured to transmit data from

applications like e-mail, Intranet, ftp, and SAP on a channel of 48 Kbps while

the other 16 Kbps channel was reserved for voice communications.

IBM got an AS 400 server to host the number crunching SAP R3

application. The back-end data processing, which used to happen through dBase

was now shifted to SAP R3 and the aggregation of the data was through the VSAT

network. The challenge was to allow employees as well as authorized service

centres and dealers to log onto the SAP system using both dedicated links and

the Internet. For the partners, the system was to enable enquiry of outstanding

balances, ordering of spares and finished goods, provision of sales support and

marketing/sales literature. The missing piece required for this was mySAP.com,

which was selected as the B2B engine. This was also integrated into the system.

During this phase, Sony India was able to launch a web site

and an Intranet. The B2B system was also up and running.

An Ongoing process

The transformation is still on at Sony. Work has started on the next logical

step–B2C. The company is waiting for the government policy on e-commerce.

Talks are on with payment gateway companies. Sony Corp. has now also indicated

its desire to synergize its operations in India. There are plans with IBM for

having a combined Group portal for Sony India, Sony Music, and Sony

Entertainment. Sony India has a target of spending at least one percent of its

turnover on IT. It has realized that support is very crucial and critical for

its existing infrastructure. A strategic outsourcing partnership with IBM on

this line is on the cards.