One of the biggest success stories in the Indian two wheeler segment, Hero Honda is a household name today. What’s not so well known is the fact that the company has successfully used IT to help it reach the top. Gaurav Patra profiles the motorbike giant’s IT story

Balasubramanian feels the company’s business analysis has become sound and credible thanks to its stable IT infrastructure

Hero Honda is a leader in the two wheeler segment in the country, and even claims to be the world’s largest two wheeler company in its advertising. To reach the heights that it has, Hero Honda has successfully leveraged the IT advantage, especially in recent times.

The company has a highly efficient and reliable network today. But till 1998 Hero Honda depended on legacy systems, which had a high failure rate. “The set up was not in a position to cater to the expansion that Hero Honda went through and was not suitably updated. Because it was obsolete, the management decided to revamp the entire IT set up,” explains S R Balasubramanian, vice president, Information Systems, Hero Honda Motors. At that point of time the management perception about IT was also changing and they decided IT would be part and parcel of Hero Honda. This helped in modernising the information systems at the company. Apart from this, competition in business and deployment of bandwidth hungry applications forced the company to migrate from a slower legacy network to the new faster and more reliable network.

The IT infrastructure of the company is connected over three major Local Area Networks (LANs). These connect the corporate office in New Delhi with two manufacturing plants (Gurgaon and Dharuhera), and other zonal and marketing offices. 21 locations are connected through its Wide Area Network (WAN) set-up. Most of these locations are connected with the corporate office through VPNs, leased lines, and at few places through VSAT connectivity. The motorbike major has a total of seven TDM/TDMA VSATs and two PAMA VSATs. As far as the VPN set-up is concerned, it is still a closed-user group. For connectivity between its Dharuhera and Gurgaon facilities the company uses a very fast radio link. The company has installed the PAMA VSATs from Comsat Max as a backup facility. The Hero Honda network spans 750 nodes across the country.

Hero Honda uses 10/100 Mbps Ethernet switched technology for data transmission and is connected with both optic fibre and Cat 5 cables. Optic fibre is used for the backbone, which will also solve the future bandwidth requirements of the company. The company has three Cisco routers.

Mukesh malhotra feels ERP has helped the company to implement better cost control measures

The company also uses a mix of switches from three vendors: Cisco, IBM and 3Com. For non-critical applications, the company has opted for 3Com switches. “As IBM switches are cheaper than Cisco ones, we will be going in for more and more IBM switches in the future,” says Balasubramanian. All the switches and hubs at the company are managed devices. Apart from this the company also uses an IBM RS 6000 server for running SAP applications, and other midrange servers for running Ingres and Oracle. For Lotus Notes applications the company has opted for IBM’s Netfinity servers.

As far as other networking hardware is concerned, the Gurgaon plant has two Cisco routers, which are connected to an IBM LAN RouteSwitch, and the storage box is connected to the RS 6000 server. The company is also using a tape library, which works as a backup device.

One of the key features of Hero Honda’s networks is that most sites enjoy excellent backup facilities. For instance, Dharuhera is connected directly to Comsat Max’s PAMA VSAT main hub. The IT facilities at Gurgaon is connected with two electrical sources, two MCBs, and two UPSes. The company has also installed an extra server as a backup. It possesses a Network Attached Storage system, with plans to shift to a Storage Area Network. For this Hero Honda has gone in for an IBM Trivoli solution. “The whole idea is that information systems should be able to cater to 99 percent of availability. Even if a LAN or a switch fails it should just take 10 minutes to switch to another LAN or switch,” explains Balasubramanian.

Enterprise applications
A good and reliable messaging system was a long-standing need at Hero Honda. “When we first introduced messaging, it took off very well. To ensure its success the management arranged training programmes at all the three major areas and also invited the regional offices to join in,” says Balasubramanian. “The success of the messaging system was so good that people started overlooking the VSAT network”, he adds. The company messaging set up evolved around Lotus Notes. “We evaluated both Microsoft Exchange and Lotus Notes, and finally decided to go in for Lotus Notes.” The Lotus Notes application at Hero Honda evolved around those applications that users are familiar with. This is done as a part of the information systems plan along with the business plan to integrate information systems in the organisation, integrate all the departments. “As the management knew that the implementation of ERP would take some time, they wanted to use that time to introduce an IT culture in the company,” he explains.

After the successful implementation of this system, the IT set-up faced some problems during the first Diwali after the introduction of the messaging system. This happened because of huge number of greeting messages and card attachments. This prompted the company to introduce a new greetings system on the lines of Bluemountain.com. They opened up a car4.809 cmd’s library system and asked the users to go to the card library and select a card and send it across. By this, no attachment would go, but only the link. “After this we were able to avoid a considerable amount of traffic. And users were quite excited about having a card application. People started enjoying the use of IT applications,” says Balasubramanian. Subsequently, the company put up an intranet and workflow applications.

The next move was to implement ERP in order to integrate various functions and control its operations. The company went live with SAP R3 on February 1, 2001. It uses modules like production, materials, finance, marketing, assets, quality sales and distribution. Siemens Information Systems was the implementation partner for this rollout. The ERP implementation presented a high level of data integration. “ERP has helped the company immensely. Today nobody asks any other department for information. One can log in and see reports online,” says Mukesh Malhotra, deputy general manager, Hero Honda Motors. “We are able to implement better cost control measures. This has helped us in calculating the cost of consumables, tool inventory cost, power and fuel costs, and plant overheads. Because of this we are also ready for future SCM and CRM implementations,” adds Balasubramanian.

ERP helped in improving quality, access and usage of transactional data and suitably eliminated multiple entries. Besides, there was no need for manual reconciliation any more and operational processes were improved at various stages. Order processing was standardised across all functions. And real-time information on product cost, profitability analysis, dispatch and production status was available too. “One of the main reasons for the success of our SAP project was that the project was perceived as a business project, and not as an IT project. And different functional heads and module leaders were also involved in the project”, says Balasubramanian. Apart from this, the deployment of relational databases like Oracle and Ingres helped in consolidating data at one place and made it accessible to all authorised users.

Bottlenecks
Till date, the IS department has not faced any major bottlenecks. “With a proper plan and proper implementation of those plans, we have overcome all hurdles,” comments Balasubr-amanian. The only major problem the IS team has faced till date was management perception of ERP. They were of the opinion that ERP implementations were mainly failures. Many felt that instead of going in for ERP they should implement an e-business solution. Balasubramanian had to tell the management that one could not run e-business without a stable information systems structure within the organisation.

“Today, IT has taken off very well, especially with support from management. There has also been very good user support, which helped us in experimenting with new technologies,” says Balasubramanian. “Thanks to the stable IT infrastructure the company’s business analysis has become very sound and credible,” he adds. The company is now one of the reference sites for SAP, and only one of ten companies in the Asia Pacific region selected by SAP for this honour.

In the IT pipeline
In the near future the company is planning to introduce videoconferencing facilities and bar coding systems at the assembly section and store. Balasubramanian also has plans to implement some more modules of ERP like HR and production management. For dealers and distributors, Hero Honda has plans for Web-based standard connectivity.

The company is also is planning to connect some of its vendors through a process called direct online. By this the vendors will supply directly to the stores and there will no quality check, rather it will be self-assuring. “The whole idea is to make things completely automated,” says Bala.