Top IT deployments

ERP rising

Although desktops led the list of top IT infrastructure deployments among medium businesses, ERP was second with servers finishing third. By Varun Aggarwal

With vast IT budgets and increase dependence on technology, medium businesses have a sharper focus on IT policies. They usually have a well-defined IT budget rather than spending just any amount on an ad hoc basis, a trend which was seen to be persistent in the small enterprise segment. Since these organisations already have their basic IT infrastructure in place, they are either planning expansion or leveraging technology.

It is common to see companies overshooting their IT budgets. What is interesting is the fact that in a few cases, some organisations completed their IT deployments for about 25 percent less than the stipulated budget. The decreasing prices of products and services made this possible in most cases. However, for 70 percent of organisations surveyed, their IT budgets remained the same.

The Chemical & Pharma industry overshot its budgeted amount in 31 percent of the cases, the highest among surveyed industry verticals. The Auto & Auto Components sector was the most accurate in terms of following budgets. Only 17 percent of these organisations overshot their budget for their most significant IT deployment.

There were multiple reasons for excess spend over the budgeted amount. One of the most significant reasons which most organisations faced was that the organisations opted for better technology or products which were more costly. Apart from this, increase in the prices of various products and services and missed deadlines stood in the way of sticking to their IT budgets.

Impact of deployments

Even the smallest development in terms of technology can have a long lasting impact. While, good decisions can help you gain a competitive advantage and increase productivity, poor deployments can result in work getting deferred. Thus, ensuring the use of the right technology at the right place is very essential.

Henkel CAC wanted to replace its FoxPro based legacy application with a state-of the-art solution that would help improve business performance. Thus, V S Manikkam, Head IT, Henkel CAC, decided to implement Ramco e-application’s production, financials, human resources, inventory and quality modules on Windows Server. It helped them achieve improved efficiency in terms of yield, better control on business operations, improved cash flow, improved accountancy efficiency, and a better work-life balance.

While Manufacturing/ Engineering and Chemical & Pharma focussed on streamlining their processes while deploying their most significant IT projects, for FMCG organisations, cutting costs was the key driver. Retail/Services were more focused on building a competitive advantage with the deployment while IT/ITES companies needed faster delivery of products and services.

Desktops on top

Desktops remained on top of the IT infrastructure deployments list as most medium businesses have been expanding their IT infrastructure and purchasing desktops is the first step. While the average number of desktops in the organisations surveyed was found to be 361, none of the verticals found this number satisfactory and there was a strong need to purchase more desktops across verticals.

While most organisations saw the need to purchase desktops and notebooks, only 16 percent of organisations showed interest in thin clients. Thin clients are better than PCs as they offer lower Total Cost of Ownership (TCO). By reducing maintenance and installation time, thin clients keep downtime to an absolute minimum. Take the example of a business that has a server and five PCs. Assume that this business needs to apply a security patch for an application that’s installed on all the PCs; it would need to update and configure all five PCs, one at a time.

With a thin client, an update on the server ensures that all the thin clients are running the latest software. Client management and maintenance is centralised. It attempts to address staffing shortages, data privacy and security issues, and the quest for value from technology purchases. Centralising core functions of processing, disk storage, memory, applications and operating systems shifts the requirement for performance significantly, with the entire burden being placed on one or more back-end servers. With increasing awareness, more organisations are planning to invest in thin clients in the current year.

Although the benefits of notebooks are numerous and the cost of ownership is also declining consistently, most organisations prefer to restrict usage to limited staff. Since notebooks can also pose security threats to organisations apart from increasing costs, organisations choose to deploy more desktops and restrict the deployment of notebooks only to departments like marketing and for senior management.

Organisations in the medium sector are also exploring possible options to cut costs. Companies are increasingly evaluating open source operating systems. Om Logistics Pvt Ltd has deployed as many as 1,500 workstations running Linux. This not only saves them licensing costs, but also reduces security-related expenses.

Enterprise Applications

Medium businesses are no more satisfied with simple off the shelf products for IT management. They are looking for better, tailored software to boost productivity. There is an increasing focus on ERP and other enterprise applications. More organisations are taking their business strategy the IT way.

Manikkam opines, “Using the ERP tools we have developed hundreds of reports, which are helpful for day-to-day analysis and annual statutory requirements. We are now able to find problematic transactions with less time and effort.” He finds the ERP application very user friendly and easily adaptable to the organisation’s business operations.

About 17 percent of the respondents deployed an ERP application in 2006 and termed it as their most significant IT deployment for the year. Already 95 out of the 167 respondents have some kind of enterprise application deployed, out of which 78 percent have ERP apart from other applications. The deployment of ERP was observed to be most dominant in the FMCG and IT/ITES sector. These industry verticals are bullish about ERP. About 64 percent of the respondent in the FMCG vertical and 67 percent in the IT/ITES vertical are planning to invest into ERP in the current year. Other important enterprise applications were database applications, messaging, customer relationship management (CRM) etc.

Servers

The importance of servers has increased with the rise of enterprise applications. Though preference is still given to x86 servers running Windows, there is a rise in the demand for Linux servers as well. Organisations in the Auto & Auto Components vertical are the biggest consumers of servers. All the respondents from this industry vertical have already deployed servers and most are still looking to invest in servers in the current year. Respondents from Auto & Auto Components and IT/ITES seemed to be more fascinated with UNIX systems rather than Linux.

Go..IP solutions (a system integrator) uses both Windows and Linux servers. It uses Linux servers for the purpose of research and development as its software development group find Linux more comfortable to use for R&D. However, it runs its mail infrastructure on Exchange on Windows Server since it finds Windows to be more user friendly.

As computing needs and the criticality of data rise, medium businesses are looking to UNIX and Linux which they perceive as stable. Microsoft Windows servers are preferred for the ease of use. Though concepts like server virtualisation are not yet prevalent in these organisations, some of the respondents are still exploring the option. This would drastically bring down their cost of operation.

Connectivity

Internet connectivity was the next most important in terms of IT deployments in 2006. Leased lines were used by 74 percent of respondents, while 56 percent also had DSL connections. With an aim to connect remote locations where you wouldn’t find any service provider to support, companies are investing into VSAT connectivity. One such company is Apeejay Surrendra Corporate services Pvt Ltd, which was facing challenges in terms of getting its 17 tea gardens connected, which were located at remote locations. Thus, they deployed VSAT and now all the 17 gardens are connected through a central server.

Apart from leased lines, DSL and VSAT, 24 percent of the respondents were found to be using radio links for connectivity. However, it is still surprising to see that not all organisations in the medium enterprise segment are connected. The most customer centric industry vertical of Retail/Services was found to be the least connected of them all. Only 87 percent of the respondents from this sector were found to have connectivity. There is a huge focus on leased line connectivity right now and most respondents, who are currently not connected, are planning to go for leased line connectivity in the current year.

Security

Security is one area which small businesses take for granted. However, this is not the case with medium businesses. While it was seen that in terms of security most small businesses had only anti-virus software, medium enterprises are taking security more seriously. They are more focussed on security than anything else. Not only have these organisations implemented sophisticated security solutions, many have well placed security policies.

Apeejay Surrendra Corporate services Pvt Ltd has solutions like firewalls from Cisco, UTM (unified threat management) from Fortinet and an anti-virus suite from Trend Micro. Their focus on security can be observed looking at the kind of solutions they have, but this is just the beginning. They have well placed policies for information security. People at different levels in the organisation are given access only to a specific set of URLs on the Internet apart from limited access to enterprise applications.

There’s a better understanding in the medium business segment that having just an anti-virus solution is not enough. You need to have various levels of security in order to ensure safety of your data. Apart from this, well placed security policies are required to ensure that the security solutions are providing an optimal level of security.