Meeting business demands

Carnation Auto is an initiative by former Managing Director and CEO of Maruti Suzuki, Jagdish Khattar. The company is setting up a chain of multi-brand auto solutions and sales ‘hubs’ with services such as car maintenance, insurance, CNG/LPG retrofitment, body and paint, accessories and car customization, amongst others, under one roof for various auto brands.

The company also has plans to establish retail locations for new and certified pre-owned vehicles, and plans to set-up approximately 100 multi-brand auto solution hubs in the coming years. Carnation currently has 12 hubs in seven cities, with more than 700 employees, and is targeting 30 hubs by year-end.

Business challenges

Carnation customers are given a wide array of services ranging from regular mechanical servicing to financing and insurance requests. For this purpose, there was a need for the company to establish a centralized IT system that would consolidate information across the entire Indian automobile industry landscape. Additionally, this centralized IT system needed to include new and used car dealerships and distribution channel details, finance and insurance information, and a variety of service details including tyres, batteries, car customization, and accessories.

As Carnation was relying on technology to retain its key differentiation and reduce time-to-market, it chose Tata Consultancy Services (TCS) to provide end-to-end system integration services through a multi-year agreement for an enterprise IT solution. This scalable and integrated solution was designed to enable forecasting, inventory management, sales, HR, CRM, and payroll, as well as to provide business consulting, technology implementation, and support.

“We are happy to be associated with a growing brand that has a vision for transforming the automobile industry,” said G Srinivasa Raghavan, Country Head–India Business, TCS. “TCS will leverage its domain expertise and transformation capabilities to enable Carnation to meet its service roll-out schedule. This partnership will pioneer significant changes in the automobile retail market space.”

Reliability, performance, availability, and response time were the key considerations during the search for a technology solution. TCS, the implementation partner for Carnation, designed a cost-efficient and scalable technology solution that can cope with the changing needs of the business. It also proposed setting up the infrastructure on an end-to-end Red Hat platform.

“We considered a number of operating systems as the platform for our business-critical SAP applications, and after much testing and evaluation, we selected Red Hat Enterprise Linux Advanced Platform on HP ProLiant servers because it met our requirements and provided the best overall value, stability and performance,” pointed out Mohit Agarwal, CIO of Carnation Auto.

Jagdish Khattar, CMD of Carnation Auto, further commented that the company is built on customer expectations and needs, and the ability to deliver on their commitments and promises. These can only be enabled with technology. This is the first time a start up is attempting to roll-out a corporate structure in the automotive service domain. “There is a need for visibility, control and compliance. With their technical expertise and track record for innovation, Red Hat, SAP and TCS were our preferred partners of choice,” he added.

Red Hat solution

To ensure it had the capabilities to provide a consistent and high quality customer experience, Carnation needed a seamless automation. While the start-up company’s decision-makers had a clear vision of what they needed, they also realized the need to watch their costs.

“I did compare the system with a retail store. The deployment resembles a typical Point of Sale (POS) system, meaning it has to be accessible to end-customers as they check for information—for example, the availability of spare tires and equipment, status of service, the availability of receipts for payments,” stated Agarwal.

Response time is critical to a system that is partly exposed to the end customers as any performance delays would adversely affect end customers’ confidence in the solution. The system needed an enterprise-class operating platform that could aggregate information across domains and a customer-facing front-end that performed like a retail operation.

The solution was critical to the success of Carnation, which needed a rapid solution implementation cycle to gain mindshare, lead, and remain competitive. Realizing that performance, scalability, and costs were two main drivers for the solution, TCS and Carnation selected SAP Business Suite running on Red Hat Enterprise Linux Advanced Platform with integrated virtualization on HP ProLiant BL460c G6 servers.

Agarwal asserted, “Our unique business model is an innovative approach to an existing business method, and we have immediately gained traction and momentum with our end-to-end auto services strategy. An accelerated rollout and rapid scalability of our services was critical for early success, and TCS’s recommendation to deploy SAP Business Suite applications on Red Hat Enterprise Linux Advanced Platform and HP BladeSystems was vital for creating the transformational architecture.”

The company chose Red Hat Enterprise Linux Advanced Platform for a number of reasons, the most basic being lower costs, simplified management, scalability and performance with SAP Business Suite and HP ProLiant servers.

Red Hat Enterprise Linux Advanced Platform with integrated virtualization enables Carnation to quickly virtualize servers for testing and development, and try new features in-house before deploying them on customer-facing applications. Additionally, Carnation can rapidly push servers live into production, effectively increasing the utilization of servers without server sprawl in data centers.

“We have achieved truly outstanding performance with Red Hat. With Red Hat’s virtualization technology, we can maintain the hardware without affecting the performance by moving virtual machines on the fly,” said Agarwal.

The Red Hat deployment has given Carnation the assurance that its system is secure and easy to manage. The network comprising Red Hat Enterprise Linux Advanced Platform servers and desktop systems provides Carnation with the security and reliability it requires.

“Running our business critical SAP applications on Red Hat Enterprise Linux Advanced Platform has delivered significant improvements in performance. And the HP BladeSystem servers are very power-efficient, which translates into cost savings and a reduced carbon footprint,” added Agarwal.

As a result of SAP’s commitment to the Linux operating system as a long-term strategic supported platform, Carnation is assured of a solution that has end-to-end support from the hardware, to the operating system, and the business applications.

A large portion of Carnation’s cost savings resulted from the elimination of software licensing fees that are standard with proprietary vendors.

The solution was implemented in four months and has exhibited exceptional stability—a strong testament to the Carnation, TCS, and Red Hat teams, and most importantly, the stability of the underlying Red Hat Enterprise Linux Advanced Platform and HP ProLiant servers.

The factors that contributed to the decision to select Red Hat were compelling. Disaster recovery and availability of the data center were central to the solution and Red Hat Enterprise Linux Advanced Platform’s inclusion of clustering provided high availability and storage management capabilities.

Reaping the benefits

Carnation’s centralized IT system has given the company a competitive advantage, operational efficiency, informed decision-making at the outlet level, and a 360 degree view of the business for the headquarters. The company is now in a position to make rapid and informed business decisions, such as ordering spare parts or providing timely information to customers.

“Red Hat provides proven enterprise-class support at an affordable price. We make our IT decisions after thoroughly examining and understanding the potential impact on our business, performance requirements, and the net impact on our operating costs. In that sense, running SAP Business Suite applications on Red Hat Enterprise Linux Advanced Platform delivers maximum value to our business,” highlighted Agarwal.

The volume of data and the number of transactions are rising with each passing day. To address these demands, Carnation deployed a comprehensive set of SAP applications that included DBM (Dealer Business Management), BI (Business Intelli-gence), CRM (Customer Relationship Management), FICO (Financial Accounting/Controlling), SD (Sales and Distribution), HR (Human Resource), and MM (Material Management).

Carnation is pleased to have partnered with TCS and Red Hat, the leader in open source software, and expects to see upwards of a 30% cost savings on the IT investment in Red Hat solutions over a five-year period.

nivedan.prakash@expressindia.com