Vertical Focus

IT to cement infrastructure growth

The CIOs of the infrastructure vertical are compelled to look at IT as a business driver. By N Geetha

public infrastructure projects plays a central role in promoting a strong and growing economy for any nation. It is substantiated by IDFC's (Industrial development finance corporation) figures, which states that the infrastructure vertical needs to grow at a CAGR of 15% over the next years to support the growing requirements of the Indian economy.

An economic survey from IDFC observed that the government has offered various incentives with the objective of stimulating and mobilizing increased private sector investments either from domestic sources or foreign avenues.

The survey reveals that that the total investment requirement for up-gradation and modernization of the country's infrastructure projects runs into a few billions of dollars. Further it is said that the investment required would be around $ 445 billion over the next five years. Aligning with this growth strategy, the CIOs have been working out ways to increase their IT spend too which is imperative to drive growth. Most CIOs agree that the infrastructure vertical, which has been traditionally a conservative IT spender, has surprisingly been projecting a different outlook. The last one year which has been the toughest recessionary period saw great momentum in IT spending amongst these companies.

The CIOs were given a free hand to evaluate their [IT] spending strategy and also deploy good IT projects which can directly boost business revenues.

Satish Pendse, CIO, Hindustan Construction Company (HCC) said that this sector had not felt the slump and given the 4% of the GDP spent on infrastructure—we expect a double digit growth for this market.

However, Pendse opined that the sector has been grappling with growth opportunities, while the IT processes have been ageing. "This calls for the need to scale processes which goes with the challenge of managing growth amidst lack of solid processes,” pointed Pendse. The lack of appropriate manpower relevant to the power sector is another challenge that he sees where the requirement of IT is immense.

Subbarao Hegde, CIO, GMR believed that given the substantial scale and exponential growth of the infrastructure, GMR was in a position to develop a sustainable competitive edge to be ahead of the competition. "As the boom in infrastructure development continues further world-wide, the technology will continue to play a vital role in our businesses (energy, airports, highways and urban infrastructure including SEZ) will provide adequate bandwidth for the group to effectively leverage their core competencies and expertise for consolidation,” said Hegde. But his priority and challenge would be to improve people productivity while reducing the business costs associated with travel and communications.

Nita Mahuvakar, CIO, Gammon India observed that the mindset within this sector had gone through a sea change where technology is considered to be important for growth. Obviously, the growth and IT focus bring in greater business challenges for Mahuvakar, with the wider spread of projects across remote locations. "We have about over 100 projects spread across different locations where connectivity becomes an issue and deploying certain high-end technologies becomes a challenge," said Mahuvakar.

2009 witnessed certain key project deployments within this sector and kept the IT heads on their toes to ensure the benefits of their deployments.

Key IT projects

The primary focus which took precedence over others for Hegde was to handle change management for building a knowledge-based enterprise though training and collaborative transformation across the organization. An e-overhaul is termed as the thrust area.

As per analyst Arpan Gupta, Manager, Consulting, Industry Verticals and Services Research, IDC India about 22% of total IT spending on infrastructure will be on implementing new projects. The core spend would be towards deploying life cycle management, ERP and some flavors of CRM.

Companies such as Gammon India felt the need to have an ERP system to have tighter control on transactional systems and streamline business process covering HR, purchase, project execution, accounting and inventory. "We went in for an in-house developed application—SITE ERP with a little tweaking to our needs and deployed across all the functionalities,” said Mahuvakar. The priority for Mahuvakar has been to improve user productivity within the company and hence deploy some amount of Business Intelligence and document management solution developed in-house on the .Net platform.

Hegde found it imperative to ensure that the learning of the employees on projects was captured, archived and disseminated in a structured and secure manner. A detailed study of the project acquisition and execution processes resulted in the identification of the functionalities that were required to be provided in the collaboration and knowledge management systems. "Evaluating various technologies with regard to current functionalities and future roadmap and integration enablement with future releases, we zeroed in on Microsoft SharePoint suite for collaborative solutions", said Hegde. GMR's study resulted in the identification of SharePoint Server 2007 as the platform to build the collaboration and knowledge management system, which is tightly integrated with Microsoft Exchange, Calendar, Microsoft Project, Office OneNote and Office Communication Server 2007 R2 (unified communication).

GMR would use the tool in project rooms to manage project tasks, issues, risks, documents, to help structured discussions with experts within the group.

"We have made the tool available over the Internet for our partners including design consultants, EPC contractors etc., which is resulting in savings in time besides having a common version across the enterprise," said Hegde.

While HCC has been using ERP from SAP for its various functionalities, Pendse found the need to go beyond ERP automation of supply chain and extend it to supplier portal and implementation of a document management system (DMS). The objective around deploying a DMS according to Pendse was to have a platform for global suppliers to easily access the procurement opportunity provided by the organization. HCC deployed components of Supplier Relationship Management (SRM) and DMS from SAP. It purchased about 1,500 SAP licenses towards this project.

The uniqueness that Pendse found about the project is to have a simpler process of handling 'C' forms through the portal. Additionally managing and vehicle tracking has become easier with document management systems integrated with SAP-ERP.

The tangible and intangible benefits that Pendse found were immense. According to him, in addition to deriving RoI on communication costs with the suppliers, real estate costs were saved. Supplier interaction time and lead time for various transactions has been reduced.

While 2009 had been critical in terms of IT deployments, the CIOs intend to continue the momentum as they go along.

Road ahead

The CIOs of infrastructure sector have now been in pursuit of newer technologies and earnestly tracking emerging ones. Hegde targets a Green IT initiative as his future plan of action. He has put a measurement concept for power consumption of data center in place right at the inception stage. Before getting into the virtualization stage, GMR developed a virtual lab to carry out the server and storage consolidation, replaced inefficient equipment and made a transition toward energy-efficient blade servers.

While building more technologies over the existing supplier portal, HCC's Pendse intends to provision a payment gateway for its portal. "I would like to drive mobility applications initiative and extend business intelligence to our supplier portal while inducting other functionalities of SRM such as vendor evaluation, vendor rating etc," said Pendse. Seamless integration between SAP of the key suppliers including steel vendors are key while integrating payment transactions. n

geetha.nandikothur@expressindia.com