How MindTree’s New ERP Saved It Millions

What was needed, says Krishnakumar Natarajan, CEO of MindTree, was a system that could give them "billing, gross margins, financial parameters, and the amount of unused talent every month-end. In the services business, if you have people who are unbilled, it's a loss forever."

MindTree chose to begin with two critical processes: order-to-cash (OTC) and project planning. The second phase would deal with automating the payroll process and phase-III would bring CRM into the ERP fold. But as phase-I took off, Reddy realized that there was a basic flaw with the initial blueprint. The processes at MindTree were project-dependent, which meant that linearly creating process automation would not demonstrate the benefits of an ERP system.

His need for speed and impact, pushed Reddy to revisit the initial ERP blueprint. He says that they changed the approach to building each cross-functional business process into the system, showing results and only then moving on to the next business process. Crucially, Reddy chose to drop the project planning module from phase-I and decided to focus on order-to-cash. His foresight would pay off.

By April 2006, OTC was completely automated, enabling MindTree to integrate the time staff spent on a project with billing. In 2005, before mPower, it took MindTree until the 20th of the following month to arrange for the invoices of 250 projects. With the ERP in place, it created invoices for over 650 projects by the 4th of the following month - giving the CFO visibility into the organization's receivables within three days of each month-end.

"That's an improvement of 16 days despite huge growth in the number of projects. The enterprise saved a whopping $500,000 (about Rs 2.5 crore) a year just in interest on unbilled outstanding," Reddy says. The momentum of that first success allowed Reddy and his team to go on a rollout spree from January 2007 to June 2008, as they consolidated and automated several key business processes. As many as twelve functional business processes, including CRM, expense management, travel management, project tracking, and asset management were automated.

Once in place, mPower helped the enterprise enjoy numerous tangible and intangible benefits. By increasing MindTree's visibility to as early as 4th of the month, early signs of weakness can now be sensed and dealt with by business teams who are now able to guide the organization better with 95 percent more accurate data.

mPower has also improved MindTree's ability to measure utilization more accurately - an important metric in the service industry. A year after mPower was implemented, MindTree calculated that it had improved its utilization by 3.5 percent - a task that would have been impossible to even start on without the ERP project.

The Person Behind It

Parthasarathy N.S.

COO, MindTree

For a 5,000-strong organization, to be able to get data so early gives us the ability to react quickly to the market's changing needs.

Sudhir Kumar Reddy..

CIO, MindTree

In the end, quick deliveries and the resulting benefits created true believers of even the staunchest of doubters