VST Triumphs with In-House ERP, Makes it Profitable Too

"Even after giving our outsourced partner sufficient time to prove themselves, we got unacceptable service levels," says Nemani.

The company, which has first focused on bringing home its ERP, now offer it's SAP expertise to other companies. Payroll was a part of the outsourced services deal but it stayed out. But when problems of service cropped up in that area too, Nemani decided to bring it home. He says he simply could not afford the drop in efficiency. And in any case, his own customers now wanted him to handle their payroll too. So he developed a payroll module which could be integrated with ERP as a part of his SAP consulting services business.

"With this shift, VST now manages its entire IT setup in house. We can now develop skill sets in IT facilities management and provide these services to the local market. In fact, we started selling the payroll product on the 1st of April 2009. Now we were a one-stop solution for SMEs. We offer SAP plus payroll plus FM services," says Nemani.

To top it all, instead of dropping his partner, he convinced them to clear the transit phase, so that there was no impact on the business. He also hired freshers and trained them to enable the takeover. "A detailed request was sent in advance to the company to bear with us until we took over completely from the partner. All our internal customers supported us during the transition," he says.

The move cost him Rs 1.25 crore, but Nemani has already saved Rs 50 lakhs in the first year and will save another Rs 20 lakh next year. "Apart from these savings, we are now providing low-cost FM services, which is another revenue stream for the company," he says. What a way to fight the slowdown.

The Person Behind It

Ratnakar Nemani, CIO and Head-IT Projects Wing

VST Industries

“The move from being a customer to being a service provider was a radical change.”