Interview Questions

Full Interview with Ravi Uppal

Ravi Uppal:

At ABB, IT is not an end in itself; it is a means to an end. What we have done is to integrate IT into business systems in order to use its full potential. We basically believe that any operation is successful if systems are simple, avoid a duplication of effort and are integrated seamlessly. So, we performed an audit of our systems to see how they could be made more efficient, how we could ensure a single point of input for information and disseminate this information to all stakeholders.

Basically, we have adopted a '4S' philosophy at ABB. When I returned to ABB in 2001, I realized that we needed to focus on 'Systems, Spirit, Simplicity, and Speed.' IT contributes to each one of them. When IT enablers are integrated into your system, speed is an automatic result. Using Web-based mechanisms achieves simplicity. It's vital to ensure that all systems integrate with each other and are not running in parallel.

I have an unflinching conviction that IT has contributed to build efficiency. We've defined productivity by dividing total value by personnel expense. If you looked at our productivity level in 2001 it was around 1.8. Now it's currently more than three.

 

Ravi Uppal:

We think of the 25 business units we own as standalone companies because their products and services differ from each other. But, this doesn't mean that people have free rein to do as they wish. We have an IT strategic group at the corporate level. We scan the environment and identify best practices. This group constantly evaluates what we need to introduce into the company.

We cannot have 25 different ERP systems or 25 different ways of working with IT. On the contrary, seamless integration is desired. Seamless integration is only possible when you have common systems and practices in each business entity, so that they can communicate and integrate results.

When we roll out an IT system, it's across all business units. This is something that all the business heads appreciate.

 

Ravi Uppal:

We took a decision in 1999 to go with SAP the whole way and rolled it out across all business units. It has been great blessing. I personally believe that you can only get the best out of an ERP system when you roll it out across the enterprise. You cannot take an approach that says 'here we do it, here we don't.' Extracting full functionality requires an enterprisewide rollout, encompassing all business functions and processes. This implementation has bought us numerous advantages and has increased our efficiency as a business enterprise. We've also enjoyed a close relationship with SAP Labs. In fact, for some of modules, like HR, we've actually been both a beta and a reference site for SAP.

Ravi Uppal:

Implementing ERP is not a question of getting a framework ready and forcing it on people with 'here from tomorrow, you're working with this.' ERP has a very pertinent cultural angle, which is related to the systems and processes in place. There must be some compatibility between the processes and what the system can offer. Initially, we spent a lot of time reengineering processes, so that we could align ourselves with the output of the ERP system.

This also meant educating our people. They were accustomed to producing things by themselves, working on spreadsheets and being islands of information. They had to get used to working on integrated information, where what they were doing in one place would be visible thousands of miles away on a real-time basis. It was a process that had its share of novelty and challenge. One has to be patient and sustain people's efforts.

 

Ravi Uppal:

A CIO has to be a facilitator. He cannot take over implementation. What we did first was to sell the concept to every business unit, from the head of the unit downward. We then created an implementation taskforce which is led-not the CIO, because that is the first mistake-by the person who owns the business unit. We did this to ensure their buy-in. We gave them the freedom and time, and they gave us the dates of implementation. We also took help from external organizations, who were focused and had domain expertise in specific modules like finance and production. We carefully screened these domain experts and embedded some of their people into our internal teams. Our CIO was the one who actually identified competent organizations.

Ravi Uppal:

I don't take on any project until there is some tangible benefit. And in IT's case, the benefits are overwhelming, like building the company's productivity, accessing information faster, and making sure that we cut down the number of people working in a particular area. The number of people, for instance, working in the finance department and HR is being brought down.

With human intervention, processes and results can sometimes go awry or get inaccurate. I have an increasing belief that activities, which do not require creativity, should use as much automation as possible. Automation brings efficiency, it brings accuracy, and it makes a system immune to any kind of manipulation.

 

Ravi Uppal:

Quality is an important focus area for ABB. IT tools are embedded into all our systems now, and help us to access information on a real-time basis. Asia is becoming a very prominent market for us and, in terms of manufacturing, a lot of global activities are shifting to Asia. But with this comes one worry. It's a bias people have: If something's made in Germany or Sweden, then it is bound to be better than if it is made in China or India.

We have taken a decision to ensure that the quality of the products we make in any country is absolutely identical to the quality we find in the West. We have gone a step further. We don't even mention which country a product's manufactured in-just 'Made by ABB'.

We're on the road towards integrating our Manufacturing Execution System (MES) with SAP. We want to be able to track quality and defects at the assembly line stage. Right now, this process is done mechanically, and since we don't get the data fast enough, it's open to inaccuracy. We are completely reengineering the production lines and putting in digital devices, whereby data will flow automatically from the MES into SAP. This way we will immediately know when anything out of the normal occurs. It will help us to pinpoint the sources of failure more accurately and initiate action with suppliers, if that's what's required.

 

Ravi Uppal:

Phenomenal. We started this portal in 2002, and every year it been growing exponentially. Today, we do sales close to Rs 200 crore through the portal. Things have progressed so well that most of our channel partners prefer to transact over the Web rather than face-to-face. The portal ensures accuracy in communications, and also provides a history of what's been discussed.

Every channel partner has been given an account from which they can check which payments have been made and which are outstanding. It's also helped us keep in touch with partners in locations like Siliguri or Jaisalmer, where it is difficult to send sales people. Today, a lot of the information that our partners typically require is available on the Web.

We've also extended our web strategy by launching a similar portal that helps our customers track projects.

 

Ravi Uppal:

Absolutely. It's been a phenomenal success. This is a brilliant example of what the Web can do. Before, it was a very laborious process going to 30 engineering colleges, administering tests locally, and hopping from city to city. So, we tied up with Reliance, who beamed our questions from their datacenter to Reliance Web Worlds in 23 cities. We got all the candidates to take their aptitude and technical skills tests online. The evaluation was also done online, which quickly gave us a shortlist. Within half an hour of the tests, we were able to inform those who had qualified of the next round of tests. We intend to take this further.

Ravi Uppal:

We are constantly thinking of integrating IT into our business processes. We are working with the finance department and are putting systems into place that will close the company's balance sheet every evening. Today, this is done manually but we want to change this. It will mean that we can close monthly results earlier. Once we do this, we should be able to get monthly data in just a day. At the moment, it takes us five days.

We also want to put the company's financial and business controls in automatic mode, so that problems are flagged immediately.

We are also working with banks for an electronic drop box system, which will help us communicate our requirements for bank guarantees or letters of credit which can be processed automatically.