Carzonrent : On The Fast Track with IT : R.K. Vij

Interview Questions

Full Interview with R.K. Vij

R.K. Vij:

The car rental industry was facing a challenge because none of its players were looking at it as an organized business. It was treated as a support business to the hospitality sector. That's why this industry lacked steam in India.

I felt that it was critical to set up an organization which focuses only on ground transportation. I studied how

the industry progressed in other parts of the world. In developed markets, you find four kinds of services including self-drive service, radio taxis, limousine service and corporate fleets, which are on operating lease.

A few years ago, India had only metered or non-metered taxis. A non-metered taxi was called 'rent a car' but it was not really the same. We decided to focus on giving a new shape to this industry and do everything that was required to build it. And thus, we started Carzonrent in 2000, and acquired the license for Hertz in India. We have not re-invented anything. We just picked up the model that existed in the best cities of the world.

 

Right now, we are installing credit card swipe machines in all our cars to give the customer payment options. Other than radio cabs, we also operate corporate fleets where we provide services to large corporates across the country.

We have also got into the limousine business to service high-end customers in India.

 

R.K. Vij:

In India, the car rental industry is fragmented with hundreds and thousands of operators with small fleets. That's why nobody invested in technology. In 2005, when we first raised our private equity investment in the company, it was raised only for making investments in IT. That's when we implemented Oracle Financials to

automate and streamline all our financial business processes - at a time when the industry was at a nascent stage. We decided to move to an ERP platform. We started building a completely technology driven operational interface with an Oracle platform at the backend. This gave us the ability to run a fleet of over 2,000 cars.

At the same time, we started investing in building a mobile technology platform to reach out to our customers. Today, every time a customer makes a booking, the system automatically generates a confirmation; the customer receives order details including a car number and a driver's mobile number. The customer can send an SMS to get information about the amount he has been charged for the service.

We created this Web-based platform and it has helped us operate in 34 locations.

 

R.K. Vij:

I have studied this industry for 15 years. I have seen the systems and technology being used in the largest car rental businesses of the world. Therefore, I insisted on investing on technology because that's the only way I believe that this business can be built in India.

R.K. Vij:

My objective is not to just build my own organization. It will be good if the industry's standards also improve simultaneously. As far as competitive advantage is concerned, our technology-driven approach keeps us a few steps ahead of others. I am excited that we have done almost everything completely on our own. Others, who have followed us, have not been able to achieve what we have in spite of taking help from some of the largest technology companies.

Some of our competitors' platforms, who have developed their software using some of the big names in the IT industry have not been as successful. In terms of functionality and benefits to the customers, our platform is far superior as we took the technology route earlier than other players.

 

R.K. Vij:

We have used multiple server farms to host our servers. We have very strong processes in place for backups and business continuity. To ensure connectivity at all locations, we use three parallel service providers. We have one primary service provider and two backups. Similarly, one set of servers is kept in our own premises; a second set somewhere else in India and a third set is a backup in the USA.

In terms of our back-office setup, we use some of the processes in our own premises and some processes in a BPO, which is outsourced. If there is a problem, we should be able to shift the processes by just shifting people. This is our approach across multiple cities.

 

R.K. Vij:

IT is a great enabler for us. We have a great team headed by Rajesh Munjal. We have about 12 people who are specialists. These people are responsible for different functions that bridge gaps in business. We keep our IT aligned to our business goals. Take for example customers who want a car in half-an-hour and not two hours. That is a challenge. Our chauffeurs need to be able to print a duty slip or rental agreement instantly. To meet that requirement, now all the cars are going to be equipped with a thermal printer, where, whenever we want

to release a car for a particular duty, the system will generate a message to a car's thermal printer and it will print out the whole agreement. At the end of duty, it will generate an invoice which can be handed

over to the customer.

 

R.K. Vij:

We want technology to help us deliver a taxi to a customer within five minutes. It will happen. Right now, we're at about 15-20 minutes. I also believe that the mode of transport for employees of IT companies,

like our western counterparts, is going to shift to a radio taxi model. This, over a period of time, will help reduce congestion in busy cities.

Also, as of now, our drivers are expected to know various routes. They are expected to reach the destination using the shortest route in shortest time. And for me, getting there before everyone else, as fast as possible, is the differentiator. When a driver needs route advice he should be able to call a help desk and get assistance.

With radio taxis coming into the market, the expectation of customers where turnaround time is concerned is growing. The technology function has been able to work that out with some vendors and we are almost there in terms of implementing this.

 

R.K. Vij:

Scalability of business comes first. The second, is that in our business the utilization of a fleet is most critical and only technology offers us the opportunity to achieve the highest utilization. The third is revenue maximization. We are using technology to figure out the availability of inventory and demand. We have a revenue management platform for the same.

These three are the most critical components that we try to address with technology. Without IT there is no way you can manage all this and achieve revenue maximization.

 

R.K. Vij:

I think the fact that a CIO is involved in all our businesses, in terms of strategy and long-term plans, he is expected to think and provide solutions so that technology keeps pace with business plans. He has to be a thinker.

R.K. Vij:

I think there are a few fundamental issues to be kept in mind. First, what are the capabilities of the vendor for implementing the technology we want? We need to be able to know the track record of the vendor in earlier implementations. The relationship has to be that of a partnership and not buyer and seller.

R.K. Vij:

We outsource all the time, but I think it's important that we have a core team, which can provide support that is required by the business. This team should develop an understanding of the domain and therefore be an interface to the outsourced technology partner in a structured manner. You do need technology guys to

talk to vendors and if those technology guys are working in your organization, they understand what the requirements of your business are. You can speak to them in a business tongue and they can convert your message into a language technology understands.

 

R.K. Vij:

We require all these three platforms and we do offer all three to our customers. But over a period of time, the customer will have better access to the Web platform and we will keep enhancing our services. I am not

sure about the SMS platform as of now. Mobile technologies also play an important role in other applications like getting customer feedback and sending information to a customer.