SMAC

Smac, the acronym for Social, Mobility, Analytics and Cloud is becoming a business reality

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In the fast-paced, jargon-filled world of the Indian information technology industry, a new acronym is being marked in bold. "Smac", the acronym for social, mobility, analytics and cloud, is not just the latest buzzword but it's also quickly becoming a business reality.

"The chief executive has not written it on the door yet, butSmac occupies most of the conversations these days," said Naresh Nagarajan, a top executive at India's fourth-largest technology company, HCL Technologies.

By 2020, the Indian IT industry is slated to collectively rake in over $225 billion (Rs 12.5 lakh crore) in revenue, thereby riding the wave of emerging technologies and new innovations, according to Nasscom. Experts feel that to reach this target, the traditional IT companies, which focus on cutting costs and managing IT infrastructure, need to move into higher-margin projects that help clients' businesses grow.

In three to four years, emerging technologies will become a major component of revenue for Indian companies and will separate the "wheat from the chaff", says Nagarajan, senior vice-president and head of Ecosystem Business Incubation at HCL Technologies.

These technologies also offer companies an opportunity to move to higher-margin business by offering solutions that help businesses grow instead of increasingly cutting margins for typical IT services contracts. "If you don't do these things, then maybe you'll start falling out of the market," warned Biswajeet Mahapatra, research director at Gartner.

Indian IT service providers traditionally provide services that support clients by creating and maintaining their software and hardware. Existing services are now becoming commoditised, forcing companies to seek newer projects that are transformative in nature and work closer to the client's business.

The team Nagarajan heads at HCL Technologies was formed two years ago to identify disruptive technologies, invest ahead and create an ecosystem of partners and solution providers for the company. Similar efforts are underway at other technology companies as well.

At Infosys, the country's second-largest IT company, Infosys Labs plays a key role in identifying new and emerging technologies. At Labs, the company looks at various technologies and figures out if it needs to do further research, build competency, invest in capabilities and prepare for commercialisation. "Once the technology is ready to be productised, there is a smooth handshake between the Labs and my team," said Sanjay Purohit, senior vice-president, global head of Products, Platforms and Solutions.

At Infosys, the ambition is to get one-third of revenue from platform, product and solutions business, which presently account for only 6% of the company's business. There is a clear recognition of the fact that there is a fundamental disruption happening, says Anurag Srivastava, chief technology officer and senior vice-president for Wipro's Global IT Business.

The change, according to Srivastava, is not only limited to technological changes but also includes changes in the business model as well. "The next 7-10 years are very crucial. Speed of innovation is very high. Connectivity and mobility-based solutions will change the underlying dynamics of business processes significantly," said Srivastava.

About a year-and-a-half ago, Wipro picked various divisions in the company and grouped it under Analytics and Information Management Services, which focuses on data analytics, visualisation and big data. The 8,000-strong service line grew 30% in revenue over the previous year on the back of transformative deals, says Sanjiv KR, senior vice-president, Analytics & Information Management Services.

Indian companies, which count the world's largest banks, retailers and Fortune 500 companies as clients, have seen them demand solutions that leverage social, cloud, mobile and analytics. For instance, Walmart, the world's largest retailer, is combining its brick and mortar stores with commerce, over mobile phones and the internet, to create multiple channels of revenue.

"We recently created a digital kiosk for an Australian bank," said Nagarajan, explaining that the kiosk uses data from the social profiles of customers and uses it to serve customers. These are potentially large deals."

NAMO...

HUL's Distribution Network....

The evolution of HUL's Distribution Network:-

The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total orders collected. The company salesman grouped all these orders and placed intent with the Head Office. Goods were sent to these markets, with the company salesman as the consignee. The salesman then collected and distributed the products to the respective wholesalers, against cash payment, and the money was remitted to the company.

The focus of the second phase, which spanned the decades of the 40s, was to provide desired products and quality service to the company's customers. In order to achieve this, one wholesaler in each market was appointed as a "Registered Wholesaler," a stock point for the company's products in that market. The company salesman still covered the market,

canvassing for orders from the rest of the trade. He would then distribute stocks from the Registered Wholesaler through distribution units maintained by the company. The Registered Wholesaler system, therefore, increased the distribution reach of the company to a larger number of customers.

The highlight of the third phase was the concept of "Redistribution Stockiest" (RS) who replaced the RWs. The RS was required to provide the distribution units to the company salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS also undertook demand stimulation activities on behalf of the company.

The second characteristic of this period we realized that the RS would be able to provide customer service only if he was serviced well. This knowledge led to the establishment of the "Company Depots" system. This system helped in transshipment, bulk breaking, and as a stock point to minimize stock-outs at the RS level.

In the recent past, a significant change has been the replacement of the Company Depot by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as buffer stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in cost savings in terms of direct transportation and reduced time lag in delivery. The most important benefit has been improved customer service to the RS. The role performed by the Redistribution Stockiest has also undergone changes over the years. Financing stocks, providing manpower, providing service to retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data, screening for transit damages are some of the functions performed by the RS today. HUL has grown manifold over the years. In the process, the number of factories and the number of SKUs too have increased. In order to rationalize the logistics and planning task, an innovative step has been the formation of the Mother Depot and Just in Time System (MD-JIT). Certain C&FAs were selected across the country to act as mother depots. Each of them has a minimum number of JIT depots attached for stock requirements. All brands and packs required for the set of markets which the MD and JITs service in a given area are sent to the mother depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-weekly basis. At present, HUL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockiest covering about one million retail outlets. The distribution network directly covers the entire rural population.

In addition to the ongoing commitment to the traditional grocery trade, HUL is building a special relationship with the small but fast emerging modern trade. Our scale enables us to provide superior customer service including daily servicing, improving their range availability whilst reducing inventories. We are using the opportunity of interfacing more directly with our consumers in this retail environment through specially designed communication and promotions. This is building traffic into the stores while yielding high growth for our business. An IT-powered system has been implemented to supply stocks to redistribution stockiest on a continuous replenishment basis. The objective is to catalyse HUL’s growth by ensuring that the right product is available at the right place in right quantities, in the most cost-effective manner. For this, stockiest have been connected with the company through an Internet-based network, called RS Net, for online interaction on orders, dispatches, information sharing and monitoring. RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every day what HUL stockiest have sold to almost a million outlets across the country. RS Net is part of Project Leap, HUL's end-to-end supply chain, which also includes a back-end system connecting suppliers, all company sites and stretching right up to stockiest. RS Net has come as a force multiplier for HUL Way, the company's action-plan tomaximise the number of outlets reached and to achieve leadership in every outlet, by unshackling the field force to solely focus on secondary sales from the stockiest to retailers and market activation. HUL Way has also led to implementing best practices in customer management and common norms and processes across the company. Powered by the IT tools it has further improved customer service, while ensuring superior availability and impactful visibility at retail points. HUL, has been at the forefront of experimenting with innovative methods to reach the rural consumer.