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SAP in 6: Leading change in the sector

Rabia Garib | Sept. 9, 2008
SAP is a multifunctional software which has been deployed at National Foods (Pakistan) with its basic six modules at National Foods.

"You see, the business of FMCG companies works something like this -- there is a huge investment on the procurement of materials. Certain ingredients are seasonal while others are influenced by quantities and pricing, which the company will always try and optimize. Therefore, the preplanning required to procure these materials at an optimal time so that a product can be produced and sent to market at the correct time to meet the market demand, is a formula you have to get right."

For example, Ramadan begins in the first week of September this year, which means the products should be available in the market by the first or second of the month so as to ensure that the brand customers find the product in time. This, of course, is seasonal, but the company would need to accurately plan all of its pre- and post-production activities to preempt the customer timeline and suit their buying behavior.

"This gives rise to the concept of MRP, or Materials Requirement Planning." The company identified areas where processes could be more optimized to increase efficiency and reduce wastage. "The difference in the way IT managers work today is that the skillset is beyond just the technical programmer working in isolation. The IT Department today needs to be made up of people who have an understanding of business, operations and empathize with the operational challenges that a manager goes through on a daily basis. That's the only way you can tell which process is struggling with which methodology, and how the interference of automation can help improve that."

The shift in the mindset and the role of IT in the business

With a strategy like this, a company's IT department plays an integral role in leading the change to create optimized behavior from its workforce.

Perhaps the question that most people will want to ask if how can you quantify the ROI when we don't necessarily work in ideal situations. "We can assess or predict how software is going to benefit but we can't know the exact figure for obvious reasons. But if we waited for the ROI to show itself before making the investment, there is no concept of risk involved. The implementation of an ERP such as SAP can be in the billions over the course of a long duration, but the long term benefits it will bring, will be many times greater than that."

Today, the role of the IT Manager isn't what it was traditionally meant to be. An IT guy needs to know more about every part of the business in order to bring the actual benefit into it. Every vertical that is there in an organization, must have a leader to champion the integration of technology into it.

 

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