Cloud Computing explained through users

Vivek (CA ) (2368 Points)

22 February 2011  

ET Bureau

Cloud Computing explained through users

var facebookktitle='Cloud Computing explained through users'; facebookktitle=facebookktitle+" - The Economic Times"; var facebooksyn='By paying a one-time fee of Rs 10,000 and Rs 3,200-3,500 monthly subscripttion for each user, exporters will be able to access complex business applications that automate their processes.';
By Jayadevan PK & Pankaj Mishra

Like most technology jargons, cloud computing is best explained through users. For small businesses, cloud computing offers an opportunity to use sophisticated solutions like enterprise resource planning at less than half the cost by avoiding upfront investments in buying software licences and any computer hardware. ET spoke to over dozen users of cloud computing solutions and selected a few from the industrial clusters of Tirupur and Peenya (near Bangalore) to see whether this cloud can really rain benefits.

Now, functioning becomes easier: PS NAIR, MD, ETA Technologies

When ETA Technologies decided to implement an Enterprise Resource Planning (ERP) software two years back, it was the beginning of a transformation. Along with a few other companies, which formed the Bangalore Machine Tool Manufacturing Network , ETA Technologies paid Rs 2 lakh and installed a cloud based ERP software to make functioning easier.

For ETA, it simplified the process of judging quality parameters, quantifying wastage and taking action based on reports generated. Item delays, reason for delays, costing and tracking items became simpler post ERP implementation. "From a customer service standpoint, we have a ready-reckoner of complaints on which the top manage-ment can work on,” says Nair, managing director, ETA Technologies.

“We are also able to check quality parameters and follow-up with suppliers. We have a record of items that get delayed and the reasons why they get delayed. On the manufacturing side, it was very difficult to keep track of each item that goes into a machine we build. But now, each item is segregated and is easier to handle costing,” he points out. ETA Technologies makes special purpose machines, electrical upsetting machines, assembly machines and test rigs for auto components.

Linking up for customisation: INDRADEV BABU, MD, Uday Computer-Aided Manufacturing

Indradev Babu, head of Uday Computer Aided Manufacturing , had been hearing of cloud-based ERP solutions — and their positives — for a while when he got in touch with an employee of a software major. The engineer sold him the idea that two or three companies could join hands and implement a cloud-linked solution for small businesses.

Soon, the company got together with two other firms located in Mysore and Bangalore, negotiated with the vendor and implemented a custom-built solution.

Though there were hurdles in the beginning, the system’s functioning improved over time. “We have been hearing how wonderful a tool ERP solutions are. Then we started talking to different people and found that small systems — created locally -- were not really configurable and can sometimes fail. We wanted to go for a proven system,” said Indradev.

“Introduction of the system was chaotic in the beginning. Though we had some trouble initially, it is up and running now. Our business processes became more streamlined,” he said. The expense on the solution was Rs 35 lakh shared among the three, he added. While only some functions of the system are being used right now, it has plans to improve functionality in the future.

Tracking at the click of mouse: FENWICK THOMAS , Partner, Fenwick & Ravi

For the two-decade-old manufacturer — Fenwick and Ravi — tracking orders and managing thousands of parts that go into a machine was becoming a problem. Roughly two years back, the company -- which makes machine tools as well as special purpose machines — moved to cloud-based hosted ERP solutions and things have changed a lot since then.

“Earlier, tracking orders and maintaining records was a problem. With ERP, all information is now available online. We are now trying to go to the process level with the cloud-based solution. That way, it will be a complete solution. Also, addressing customer complaints becomes easier as the management can directly access records,” said Fenwick Thomas, partner, Fenwick and Ravi.

The company uses an ERP product called developed by a Bangalore-based company to generate purchase orders based on requirements, handle dispatch and other functions including generation of the final invoice.

“We introduced the software two- and-half years back. It is not very expensive compared to its wide range of use and costs less than Rs 3 lakh,” says Fenwick. The export-oriented firm also gets feedback from its overseas customers online since users can log in to the service network and report problems.

Moving to cloud to trim costs: SANJAY GUPTA, CEO, E-Readiness Centre, Tirupur

After months of evaluating different ERP solutions from top global vendors including SAP and Microsoft , and forming a special purpose vehicle called G Tech Solutions , the exporters in Tirupur led by Sanjay Gupta have finally decided to go with a home- grown business software. Tirupur’s exporters will customise the solution and manage the data centre, which will host the application.

To avoid high software licensing and maintenance costs, the application is going to be delivered using ‘cloud computing’ model that allows users to avoid these costs and access services related to human resources, procurement and inventory by paying a monthly subscripttion fee.

“We are putting everything in the cloud,” says Sanjay Gupta, CEO of the e-readiness centre (ERC) at Tirupur, an organisation that helps exporters leverage technology. “We now plan to have a centralised ERP that can be delivered to exporters for monthly fee of Rs 3,000-4,000 without having to invest upfront,” he says.

By paying a one-time fee of Rs 10,000 and Rs 3,200-3,500 monthly subscripttion for each user, exporters will be able to access complex business applications that automate their processes of order monitoring, inventory management with ease.

Indeed, while evaluating similar software from other vendors including SAP and Microsoft, exporters realised that per user subscripttion was too high. In some solutions the per month per user fee was as high as Rs 9,000.

These exporters are hoping that an ERP software will help them track export consignments in a real-time manner through computers and even mobile phones, helping them erase almost Rs 800 crore in losses each year because of delayed shipments, apart from saving another 200-300 crore from supply chain efficiencies. Exporters from Tirupur have to incur extra air shipment charges, that are over six times cost-lier than shipments sent through sea route.

With this software, almost 4,000 small and medium exporters can save Rs 1,000 crore and compete more effectively with rivals Bangladesh and China.

A must-have IT solution: SHIVA SHANKARAIAH, MD, Trishul Machine Tools

Shiva Shankaraiah left a bigger company to start his own specialised machine manufacturing unit. One of the many things he learned at the bigger company he worked for was the use of ERP to streamline operations. For Shiva Shankaraiah, ERP was a must-have in his own company, which makes specialised machines exported to the US, the UK, Turkey and Germany.

Right from acceptance of order to planning, purchase, dispatch, costing and finally getting customer feedback, the ERP solution has helped, says Shankaraiah.

“We don’t use ERP for accounts and salaries as yet because the applications seem to be a little more complex. For that we use solutions from Tally. For everything else, the custom-made ERP works fine,” said Shiva. “For accounting, we use Tally because it takes care of all statutory compliance requirements,” he added. He is now planning to invest Rs 4.5 lakh to buy a more advanced – and cloud-based -- ERP solution that provides a higher degree of efficiency.

“The custom software cost us about Rs 60,000 five years back. It has been very useful but it is difficult to quantify the exact financial implication. We plan to upgrade to a cloud-based ERP solution,” he added.