Reducing operational costs and standardizing all applications were the objectives behind broadband wireless access company Soma Networks' decision to migrate its entire ERP system from the U.S. to India. This project proved difficult for Puneet Kaur Kohli, the global CIO of Soma, since coming up with the business proposal for this ERP migration project and convincing the CFO was a big challenge.
Headquartered in San Francisco, Soma has been present in India for three years. Soma currently runs on an Oracle-based ERP which is operated from the U.S. It is now in the process of migrating its entire ERP to India.
Planning for the ERP migration project began in January 2009, and is due for launch in the second quarter of 2010. Kohli is expecting to complete this ERP project within the time frame of one and a half year. "We are presently on Oracle 11i, which we would like to migrate to India and upgrade to R12. A fresh implementation will then start in India from scratch, where the two tools will get implemented into one system," says Kohli.
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To ensure the ERP migration project's smooth implementation, Kohli has already completed the process of evaluating systems integrators. Soma's IT team is ready with a request for proposal, which will soon be released to the evaluated and identified system integrators. The ERP migration project's budget is around Rs 1.5 crore. "Since we already have global licenses for Oracle tools, we do not foresee any problem in migrating these licenses to India," Kohli states.
The business requirement
Soma's U.S. office deployed Oracle in 2003. However, everything was manually driven in India. "Take the supply chain itself as an example. There were no systems where we could track logistics; transportation and freight forwarding was manually done. Processes were Excel-based, and these were difficult to manage," says Kohli.
Soma already runs on ERP for its finance functions, but the new ERP migration project will implement ERP across all functions. Customer-facing applications such as billing and invoicing will be based out of ERP, along with part of payroll, HR back-end and internal operations. Apart from this, the entire manufacturing process, supply chain system, logistics, distribution, freight forwarding and transportation will be on ERP.
Kohli had to face different levels of challenges during the process of planning for the ERP migration project. Initially, there was no business buy-in for the ERP migration project. "The CFO expected minimal operating costs on any IT project, so my commitment to the CFO is that I will come out of all the manual processes with less operating costs," says Kohli.
Even after the business approval, management of the ERP migration project remained a challenge. "To help others understand the ERP migration project's relevance, I had different power users from different functional teams form a core implementation team. I explained to them what the ERP migration project was really about. I went to the U.S. to analyze better how the supply chain function and engineering module worked there," informs Kohli. "We already had a systems integrator—Core Services—in the U.S. I sat with them and understood stuff like how their licensing worked, and the number of licenses for each module. Preparing a detailed plan of the ERP migration project took around nine months. In this time, we received good support from the stakeholders as well as the user group."
Now the challenge is to build the infrastructure which can support the ERP project in India. The entire operations will be carried out from the company's Gurgaon office. Since Soma has a presence in seven countries, connecting everything will be a difficult task.
Soma's back-end operations are based in Toronto, and its R&D center is in Ottawa. "That's why we need to have global MPLS, and also need to link our financial hub, which is in San Francisco. Apart from this, offices in the U.S. and Singapore will also be integrated with Indian locations. We need to have manpower in accordance with different time zones, and round-the-clock services will be provided. Hence the ERP migration project demands a substantial bandwidth upgrade, routers, network equipment, servers, etc."
Kohli plans to achieve a return on investment in the ERP migration project in the next three years. The ERP migration project will help in standardization of all applications across all entities and geographies. In addition, it will create a single database which would be able to cater to any kind of report demanded by the business. "The ERP migration project will definitely work toward converting IT into a profit center," Kohli promises.