BI, customer apps, cloud computing lead manufacturing budget wishlist

As Indian manufacturing comes out of the recession's aftermath, CIOs now look forward to adoption of trends like cloud computing and business intelligence.

Comprehensive Indian IT budget insights for 2010
ITSM and virtualization top Indian IT/ITES IT budgets for 2010

Indian data center IT budgets set to grow by more than 5% in 2010

Server virtualization: India Inc.'s top data center priority for 2010

Green IT: How far is the Indian corporate ready to go?

The use of IT in Indian manufacturing has come a long way. This is not a surprise, since manufacturing industry has always been considered as a major adopter of information technology — as early as 20 years back. During that era, manufacturing did not face any competition from verticals like IT/ITES, telecommunication, and BFSI. However, the scenario changed rapidly after these verticals started contributing heavily to the Indian economy, and technology adoption became the prime driving factor. As a result, these verticals overtook manufacturing when it came to technology adoption.

With liquidity in short supply during 2009, Indian manufacturing companies had to achieve more with less, be agile, and find innovative means —not just to survive, but also to protect the stakeholders' interests. According to Indian manufacturing industry experts, the focus in 2010 will be on lean, agile, cost effective manufacturing, and increase value for its customers. Therefore, IT budgets will continue to be under the scanner as before. Hence manufacturing companies are clear that all IT projects should have tangible business as well as operational benefits, quick ROI, and integrate the enterprise with stakeholders. These factors are essential to pass the board's scrutiny and approval process. According to Rajesh Uppal, the CIO of Indian auto major Maruti Udyog Ltd, "Manufacturing has been one of the first few verticals to come out of the recession. The scope for IT adoption looks very positive in the new year."

CIOs across the Indian manufacturing sector are looking forward to try and adopt new technologies during 2010. As a result, the following key trends have been highlighted by several CIOs of major Indian manufacturing companies:

Customer facing applications: The Indian manufacturing vertical is giving much prominence to customer facing applications due to increased competition and brand visibility. "Since the manufacturing industry is more inward looking, we focus on manufacturing, production and sales. Customer facing activities are generally neglected, as compared to other verticals like telecommunication, retail, and banking. However, as the business demands better connectivity to external stakeholders and customers; CIOs are now focusing on applications like customer relationship management and supply chain management. So the spends for 2010 will be on software, training, manpower, implementation and infrastructure costs," says Ajay Dhir, the group CIO of JSL Limited. Apart from this, Dhir, Uppal and S R Balasubramanian (the executive vice president of IT and corporate development for Godfrey Phillips) are also considering various CRM related activities this year.

Business intelligence/business analytics: The typical manufacturing organization generates enormous amounts of data through its various business processes. As a result, monitoring and management of information is a challenge for manufacturing CIOs. "Business analytics will help the business in better forecasting and analysis, which will help future investments in various business areas," says Uppal.  Dinesh Mohan, the head of information systems and services at Ester Industries adds, "Business Intelligence will be used mainly in demand shaping. It will be used to collect customer demands, preferences, and survey results. Collating all these inputs will help the company to understand customer demands."

Cloud computing: Most Indian manufacturing CIOs feel that 2010 will belong to cloud computing. Better manageability of IT infrastructure and cost effectiveness will be the driving factors for adoption of this technology. "When you opt for the cloud, you have access to infrastructure as a service, software as a service, and platform as a service. In such a scenario, you can skip upfront investments and go directly for adoption. The pay per use model is a cost effective and proven model," says Dhir. As a result of this realization, several manufacturing CIOs are now working towards making a business case out of cloud computing.

The Human Machine Interface (HMI): In the recent past, HMI has seen a rapid adoption rate in India. This technology helps interfacing of IT systems like ERP, manufacturing execution systems (MES), and plant automation. Although HMI is a capital intensive application, Indian manufacturing is attracted towards this technology due to faster ROI. A good case in point has been Jindal Steel, which recently invested around Rs 1 Crore in its HMI project. Jindal Steel claims to have recovered its HMI investments in three months.

Server virtualization: Server virtualization will have much more relevance in manufacturing during 2010. This is due to advantages such as reduction of power, cost and space, which optimization of server infrastructure brings to the table.

Green IT: Going green is gaining more importance in Indian manufacturing industry this year. Since manufacturing has traditionally not been a green industry, the industry is now focusing on making its existing IT systems greener. As a result, there will be considerable importance given to saving power, maintenance of IT infrastructure, and efficient use of IT.

Data warehousing: There will be an increased requirement of data warehousing, with the increase in use of electronic documents system in the form of workflow, storage of documents, archiving and maintaining a central documents repository (CDR). Data warehousing is also very effective for providing enhanced information about the supply chain and manufacturing processes.

Information security: "Information Security has been a buzzword for almost a decade. But now the trend is changing, especially as Indian manufacturing companies go global and open up to the idea of innovation and intellectual property. This has given a core dimension to IT security. Indian manufacturing companies are now acquiring patents via their acquisitions. Aspects like customer data and market projects will demand far more security," says Mohan. As an associated trend, 2010 is likely to see more manufacturing CIOs opt for UTM boxes.

Other technologies like bar coding and RFID will gain more prominence during 2010. Usage of these technologies will be largely in factory premises and for other internal application areas. "RFID has become quite mature. Implementations are easier now, and several new projects are coming up," says Uppal.

Read more on Managing IT and business issues