Carnation is a multi-brand auto solutions provider started by Jagdish Khattar, former MD and CEO of Maruti Suzuki. After commencing operations in January 2008, the company was officially launched in March 2009. Carnation is growing at a fast pace, and already has a pan-India presence through its network of 18 branches. To manage this kind of growth, the company needed a robust IT infrastructure, which is where SAP on Linux showed the promise of able service.
"On an average, we were setting up two branches every month. To manage this rapid growth, we needed an engine with good processes, which could control this distributed business. It had to give us visibility centrally, so that we could monitor things closely," says Mohit Agarwal, the company's CIO.
With the support of its management, Carnation's IT team began the process of ERP evaluation. The team was looking out for an ERP solution which could meet a startup's requirements. Factors such as performance, management, ability to scale, and execution cost were taken into consideration. Finally, Carnation zeroed in on SAP. SAP's industry solution known as SAP Business Suite applications comprises of dealer business management (DBM), business intelligence, CRM, financials, sales & distribution, human resources and materials management.
According to Agarwal, the entire management team looked at SAP as a strategic initiative with long-term benefits. "There was huge management buy-in, because we knew that SAP would provide us with the technology infrastructure to help us grow in the market."
Enter: SAP on RedHat Linux
Once Carnation's team chose SAP as the right solution, the next decision revolved around selection of the right operating system. During this evaluation, Agarwal and his team looked at different Unix- and Linux-based systems available in the market.
Since Carnation was a startup, the focus was on total cost of ownership associated with running SAP on Linux or Unix. After assessing a few options, the company chose RedHat Enterprise, since it suited company's requirement. RedHat Enterprise Linux Advanced Platform had certain desirable features in terms of server virtualization, which were crucial for the company. "Scalability of SAP and Linux was also a major requirement, which was provided by RedHat. We started with 30 users in September 2009 and in a period of four months, we had almost 400 user licenses. Also, from a single location we grew to 18 locations, so our growth was clearly brisk," says Agarwal.
The SAP on Linux implementation started in May 2009, and went live in September for three locations. It now covers all 18 locations. The SAP on Linux implementation was broken down into two phases.
The first phase of running SAP on Linux involved bringing all the basic transactions into place. This covered service operations for the company's dealer management system, materials management, supply chain management, organizational management, and administration for HR and finance. The company is now in phase two of its SAP on Linux project, and its IT team is rolling out the remaining modules of DBM, which include the business of both new cars and pre-owned cars. Multi-resource scheduling is also part of phase two; this allows the company to do real-time scheduling of critical assets which are used for servicing.
Right now the company has a very small IT team. "As part of the SAP on Linux implementation process, we pulled in a core team resource from each of the functions which are defining the business requirements," informs Agarwal. "Apart from them, TCS, which was our strategic outsourcing partner, looked after hardware, software as well as the SAP on Linux rollout. On the average, we have around 20 users per location, and each of them was trained in the software."
Carnation is the first company to implement the module in India on such a large scale. Support from all the technology partners played a key role in the project. HP was front-ending the entire hardware scene, while TCS was one of the partners which recommended the SAP on Linux solution to the company. TCS also had a center for excellence for the SAP DBM product.
Issues with SAP on Linux
According to Agarwal, there were a couple of issues before Carnation started the SAP on RedHat Linux implementation, but these were resolved quickly. "Since then, we have not faced any problem, and now we are seven months old on this platform. Ours was a slightly complex environment, because we were trying various things like partitioning the servers and clustering. Despite all the issues, it was like a learning curve for everyone. I would call it the project startup hiccup," says Agarwal.
Agarwal adds that since Carnation is a new company, it did not have any legacy systems, hence change management issues were not raised during the SAP on Linux project. "The evolving business model and the company's growth phase are some of the challenges to handle. Business models will continue to get modified to meet business needs, and we will have to work accordingly."
Apart from its SAP on Linux project, Carnation is the process of implementing Linux LDAP and its mailing solution. "We have a concept called 'workshop on wheels,' whereby Maruti Versa vans service your car at your doorstep," informs Agarwal. "We are now looking at a mobile solution, which will interface with our back-end systems like SAP to track these vans as well as do things like billing and order creation."