Unitech's ERP rollout braves times of recession

Leading developer Unitech had to tackle the recession in order to complete its half-laid ERP rollout plans. Here's how the company managed the ERP rollout.

Delhi-based real estate developer, Unitech Ltd, has had its fair share of challenges. Close on the heels of implementing about 70% of SAP in 2007, it saw the ERP rollout disrupted due to the downturn. Umesh Vashishta, the chief information officer and VP - IT of Unitech Ltd, and his team were left with having to deal with the managerial and financial issues during the ERP rollout process.

For Vashishta, this was a bigger challenge—after having been involved in successful ERP rollouts at Jindal and other companies, he had to deal with the nuances of the real estate scenario when he joined in 2005. "I found the real estate sector highly disorganized. We deal with raw materials, manpower, etc. and the financial transactions here are highly different as compared with other organized sectors. Tracking everything down into one ERP system was a difficult task," says Vashishta.

In order to ensure installation of the right ERP system, the team had to restructure the entire organization, and make people unlearn their past 30 years of practices. "Management of such issues is 70% of the ERP rollout effort, whereas a mere 30% is technology tools. We started with a CRM deployment project, which benefited the company and helped us to increase productivity," he adds.

The CRM implementation took care of the customer part of the business. Back office automation was a challenge, since it required to take a number of factors into consideration like raw material suppliers, contractors and civil engineers spread across different locations, not to mention the workers on field. "While evaluating the scope of this ERP rollout, we realized that people could be non-receptive to changes. A choice was to go in for business process reengineering, also called for business process management. The ERP rollout's objective was to eliminate non-value processes in order to improve productivity," says Vashishta.

Unitech's IT team began its tryst with the ERP rollout in Q1 2007. To understand the subtleties of the business and make business users receptive towards automation, the IT team ensured constant communication. The company on its part brought out presentations to help the IT team understand the different core areas of the business structure. "We went in for more servers, and spent around Rs 4 crore on aspects such as setting up the IT infrastructure, licensing and implementation partner," says Vashishta.

 We expect our SAP ERP rollout implementation to help meet business deliverables on time and enhance quality of projects through tools like project management
Umesh Vashishta
chief information officer and VP - ITUnitech Ltd

Recession obstacle
"Mid way through our ERP rollout project, we heard that Lehman Brothers had gone bankrupt. Lehman had stake in our company. The market crashed, and all IT projects at Unitech went on hold. At that time, we had completed almost 70% of the ERP rollout," recalls Vashishta.

Although Unitech reeled in the wake of this development, the event was a blessing in disguise. The recessionary period offered additional time to understand the business' direction. This interim period also shaped some major changes in the company's business model, which was more realistic in nature.

It is only recently that Unitech has begun work on the ERP rollout project once again. Vashishta and his team are in the process of implementing the remaining 30% of this ERP rollout with some tweaking due to the change in business model. The implementation will be end-to-end and will have almost 10 modules covering areas like land conversion, concept design, budgeting and planning, project management tool etc. The project will go live on June 6, 2010.

"We expect our SAP ERP rollout implementation to help meet business deliverables on time and enhance quality of projects through tools like project management. Business intelligence is another module which will help in future business decisions-making," says Vashista. The total cost incurred on this ERP rollout is about Rs 7 crore. Going ahead, the company plans to include HRMS and CRM within SAP.

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