I interviewed Ramesh Krishnamurthy who discussed IT Planning Systems: Go Global or Local?
1. Please provide a brief background of yourself.
Ramesh is the Founder of Indus Momentus Business Solutions, a Service Integration company in the area of Decision Support Tools in the Sales and Operations Planning domain. IMBS is focused on technology enablement of Sales and Operations Planning process. IMBS along with its partners, have more than 70 installations across industries mostly focused in India.
Ramesh, on a personal capacity, also engages in Strategy/Operation Consulting Projects as a Freelance Consultant. He has over the past couple of years completed projects with Monitor Group’s Inclusive Markets project in the area of Low Cost Housing in the urban areas of India.
Ramesh has an engineering degree from NIT, Suratkal and MBA from IIM Ahmedabad. Post his MBA, Ramesh worked with KPMG as Management Consultant in London and Mumbai. He was mainly involved in Telecom and Manufacturing projects in KPMG. After a 5.5 year stint in KPMG, Ramesh decided to pursue a career option that offered him challenges outside his comfort zone, and joined as the COO of Dimexon with the responsibility of setting up the diamond jewellery operations in Hong Kong and China as per the business plan conceived by him whilst in KPMG.
Apart from work, Ramesh is passionate about music and plays the drums and is part of a rock band. Ramesh is also deeply involved in running the India chapter of Junior Achievement, an education focused NGO that tries to bridge the gap between the academic world and the work world.
2. When is a broad Think Global Act Local philosophy appropriate?
When MNCs expand into newer markets, the key question facing them is which parts of the organization and its products/services should follow global norms and which should leverage/cater to local culture and needs. The key considerations for providing global focus to specific areas are the need for Global Shared Vision and Objectives, Global Homogeneity and Global Conformity and Control. Some areas that are standardized worldwide include Company Identity, Brand, Vision, Mission and Purpose, Industry Focus, Global Processes and Systems, Work Culture, Policies and Standards. On the other hand, aspects that need to take into account local tastes and preferences, local realities as well as local capabilities tend to receive local focus. These include products and services. For Instance McDonald’s basic SKU is a burger the world over, but a customized version is offered in each country – the McItaly burger in Italy, Maharaja Mac in India and the McLobster in Canada to name a few. Similarly, the Supply Chain also receives local focus as local production and procurement realities are different for each country and affect supply chain strategies. Though the organization may follow global standards for procurement, manufacturing and logistics, the actual supply chain will be adapted to the local environment.
When we take the Think Global Act Local philosophy further and apply it to Enterprise Systems and Applications, we see that Hardware and Core System Software are suited to global standards and management as the requirements are not geography dependant and most leading vendors are based out of US or Europe, with local talent being relatively less. However, in case of Enterprise Applications, which are wider in scope and scale, the Think Global Act Local philosophy becomes very pertinent. Applications such as ERP, which form the core enterprise backbone do need a high level of conformity and control and hence, are better standardized globally. However applications that facilitate Planning, Advanced Reporting and Operational Tracking (excluding financial transactions) do not require the same degree of control and can be sourced locally. These include applications such as Business Intelligence tools, S&OP tools for functions such as Supply Chain Allocation Planning and Procurement, Planning, Vehicle Routing and Planning, Bar Code systems etc for which local capabilities may also be well developed. An added factor is that the local branches of MNCs may find the cost and complexity of global enterprise applications prohibitive relative to the scale of local operations. In such cases, utilizing local talent and capabilities is the way to go.
3. Can you talk about companies in India and their use of Excel solutions for planning?
Many companies in India use Excel for planning. In many cases this is largely due to the fact that Excel is a popular tool that is easy to use for simpler plans and has the advantage of not requiring any additional financial investment. Additionally, many local subsidiaries of MNCs also use Excel as that their global organization may have forbidden the use of local applications in order to foster global homogeneity but the local organization may not be big enough to justify the cost of expensive licenses for global IT applications.
Excel when used for planning is adequate when planning is localized to a single department or one or two data sources. However, when you need to synchronize plans across several departments and pull data from multiple sources, Excel rapidly becomes difficult to use as a significant amount of manual effort will need to be spent on reconciliation. Inabilities to scale and handle complexity are just two issues amongst many, when it comes to Excel based planning. Excel does not have inbuilt document versioning or auditing and spreadsheets are prone to manual errors such as incorrect formulae, data getting accidentally erased or changed, incorrect data entry, reference errors etc.
Excel when used for transactional data entry also has several challenges including the inability to check for data accuracy and data integrity, lack of authorization, lack of an audit trail and the tendency to become bulky very soon.
Despite all these issues, local MNCs which don’t have the wherewithal to buy expensive Global licenses end up managing a lot of Planning and Transactions in Excel. In many cases, there exist local applications and capabilities that offer far better alternatives to Excel, but local MNCs, driven by Global Application Sourcing policies, are unable to implement local solutions.
4. What are your recommendations?
Organizations can realize significant benefits by applying the Think Global Act Local philosophy to their Enterprise Application Strategy. Though Act Local is an established practice for most MNCs when it comes to customizing products / services and delivery, it can be taken one step further. Functions and activities that come under the purview of Global focus typically do so when there is a need to have organization wide Conformity and Control. In case of IT systems, apart from ERP, which is an important enabler of Conformity and Control, all other applications only enhance operational effectiveness and hence do not directly impact global conformity. Most CIOs of Global MNCs have not made a distinction between ERP and other applications from a Control/Conformity vs. Local Capabilities standpoint. As a result, all applications tend to be globally sourced. This becomes sub-optimal especially in local markets where there are significant local capabilities in providing applications better suited to local realities and conditions. Hence, organizations can realize greater benefits by locally sourcing all applications other than those that provide global conformity and control.
About Ramesh Krishnamurthy
Director at Indus Momentus