Indian automaker Maruti Suzuki runs a highly successful business with the Oracle technology and business applications stack.
by Tony Kontzer, November 2009
When leading Indian automaker Maruti Suzuki says, “Count on Us,” it’s more than a marketing slogan to customers. It’s also the message that the company’s IT department is sending loud and clear to its internal customers, a team that is manufacturing and selling a highly engineered and customizable consumer product accompanied by an array of related products and services. When the company added leasing, finance, insurance, and preowned car sales to existing lines of business in 2002, it used the expansion as the impetus to replace a collection of mismatched IT applications with a series of high-speed Oracle applications. The result is a single, standardized environment that retrofits the complex, multichannel company for rapid acceleration.
Powering Goals with Real-Time Data Currently commanding more than 54 percent of India’s huge automobile market, with 2008 sales of US$3.5 billion and four relatively new business lines, the company plans to double annual production from 500,000 vehicles today to 1 million by the end of 2010. Add a huge network of dealerships, and you get revved-up demand throughout the organization for access to consistent real-time data.
When Rajesh Uppal, Maruti Suzuki’s chief general manager of IT, set Maruti Suzuki on a course of standardization in 2002, the company already had Oracle Database, Oracle Application Server, and some of the enterprise resource planning modules of Oracle E-Business Suite in place. But IT sprawl became a growing challenge. Various lines of business were using homegrown systems, and integration between them was poor. Staff had to enter data multiple times and couldn’t generate useful management reports without manually consolidating information.
The addition of four new business lines only added to the complexity, requiring even more human intervention and creating additional integration issues. Plus, plans to build on its expanded footprint and increase vehicle production made it critical for Maruti Suzuki to create an IT environment that could scale easily to accommodate more products and services, more customers, and a lot more data.
Uppal’s goals were to avoid a future filled with integration challenges and other forms of IT catch-up as well as to provide real-time, end-to-end visibility throughout the company. With Oracle technology now underlying every aspect of Maruti Suzuki’s business, from the back office to online sales to its dealer network, the IT operation is able to deliver greater efficiency and flexibility in a scalable solution with lower IT costs, streamlined support, and a tightly integrated environment that yields consistent data and simplifies the addition of new technologies.
“Our long-term perspective has been that a single-vendor stack and road map makes good business sense,” Uppal says, adding that upgrades have been significantly simplified because each generation of Oracle products ties neatly into the existing Oracle stack. The single-vendor model enables the company to complete upgrades without getting stalled in time-consuming integration projects. It’s a model that other companies would be well advised to follow, says Howard Rubin, a leader in IT benchmarking and senior advisor at Gartner. “[Maruti Suzuki is] in the business of making cars, not the business of handling software disharmony,” he notes. “In an industry where margin is being squeezed, you want to get the best leverage you can, and a single-source solution is an obvious and brilliant thing to do.”
Market Demands For Maruti Suzuki, standardizing on Oracle answered a need for continual technology improvement. “In this country, technology is one area where you have to constantly innovate. You can’t sit still,” says Uppal. “You know that you’ll be ahead of the curve only for a short time and that your competitors will catch up shortly, so the lifecycle of innovation isn’t very long.”
In that spirit, Uppal complemented Oracle Database and Oracle Application Server with a growing array of Oracle E-Business Suite modules that run its financial, purchasing, and human resources systems, among others. The open architecture of these components has simplified integration with Maruti Suzuki’s legacy procurement, dispatch, time card, production planning, and business intelligence systems, which was accomplished without any interruption to the business. That’s critical to a company generating more than 2,000 invoices each day.
One of the key operational benefits that Maruti Suzuki has achieved has been a level of integration that enables the company to work more effectively with its nationwide network of 850 dealers. The company’s proprietary dealer management system was built using Oracle Forms and has run on a centralized Oracle Database since prior to Maruti Suzuki’s decision to standardize. But because of the disparate nature of the company’s legacy applications, an inquiry through the dealer management system couldn’t reveal updates entered manually by back-office staff. This meant that one dealership might not be able to see that another had ordered the last of a certain part, resulting in erroneous information being passed on to the dealership and its customers.
Today, however, the system links to various modules of the company’s Oracle E-Business Suite deployment, ensuring that the entire dealer network is being fed the same data. Such integration also means that dealership input arrives on the production floor in real time, enabling faster response to requests for parts or rush delivery of vehicles.