Autoanc Ltd.

Autoanc is a multimillion dollar automobile and ancillaries manufacturing concern

located in the Northern part of India with divisions in West Bengal, AP and
Tamilnadu. With its associates, Autoanc is the largest business conglomerate in
North. The product line ranges from automobiles to computer peripherals.

13th May 2009, 0845 hrs

Poongavanam was scanning the list of daily activities. He was responsible for
Planning in Information Technology Division (ITD) at Autoanc

9 am: vendor meeting for identifying a bridge software for the networks

10 am – 12 noon: conference call with Chennai on ‘AI for non-technical areas’

After lunch: Strategic Planning session (SPS) with Vaman and Milan

4 pm: Presentation to President on CAD

5 pm: Meeting of cross functional team on ‘Problems in PPC’

There were a dozen other things Poongavanam could not accommodate in his
schedule.

Let us zoom into Strategic Planning session and watch what happens:

Today SPS participants had gathered at the exquisite conference hall of the IT HQ.
Chandan Chawla, CIO is flanked by Poongavanam and Vaman Vriksh, Manager
(Systems), Kolkata. Seated next to Vriksh is Milan Trimurti, Manager (Systems) at
Chennai.

The CIO begins the session saying, “ Our management feels that information is key
strategic variable, which we need to make better use of. Competition is no longer
the way it used to be. What we need is a firm technological edge over our
competitors. It is through diligent use of information technology that we should
gain the edge. I would like your comments on this.”

“Chandan, Before we proceed further, I would like someone to brief me on the

earlier strategies that the SPS of yesteryears has generated” says Vaman. He had
joined the organization recently and this was the first SPS he is attending.

“Sure Vaman, it is important we inform you of the past, if you must actively
contribute to this session. Poonga, why don’t you spend a few minutes on the
strategies we adopted in the past? It might also help in giving a better structure to
our thoughts” the CIO says.

“Our computerization started in Sep. 1969. But I would say the seeds of current
level computerization were sown in 1986.
I would divide our history of computerization in four phases: In the first phase the
focus was on data processing. Hardware decisions were taken more on the basis of
brand and software decisions followed the hardware choice. Emphasis on
technology was limited. Computers were brought in assisting in heavy volume
tasks. Autoanc was, at that time, one of the very few companies to make expensive
investments in hardware. During this period the computers were brought in mainly
for faster number crunching. Middle level managers were yet to be convinced of
the benefits. Many operations staff felt that computers were responsible for
delayed and erroneous reports. The information coming out of computers was
either inaccurate or irrelevant or both.” Poonga passes at this point.

Milan, who was deeply involved in the first phase of computing continues “The
staffing of the computer department during the first phase was interesting. We did
not have professional computer specialists. Many of the programmers were
graduates picked up from the shopfloor with little or no experience in computers.
They were trained in-house and assigned to programming”

“What was the environment?” Vaman asks

“We had an ICIM 2904 and 10 IBM data entry machines. All systems were file based
and applications were written in Cobol. The systems ran in batch mode and utilities
that were available were hardly used” says Milan.

“In the second phase the need for correct and timely information was strongly felt.
The focus shifted from data to information. The computer department, popularly
known as IBM department (despite its ICIM environment) was rechristened as the
Information Systems Department (ISD). Chandan joined as CIO. More manpower
was added to the department. The significant change, however, was in the
computing environment. Chandan, would you like to comment on it?” asks Poonga.

“Oh. It was a lot of change. Batch to on-line. I would say that is the time we started
the war against stale information! Powerful MC68020 processor-based systems
were installed. Terminals were located in user locations. Applications were
converted to on-line mode.” The CIO says

“All data entry operators were transferred to the user departments. Unix operating
system was made the standard. All applications were developed on a relational data
base UNIFY and C was made the official DP language” the CIO continues.

“It was not as if second phase ended and third phase started. In fact third phase
started almost parallelly with second phase. Still it is called third phase because it
was the next step in computerization.”, Poonga continues. “Having done the
groundwork, it was now required to exploit all the capabilities the hardware and
software offered. Thus the third phase saw the introduction of personal computers,
communication facilities and office automation equipment.” Poonga says.
“In this phase a drastic change was brought into working procedures. It was a
cultural change. Personal computers were ‘dumped’ into all departments.
Electronic typewriters replaced manual ones. Copiers and paper shredders became
common property. Managers were asked to generate all reports using personal
computers and to use copiers for distribution. Middle level managers, department
staff, operators and secretaries swarmed the computer centre for training. Training
became a major activity in the third phase.” Milan recollects the past with
enthusiasm.

Poonga joins this journey down the memory lane: “When such a revolution was
taking place among end-users, data processing community too were faced with
drastic changes: “We changed from dumb terminals to PCs. Distributed processing,
cooperative processing and integrated databases became the hot topics. While
servers did the number crunching, these data were downloaded into PCs for
analysis.”

Chandan adds a word of caution: “It was not as if all these happened very smoothly.
By now operations staff have started accepting computers, but they could not cope
with the pace of change – more so because of the software changes in the early
years of PC” .

Poonga, who had joined Autoanc in the beginning of the second phase has seen the
fierce hostility between IS and other departments in the managers’ meeting. Many
of the managers in the operations department questioned the huge investment
made in IS facilities.

“The fourth phase had a generic agenda: to exploit the computing capabilities to its
full and this phase is an on-going one. We could call this an era of consolidation and
diversification. Consolidation was achieved through communication and
networking. Integrated data bases, resource sharing, currency of information and
inclusion of external agencies like suppliers and distributors into our computing
environment were to be made possible in the fourth phase by extensive
investments in communication. At the same time we diversified the use of
computers to areas other than data processing such as computer aided design. It is
at this time we renamed ISD into ITD” Poonga narrates.

“We have now networked all our computers and other resources. Kolkata, Chennai
and other smaller plants have all been linked through VPN. These are capable of
voice and data transfers. Thus it is possible for any employee of Autoanc in any
location to contact any other employee of his choice. We propose to bring dealers
and distributors also into this network” Chandan adds with pride.

At this point, Chandan calls in Akar Chand, Manager, Computer-aided Engineering

(CAE) to brief on the activities in his area.
Akar takes the reins and starts “ The chief objective of the CAE is to increase the
productivity in operations to meet the competition. It is necessary that our R & D
operate at much higher levels of sophistication, if we were to turn out reliable and
inexpensive products that far surpassed the quality of those of our competitors.
Additionally we also have the responsibility of introducing AI into our data
processing.”

“Thanks, Akar. Since we have seen the past, we can now define the strategies of
the future” says Chandan.

(Case material prepared by M.S. Suresh updated and modified by S. Ramanathan

for class discussion)