Larsen & Toubro Ltd.

IT Strategy

Presented By
Group 12
Introductio
n
 The Foundation

Founded in Mumbai (erstwhile Bombay)

in 1938 by two Danish Engineers :

•Henning Hock-Larsen

•Soren Kristian Toubro

 THE ORGANIZATION ( 1/ 2)

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 THE ORGANIZATION ( 2/ 2)

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IT Design
VMG Framework ( 1/ 3)
 VMG Framework ( 2/ 3)

Mission Lakshya

ustomers through superior product structuring by cap

VMG Framework ( 3/ 3)

Business Goals
 Balanced Scorecard (1/2)
Balanced Scorecard Approach
BS Perspective Weight Strategy Weight Aggregate
Weight
G1 :  
G1 : Increasing Operating Margin to 11 - 12 %
Incr (cut-off = 0.08)
Financial 0.3 Increasing customer base through 0.4 0 . 12
easi geographical expansion
Venturing into new products or services 0.3 0 . 09

ng Reduce Operational Expenses 0.2 0.06

oper Customers 0.3

Change the pricing to improve profits 0.1

Maintaining Service standards as per the 0.5

0.03

0 . 15
atin SLAs
Customer satisfaction through quality and 0.3 0 . 09
g on-time completion of projects

Long term relationship with clients for 0.2 0.06

repeat business
Internal Processes 0.2 Seamless integrations of all the 0.4 0 . 08
processes through ERP
Cross Business Unit Integration 0.3 0.06
Increasing Productivity of the employees 0.3 0.06

marg Learning and Development 0.2 Knowledge Management and Knowledge

Sharing
0.5 0.1

in Training workshops and technology

seminars
0.3 0.06

to Job rotation for cross functional domain 0.2

knowledge
0.04

11-
12%
 Balanced Scorecard (2/2)
G2 : Grow
Balanced Scorecard Approach

inorganica
BS Perspective Weight Strategy Weight Aggregate
Weight

lly into
 
areas with
G2 : Grow Inorganically into areas with lucrative opportunities

lucrative
(cut-off = 0.08)
Financial 0.5 Explore opportunities to grow in 0.4 0.2
business the current business
Expanding as an organization into 0.6 0.3
opportunit new sectors

ies Customer 0.2 Connecting with the new customers 0.3 0.06

Keeping faith of old customers 0.7 0 . 14

Internal Process 0.2 Faster and prioritized M&A 0.5 0.1
planning
Manage culture change during M&A 0.5 0.1

Learning & Growth 0.1 Research and Development in new 0.1 0.01
sectors to develop proprietary
technology
Quick time to market 0.1 0.01
Seamlessly merge the technologies 0.8 0 . 08
and maximize usage
 Business Strategies ( 1/ 2)
G1 :
Increasin
g
operating
margin to •Venturing into new products or services like defense, nuclear power and aerospace
11-12%

•Seamless integrations of all the processes through ERP

•Customer satisfaction through quality and on-time completion of projects

•Customer satisfaction through quality and on-time completion of projects

 Business Strategies ( 2/ 2)
G2 : Grow
inorganic
ally into
areas
with
lucrative •Expanding as an organization into new sectors
business
opportuni
ties
•Faster and prioritized M&A planning

•Manage culture change during M&A

•Seamlessly merge the technologies and maximize usage

 Tactical Goals (1/2)
BUSINESS STRATEGY TACTICAL GOALS
G1 G1S1
: Increasing customer base
through geographical expansion
G1S1T1 Entry to the Middle-East, South East Asia
and Russia, Africa and Latin America
Increasin
g G1S2 Venturing into new products or G1S2T1
services like defense, nuclear
Expand facilities at its Hazira plant

operatingpower and aerospace G1S2T2 Ship building plant at Chennai

marginG1S3toIncreasing
employees
Productivity of the G1S3T1 Use of business applications and
reducing skill gap
11-12G1S4
% Maintaining Service standards G1S4T1
as per the SLAs
Clear-cut definition of the expectations,
obligations and penalties in the SLA
G1S5 Seamless integrations of all G1S5T1 Implementing/Integrating all the
the processes through ERP functional modules on ERP
G1S5T2 Encouraging managers to make decisions
in view of information available through
ERP
G1S6 Customer satisfaction through G1S6T1 Use of Advanced Project Management tools
quality and on-time completion
of projects

G1S7 Knowledge Management and G1S7T1 Informal interest groups within the
Knowledge Sharing organization
G1S7T2 Usage of Knowledge Management tools
 Tactical Goals (2/2)
G2S1 Explore opportunities G2S1T1 Strategic tie-up with global players having the best
G2: Grow to grow in the current
business
mix of technology and competitiveness

Inorganic
G2S2 Expanding as an
organization into new
G2S2T1 Tie-ups with global players to foray into new
sectors like deep-sea exploration, ports and power
ally into
G2S3
sectors
Keeping the trust of G2S3T1
plants
Efficient use of business intelligence to sharpen
areas the customers relationship with customer
G2S3T2 Leverage the current ERP strengths to gain faster
with access to customer and provide better service
lucrative
G2S4 Faster and prioritized G2S4T1 Setting up a corporate centre (separate M&A dept)
opportuniM&A planning which will support its initiatives to grow
inorganically
ties G2S4T1 Setting up the required processes to empower M&A
team to take correct & prompt decisions

G2S5 Manage culture change G2S5T1 Setting up process to ensure smooth integration of
during M&A the culture, process , tools and technology

G2S6 Seamlessly merge the G2S6T1 Cross Training employees of merged/acquired firms
technologies and
maximize usage G2S6T2 Systematic usage study of technology/applications
and corrective action
 PROCESS, ROLES, APPLICATIONS & TECHNOLOGY (1/2)
Goal Process Role Applications Technology Integration
G1S1T1 Identify viable Geographical CMO and Market research Team, BIW Reporting MSS, DSS, BIS, - Integrate data collected
points of entry (PESTLE) CEO, CIO Applications, ESS from new markets into
Entry to the SPSS, Business existing data warehouse .
Middle-East, Map companies strengths to needs Panel of Senior Management Analytics - Integrate data formats
South East of the new market applications of new market into
Asia and Create business-geography matrix Panel of Senior Management current database
Russia, Africa and prioritize - Enable reporting by
and Latin integrating with existing
America Prioritize the entry options Panel of Senior Management BIW system
(SWOT)
Acquire funds and resources CFO , CEO, CIO
Enter into new market and CEO, CIO
integrate
G1S3T1 Identify new training needs Individual department heads Performance SAP, Web - Tightly couple TnD and
appraisal based ESS, KMS with PMS
Use of Train employees to use business HR department, Training system, Intranet - Integrate KMS with
business applications experts Training and applications Training and Development
applications Encourage maximum usage of HR department, Department Development, system
and business applications Heads Knowledge - Integrate MIS with ESS
reducing skill Management, and web intranet to
gap Periodic measurement to asses CIO, Department Head BIW collect usage information
application usage - Integrate all
Identify gaps in usage HR department applications with BIW

Re-train/Motivate employees to HR department, Department

maximise usage Heads
G1S4T1 Re-asses customer needs and Individual Project Managers BIW, DBMS, MSS SAP, Oracle, - Enable SLA data
revamp agreement Cognos collection from customer
Clear-cut contact points into DBMS
definition of Revisit set SLA guidelines and Individual Project Managers - Integrate with BIW and
the document enable reporting through
Identify gaps in SLA definitions CIO, PM, Project team
expectations, Cognos
obligations Re-define SLA as per customer CIO, PM - Enable continuous
and penalties needs feedback and SLA early
in the SLA Renew the SLA tracking CIO, PM warning system to MSS
measurements
Track SLA on regular basis PM, Project team
 PROCESS, ROLES, APPLICATIONS & TECHNOLOGY (2/2)

Tactical Goal Process Role Applications Technology Integration

G2S1T1 1) identification of CEO and other Business Master data Integrating all
strategic partners top management Intelligence, management, the business
Strategic tie-up with 2) Negotiation and deal Marketing Research Oracle 11i, changes into
global players having the finalization Applications, Olap tools ERP
best mix of technology and 3)Development of tie-up Industry Analysis
competitiveness policy
4)Integration with partners

G2S2T1 1) identification of global CEO and other Business Master data Integration
players in new sectors top management Intelligence, management, with the
Tie-ups with global players 2) Identification of areas Marketing Research Oracle 11i, processes of
to foray into new sectors of synergy Applications Olap tools the partnering
like deep-sea exploration, 3)Division of roles and firm
ports and power plants responsibility

G2S3T1 1) Analyze business CIO CRM, Business SAP CRM, SAP Integration
processes and reporting Business head Intelligence Business with Customer
Efficient use of business requirements IT team Communication Relationship
intelligence to sharpen 2) Identification of BI CIO management Management
relationship with customer contents required
3)Selection of BI tools
4) Implementation of BI
Process flows (1/5)
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Note: The blue icons represent interface with
the database
 Process flows (2/5)
G1S3T1 : Use of business applications and reducing
skill gap
 Process flows (3/5)
G1S4T1 : Clear-cut definition of the expectations, obligations and
penalties in the SLA
 Process flows (4/5)
G1S5T1 : Implementing /Integrating all functional modules in
ERP
 Process flows (5/5)
G1S6T1 / G1S7T2 : Implementing advanced PM and KM
Tools
Implementatio
n
Critical Success Factors
Roadmap
Change Management(1/2)
Change Management (2/2)
 Roles and Responsibility
CEO Support to CIO and IT team
Promote use of IT
Encourage new initiatives for IT

CIO Provide a vision to IT team

Involve stakeholders
Link IT objectives with department objectives
Track IT goals

Program Manager Overall responsibility for implementation

Resources allocation
Coordination with all stakeholders
Performance evaluation of IT strategy
Training and skill development for IT
Define success criteria for completion

HR head Provide incentives for IT use

Encourage change agents
IT consultant Bringing industry best practices
Provide direction
Standardise process flow based on EVTXM
Ensure alignment with business objectives
Rewards and Recognition
 Financial Benefits
  2008 - 2009 2009 - 10 2010 - 11 2011 - 12
    With IT    
strategy
initiatives

Income        
Gross Income 34666 . 00 34666 . 00 34666 . 00 34666 . 00
         
Expenditure        
Manufacturing, 26232.00 25969.68 25450.29 25190.59
Construction and
operating
Staff 1998.00 2197.80 2329.67 2417.58
Sales Administration 1864.00 1864.00 1938.56 2050.40
Interest and Brokerage 350.00 350.00 357.00 385.00
Depreciation 307.00 307.00 322.35 337.70
Total 30751 . 00 30688 . 48 30397 . 86 30381 . 27
         
License cost of ERP 1.10 1.10 1.10 1.10
Implementation of IT 0.00 4.00 2.00 2.00
strategy
         
Less: Overhead to Fixed 25.00 25.00 27.00 30.00
Assets
PBIT 3939 . 00 4001 . 42 4294 . 04 4313 . 63
PBT 3940.00 4002.42 4295.04 4314.63
Tax 1221.40 1240.75 1331.46 1337.54
PAT 2718 . 60 2761 . 67 2963 . 57 2977 . 09
Post Implementation Review
Thank You