Tisco (tata iron and steel company limited)

1. Introduction

TISCO (Tata Iron and Steel Company Limited) is the world’s sixth largest steel company which was established by Indian businessman Jamshetji Nusserwanji Tata in 1907. It is also the largest private sector steel company in India in terms of domestic production. The company is the fifth largest steel producer in the world as it produces 18 million tons of steel in India and 52.32 million tons overseas. [1]

The aim of the company was to maintain its reputation in the steel industry. For this they had to do some advancement in their technology because, the legacy system was outdated. Basically they wanted to transit from a production-driven company to customer-driven company which will make them more Customer friendly. [2] For the improvement in the system they had implemented ERP SAP 3 which later on resulted in a success of company. Generally it’s not so easy to be successful in the ERP implementation process, but as the company had taken right decision on right time, they were able to get the desired results from the implementation

2. ERP Implementation

2.1 Need of an ERP System

TISCO was facing two main problems. Firstly, the systems which were they using were outdated and it was also having some errors. Secondly, the system was mostly designed for the process and which made them to pay less attention to the customer needs. [3] Finally, company decided to implement a new ERP system which is error-free as well as less complex and which will also help them to become more Customer friendly.

2.2 ERP System Selection

The company wanted such an ERP system which would satisfy the factors such as time, profit, cost, compatibility, support, transparency and future requirements. While working on these factors company was also forecasting the condition which will become in the future after implementing any ERP system. So finally after a thorough study, the company ended up with the SAP 3 ERP which was fulfilling all the requirements of the company. [2]

2.3 ERP Implementation Process

The ERP implementation process is a very time consuming because it has to go through some major factors like planning, designing and testing. Most important thing is that the system should meet the company’s demands. Thus, to implement the SAP ERP system, a period of 8 months was allotted which was a big challenge for the company. [3] But the company was able to meet the deadline successfully.

3. Factors Contributing to Success

3.1 Planning

The initial step for the company was to list out the goals that are is to be achieved. According to the goals they designed the process plan. TISCO wanted to create such an environment which will always make them to learn something new by which they can make changes to make the system more efficient. They had also planned about the changes that can affect the system in future. By this they can immediately implement the solutions for the changes without wasting the time. The company wanted the software to work in such a way that it would improve the products and services which will make the company to maintain its reputation in the steel industry.

3.2 Process Organization

It’s always good when the process is divided into some parts so that each process can be handled separately with less complexity. So the company had divided the whole process into two parts. The process which was more complex and had more transactions was defined as the ‘Hubs’ and the process with less complexity and transaction was defined as the ‘Spokes’. [2] Hubs are the major part whereas the Spokes are the minor parts. Spokes were attached to the Hubs because finally the whole process was going to run together. These processes were designed into the SAP modules. Enough training had been given to the developers to work on these modules so that they can handle the problems which might occur while testing these modules. The company had given deadlines for each module because the final task was to run all these modules at the same time. And at this point if any kind of errors would occur then, there should be enough time to work on it. So, In order to run all these modules together the developers had to do the proper implementation of their knowledge.

3.3 Final Stage

At this stage the company was ready with all the modules and was preparing to go live with the entire project. This stage was very crucial for them because this is the moment when they will get to know the results. As the company did not face any problems while working on the project, the desired results were expected. They had done the thorough analysis of the whole process and implemented the solutions for the changes where they were required. So the company was quite confident about the outcomes.

3.4 Result

Finally TISCO got success in SAP ERP implementation project. This project helped the company in terms of financial, technical and managerial aspects. [3] This project made company to update its customers daily and providing a good quality of service across the country which led to the improvement of customer management. This project had led company to an improved productivity, enhanced customer service, speed delivery and reduced cost. The system was less complex and a user friendly which was the biggest advantage. This project helped the company to reduce the product cost and gain more profit in the industry.

3.5 Future Steps

The success of this project was motivating for both the TISCO and the ERP vendors. Now TISCO is not only using this software but they are also going to work on it further to gain more benefits for the company as well as for the stakeholders. [3] This will help company to make more profits and satisfy the customer needs efficiently. In this way the company can keep its existing hold in the steel industry.

4. Conclusion

Many big companies have failed to implement ERP systems. Due to this fact many companies doesn’t prefer to implement ERP. But this fact did not affect TISCO’s morale. They worked very hard on the project which made them more confident about the results. The speed at which they worked and the way they synchronized all the work was remarkable. This was one of the major contributing factors for the success. Finally the project gave the desired results and fulfilled all their expectations.

5. References

1. Wikipedia (2007) http://en.wikipedia.org/wiki/Tata_Steel

2. Bhavish Sood, (2001): Indian Express Group (Mumbai, India)

http://www.networkmagazineindia.com/200210/case5.shtml

3. Crewind Technologies Pvt. Ltd. (2009)

http://www.erpwire.com/erp-articles/saperp-success-in-tisco.htm