TATA MOTORS

SAP ERP helps Tata Motors to serve their customers better and faster
SAP has a clear superiority in the market !t has a lar"e presence and "ood support# so $e
chose the SAP ERP Solution for our company The results have definitely e%ceeded our
e%pectations&
Tata Motors Limited, Indias largest automobile company, is the leader by far in commercial
vehicles in each segment, and the second largest in the passenger vehicles market with winning
products in the compact, mid-size car and utility vehicle segments The company is the worlds
fifth largest medium and heavy commercial vehicle manufacturer !stablished in "#$%, Tata
Motors presence indeed cuts across the length and breadth of India &lose to $ million Tata
vehicles ply on Indian roads, since the first rolled out in "#%$ The companys manufacturing
base is spread across 'amshedpur, (une and Lucknow, supported by a nation-wide dealership,
sales, services and spare parts network comprising over ),*** touch points Their annual
turnover last year was +s ),,*** crores The companys )$,*** employees are guided by the
vision to be best in the manner in which they operate, best in the products they deliver and best
in their value system and ethics
They became the first company from Indias engineering sector to be listed in the -ew .ork
/tock !0change in /eptember )**$ They have several international collaborations and
ac1uisitions including 2aewoo of 3orea and Marco (olo of 4razil Tata Motors and the 5iat
6roup have recently signed a Memorandum 7f 8nderstanding to establish an industrial 9oint
venture in India to manufacture passenger vehicles, engines and transmissions for overseas
markets :/;( has a clear superiority in the market It has a large presence and good support, so
we chose the /;( !+( /olution for our company The results have definitely e0ceeded our
e0pectations,< /ays (robir Mitra, &I7, and Tata Motors 4efore implementing the /;( !+(
/olution, there were several homegrown applications that managed all of the companys
IT re1uirements /ince they were developed over long periods of time, they were on multiple
platforms and hence difficult to merge The biggest drawback of the legacy applications was that
they were function and location specific and were built on local and individual perception of
needs &ommon and rationalized processes and practices across all organizational units were not
enforced Therefore, managing functions like =+, sales and finance across three manufacturing
units spread across the country and their corporate office was tedious and time-consuming
Integrated functions like materials management and payment processing were separate entities,
causing delays in individual transactions This led to unnecessary increase in overhead costs and
duplicated efforts at each unit Tata Motors soon understood that the need of the hour was a
unified real time database that gave up-to-date information to all their stakeholders - both
internal and e0ternal They had to move from their legacy decentralized platforms into a
consolidated enterprise platform and rationalize the business processes across the various units
This would give them an enterprise perspective both across process and IT infrastructure The
company could then serve their customers much better and faster, even while reducing
operational costs and cutting manufacturing cycle times
They decided to "o in for the SAP ERP Solution# $hich provided them all the ans$ers and
much more The SAP Solution $ould enable them to improve business continuity by
unifyin" the database and functions across the country into one sin"le entity !t $ould no
lon"er re'uire any location(specific e%pertise and thus be much easier to maintain
>ith the /;( solution, customization and up gradation costs could be lowered +isks, which
emanate from attrition or change of guard in the company, would also be minimized
!mplementation of the SAP ERP Solution
Tata Motors outsources their IT to Tata Technologies, which is their "**? subsidiary company
/o Tata Technologies became their implementation partner /;( India also organized some
consulting for them, which had consultants from both India and abroad In "##,, when the seed
of implementation was sown, the >;- infrastructure in India did not permit a single server
implementation =ence a distributed server implementation was done in stages over a period of
two years between "##@ and )*** The version used was A"= In ;ugust )**A, they moved over
from /;( A"= to /;( $B& on a single server platform There are A%** users across the
country 7nce /;( was implemented, rationalization of several processes was done e0tensively
Carious business processes like materials, finance, logistics, etc were stripped down to their
basic components and a lot of re-engineering had to be done, as all these processes became
location-independent Tata Motors also opted for the standard cost functionality, which was a
significant business process change for them
)enefits
>ith the /;( !+( /olution in place, Tata Motors has e0perienced significant benefits in
productivity and cost control The number of servers as well as the number of different
applications run on them has been greatly reduced The disaster recovery management is being
done only for one entity rather than for every application -on-value-add activities have been
lowered The implementation of a single /;( instance forced a much re1uired change in the
organization ; 4(+ to achieve uniform processes with business users talking the same language
was the outcome There is a significant reduction in inventories and better control over
receivables and other credit control ; shared services platform has also been created for IT and
shared financial services &urrently, they are e0ploring the possibility of a shared services
platform for =+ too There has been a reduction of almost ) weeks time in financial
consolidation The statutory compliance of 1uarterly closing of books and audit has been very
largely facilitated by /;( &ompliance has thus now become more structured and easier to
manage The speed and granularity of cost data availability is a big improvement The richness
of analytical data using 4> has provided enormous benefits /;(D /+M has provided a
seamless integration with vendors The biggest benefit has been the large unified database for the
entire enterprise :-ow anyone across the enterprise can 9ust look in and find out what customers
we have, who are our suppliers and vendors, what prices we offer, etc very easily It brought a
synergy in purchasing by strategically sourcing critical components for the entire organization
This resulted in strategic partnering with vendors with volume discounts,< says Mitra
*ith the +ompany bein" listed in the ,e$ -ork stock e%chan"e# SO. compliance
becomes mandatory *ithout SAP# SO. compliance $ould have been e%tremely difficult
$ith the lar"e and fra"mented spread of le"acy application& adds (robir Mitra
/;( /olution has helped Tata Motors serve their customers better and meet all their needs /ince
information is now on a real-time mode, they are able to 1uickly respond to their customers,
vendors and suppliers demands :(reviously, we had to pick up data from four different locations
and then consolidate them before you could update your customer -ow, we have up-to-date
information about the customer right up to his last transaction,< says Mitra
/uture Plans
Tata Motors is now a satisfied customer of /;( - they have the largest deployment of the /;(
/olution in the automotive industry, considering the spread of functionalities they use They are
keeping abreast of all the new developments and ensure that the applications they run
commiserates with the /;( enhancements They would definitely choose /;( for their future
plans too :7ur e0perience with /;( has been very good >e are consistently looking to add
new functionalities to our e0isting suite of coverage,< says Mitra Tata Motors has been able to
achieve enterprise integration, a high productivity gain and also build a stronger, enduring
relationship with its customers, thanks to the /;( !+( implementation Thus, the company has
not only retained its leadership in India but has also been able to enlarge its footprint in the
global automotive industry