'A Grey Area Between ERP And Supply Chain'

<div>The interesting thing about Bristlecone is that despite being part of the $15.9-billion Mahindra group for almost a decade, the company doesn't aim to expand across verticals but rather to reinforce its claim to fame for supply chain analysis and optimisation. <strong>Irfan Khan</strong>, senior vice-president and general manager, Global Field Operations of Bristlecone believes that the company's USP is their specialised focus and strategic attempt to not become a regular IT service firm. In an interview with&nbsp;<strong>Alokita Datta</strong>, Khan talks about the transition from traditional ERP to supply chain most companies are going through, Bristlecone's optimism about the data analytics market, why India is still not ready for the next phase of supply chain optimisation and how companies are responding to the idea of new technologies. <br /><br /><strong>What is Bristlecone's core competence and how have you evolved over the years?</strong><br />If you look at Bristlecone as a company, we are first a part of the Mahindra group, since 2004 (Bristlecone was founded in 1998). Mahindra was looking for a foothold in the US and we were looking for a foot in India, so it worked out for both of us. We were at a point of inflection where either we would combine hands with someone or buy a company. Mahindra is now running at $15.9 billion as a group and our focus has been in the area of optimising supply chains which is becoming the backbone for most businesses. That is our claim to fame.<br /><br />When we work with companies we look at their processes and the technology which is enabling them. We talk to the business (departments) and IT and most of the time find a disconnect. We used to find that CIOs spent a lot of money on technology that they found very fancy and suddenly business would wake up saying we don't know what to do with it. If you look at statistics, 65 per cent of ERP projects don't see the kind of RoI they want to. Fundamentally, the case used to be that companies were not worried about what the business wants but about not being able to make the key linkage between the amount of money spent&nbsp; and its impact on the bottom line. That has shifted and I can take pride in saying that we are one of those companies that have constituted to the shift.&nbsp; We don't do IT consulting and we are also just the right size - 1,200 people, globally. With the enhanced force of Mahindra's IT portfolio we can pool resources from our sister company - Tech Mahindra - and this has enabled us to pick up some very large projects. We have customers such as Apple, Brooke Bond, BlackBerry and a lot of companies who would want to work with us since we are specialists in our field. <br /><strong><br />What is your modus operandi once you have acquired a client?</strong><br />If you look at it simply, there is a supply side and a demand side, and I am keeping technology out of it because we don't talk about modules per se. When we go to work with a customer, we insist on spending a lot of time with business people before we speak to the IT people.&nbsp; In today's word the head of supply chain, head of IT and the CFO play a very key role. Our objective is to really get them together to make sure they speak the same language. It is important to understand that a bad supply chain can really detract a company from profitability and we have seen that happen. <br /><br />A lot of companies are wedded to technology, primarily because of the past era; you choose one and you go with it and its upgrades. It is important for us to find out the mindset of the customer, therefore.&nbsp; <br /><br />We are very hardnosed about doing a blueprinting phase which is where we develop the skeleton of the project. It is to try and present customers from ending up in the 65 per cent (of companies who don't get an RoI from their supply chain) We try not to give (cost) estimation before we do a blueprint. We have imbibed our work culture from the Mahindra group and as a company; we want to grow at our own pace focusing on what we do best. Otherwise we would have delved into the IT services domain, like so many other companies. It is tempting but we have stayed specialised because it is not strategic for us.<br /><br /><strong>What kind of services portfolio do&nbsp; you offer to clients?</strong><br />There is a service called process cleanup/optimisation that we deliver and then there is a tool (software) which goes in , you align the process, deploy the tool and make sure the tool maps to the processes. We are not a process delivering firm but are right at the brink where the process is about to be frozen and technology cuts in. For instance there is a phone (manufacturing)&nbsp; company,&nbsp; with 50 retail locations and one that grew from 0 to $5 billion in 5 years and are still tracking things on excel sheets. That is where we step in to provide the company with the ability to predict their inventory, marketing spend distribution. Companies need us to automate their solutions and show them if things work. We deliver this solution, maintain it and keep enhancing it as the business model changes.<br /><br /><strong>In what ways is the supply chain model changing for most of the companies you are working with?</strong><br />We have realised over a period of time, thanks to our customers that they would like to see us as a supply chain shop, rather than a technology wrapped supply chain shop.&nbsp; Customers aren't really married to technology; there are some big players in this area: SAP, Oracle, Ariba, acquired by SAP and others. Most of them are realising now that the next big thing in the application space, after ERP is supply chain procurement. Thus, they are also working towards enhancing their portfolio from ERP to supply chain and procurement. Every company is trying to get close to customers and in that basic ERP won't do; They should be able to predict the market, the spend and procurement. <br /><br />ERP is being deployed everywhere now; the next phase of maturity is what we are structuring. There are some countries and regions, such as the US and Europe which are ahead in the game, India and APAC are still going through the ERP curve. They would take the next 48 to 60 months before they really start thinking of spending money on supply chain. Therefore we are more focused in America since the from a customer maturity point of view where they understand that we really know their supply chain.&nbsp; There is still a grey area between ERP and supply chain in India. <br /><br /><strong>How do you draw the distinction between the two?</strong><br />ERP to me is how components are linked together, but those components do not let you predict demand and supply or analyse it. You put something in a system and it comes out in a very seamless manner. How much you put in a system, how much you should buy from a vendor, how much do you stock and spend, this kind of thinking power comes comprises supply chain optimisation. This is one big trend where companies are looking for a single shop by expanding to get supply chain and procurement together. <br /><br /><strong>What are the other big trends in the (global) market when it comes to supply chain optimisation?</strong><br />The next big trend relates to cloud computing. Over the last few years there have been successful implementations on cloud which is non perpetual in the CRM (customer relationship management) and HR space. When software vendord, who build supply chain solutions, look at this trend, they want to jump in the bandwagon thinking let's build supply chain models on the cloud. The last 12- 18 months have been a struggle for the big boys because when they are doing cloud-based selling, they are losing licence revenue and maintenance revenue which is pure profit for them. But they realise that this shift is irreversible and are jumping in to move to cloud. This shift is also working out well for us because we had also made some investment 12 months back; we have a fairly large product development shop which does work on supply chain solutions for certain core vendors. Since we are not a very big firm, we can shift more easily, or rather expand our portfolio.&nbsp; <br /><br />The third thing that has worked for us is the whole spend around data. One is big data and the other is analytics. A lot of customers need information out of data which is subjective and objective. To crunch the data into meaningful information you need some high performance, in depth memory devices, in-memory devices, a very strong database, strong analytical tools and want to process the data as fast as possible which means in-memory processing is becoming more and more powerful now. Suddenly there is a new market which has memory and hardware (databases) coming together. Processing that market is a whole new market which we will tap into. And we are excited about this market around analytics. Mobility is big for us as well: making the supply chain mobile. It is a simple concept but it adds a lot of value for customers if we can extend them to mobile devices. That is another shift which is not going to reverse back. <br /><br />The last thing is that CIOs are thinking more like businessmen. A few years ago CIOs would go either with SAP, Oracle, but now they are spending a lot of time with business departments to really focus on what they want. We do a lot of work with Apple and we see this trend with other companies as well who are looking for technology that fits their business even if the parent or group company is going with a different technology. For instance, the CIO and VP of Supply Chain management are also taking swapping roles. <br /><br />Sometimes companies aren't ready to spend money on supply chain because for them it is ERP and then we have to tell them that they have to be able to see the value in optimisation, if they can't they're probably not ready for it. We have done 250 successful implementations by now, globally. We have spend nearly 1000 man years on pure IP (intellectual property) development which happens in house and are source codes which go into customer deployment. We see a lot of processes that are repeatable in certain industries and tell companies what will work accordingly. A case in point is semi conductors; we have built enough IP where now there are very few semiconductor companies who may not like to talk to us. <br /><strong><br />Which are the major sectors, industries, you cater to?<br /></strong>Our core industries include high tech and semi conductors, CPG (consumer packaged goods), equipment manufactures and automobiles. But if you look at our 250 implementations we have touched around 18 verticals, the chemical industry is another area where we have done a lot of work.&nbsp; <br /><strong><br />Where are the major development centres for Bristlecone located, globally?</strong><br />Bristlecone is headquartered out of MountainView in California, we also have a headquarter in Switzerland and 4 hubs in India: Noida, Pune which is becoming a core centre now, Bangalore and Mumbai. These are basic training and deployment centres, because a lot of work happens offshore.&nbsp; We are also present in Singapore, but Asia to us, is very controlled right now because supply chain will take a couple of years to mature here. However, expanding to Asia is not on the roadmap today. We keep an eye on the region but our hands are too full with US and Europe at the moment.</div>