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Against the grain: Bucking the outsourcing trend

Kanika Goswami | Nov. 24, 2008
Underneath its distaste for chrome, glass and anything loudly modern, VST's been busy pulling off an IT feat few other modern companies have attempted.

Nemani was categorical about his ability to deal with the insourcing move. And he pointed to his track record to prove it. "When the CEO asked me how I would manage, I told him 'I've already been part of this process for four years. We were already doing all of the work when they were not supporting us'," he remembers saying.

It helped that Nemani garnered support from his direct superior, Sankar. The Finance Director and Company Secretary says that he had seen Nemani's grow from a finance personnel to an IT evangelist. "He has been involved in the [IT] operation right from the beginning, so we thought an opportunity should be given to him. Initially, we were a bit skeptical, but his confidence helped," says Sankar.

That wasn't the end of it. Management knew it was crucial that Nemani had an IT team to back him up. Before VST had outsourced, it had an IT department that was 20 people strong. Over time their strength had dwindled to three.

Once again, Nemani took the road less traveled. He banded together a team made up of representatives from functional areas -- not IT professionals. Much like his own experience, members of other departments had also found ways to work around the vendors -- building expertise along the way. "They are not LOB (line-of-business) heads," says Nemani, "but business experts, the second or third level of each department. And even they had enough confidence."

His unusual approach, however, could cut one of either two ways: by using business experts who needed ERP training, the business could take off -- or the lack of IT training could spell disaster. By making business processes more important that IT, Nemani was opening up a new model: one in which IT, it seemed, would take a back seat.

Point of No Return

In the meanwhile, business was moving at full steam. To meet VST's competition head-on, management required IT to be more than a support function, they needed IT to step up its game. VST needed new ERP functionalities for treasury and risk management and the company also needed to bring the Tobacco division under the ERP. By this time, VST's ERP was five-years-old and was ready for an upgrade. "We wanted contemporary technology working for us," says Nemani.

VST's management turned to Nemani and pointed out that if he wanted to handle IT, he would need to bring it back in-house and upgrade to the next version of ERP -- at the same time.

To meet the new challenge, Nemani decided he needed to hire more people from outside -- and again the bias was on people with functional knowledge. "We had recruited people who had five-plus years of functional experience with one year of ERP exposure. In one instance, we recruited one person who worked at the Nagpur ordnance factory. He has many years of domain knowledge but knows nothing about ERP. We trained him in SAP, and his business processes expertise did the rest."


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