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Pharma: Matrix Laboratories - Catalyst for Consolidation
Companies bank on IT to take them through consolidation pains, an aftermath of any merger or acquisition
Rajneesh De
Saturday, March 17, 2007
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Much of the IT adoption at Matrix Laboratories is determined by the nature of its business as well as its business dynamics in the last few months. With R&D facilities near Hyderabad and manufacturing near Vishakpatnam, Matrix is involved in the manufacture of Active Pharmaceutical Ingredients (APIs) and Solid Oral Dosage Forms. While till a couple of months back, Matrix was still one of the few domestic pharma companies amongst MNCs, the status has now changed with the US-based generic pharma company, Mylan Laboratories, acquiring up to 71.5% stake in Matrix.

Consolidation has become the primary reason for the increased activity in Matrix on the IT adoption front in recent times. Be it server consolidation, data center consolidation or even ERP consolidation, this seems to be the flavor of the season sweeping across the company. The fact that Mylan is coming with its separate, disparate IT systems is definitely influencing much of this consolidation phase, admits Srirama Murthy M, DGM-Systems, Matrix Laboratories. Also the fact that being involved in bulk drug manufacture involves direct customer sales, and a consolidated IT environment helps in making manageability simpler, adds Murthy.

The Mylan acquisition of Matrix implies not just ERP consolidation, but the need to standardize by conforming to global norms. Since Matrix was running on SAP ERP while Mylan had some in-house ERP, there was the need to consolidate both operations into one platform; the decision was to close on SAP and Murthy informs that Mylan is currently moving in that direction. Subsequently, as the two enterprises consolidate, the merged entity also plans to implemented Business Intelligence and data warehousing tools from SAP. "In two months time, the consolidated entity will go live on SAP and we will also implement BI tools," informs Murthy.

'Time in reporting of outbreak
of diseases from remotest areas has dramatically reduced'

-Srirama Murthy M
DGM-Systems,
Matrix Laboratories

While ERP consolidation on SAP will help back-end integration of the two companies, plans are also afoot to have a common data center

While consolidating on SAP will help back-end integration of the two companies, plans are also afoot to have a common data center. This data center will have blade servers running most of the non-ERP applications like messaging and the likes. Since scalability is becoming a crucial issue for the merged entity, the decision has been taken to also go in for IBM p-series servers as well as storage solutions from EMC. Scalability is important since even prior to getting acquired by Mylan, the company has been growing inorganically through acquisitions of Concord Biotech, DocPharma, Mchem Group and Explora amongst others.

Murthy admits that retention of IT talent has become a major challenge for Matrix. "Everyone wants to join the IT vendors and in recent times we have lost 40 members from our team." Subsequently, the company has seriously looked at third party outsourcing; areas like facilities management, server administration, security management, ERP support have been outsourced to NetSol, the company that has become a part of IBM now.

Rajneesh De
rajneeshd@cybermedia.co.in

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