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Steel manufacturing is an extremely competitive and complicated terrain. The finished product happens after various processesfrom iron ore to selling to OEMs to mainstream consumers. The key differentiator of the steel vertical is that it has two parts to the supply chain. The first part is the converging supply chain that includes raw materials converted into crude iron. The second part is the diverging supply chain. This unique combination of converging and diverging supply chain is unique to the metal industry. To manage all the processes IT needs to be strategically used in each and every process. Al Ghurair Iron and Steel (AGIS) uses various enterprise applications to improve its operational efficiencies. Like banking, Steel companies also have a lot of legacy systems, and AGIS is no exception. But the company has adopted automation in full swing using the latest enterprise apps from companies as diverse as Ramco to SAP.

AGIS is a greenfield steel complex promoted by Tradeline LLC, an Al Ghurair Group Company. The project, in addition to being of strategic importance to UAEs industrial development, will also leverage the industrial growth of upstream and downstream manufacturing facilities aligned to the segment and will usher in an era of rapid investment opportunities in manufacturing. The IT head of the company Saadath Thajudeen, speaks to Dataquest about the IT and other issues confronting the enterprise computing landscape. Excerpts

How do you see the latest economic turmoil, and is it likely to impact IT spending?
Steel manufacturing has already hit the bottom and is beginning to show an upward trend. This economic turmoil has surely impacted IT spending. A recent study by Forrester Research, done by Andrew Bartels, has revamped the IT spending forecast and projected a growth rate of 1.6% in 2009, down from 4.1% in 2008. There will be a revival in IT spending in late 2009 that will carry onto 2010. Much of this spending will be in hardware upgrades that were put off, but the surge predicted in 2010 will carry all sectors. In other words, the tech spending recession will end in the third quarter of 2009. In 2010 the IT spending will be almost 8%.

How can IT help improve competitiveness in a down economy?
IT can help improve and optimize businesses in various ways in a down economy. One of the benefits is using analytics which will give a competitive edge for businesses across their supply chain to accurately forecast demand, reduce stock-outs, optimize inventories, improve customer service and mitigate supply chain risks which affects both topline and bottomline growth.

Can you give a historical perspective about how IT has been adopted and used over the years in the company?
Our company has adopted and used IT as a key enabler to increase our competitiveness in the global market, in a phased approach. We understand that the strategy of one size fits all is problematic given our diversified businesses. Starting with home grown legacy systems, we have moved onto automating processes through Ramco ERP, IT infrastructure security, online and secured real time information anytime-anywhere, to name a few adoptions.

Which major applications/solutions have you deployed in the last few years? How has it impacted operational efficiencies?
We have implemented Ramco, Oracle-based and SAP applications during the last few years. We have benefited as a whole in streamlining processes, removing redundant data entries and reducing process turnaround time. I feel that to have a positive impact on operational efficiency, it is a must to understand the organizations existing processes thoroughly, and its working culture. The users will always appreciate if we inform them of the benefits of adopting solutions for increasing operational efficiency.

Outsourcing is both a management and technology decision. What is the CIOs role when the company enters into outsourcing? Which key parameters should a CIO consider before outsourcing?
The role of a CIO becomes very critical when the company enters into outsourcing as the CIO will have to then be careful in planning outsourcing business drivers and benefits, and evaluating and mitigating the risks involved in outsourcing. The key parameters for outsourcing are:

• Defining non-core and non-strategic operations for outsourcing
• Clearly define the scope and schedule of the project
• Look for specific experience fit
• Evaluate a service provider like you would for a full time employee
• Tie compensation against clearly defined project milestones
• Define support terms after the project is complete
• Start small and then go for optimization

Whenever a major IT spend is planned, it impacts all the stake holders of the company. Given this, how do you see the role of a CIO in the current times as things have become much more challenging?
I would say a CIOs role has changed for the better in the current times than the formative days of EDP, from the operational level to strategic level. In todays context a CIOs task would include building a great team, proactively establishing goals for IT, extracting maximum value from existing IT investments, holding all vendors accountable for delivering on the given promises in writing and so on.

The management always wants tangible RoI. Is this a big challenge for CIOs?
A mature organization always understands the metrics of measuring ITs value. Since ours is a mature organization, the management understands both tangible as well as intangible benefits out of any implementation. We prepare the RoI in terms of value, cost efficiency and operational efficiency, turnaround time, etc, before any major implementation and measure the benefits after implementation.

What kind of support do you get from the management on various IT initiatives?
We get the best support from our management. The management understands and encourages us to innovate and identify the right solutions for the organization. They also suggest on automated or real time management reports that should be generated for quick decision making.

What would be your key focus areas in terms of IT for the ongoing year?
The major items on our agenda this year would be to optimize on our enterprise apps, spruce up our IT infrastructure and the system integration of our plant. Obviously security tops our agenda. Other than that we are also gearing up for ISO implementation.

Shrikanth G
shrikanthg@cybermedia.co.in

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