Mahindra & Mahindra Ltd.

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Mahindra & Mahindra Limited (M&M) is the flagship company of US $ 2.59 billion Mahindra
Group (F04 - US$ 1.96 billion, which has a significant presence in key sectors of the Indian
economy. A consistently high performer, M&M is one of the most respected companies in the
country.

Set up in 1945 to make general-purpose utility vehicles for the Indian market, M&M soon
branched out into manufacturing agricultural tractors and light commercial vehicles (LCVs). The
company later expanded its operations from automobiles and tractors to secure a significant
presence in many more important sectors.

M&M has two main operating divisions - Automotive Division manufactures utility vehicles,
light commercial vehicles and three wheelers. Tractor (Farm Equipment) Division makes
agricultural tractors and implements that are used in conjunction with tractors, and has also
ventured into manufacturing of industrial engines. Tractor Division has won the coveted Deming
Application Prize 2003, making it the only tractor manufacturing company in the world to secure
this prize. The Company has recently entered into a JV with Renault of France for the
manufacture of a mid-sized sedan, the Logan, and with International Truck & Engine
Corporation, USA, for manufacture of trucks and buses in India.

What are the IT initiatives of NSE in the year 2005 - 2006?

Project Sankraman - SAP R/3 Enterprise (4.7) Implementation on Centralized

Architecture
M&M entered into a new phase in technology initiatives from April 2005 by virtue of two
important events:

 Implementation of SAP R/3 Enterprise 4.7 on single instance and centralized architecture
 Centralization of all servers located across various units to a single server at secure data
centre located at Kandivli

Although the implementation work of the project was completed in F05, the post-launch and
benefit realization were major activities in F06. This signified M&M moving closer towards
being a real-time organization. It provided access to new functionalities directly catering to the
Indian taxation and auto industry requirements. It also facilitated standardization of business
processes, harmonized master data and better system compliance. Single sign-on and role-based
authorization features provided enhanced user experience. Organization-wide information now
being available on single server resulted in on-line availability of consolidated information with
drill-down up to transaction level.

Implementation of SAP APO (Advance Planner and Optimizer) for Automotive Sector
Implemented SAP APO at Farm Equipment Sector in F04, and rolled-out at Automotive Sector
in F06. SCM processes are streamlined using SAP APO. Forecasting, planning, and decision
support has been facilitated through on PPDS (Production Planning Demand Scheduling) & SNP
(Supply Network Planning) modules. APO-DP (Demand Planning) facilitated collaborative
planning between dealers and sales offices.

Roll - out of SAP SRM (Supplier Relationship Management)

The objective of this project was to extend visibility of supply end of the value chain. The
supplier portal - www.mahindrasrm.com - enables suppliers to do transactions and also track
material supplied to M&M from the stages of receiving, bill passing & payment. M&M buyers
get online information about e-invoice created by suppliers. Suppliers are also able to view
analysis related to their supplies. As a result of the roll-out, all major suppliers are now accessing
SRM portal. Implementation of Strategic Sourcing supporting sourcing module is now under
process.

Implementation of SAP DMS-CRM (Dealer Management System - Customer Relationship

Management)
It is essential for Auto OEMs to keep in close contact with the end consumers, build brand
loyalty and provide total customer experience. Implementation of centrally hosted Mahindra
Dealer Management System (DMS) covers - Marketing, Pre-sales, Sales, Services, Spares,
Warranty, Dealer Financials, Analytics, CRM and Business Intelligence. The pilot involving 50+
dealer locations initiated last year is in the final phase of implementation, to be followed by roll-
out across Mahindra Dealer Community. Appropriate infrastructure including dealer connectivity
is being established.

Implementation of SAP DMS-CRM has provided an additional opportunity to ensure process

standardization and compliance across all dealers of M&M. Enhanced the ability to integrate a
change more easily across the entire dealer chain. Facilitated better customer information
management, end-customer database, along with seamless integration with back-end SAP
systems.

Bar-coding Enabled Warehouse Management System at Spares Business Unit

The Spares Business Unit (SBU) has a Warehouse at Wagholi. The spare parts required for
Automotive & Farm Equipment Sector dealers are managed through this warehouse. Wireless
hand-held terminals are used to scan the bar-codes on the component packs. The same is
integrated with SAP R/3 System and being used to track the material during Pre-packing,
Binning, Picking & Packing and error-free warehouse processes. This has facilitated substantial
improvement in productivity and efficiency of warehouse staff to support high volume needs of
the business.

Implementation of SAP CFM (Corporate Finance Management)

Loans, Investment SAP CFM were implemented in F05 for Corporate Finance function. This
year focused on Forex module and Market risk analyzer. This has facilitated online monitoring
of financial measures such as Forex exposures, Investment portfolios, Yield to Holding etc.

Project Suraksha
Considering the criticality of Information Security in current business environment an
organization wide security project has been initiated leading to BS7799 Certification. The scope
covers all Information assets in Paper or Digital format across all the locations of M&M and
underlying IT Infrastructure. Organization wide information security policies and all the relevant
systems & processes have been documented and published on company intranet. All business
heads/ department heads are directly responsible for ensuring policy compliance.

All the information and IT assets across locations have been identified, risk analysis carried out,
risk mitigation plan defined by the users and concerned departmental heads supported by
Information Security team. A well defined Information Security organization structure consisting
of Apex council, Information Security Councils at each location and departmental
representatives is in place. Information Security Cell within Corporate IT coordinates all
activities related to this initiative.

M&M has deployed a world class Security Infrastructure, designed to both protect and enable
business, thus ensuring Confidentiality, Integrity and Availability of the information systems at
all times. Among the Security Infrastructure components are - Firewalls & Intrusion Detection
System, Antivirus Architecture, Virtual Private Network and Web Access, Strong
Authentication, Anti-spam & Content Filtering.

What are the business benefits that the company derived and beneficiaries of the
implementation of above mentioned initiatives?

M&M has always been in the forefront of Information Technology adoption for business
benefits. Today, Information Technology touches every corner of the business and enhances
capabilities of every process taking M&M towards its IT vision of being the "Best IT Enabled
Real-time Enterprise".

M&M was one of the First organizations to implement SAP R/3 way back in 1998. It was the
largest site in the world on Windows NT platform at that time. Today SAP R/3 Enterprise
(version 4.7) integrates all the organizational processes across all the locations. Built on this
platform, Information Technology has been extended to integrate with business partner processes
through New Dimension solutions such as:

 Supplier Relationship Management (SAP-SRM) - First to implement in Asia-Pacific

region
 Advance Planner & Optimizer (SAP-APO) - First to implement APO in India.
 Dealer Management System - Customer Relationship Management (SAP DMS-
CRM)

All these are driven with the objective of providing the best products and services to the
customer at optimal cost and simultaneously ensuring the value to M&M's business partners.
Other decision support and productivity improvement modules include:

 Strategic Enterprise Management (SAP SEM - BCS)

 Business Information Warehouse (SAP BIW)
 Employee Self Service (ESS) through Enterprise Portal
Entire design process and product data management is through Team Center Enterprise from
UGS

All the above business solutions are effectively delivered through state-of-art Mahindra IT
Infrastructure (MahindraNet) connecting all manufacturing plants, Corporate Office, regional
offices, sales offices and Data Centers with the best in class security architecture, Network
Operations Center to monitor and manage this network. Redundancy for power, network,
bandwidth, hardware, Data Center and DRS set-up ensure almost 100% availability of
applications to users. The whole organisation is geared towards complying with the BS 7799
information security standard, which adds to the confidence of M&M customers and partner
organisations. M&M will be the first BS: 7799 certified organization in India, in the
manufacturing sector, with such comprehensive scope.

M&M users are using various value-added IT Services such as VPN, Desktop Web Conferencing
- Video & Audio interaction from desktop, Video Conferencing - Video & Audio interaction and
conferencing between multiple locations, Live Chats and FTP.

Live Interactive chats have been a successful platform for M&M employees to communicate
with Mahindra Senior Management. Senior executives share their vision, thoughts and also
answer to queries from employees. This technology is used successfully for interaction between
senior executives and subject experts during Finance Minister's Union Budget speech.

The adoption of Information Technology has moved up the value chain, from cost savings to
business enablement. The business benefits of various business solutions implemented have
resulted in standardization, synergistic operations, inventory reduction, easier consolidation,
cycle time reduction and optimized business processes leading to faster operations and informed
decision-making.

However more importantly, IT has impacted all the business functions and processes in the
organization, the value of which can be seen more in creation strategic capabilities - such as
anytime, anywhere availability of secured information, facilitating collaboration and improved
communication within and outside the organization, effective leveraging knowledge within the
organization for business benefits, enabling organization to be more customer centric and agile.

Updated on: 26 Jul, 2006