The role of a CIO in the diamond industry, where the use of IT is relatively new, requires being as sharp as the diamonds themselves. Satyanarayan B, CIO & Vice President of Dimexon Diamonds Ltd., a 40 year old diamond and jewellery manufacturing and trading company, talks to Biztech 2.0 about managing IT in the gem and jewellery industry.

You have seen the evolution of IT across different industry verticals. How different is it in the diamond industry?

IT in the diamond industry is very different. To share my experience, I started my career with TATA Motors and was with them for twelve years. Then I moved on to Crompton Greaves, then to Bayer, which is an international Pharma company then to Bombay Dyeing. These are large MNC’s and Private Companies managed by professionals, where as gems and jewellery businesses are largely family owned. IT has not penetrated much in this industry vertical. A CIO should have a different strategy to make IT successful in family owned businesses. I can proudly say that we are the first diamond company to go live on SAP ERP with a big bang approach. The support from the top management was a driving factor.

What is the main criteria CIOs should consider while implementing a complex software such as ERP?

We recently implemented the latest version of SAP ERP ECC 6.0 and went live on 18th Jan’07. We first made an internal study where we put down our requirements, business process and expectations. We tried to bring a technology that matches all this. After the evaluation, we found that none of the ERP packages meets all our requirements and expectations. While implementing any ERP package, you do come across a lot of gaps. We need to understand them, come out with work arounds and go for a system which has minimum gaps.

Another consideration is the implementation. Any ERP package can’t be implemented on its own. We need to have a choice of implementation partners to choose from and be careful while selecting a partner.

We’re in a high tech area. In this area, the moment you implement a technology, you have to train people in that technology, and the moment you do that, their market value and expectations goes up. There are chances that you lose trained people, so you have to have a strategy in place to take care of iteration. Go for an ERP where trained manpower, training institutes and development centres are available in the country.

What are some of the benefits you have experienced by using IT?

There are tangible benefits, which you can relate with value, money, and reduction in manpower and number of hours saved. We handle diamonds, which are high value items. We need to keep track of them and where each and every piece is lying. It changes departments, persons, machines and so on. At the end of the day, we need to tally our inventory with that of the beginning of the day. If stocks do not tally, we need to stay back and analyze.

Just imagine the pressure in the situation when we worked it manually. The number of hours required to tally inventory has gone through a dramatic change, thanks to our ERP implementation. We are happy to say that now; our people involved in stock tallying are able to go home much earlier. In some departments it is one hour earlier. That’s a big benefit, which can be co-related with financial value. The number of people going home 1 hour early multiplied with their salaries can come up with the results. This was one of the visible changes we could see after implementing ERP.

There are many intangible benefits which we have achieved. To name a few, online information for taking business decisions, online Credit management, visibility of stocks, controlled WIP, value flows, etc.

What are the major challenges you face as a CIO in the diamond industry?

There are many challenges from the ERP system side. Today, SAP is strong in automobile, pharma, media and engineering. It has industry verticals. But in the gems and jewellery segment, they don’t have any verticals. In such a scenario, making SAP implementation success is itself a big challenge. Having a data centre in India and provide 24x7 support and uptime to India and international locations including Hongkong, Dubai and China is a challenge by itself.

In our workforce, out of 5200 employees, 90% are women. All our manufacturing plants are in the southern part of the country, in Tier 3 cities. In these cities, both IT infrastructure and literacy is much lower than that in Tier 1 and Tier 2 cities. Making IT a success in such an environment is a challenge. I strongly believe that, where there are challenges, technology always has solutions. We could demonstrate that through emerging technologies like ERP implementation, interfaces with machines and network connectivity.

How do you handle change management issues when switching from an old system to a new one?

I have anticipated based on my past experience that there are always problems and challenges when you switch systems. You have to tackle these problems across all levels. At the level of top management, middle management and end users. We have to conduct workshops and keep them informed about the changes. We also need to understand their issues and pain areas and prepare them for a change. We have conducted a series of trainings and workshops across all levels to address the change and progress of the project at every milestone. We identified some core team members from the business, who were our backbone. They were a bridge between the business and IT department.

We trained them extensively and prepared them for a change so that they can take it forward down the line. After going live, it all depends on how soon you understand the problem and provide the solution to the users. It’s about how you distribute the core team and IT team to see that they are available to the users when they need them so that the business does not suffer because of the new system. We need to demonstrate that IT is an enabler for the business and not a hindrance.