Dr Lalit Khaitan, Chairman and Managing Director, Radico Khaitan

In a discussion with Yashvendra Singh, Executive Editor, BW CIOWorld, he throws light on how IT is making a difference to Radico Khaitan’s business.

How have you seen the role of technology changing in business?

I have been in business for a long time. Earlier, everything was done manually. Accounting, for instance, was a herculean task. When companies started deploying computers, the employees were apprehensive as they felt their own employment was threatened. They were averse to any change. When we stated computerization, more than 25 years back, we could feel the same resentment. As Radico Khaitan has been a progressive company right from the beginning, we were able to overcome the resentment from the employees. For many years now, we have a paperless office. Whether it is the balance sheet, P&L account or any statement, in the last 2-3 years I haven’t received any paper from my organization unless I need to sign a document.  There has been a sea change in terms of technology adoption in corporates.

As a business leader, how have you managed to keep pace with technology?

I was once traveling internationally. While reading the World Executive’s Digest, I came across an article that said if you are over 50 and feel that technology is for your secretory and not for you, you might as well retire. I had just crossed 50 at that time, and this struck me. It inspired me to keep abreast with technology.

How have you leveraged IT for growth? Please give examples.

Radico Khaitan has always been ahead of competition when it comes to leveraging technology. We have 32 plants all over the country. The finished products are delivered from these plants to wholesalers and retailers. There is a transport charge and it was proving difficult for us to monitor these charges. To overcome this challenge, we developed an automated solution. We now have complete visibility into these charges. We also have insights into whether the trucks are carrying full capacity or not. The cost per case would be higher in the latter scenario. The innovative solution helped us in streamlining everything. We were able to save a lot of money.

Radico Khaitan was the first in the distillery industry in India to monitor each truck through GPS.  As the portable liquor industry is highly regulated, we regulate from our end by closely monitoring the movement of trucks, whether it is reaching at the right time through the right path or not.

Through IT, we have been able to analyze our data much better, which has in turn helped us in controlling the company well through enhanced management of material, human resource, marketing, sales etc. We have felt the difference in each field.

How has the deployment of ERP helped business?

In 2002, we implemented SAP ERP. We reached a point where we said now what? After a lot of discussion, we went for SAP. As the chairman of the company, I had to call a group of 75 people to discuss why we should go for it. I was able to convince them and we started the implementation with the accounts department. Today, we have advanced far ahead and critical management decisions are taken through it. We have several brands and in each brand there are three different kinds of packaging. In all, there could be more than 150 different products which they have to produce. Today, based on the insights from SAP ERP, each of our 32 plants is asked to produce X quantity of a product of a particular brand every month.  Earlier it was all manually calculated. Today sitting in the HO, we can work out everything automatically. We also know the inventory levels and therefore place X quantity of order for X kind of packing material. Material orders are generated automatically and also the cheques are automatically generated. We also get insights into our competitors and into ROI on advertisement spent.

Going forward what are your plans with respect to technology?

Success is a journey not a destination. Similarly, investment in technology is a continuous plan. We have a system in our organization wherein the IT Department first analyses the cost and ROI of any project. We hold a meeting once a month and where IT and HoDs are present. The plan is presented to us, including the timeline, and a decision is taken. We have already done the main investments in IT. Now we just have to bear the incremental cost which is not must. We have a reasonably good budget for IT but we can allot more depending on the needs and requirements.

If IT was not there, we couldn’t have been as efficient as we are today. It would have impacted the top, bottom and even the middle line, including the individuals. IT is no longer important, it is an integral part of business. The more advanced the business is in IT, the more insights it will derive and take informed decisions. Any business house should focus a lot on IT. The boss should take personal interest to ensure that the IT strategy is implemented properly and in time.

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