Penna Cement faced challenges with its legacy IT system as the business grew tremendously. It decided to implement an ERP system. Three vendors were considered - SAP, Oracle, and Indice. Indice was selected because it was more affordable and specialized for the cement industry, unlike SAP and Oracle. Indice had also successfully implemented systems at other cement companies. Key factors in the selection were price, licensing flexibility, and faster implementation time.

2. Introduction
Construction Sector at its boom .
In year 2006, Cement production grew 11% .
Industrial and Infrastructure sectors, consumption of
cement rose upto 12%
Andhra Pradesh with 18 Large and 16 mini cement
manufacturing facilities rank second in production of
cement in the country .

3. Introduction of Penna Cement
Industries Limited
 Largest companies in the state.
 In August 1994, Penna Cement was incepted in
Anantapur District.
 Had access to finest quality Limestone.
 Capacity expanded to 1.7 million tonne per annum.
 1 million tonne plant at Ganeshpahad Village .

4. Penna Cement IT System
 Developed in house IT system since its establishment.
 It manages various business operations such as
purchase, sales and accounting operations.
 But due to tremendous growth of business IT system
was inefficient.

5. Legacy System at Penna Cement
 Penna has developed an in house transaction
processing system at their Head office in Hyderabad
was developed by M/s Sindhu Corporate Services.
 It includes following modules such as
I. Sales and Distribution
II. Accounting
III. Material Management
IV. Payroll
 All Offices uses an Oracle Financials of their
accounting system processing

6. Challenges faced by the Legacy System
 The Problem of Goods-in transit Identification.
 Paying sales tax on due date.
 Problem of limited scope.
Challenges in System Architecture.
 it consist of two layers- Client and Server.
 Each Client application requires its own session.
 It has restricted flexbility and choice of DBMS

7. Integrated Transaction Process System
 Data for routine activity.
 The system which process transactions of all the
functional areas of business is called Integrated
Transaction Process System.
 Eg- Payroll, Accounting system

8. ERP Vendor Selection
ERP Vendor
Product Vendor
Implementation
Vendor

9. Steps in ERP process
Strategic plan
Implement the
ERP Solution
Readiness
Assessment
Plan for
implementation
Prepare for
Vendor
selection
Vendor
selection
Focus on the case
Post
Implementation
Assessment

10. Three things to focus
 Complete knowledge of business, its process and the
current system working on.
 ERP implemented companies in same industry, its
benefit and limitation and
 Collect the information of all the vendors available in
the market and what they offer.

11. Which to select?
 SAP- customize the module according to the
processes irrespective of the type of business.
 Oracle-keeps all the information and manages the
business in a single database
 Both this software are costly, time consuming and
risky.

12. Best alternative
 Industry specefic ERP is preferred.
 The product of these vendors, target specefic areas of
the business to attract consumer.
 Provides better solution of having in depth knowledge
of industry needs and requirements.

13. IMPLEMENTATION VENDOR
 The management approached three vendors- SAP,
Oracle and Indice.
 All the functional departmental heads and technical
team of Penna were present.
 The company concentrated mainly on three factors:
- Price factor
- Licensing
- Implementation time

14. Cont..
 The price factor has made the global players SAP and
Oracle to get ruled out.
 Licensing is also an problem in case of installing
other leading ERP packages.

15. INDICE
 It is the product of IC Infotech.
 It was choosen for implementation as the management
thought it would be better than SAP and Oracle.
 IC Infotech is one of the fastest growing software
services company.
 It provides leading edge solutions for BFSI,
Manufacturing, Retail and e-Governance verticals.
 Indice has been successfully implemented at India
Cements and Visaka Cement Industries.

16. Cont..
 Indice is an Integrated Information System specially
designed for the process industry, completely web
based and following three- tier architecture.
 It has its module in Sales and Distribution, Finance
and Accounting, Material management, Plant/Factory
Maintenance, Plant/Factory MIS, logistics Planning,
Human resource management & Payroll etc.

17. Used for following industries
 Chemicals
 Miscellaneous Manufacturing
 Oil and Gas
 Other transportation
 Pharmaceuticals
 Plastics and Rubber products
 Pulp and Paper
 Textiles and Apparel

18. Key features
 Secure
 Simple
 Comprehensive
 Reports
 Add- on
 Web based
 Platform independent

19. ATTRIBUTES
VENDORS
SAP
ORACLE
INDICE
PRICE
Very expensive
Expensive but compared
to SAP, it is lower
Less expensive
AFFORDABILITY
Not affordable
Not affordable
Affordable
ARCHITECTURE
3- tier architecture
Database layer
Application layer
Presentation layer
3- tier architecture
Database layer
Application layer
Presentation layer
3- tier architecture
Data tier, Business tier
and User interface tier
LICENSING
Per- user
Per- user
Blanket licensing
INDUSTRY SPECIFIC
Not specially designed for
cement industry
Not specially designed for
cement industry
Specially designed for
cement industry
EXAMPLES OF
SUCCESSFUL
IMPLEMENTATION
Ultra Tech Cement Ltd.,
Ambuja Cements Ltd.
Not implemented
India Cements and Visaka
Cement Industries
COMPLEXITY
High
Medium
Low
TECHNOLOGY
Primarily ABAP
PL/ SQL
Java, Java scripts
USER FRIENDLINESS
Low
Low
High
EASE OF
CUSTOMIZATION
Not easy
Not easy
Easy

20. The Battalion for implementation
Project Coordinator
Experts from
Indice
Experts from
Penna
Project Manager and
project Lead
Coordinates all Functional
Heads
HR
S&D
FI CO
PM
MM

21. Selection of Modules
 Important task in implementation of ERP.
 Depends on the company’s requirement, affordability,
size and type of business.
 Penna decided to go for S&D, F&A, MM, P&P, PM
and HRM modules.

22. Conclusion
 The case emphasizes the importance of an appropriate
vendor selection in ERP process.
 Vendor selection depends on number of factors.
 It is not always true that all large scale companies opt
for leading vendors. Sometimes local vendors also
suit company’s business processes in a more
appropriate manner.