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ICT Blueprint: Increasing use of technology by sales and distribution enterprises

March 04, 2016

ICT Blueprint: Increasing use of technol...
Enterprises across business verticals recognise the role that information and communications technology (ICT) plays in their day-to-day functioning. An enterprise requires robust IT and telecom infrastructure to communicate not only with its customers but within the organisation as well. Driven by the need to ensure effective communication, reduce downtime, improve productivity and increase efficiency, enterprises are stepping up their investments to upgrade their ICT infrastructure. With the rapid proliferation of smart devices and the launch of faster networks, the most significant trends that have emerged are the adoption of mobile, analytics and cloud technologies. Leading enterprises in the sales and distribution industry discuss their IT strategies, emerging technology trends and future plans for IT infrastructure upgradation…


What are the technology changes that are shaping the sales and distribution functions across enterprises?

Tarun Bali

Enterprises today are striving to deliver a personalised experience to their customers. Further, customers have become more digitally enabled and there is a rising demand from them for a consistent, positive shopping experience. As a result, enterprises are adopting new technological solutions to enhance their sales and distribution functions.

Sanjeev Gupta

There have not been any major technological changes in the past few years that I have been involved with the distribution industry. The industry is still based on a buy-in-bulk and sell-in-bulk model. The distribution industry, not necessarily the end-user sale segment, is still heavily focused on building relationships. Therefore, in many ways, the job of the IT team has not been to support the function but only to monitor it. Decisions are taken outside the automated framework and applications like supply chain management (SCM) and vendor management are deployed to implement the decision taken. This is true for distribution industries across Europe and Asia. While this is true for the offline industry, the online distribution channels have leapfrogged in term of technology adoption. Since the online industry is building its systems from scratch, it has the luxury of bringing in newer technology. For example, the offline industry still does the majority of its payments through the traditional banking channels, not through the online transfer of money. On the other hand, the online channels thrive on online payment gateways.

Ameen Khwaja

There are three distinct technology trends visible in the sales and distribution industry. The first is the growing popularity of mobile devices for conducting transactions online. Mobiles have helped enterprises target buyers any time. This has resulted in digital sales becoming the most important component of overall sales for enterprises involved in sales and distribution.

The second trend is the emergence of advanced analytics. Today a huge amount of data is being generated constantly. There are a number of solutions in the market that help enterprises leverage the available data. For instance, Google Analytics Premium helps enterprises optimise data and connect to the right consumers at the right time.

The third is the adoption of cloud computing, which has made it much easier to maintain IT infrastructure and run enterprise applications. The cloud is changing the way Indian enterprises operate by influencing the manner in which technology is delivered and consumed.

Spokesperson, Electronic Goods Firm

The biggest change being witnessed in the sales and distribution industry is the proliferation of mobile applications. We are planning to roll out our mobile-friendly application soon.

What is the company’s telecom and IT blueprint? What new IT infrastructure has it deployed?

Tarun Bali

Retail operations are very complex and demanding in nature, and require continual improvement in technology. So, the IT department is always on its toes to fulfil the expectation of external as well as internal customers. The technology requirements can be further split into front-end (retail outlet) and back-end (head office) operations. For data security, we are using a hardware-based virtual private network (VPN) to connect to our data centre resources using the public internet. We are now coming up with VPN data cards for employees to get office resources on the move/at home under the company’s internet usage policy.

In terms of business applications, we are running an integrated customer loyalty programme for instant gratification of customers and plan to shortly implement a centralised payment gateway solution to accept plastic currency with more customised offerings. The in-house hosted point-of-sales (POS) application is offering convenience billing, dynamic promotions, and gift vouchers with relay transmission of transactional data at the head office for quick analytics by stakeholders. These front-end applications are backed by the strong, integrated enterprise resource planning (ERP) SAP ISRetail solution to fulfil product sourcing, merchandising and supply chain demands. All these applications are supported under LAN/WAN environments as process owners/end-consumers are always geographically spread out.

Our in-house hosted data centre is backed by dedicated optic fibre leased lines to facilitate remote connectivity of stores and e-commerce channels with the warehouse at all times. The central warehouse is also connected through leased lines with additional broadband internet as a backup line. The stores are using different ISPs as per the availability of services. Internet traffic includes data (POS, biometric attendance) and video streaming of CCTV footage to be viewed centrally at the head office.

A new IT initiative that we have undertaken in the past year is the installation of VPN boxes at our stores that run on public networks. This has been done with a view to ensuring secure connectivity and is in line with the company’s IT policy.

Sanjeev Gupta

Our IT needs are similar to what enterprises in general require. The role of our IT infrastructure is to enhance productivity and efficiency. We have put in place applications such as ERP, messaging and customer relationship management (CRM). We use the Google Public Cloud service for emails and messaging, and private cloud services for hosting our CRM and ERP applications. In addition, we have deployed certain applications for sales force automation. Our SCM is done through ERP based on cloud. We have two data centres hosted on the private cloud, one in Delhi, which covers India, and the other in Singapore, which caters to the rest of the world. We are centralising most of our IT set-up in terms of servers and software. Typically, our employees use a browser or a mobile phone. We do not really push the use of applications among employees. Our main focus over the past six months has been on finding ways to take data out of desktops/laptops and push it to our data centres. So, if one of our sales managers loses his laptop, there is a loss of physical assets, but no data or productivity loss because everything is on our private cloud.

Ameen Khwaja

Our IT infrastructure has three layers. The first layer, or the front end, deals with consumers who place orders on our portal. This is based on the Amazon Cloud Delivery Network. The framework that we are using is Java ERP. The second layer, or the middle layer, receives the order placed by a customer on the front end. The third layer is based on Microsoft Dynamics ERP, where we process our orders. This layer is involved in order management, warehouse management, seniority management, etc. Our IT infrastructure is based on 50 servers currently.

Navneet Singh

All our back-end systems run on Amazon Web Services. Customers mostly place orders through the Android and iOS applications, while a small fraction continues to use our website. However, going forward, we will only be investing in our mobile application. In terms of hardware, most of our teams use Lenovo laptops, while the engineering team uses MacBooks. There are no security issues anywhere in our system. Earlier, we would order everything online but are now mature enough to warrant using vendors for procurement. Having said that, we value speed in getting things done instead of focusing purely on price.

Spokesperson, Electronic Goods Firm

All our locations across India, including stores and warehouses, are connected through a multiprotocol label switching (MPLS) network, which is entirely hosted on our data centre in Bengaluru. All vendors are connected to our internal portal. For customers, we use a CRM application that runs on cloud. We are now planning to deploy an internal CRM solution with our sales force partner, which will help move all customer-related matters to one window.

What advantages has the company gained from the new set-up? What were the challenges in implementing the new infrastructure?

Tarun Bali

With the installation of VPN boxes, the company has been able to ensure secure and encrypted transmission of data. This has enabled it to have a centralised control on data transmission, prevent data leakage and optimise hardware resources. A key challenge that we faced while rolling out this infrastructure was that the broadband networks were spread across multiple carriers with different internet protocol policies. Hence, the task took considerable time and enormous resources were used to configure the asymmetric network.

Sanjeev Gupta

In deploying new technologies we have learnt that an IT set-up that works in the US may not work in other geographies. For instance, we are currently expanding our operations into Latin America. We have faced regulatory challenges related to data retention and security. In other countries, we have issues with how to manage the ERP. Some countries mandate that ERP data should stay within the country, so one cannot use a global database to drive ERP.

Ameen Khwaja

We have recently enabled Time to First Render, an application that enables us to target our customers better. Currently, 85-87 per cent of our visitors access our portal using mobile devices. When a consumer logs in to our website through a mobile, our website becomes mobile friendly and downloads only limited data. It changes according to the size of the consumer’s phone screen. It also changes according to the speed of the customer’s mobile network connection. This has helped us achieve 30 per cent more visitor conversion. While there are many benefits of such a technology, it is not easy to implement a new technology as the benefits claimed may not materialise. We had to roll back one of the other applications that promised an increase of 30 per cent in the download speed of the website.

Spokesperson, Electronic Goods Firm

The biggest challenge is in ensuring connectivity. It is essential that a customer is able to get through to the customer care centre to register feedback, either through phone, email or other available routes.

What is the level of adoption of applications such as CRM, SCM and sales force automation in the sales and distribution industry?

Tarun Bali

CRM, SCM, and sales force automation are core elements of a customer-centric business approach. However, mere upgradation of the CRM platform does not cater to all the needs of customers until the back-end infrastructure is synchronised with the sales force. In our company, we have adopted the SAP IS platform for retail ERP and WenPay HRMS for people management.

Ameen Khwaja

The online retail industry already has in-house platforms for running these applications. The successful implementation of these applications has helped the online industry deliver a personalised experience to its customers. However, the offline retail industry is yet to catch up with the online industry in terms of the adoption of these specialised applications.

What are the key emerging trends in the technology space for enterprises involved in sales and distribution functions?

Tarun Bali

Automatic store replenishment systems, predictive analytics for fulfilling customer demands and timely delivery using global positioning system (GPS) tracking are the key emerging trends in the technology space for retail enterprises.

Ameen Khwaja

While a number of applications are coming up quite rapidly, for the sales and distribution functions the use of social media will be the driving force. Platforms such as Google Advertising help enterprises target consumers more effectively.

Spokesperson, Electronic Goods Firm

One of the most distinct trends is the rise in the use of social media for targeting consumers. Our company has also built its presence on various social media platforms to engage with end-consumers.

What are the company’s future plans regarding the upgradation of its telecom and IT infrastructure?

Tarun Bali

In the next few years, the company plans to replace its asymmetric digital subscriber line networks with MPLS networks at the top-performing stores. This will help us in synchronising our omni-channel fulfilment centres with the e-commerce channel. We are also going to soon launch in-store 4G-enabled tablets for obtaining feedback from consumers. This will help us in further increasing customer loyalty.

Sanjeev Gupta

We are currently in our first build-out phase. Therefore, every new technology that we deploy is an upgrade. The distribution industry has always been a low-margin industry. Therefore, the idea is to cut costs by improving productivity. Our IT and telecom expense is significantly above the industry average and we see that continuing for some time. In the near term, we want to transition to a framework where office presence would not affect an employee’s productivity.

Ameen Khwaja

We are a rapidly growing company. Therefore, we need to upgrade our IT infrastructure constantly. We currently have about 50 servers and plan to increase this number to 100 by 2017. This will require a change in the entire infrastructure diagram of the company. We will also be adding another middle layer to our IT architecture.

Navneet Singh

Over the next few quarters, we want to actively improve customer experience.  We are working on our checkout and payment flows and want to decrease the number of clicks a user needs to place an order. We are trying to make it even easier for customers to reach us. Historically, they could reach our customer care team through phone and email, but we are currently in the process of enabling them to communicate through other mediums such as chats from within the PepperTap application. Overall, the key metric we want to drive in the near term is the NPS (net promoter score) of our customers. Our entire leadership team is behind this goal, and the technology team is furiously working on a roadmap for the same.

Spokesperson, Electronic Goods Firm

Our company has a presence across four industry verticals and caters to about 4 million consumers. We need to constantly upgrade our IT infrastructure to maintain operations. We have recently revamped our telecom and IT hardware.


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