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Joining the Dots: Multi-location enterprises use telecom to stay connected

March 01, 2012
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To stay ahead of the competition and meet increasing market demands, companies with an extensive sales and distribution network are increasingly modernising as well as automating their business processes. Today, the entire chain of activities – from procuring raw material to distributing the final product – relies on an effective and flexible telecommunications infrastructure.

According to Kasturi Bhattacharjee, associate director, PricewaterhouseCoopers, telecom plays a two-pronged role in this vertical. “A flexible communications infrastructure becomes the host for various applications and supports the complex distributed network,” he says. “Besides, it serves as the core platform and enabler for mobility applications, distribution networks and sensor networking.”

Initially, telecom played a small role in this space. Typically, the connectivity infrastructure of such companies would comprise a few computers, primarily utilised for email, and telephone lines. Subsequently, enterprise resource planning (ERP) was introduced. This solution was deployed in a limited manner, within an enclosed area (mainly the head office), and had little or no coordination with the organisation’s larger operations.

Over the years, these companies augmented their telecom infrastructure and today they utilise multiple technologies for wide area network (WAN) connectivity. Typically, a leased line network, ISDN, Ethernet, VSATs and IP-VPNs are used. While ISDNs provide them with fast connectivity and higher bandwidth (especially for bandwidth-hungry applications such as video- and audioconferencing), Ethernet provides flexibility for future upgrades and is an economical option.

Interestingly, managed services are used extensively in this segment as compared to other enterprise verticals. The primary areas of deployment include network services, applications, VOIP, security and data centre services. According to the players, the benefits of outsourcing parts of their communications infrastructure include reduced costs, the ability to focus on core competencies, better management, higher service levels and access to IT experts.

Apart from standard telecom mediums, companies in this space also deploy various IT tools and services. For example, electronic customer relationship management (eCRM) is widely used. This platform helps companies to organise, automate and synchronise business processes such as sales activities, marketing, customer service and technical support. Other popular mediums are DOS-based tools, geographic information system (GIS), SCADA-based systems, SAP and IBM’s Domino.

Web-based technologies, which facilitate collaboration between the factory floor and enterprise supply chains, are also catching on. The internet too plays an important role and various web-centric technologies such as Java, XML and XML schema are other important tools being used by companies with wide distribution networks.

These companies are also deploying the enterprise portal device to create transparency and simplify business transactions. For instance, a portal for suppliers could extend a self-service facility where the supplier could access details of order schedules, payment status and stock position. A similar portal for dealers and distributors could give them access to details like order status and dispatches, along with shipment details and outstanding amounts, which could then be used to place orders, make amendments and payment transfers, etc.

Security remains an important concern. Accordingly, these companies deploy multiple security mediums, the most popular of which are Symantec AV, System Center Configuration Manager (SCCM), Checkpoint firewall and Intrusion Prevention System.

Going forward, Bhattacharjee feels that three technology trends will be seen in this space. “First, cloud services on distributed networks will emerge as an important platform. Second, delivery platforms, communication and collaboration channels are being reinvented with Web 2.0, mobile applications, devices and sensors, which organisations are deploying or are connecting to. Finally, data analytics will come to the fore, which will enable smarter use of customer data to predict behaviour, drive sales and deepen the customer-company relationship.”

tele.net conducted a survey amongst companies with an extensive sales and distribution network to assess their telecom requirements and solutions. The following questions were asked in the survey:

•   What are the company’s key technology requirements?

•   What mix of service providers and vendors is being used?

•   What are the biggest concerns with respect to telecom infrastructure?

•   What are some of the mobility and enterprise applications that the company has implemented?

•   What network security tools has the company implemented?

•   What redundancy tools are being utilised by the company?

•   Which new product or service is of interest or relevance to the company?

Key technology requirements

The survey reveals that, typically, companies which have operations spread across the country require seamless and always-on connectivity between their head offices and various branches. To achieve this, most of the companies surveyed have opted for a mix of wireline and wireless technologies, including optic fibre networks, leased lines, MPLS, ISDN, internet, radio frequency links, VPN, IP-VPNs, MPLS-VPNs and Wi-Fi.

Of these, leased lines, MPLS and MPLS-VPNs are more widely used for interoffice connectivity. For instance, Spencer’s Retail communications infrastructure is based on an MPLS-VPN backbone, provided by Bharat Sanchar Nigam Limited (BSNL). This network connects the retail major’s outlets at 250 locations, with bandwidth ranging from 64 kbps to 2 Mbps.

Prime Air Global Limited (PAGL) prefers to use leased lines for the same purpose. According to Arun Varma, chief executive officer, PAGL, “We use dedicated leased lines with 2 Mbps bandwidth and 1:1 contention. This gives us several benefits such as secure and always-on connectivity, and bandwidth-on-demand, which can be easily upgraded, depending on the requirement.”

The respondent from Rajshri Productions agrees with Varma’s view. “Being in the entertainment sector, we have to ensure 100 per cent uptime. Leased lines are our obvious choice as the quality of the connection is far superior to what is normally available via dial-up. Further, this medium is scalable, which works well for us.”

BSES, on the other hand, uses multiple network components to connect its 350 offices to the central database. Its connectivity mediums include leased lines, ISDN, radio frequency and VSATs. The bandwidth of these connectivity mediums ranges from 32 kbps to 10 Mbps.

Mahindra & Mahindra (M&M) also uses multiple mediums to connect its plants and sales offices. Its network comprises MPLS lines and leased circuits. At present, the company uses over 150 MPLS circuits and 50 radio frequency links, and 10 leased lines. That apart, the company has deployed various routers from Cisco.

Several respondents have established data centres as part of their communications set-up. Lemon Tree Hotels (LTH) has, for instance, set up a remotely managed and hosted data centre that caters to all its locations and units. This centre has an MPLS and internet VPN backbone that functions on full-duplex bandwidth. MPLS has, in other words, helped LTH achieve increased network scalability, simplified network service integration and network management, and offered integrated recovery.

Besides standard telecom connectivity, several companies have used various IT tools and platforms, albeit in a limited manner. For example, PAGL uses the eCRM platform. This helps the company to organise, automate and synchronise business processes such as sales activities, marketing, customer service and technical support. Percept Limited currently uses DOS-based applications, primarily for financial and accounting purposes.

BSES uses multiple IT tools including SAP, ESRI’s GIS, a SCADA system obtained from ABB, an outage management system that has been developed in-house, and IBM’s Domino.

Service providers and vendors

Most organisations surveyed in this vertical use the services of various operators such as BSNL, Tata Communications, Bharti Airtel, Tata Teleservices Limited, Mahanagar Telephone Nigam Limited, Reliance Communications, Wipro, IBM, Oracle and Sify.

Key issues and concerns

Connectivity, operator reliability, system maintenance and integration, uptime and cost are the key concerns of the companies covered in this survey.

Raman Sinha, manager, IT, Koutons Retail India (KRI), says lack of connectivity in rural areas is a major issue for the company. “We find it difficult to connect with our outlets in semi-urban areas due to inadequate internet connectivity. In these areas, we depend entirely on our clients for data when they connect to the internet or the server.”

Lack of connectivity options is an issue for M&M as well; the company finds maintaining adequate uptime and reducing the response time for troubleshooting problematic.

Meanwhile, companies like PAGL and Spencer’s Retail find that the cost of telecom networking equipment can be a constraint. Indranil Guha, head, IT integration with Spencer’s Retail, says, “Though most new solutions are promising, the overall costs can be prohibitive at times. The IT team weighs the cost of these solutions against the benefits while deciding on investments.”

Mobile and enterprise applications

Companies with a large sales and distribution network use enterprise applications such as Exchange Email; Microsoft Sharepoint; audio-, video- and webconferencing; instant messaging; DOS-based platforms; Prolific; Touché; Leisure Point; vBoss; and WizApp. The widely used mobile applications include mobile email, mobile data connectivity and corporate intranet.

Network redundancy

For backup, companies in this space use a mix of multiple leased lines and ISDN lines, UPS, applications such as ERP, data archiving and data recovery as well as failover systems.

Network security

Most of the respondents in this survey use multi-tiered security infrastructure. The most widely used mediums include Symantec Antivirus, SCCM, Checkpoint firewall, IPS, internal firewalls, load balancers, Trend Micro’s security product suite, access logs, security audits, user authentication, proxy servers, penetration testing and operating system security patches.

The way forward

Most of the companies surveyed have concrete plans to upgrade their telecom networks. Khushru D. Siganporia, director, IT, The Indian Hotels Company Limited, Taj Group of Hotels, says implementing a gigabit passive optical network (GPON) in all their new hotels is the organisation’s top priority. “Today’s business travellers depend heavily on online or real-time services like email and videoconferencing. Although mobile devices wirelessly connect to their respective back-ends through the internet or special mediums like BlackBerry, sometimes it is essential to have wired connectivity for security. Also, with GPON, guests would be able to stream HD videos via the internet in each room of our hotels. While the older 1 Gbps links were sufficient a year or two ago, they will run out of steam in a couple of years from now. Hence, in new hotels, The Taj Group of Hotels will build GPON networks, for the future.”

Siganporia adds that the group will implement more IP-based systems. “This will ensure that the in-room systems meet the guests’ need for an office in the room and for entertainment. Hence, we are looking to implement such systems to offer high speed internet access, IPTV facility, telephony, and room management and security features,” he says.

M&M is also looking forward to the introduction of on-demand bandwidth solutions. “Business models such as pay-per-use will help the company meet month-end cost-related challenges effectively,” notes the company respondent.

Among all the respondents, CESC was the only one that felt cloud computing was relevant to the company. According to the company respondent, “We deem it an important business tool. Network security-related risks on a cloud computing server are minimal and, all in all, it is a very convenient tool to have.”

Meanwhile, KRI plans to enhance its enterprise applications portfolio. The retail major is looking to deploy web-hosting, VOIP, and audio- and videoconferencing. The respondent expects audio- and videoconferencing to not only reduce travel costs but also to help senior officials collaborate and take business-related decisions in real time, as well as share information and data, etc.

Thus, it is evident that IT and telecom are increasingly being used by companies with a large sales and distribution network as a strategic business tool to cut communication costs, and enhance overall productivity and efficiency.

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