ITARALDE, MARK DEAN D. DLSU – FEU/ MBA- JD PROGRAM
INFORMATION MANAGEMENT MR. RAYMUND GANOTICE
CASE STUDY - MARUTI SUZUKI BUSINESS INTELLIGENCE AND ENTERPRISE DATABASES 1.
What was the business challenges facing Maruti Suzuki management prior to adopting the oracle suite?
With 15% per annum growth of the automobile industry in India from 2002- 2007, India has become the fastest growing passenger car markets in the world, and Maruti Suzuki, a subsidiary of 1 Suzuki Motors. Co., Of Japan is the leader in this market. I think the biggest challenge for Maruti Suzuki over-all is how to maintain this market leadership which it has already established for more than 24 years already and still come out strong and number one amidst the explosive growth and diversification it has embarked on. Maruti Suzuki is not only an automobile manufacturer, but also a single source vendor of both new and used car sales, leasing, finance and insurance. It has about 21 subsidiaries, associations and joint ventures that it needs to control and require regular business reports. Its dealer network includes more than 400 networks across the country. Given its huge organization, its operations challenge is how to ensure and manage that the information technology system can provide better controls, consolidation, efficiency and flexibility across the entire enterprise. To underscore, Maruti Suzuki must maintain market leadership, be efficiently growth responsive and establish better controls and consolidation consolidation across its huge organization organization - and ORACLE e-Business Suite addressed these challenges. 2. What advantages advantages does Maruti Suzuki derive from working with a single vendor, Oracle? What are the possible risks of working with a single vendor?
Working with a single vendor like Oracle has the following advantages: 1) buying several software packages from single vendor to form your information management systems, gives you an assurance that all components of your information system are able to integrate being compatible, giving you security and efficiency; 2) Oracle has also a consulting service, which Maruti Suzuki also engaged. Having consultants who came from the same vendor allows you to assume perfectly that they know their products and would be able to assist your operations real-time during implementation to avoid any problems and prevent any interruption in the operations. Moreover, same consulting service are the best links to the development team, which will create improvement and new modules when Maruti Suzuki will expand, diversify or have new needs; and 3) Oracle consulting also ensured a smooth transition by advising on process changes and providing training programs. However, taking into consideration the four forces in the industry’s environment, we can actually derive that a single supplier runs the risk of dependency, increasing the market power of the supplier by giving them the ability to command price for their products while leaving you without any negotiating power because they know that you cannot pursue your business without them. 1
Laudon K. and Laudon J.; Essentials of Management Information System;
http://wps.prenhall.com/wps/media/objects/14071/14409392/VideoCases/Ess10_CH05_Case1_Maruti SuzukiBusIntel.pdf ; http://www.youtube.com/watch?v=aZWAzbRm-ms
3. What were the important business factors which management used to evaluate Oracle Database offering?
Maruti Suzuki management wanted an IT solution that wo uld allow them to have better controls over the huge and growing organization, consolidate information to one central system, and ensure better turn-around times for its operations. Also, Maruti Suzuki wanted a system that was simple and flexible to use for employees, a system that will introduce standardized practices right across the enterprise, making data immediately available on-line without the need for any branch processing. The company was already using some of Oracles products (Oracle: Real Application Clusters, Oracle: Fusion Middleware –Application Server, Oracle: Fusion Middleware – Weblogic). It recognized that by implementing other Oracle products, it would allow them to keep and improved the legacy system they had. 4. Why was it important that a vendor’s products be able to integrate with “legacy systems?”
One, Integration and compatibility of new systems with older system is cost-efficient, because you only need to add rather than revamp the entire system. Two, seamless integration will translate into better operations services which is important for Maruti Suzuki to implement to ensure reliable and flexible customer management – systems interruptions, one would think, can actually lead to losing business opportunities, profit or financial losses. 5. What are the business benefits reported by management to using the Oracle suite of product?
As proudly enunciated by the Maruti Suzuki executives, their use of the Oracle products resulted to the following: a. Introduction standardized practices across the enterprise making data immediately available on line without need for branch processing; b. Decrease in the turnaround time of processing sales and other business transaction and producing consolidation reports for the management c. Deep insight and analysis of the financial performance of the conglomerate by using Hyperion to analyze budget sand consolidated accounts d. Provided HR staff with greater control over recruitment, payroll, compensation management, leave management, competency assessments, and staff development, given the HR modules included in the e-business suite.
