Scaling up

Having used an off-the-shelf financial package for 16 years, manufacturing firm Litho-Lav recently found the funds to deploy a much-needed ERP solution.
Written by Gregory Teo, Contributor
Boosted by a grant from innovations and productivity promoter Spring Singapore, 26-year-old screen manufacturer Litho-LAV Products finally went ahead with its Enterprise Resource Planning (ERP) deployment.

Bernard M.K. Lim, general manager of Regional Business Development and Corporate Planning, said implementation took six months and staff are now training to use the system, which also handles accounting functions. The company had been using an off-the-shelf financial-based ACCPAC package for the past 16 years.

Bernard Lim, general manger, Regional Business Development and Corporate Planning, Litho-LAV Products.
A transition was needed as Litho-LAV, with 1,000 raw parts going into its screens, needed to gel inventory with financials.

Below are excerpts of an interview we had with the company to find out more about its IT plans:

Q: What steps do you plan to take to ensure IT is better aligned with business goals?
A: We embarked on this ERP implementation. We realized the off-the-shelf package had limitations. Being on the expansion scale, we needed more transparency and on-the-fly information. This will help by enabling us to make decisions immediately.

There are a lot of other functions in the ERP system that haven't gone live yet. We are still ironing out some bugs. Modules we'd like to add include barcoding. Already 70-80 percent of the system have gone live. We are not ready to embark on these ourselves.

Our vendor is Visual Apps and the software is by a UK-based ERP application provider--strong in manufacturing--called EFAC. All this is possible with the help of the Spring Singapore grant. Fifty percent of the grant we proposed was approved. For SMBs, it would be difficult if grants were not available.

Q: Is maintaining good corporate governance an IT priority at your organization in 2005?
A: It's important whether for a large or small company. But in the context of SMBs which are family-run small set-ups or two- or three-men partnerships, corporate governance isn't that critical. Owners are usually hands-on so they've access to a lot of information such as the daily routines. Until we grow into a larger company and relinquish certain areas of work, then we've to look at it seriously

What steps do you plan to take in the next 12 months to improve efficiency in your organization?
The big IT plan was already done in 2004. We know it's going to help in every area from productivity to efficiency. We'll be looking at fine-tuning the ERP system next.

One reason we embarked on it was because of the grant. We are prudent in our spending but there are certain things that we need sometimes. The question is always where your priority is. For small companies, it is always looking for more business. When you have more business, documentation then increases and that's when IT comes in to make it easy for us to manage and handle data.

What steps will you take to ensure customers' data privacy is safeguarded in the next 12 months?
As manufacturers of projector screens, we don't deal with end users directly. Meaning we don't collect database from end users. Dealers and distributors do that. In Indonesia, our dealer has about 1,000 distributors. The same goes for other countries. Only on big government tenders do we go in directly.

Our dealers include audio-visual systems people, property developers and superstores such as Harvey Norman and Best Denki. We also work with system integrators such as NCS and SCS. They use our products and sometimes we customize our screens for their customers.

We, however, contract manufacture for InFocus for Europe and America markets. In that sense, we have to protect them as customers, because when they put their labels on--it is under license by us.

And if anybody were to take action against InFocus, they mustn't be liable for any patent action.

We trademark our designs in Singapore and we're trying to patent it worldwide.

What are the drivers behind next year's IT investments?
We are not going to spend on any big-ticket items. But one future IT plan is incorporating an e-business system linking our dealers and distributors throughout the region. We'll go beyond a traditional brick-and-mortar ordering system where order is made through fax, post or e-mail.

Enhancing our Web site to support this, we will enable dealers to place orders and check stocks online.

It's in the pipeline but we don't have a definite timeline yet. It depends on how fast we get our ERP system 100 percent running, the business outlook and the competitive level in the industry.

Maybe there is a need for us to look into it immediately.

"It's more reactive when it comes to IT. We don't really have a budget."
What was your organization's annual IT budget forecast for 2004?
It's more reactive when it comes to IT. We don't really have a budget.

Actually, for SMBs, most of the time this is ad-hoc. If there is no bad turn of events, the IT budget will not be an agenda. But if there are some problems in the manufacturing area or service accounts with dealers, then attention shifts to IT.

Compared to 2004' s IT budget, your 2005 IT budget forecast will...
It will be much less.

To the best of your knowledge, how was your organizations IT budget spent percentage-wise?
Thirty-five percent went to services; 20 percent hardware; 15 percent software; 20 percent training and 10 percent Infosecurity.

A large part went to services because we don't have an IT department. Only one or two people oversee IT. With the new system, some of the implementation and daily maintenance was outsourced to the vendor.

What are your organization's top three technology projects for 2005?
The major one was the ERP system but it does cover customer relationship management, supply chain management and business intelligence.

It also integrates information from Excel and ACCPAC applications--which is being phased out.

Unrelated to IT, the ERP system has also facilitated a financial restructuring plan where a lot of paper work and nitty-gritty stuff are being done away.

What's your organization's preferred approach to IT deployment and management?
Ideally, we'd like to see a combination of both in-house running and outsourcing development. Outsourcing development is good for us because it does away with the cost involved. But in terms of control and security, we still like to have a small crew of two or three people in-house overseeing the running.

Currently, they double up to do IT. Maybe in the long term they'll be dedicated.

What are your organization's top strategic info-security priorities for 2005?
Info-security is important. Because the information coming into company goes through file and rank. It is detrimental to the company if critical information is withheld by certain people.

But SMBs don't have the luxury to look into this financially. At the back of our minds it is important. So we've to devise our own policies to ensure that IT leaks don't jeopardize our company.

However, we're not capable of setting up a department or appointing somebody.

Who makes the final decision on IT investments in your organization?
Basically it is the key people in the management. They identify the problem areas and come up with solutions. It is not a single person but three people sit on the board.

Gregory Teo is a freelance journalist based in Singapore.

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