Expert Voice

Voltas

A Scientific Method

MIDDLE EAST A R Suresh Kumar, vice president and head of Voltas’ International Operations Business Group, shares how digitalisation has helped his company improve its offerings to the market and make it a leader in the MEP construction sector

How does Voltas International Operations Business Group (IOBG) use data and technology? The construction industry has been a laggard in the adoption of technology. Voltas IOBG, however, has been an early adopter of the same. Way back in 2007, Voltas IOBG began using SAP as their ERP solution across functions. This helped us generate volumes of useful data over the years, that we have been able to successfully collect, store, analyse and convert into useful information.

In this industry, we get to participate in bidding for projects of various technicalities and complexities. Finding the right project which fits into the business model and the team’s skill set is challenging. The right project selection is the first step towards a project’s success.

Though there are several project selection techniques available, Voltas IOBG has adopted its own proven methodology. The company devised a “Project Selectivity Matrix” tool in which the details of the client, consultant, previous dealings with the client and nature of the project are recorded. A short study is made regarding the nature of client’s business, their credit worthiness and financial status. The nature of the project, scope details and advantages of bidding for the project are also captured within the selectivity matrix. Then, an estimate is done to ensure that proper resources are available for bidding and execution.

Why did Voltas IOBG decide to go down this route of using a more scientific method? The company began studying best practices from across industries (manufacturing, technology etc.) to help map good practices into contracting. This shaped our changing attitudes towards how we approached the bidding process for projects. Over the last few years, the MEP industry has gone through major

turmoil and many MEP giants have hit the ground and not made a comeback.

A major reason for this could be getting into a contract without analysing the project sufficiently and indulging in unhealthy competition for the sake of increasing the company’s share in the market.

Voltas IOBG is making a careful observation of the current scenario and responding accordingly. Today, agility is our biggest strength, and we have highly skilled personnel that can adapt quickly to changes and challenges.

A scientific method of selecting the projects provides us with an objective and standardised approach in mobilising the proper resources required for the project in terms of manpower and machinery and gives us a clear vision of the outcome and the future state of the project.

What has been the response from the market to this way of operating? First, this way of operation has benefitted us by helping in choosing the right project and delivering the same on time. This in turn, has built trust and confidence among the various project stakeholders. Hence clients have been approaching us for their projects.

In many cases, the client has involved us during the project conceptualisation stage to utilise our experience, which could help in making the project a success. This kind of approach has helped us secure reputed projects across the GCC region and increased our purchase capability and ability to get the products at a good price.

How does Voltas IOBG use digital technologies to manage and monitor site operations? More than four years also, we set up a Centre of Excellence to kickstart our digital journey. Now, almost all project management from planning to execution is done through digital platforms thus almost eliminating the need for paper.

Voltas IOBG uses powerful descriptive analytics tools to monitor the progress across the different project sites. There is near real-time information available on the respective project dashboards into which key information flows in daily. This information comes from the various reports that have been created for

Objective approach

Voltas takes an objective and standardised approach to selecting its projects and mobilising resources for them.

Alternative functions

Voltas IOBG’s Finance and Commercial function uses technology to eliminate repetitive tasks.

90%

RPA tools have resulted in up to 90% time savings on certain activities

monitoring engineering, procurement, and construction progress, along with safety, payments, and variation data.

The dashboards can be viewed on any digital device including mobile phones, thus enabling the management to have a bird’s eye view on the progress of all the projects at their fingertips. They can give feedback through the app instantly and the respective project managers can take corrective action immediately. This end-to-end process has changed the paradigm of project monitoring in the company, thus helping improve productivity across the sites.

Does the use of technology extend to other functions – like finance as well? Indeed. With a clear goal of achieving speed and efficiency with a higher degree of accuracy, the Finance and Commercial function at Voltas IOBG embarked on the journey of system development and automation.

This helped eliminate repetitive tasks, outsource/digitalise traditional accounting functions and enabled cognitive analysis and forecasting.

System Integration and outsourcing:

Traditional accounting code functions of Accounts Receivable, Accounts Payable, Banking, closing Budgets and Audits always has been resource intensive, voluminous, time consuming and important but non-productive activities. IOBG Project Finance has adopted a twotier approach of system integration and outsourcing to overcome these issues.

Off the shelf ERPs do not provide the versality to exercise the controls of the Project Budgets which are often tracked on disintegrated excel sheets and controlled only at the rolled-up level. IOBG uses a multi system approach of specialised addons & tools integrated with the central ERP to facilitate a deeper drill down of budgets at the components/materials levels, capturing the requirements from the foreman level, aggregating the same for procurements, and reversing and earmarking the same to its source thus facilitating quantity based budgetary controls, eliminating wastages, and assisting in maintaining an optimum inventory and cashflow.

Automate repetitive tasks: Activities such as frequent budget updates, Quantity updates, maintenance of daily exchange rates, master creation, document approvals, audit logs are frequent, repetitive, and essential but time consuming. IOBG has deployed RPA (Robotic process automation) tools by streamlining, simplifying, and automating such activities thus completely removing manual interventions and making the process airtight, with audit trail and high efficiency resulting in 80%-90% time saving in such activities.

Cognitive Analysis and Forecasting:

While the use of standard and traditional financial reports provides important information on the financial health, in the dynamic project environment, the ability to extract critical lead and lag indicators, and project heal analysis play a pivotal role in success of the project. At IOBG, the finance team has deployed addons and connectors to directly extract the updated and live information from the ERPs, controlled by an authority matrix. Thus, a large chunk of data is summarised, modulated, sliced at the click of button providing the team with ability of providing data intensive complex reports on real time basis and resulting in substantial time savings (>95%) in generation of the standard reports.