The Hindu Business Line : ERP is not a magic wand

YESTERDAY, I visited a department store that belongs to the organised sector. A few weeks ago the company had re-branded the shops and put up a new name. So, naturally, I was curious, as I strolled in.

It was quickly apparent that the exercise, as often, was to recover from the slump in sales caused by competition eating into the retail share. One didn't need to see the company's P&L for confirming the dent in the bottom line; for, the hit was all too obvious on the shelves and at the counters, in the form of unsold stock and tired staff.

What was amusing was a big poster behind the billing clerk. It spoke of the company's plan to implement ERP or enterprise resource planning, so that everything will be happy and bright ever after, going by a glowing sun that the poster depicted.

For starters, ERP is "an amalgamation of a company's information systems designed to bind more closely a variety of company functions including human resources, inventories and financials while simultaneously linking the company to customers and vendors," as www.investorwords.com defines.

"Major ERP vendors are SAP, PeopleSoft, Oracle, Baan and J.D. Edwards," informs http://computing-dictionary.thefreedictionary.com. "ERP software systems rely on some of the largest bodies of software ever written," cautions Wikipedia, and lists many `limitations and pitfalls'.

To be fair, the department store isn't alone; there are many companies that are desperately trying more than one trick to increase their revenues. It is good to remember that information technology (IT) is no magic wand. As they say in CA circles, it will be a folly to expect a software solution to set right the books of account.

For the removal of doubts

Talking of CAs, here's an interesting mail from V.Ranganathan of E&Y, highlighting `explanation' to Section 65(105) of the Finance Act, 1994, brought in by the Budget last year.

It reads thus: "For the removal of doubts, it is hereby declared that where any service provided or to be provided by a person, who has established a business or has a fixed establishment from which the service is provided or to be provided, or has his permanent address or usual place of residence, in a country other than India and such service is received or to be received by a person who has his place of business, fixed establishment, permanent address or, as the case may be, usual place of residence, in India, such service shall be deemed to be taxable service for the purposes of this clause."

It is "a perfect 10 on the Richter scale," says Ranganathan, and I'd shiver in agreement! Thankfully, on February 3, the Madras High Court stayed the operations of explanation in the Tamil Nadu Spinning Mills Association case.

Information activist!

J.N. Iyer, a reader, is `happy to inform' that his "first effort to enforce citizens' rights invoking the `Right to Information Act' has been successful." He has enclosed a letter sent to the postal authorities. It seems Iyer's earlier mails weren't even acknowledged for over two months.

He's now happy that the authorities have suddenly woken up and sent `2 emissaries' to meet him. "Action has been promised as well as periodic review meetings. Now I propose to initiate similar action in respect of some banks who in disregard of SEBI and RBI orders unleash their canvassers to get credit card business or make nuisance calls."

Meat science

Let me wrap with this mail from Deepa Prakash, who teaches Food Science to post graduates at the University of Mysore.

Responding to an earlier article, `Meatier facts about meat than what meets the eye' (Business Line, January 23), she writes, "Your article was photocopied by all my students. The statistics was wonderful and up to date." Great!

"There is a joke I tell my students while teaching meat science," adds Deepa. "There are two cows. One asks the other, `Aren't you afraid of the mad cow disease?' The other cow says, `Nope, that's because I am a helicopter.' :-)"

E&OE@TheHindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ERP is not a magic wand

Your's lovingly!

Musical confluence