How Uflex De-risked a Global ERP amidst Political Instability and Cyclones

Summary:

A decision to centralize their datacenter helped Uflex leverage India’s low costs and build its datacenter at one-fourth the cost the company would have incurred otherwise.

The Organization: The name UFLEX might not evoke instant brand recall, but as the world’s fifth largest manufacturer of flexible packaging material (thinks sachets of shampoo or a bag of chips), UFLEX, touches the lives of most people. FlexFilms, the flagship company of the Rs 3,500-crore group, has manufacturing units in India, Dubai, Egypt and Mexico.

The Business Case: When FlexFilm decided to roll out an Oracle e-business suite Ravi Ramakrishnan, GM-IT, UFlex (Film Division), had two choices: create datacenters at multiple locations or just one at the company’s HQ in Noida. The former was a capital intensive move. “A datacenter framework built in India for Rs 40-45 lakh costs Rs 1.8 crore in Dubai. And service levels are far behind Indian standards,” says Ramakrishnan. It also created a host of problems, including having to hire more staffers for multiple locations. So Ramakrishna decided to centralize his datacenter at Noida.

The Challenge: But this strategy came with its own risks. “We were placing ourselves at the mercy of Internet operators in those regions,” Ramakrishnan says. The cost, for instance, of an Internet lease line from Delhi to Dubai was about Rs 1 crore a year, way beyond the company’s budget. And the production unit at Mexico is located close to a port, making connectivity vulnerable to cyclones, while Egypt, faced politically instable and had an Internet kill switch.

The Solution: “I went with an MPLS VPN network because I was sure of the quality of service,” says Ramakrishnan. That strategy, however, needed to be de-risked. For the Mexico unit, for instance, Ramakrishnan surveyed metrological conditions in Mexico, charting its cyclone cycle. Then, he travelled to Mexico to talk to locals and understand the effect of different weather conditions on local telecommunication networks. “I found that even during bad weather wireless networks worked fine, by and large,” he says.

So Ramakrishnan created a three-level redundancy plan for Mexico. He opted for a MPLS network as the primary line. His back-up was to access apps using a standard VPN, and if that failed he would turn to RF for last mile Internet connectivity.

I went with an MPLS VPN network because I was sure of the quality of service

The roll-out in Egypt was even tougher. He required permission from Egypt’s Ministry of Defence to allow the passage of encrypted data through the network. Ramakrishnan recalls how their file was stalled in the ministry for about three months, till he made a presentation for the ministry. In Egypt, his back up to the MPLS network was an Etisalat 3G network, which the government couldn’t shut down because the company is not based in Egypt.

The Benefits: Ramakrishnan’s decision to centralize his datacenter has helped Uflex leverage India’s low costs. It allowed him to build his datacenter at one-fourth the cost the company would have incurred otherwise. And centralizing operations in India saved the company from hiring 30 IT staffers, which would have bumped up IT’s total spend by around 300 percent. But the real benefit of his risk mitigation plan came into play during the Internet black out in Egypt. “My back up plan provided us the necessary connection even during the kill switch in Egypt. It was indeed an unanticipated situation” recalls Ramakrishnan.

I went with an MPLS VPN network because I was sure of the quality of service