Information Technology Reference
In-Depth Information
Information Systems in the Global Economy
UB Spirits Serves Up Success
The UB Group is a successful and growing international conglomerate based in Bangalore,
India. The bright future of the conglomerate is illustrated by the rising steel and glass
structures in the heart of Bangalore and known as UB City—a 7-acre high-rise business,
shopping, and living community. The UB Group is invested in several industries including
aviation, fertilizers, engineering, information technology, pharmaceuticals, and alcoholic
beverages, or spirits. While this may sound like an unusual and even dangerous combi-
nation, the diverse business portfolio is making the UB Group billions of dollars.
The alcoholic beverage division of UB, called UB Spirits, is itself a successful interna-
tional corporation made up of several successful distilleries: McDowell, Herbertsons, and
Triumph Distillers and Vintners. Combined, these companies produce 140 brands, 15 of
which are top-shelf classics. The brands are produced in 75 locations across India. UB
Spirits dominates the Indian marketplace and ranks as the world's second largest distilled
spirits corporation, with sales that exceed 60 million cases a year.
To comply with laws that control the distribution of alcoholic beverages in India and
around the world, UB Spirits often must negotiate a selling price for their products with
a national government. Because of this constraint, UB Spirits has to improve its profits by
minimizing overhead and streamlining operations. One obvious waste of resources in the
business was its outdated and bloated computer-based information systems. Each UB
Spirits facility across India used its own information systems on its own servers——111
Microsoft Windows-based servers in all, which required constant attention. At the close of
each month, the data from the disparate systems would be merged in a costly and lengthy
process to produce corporate reports. It was clear to the decision makers at UB Spirits that
if the company was going to grow, it would have to invest in a new system with state-of-
the-art hardware.
As with many system overhauls, UB Spirits began by choosing an ERP software pack-
age before it decided on hardware. This is smart because different ERP solutions have
varying hardware requirements. Working with IBM, the company selected SAP R/3, which
includes information systems for every area of the business.
After selecting an ERP system, the company built the infrastructure on which the sys-
tem would run. The main goal of the overhaul was to reduce the work required to maintain
and administer the system. The company selected an IBM System i550 because it is power-
ful and simple to manage. The i550 server has multiple processors, up to 64 GB of memory,
and up to 77 TB of disk storage. The i550 easily supports 400 UB Spirits users and 1.5 TB
of corporate data. It can run all of the corporate systems and be accessed by 64 UB Spirits
offices over a network.
By switching to a centralized server system, UB Spirits was able to replace 111 servers
spread across India with one server located in its home office. The new system assisted UB
Spirits in lowering manufacturing costs. It standardized business processes across the
enterprise and accelerated monthly financial reporting. UB Spirits also reassigned 20 of
its IT personnel from server administration to more productive projects.
UB Spirits found that the path to higher profits lay in centralizing its operations and
investing in large, powerful servers. Other companies have found that they can accomplish
more by distributing systems over many workstations in what is called grid computing.
The hardware in which a business invests is intimately linked to the type of information
system it implements. Creating an underlying infrastructure from hardware should sup-
port the evolving needs of the business and its information systems.
