K.L. Tan, finance manager, NTR Newtech Resources

The Malaysian company today has a distribution network comprising nine branch offices throughout Malaysia and 10 service centers in Asia. After expanding its business operations over the last few years, NTR realized it was time to implement an IT system that could provide real-time information on sales orders and stock levels of its notebooks.

After spending a few months scouting for a suitable software, NTR purchased SAP Business One for 25 users in its Kuala Lumpur, Penang and Johor offices. The software package included the full financial suite, inventory, distribution and CRM (customer relationship management) modules. It also put in place remote support for all three sites.

The company hopes to be able to forecast its orders more accurately so as to keep stock levels healthy and reduce holding costs.

CNETAsia spoke to K.L. Tan, the finance director of NTR Newtech Resources, on the company’s IT strategy and plans for the coming year.

Q: What IT systems do you have in place now and how have they benefited your company?
A: We are at the live-run stage of the SAP Business One implementation. Our branch office in KL and the Johor sales office are accessing the SAP Business One remotely via a virtual private network. This gives us an integrated environment not only from application point of view but also operational wise. The system will definitely improve our ability to analyze and track our inventory movement. This is especially important because our inventory is mostly high-value stock. The ability to track our inventory is itself a very important pay-off as it reduces our inventory holding costs and reduces missing items.

When it comes to such software, how do you justify the implementation to the management? Please elaborate on the decision-making process.

We normally conduct a survey of the market. Sometimes we ask our friends, and even business partners, for recommendations. Once a list of suppliers is finalized, they are asked to give a presentation to our heads of departments.

The final decision is made by the whole team, not just one person. When we were looking for an ERP (enterprise resource planning) package, we also considered some of the local vendors. However, most of them could not offer certain functionalities. For instance, 'service call' is not included in the package. They told us that we would need to have it customized, which meant that we wouldn’t know what to expect in terms of performance and costs.

Does your company currently outsource some of its IT operations or have plans to do so in the future?
No, not at this moment.

What steps do you plan to take in the next 12 months to improve efficiency or, perhaps, reduce costs in your organization?

We hope to have better analytical tools that we can use to analyze our business. Such tools help us make important and timely decisions which, in turn, enable us to become more competitive. By using many of the current automated features, such as Business Alert and Workflow functions in SAP Business One, we have realized improvements in productivity and gained the ability to better manage our operations with limited resources.

What is your annual IT budget for 2005? Has it increased or decreased compared to last year?

We normally plan on a project basis. Our IT budget for this year has actually increased. We allocated RM500,000 (US$131,580) for this exercise, but SAP helped us to achieve this for less than what we budgeted. Last year, we allocated about RM100,000 (US$26,316).

What are the key drivers for next year's IT investments?
We hope to develop a more complete infrastructure to support our customer service. Our intention is to implement CRM (customer relationship management) modules that come with the SAP Business One software to better support our customers, as well as to improve our revenues.

What proportion of your IT budget will be spent on hardware, software, services, staff training, and security?
I guess software takes up about 50 percent; hardware accounts for 30 percent; while services make up the rest of the 20 percent. In this case, services also include training and implementation.

What other future technologies are you exploring next?
Business Intelligence seems to be one of emerging trends in the industry. We are in the notebook distribution business which is a highly competitive market. We are therefore definitely keen to learn and understand how to use various technologies that help us be more responsive in this fast-pace industry.

How much training is enough?  

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