DATA DRIVEN DECISION MAKING AS A TOOL FOR CREATING COMPETITIVE

ADVANTAGE : A CASE OF HAVELLS

"For me, I.T. is as critical as finance, sales or marketing."

-Qimat Rai Gupta, Fonder Havells

All this originated from Bhagirath Palace (a place in old Delhi, India), a full, abounding electricals &
hardware commercial center within the Chandni Chowk range of ancient Delhi. Qimat Rai Gupta, a
teacher from Malerkotla (in Sangrur district, India), who shifted to Delhi & initiated an electric trade
business in Bhagirath Place in 1958, noticed an opportunity when an individual trader's business ran
into some difficulties. (thehindubusinessline/news, n.d.) Despite not having sufficient capital to
purchase his neighbor’s business, so his decision to acquire his brand was sensibly notable in the
electricals trade circles of Delhi, with the available cash. And branded it as ‘Havells’ derived from
the name of the brand's first proprietor – Haveli Ram Gupta! (thehindubusinessline/news, n.d.)

In 1971, Qimat Rai Gupta had invested less than 1 Million INR to secure the ‘Havells' brand, which
was not a small sum back then. However, the cost pales into irrelevance in contrast to what the brand
has grown over the years. Currently, Havells earned a revenue of 1.3 billion USD, securing the most
significant position as the Indian manufacturer of consumer electricals, as well as the fourth largest
electrical lightings brand internationally. "He was very conscious of the value of a good brand even
then" says his son Anil Rai Gupta, current joint managing director of Havells, adding, "It was not a
chance acquisition. When there was not enough money to acquire the entire business, he decided to
go for the brand." (thehindubusinessline/news, n.d.)

INTRODUCTION

Havells India Limited is one of the well know Fast-Moving

Electrical Goods (FMEG) Company, which is a chief manufacturer
of power distribution equipment having an international presence.
Havells appreciates desirable market dominance over a wide range
of items including Industrial & Domestic Circuit Protection
Devices, Cables & Wires, Motors, Fans, Modular Switches, Home
Appliances, Air Conditioners, Electric Water Heaters, Power
Figure 1 Havells India Ltd.
Capacitors, and Luminaires for Domestic, Commercial and
Industrial Applications.

The organization pioneered the thought of selective brand showroom in the electrical business with
the name ‘Havells Galaxy'. Currently over 500 plus Havells Galaxy across the country are helping
customers, both domestic and commercial, to choose from a wide assortment of products for
different applications. Havells turned into the first FMEG Company to offer doorstep administration
through its ‘Havells Connect' initiative. Superior quality of products and faster administration, it has
least client grievances and highest consumer loyalty. (Pandey N, 2015) In 2004, the company started
concentrating on the consumer market. “They entered the consumer market with the strong point of
having a profound knowledge about the Indian market and consumer necessities having a solid
network of the existing industrial dealers and buyers, large in-house manufacturing capacities, &
important professional strength of approximately 5,000 employees.” (india-consumer-electronics-
market, 2018)
 1958 1971 1992 2000 2001-3 2007 2015 2017
FOUNDER QRG BUYS HAVELLS GETS LISTED ON BUYS BUYS CRABTREE BUYS SYLVANIA ENTERS
DIVESTS 80%
FORMED A BRAND BSE AND NSE CONTROLLING BRAND FOR PERSONAL
COMPANY STAKE IN
STAKE IN VAARIOUS GROOMING
GUPTAJEE & CO. SYLVANIA
STANDARD COUNTRIES. SEGMENT
STARTS ELECTRICALS
TRADING IN STARTED BUYS MAJORITY
BUYS
DELHI PRODUCING CFLs STAKE IN
CONSUMER
PROMTEC
DURABLES
RENEWABLE
BUSINESS OF
ENERGY
LLOYD ELECTRIC
AND ENGG

Figure 2. Havells journey so far

Currently, Havells owns some of the most prestigious brands like Reo, Standard, Crabtree, Lloyd.
The organization has 12 cutting edge assembling plants in India to be found at Haridwar, Baddi,
Sahibabad, Faridabad, Assam, Alwar and Neemrana.

Strength
 Strong tie-up with channel partners and
intermediaries like dealers, distributors’
stockist, etc.
 High Recall and Brand Loyalty.
 Reliable credit policies for channel partners.
Opportunities
 Increasing consumer awareness for branded
products.
 Strategic tie-ups with other companies like
Crompton Greaves, Lloyd.
 Demand for electronics hardware in India is
expected to reach US$ 400 billion by FY24.
Weakness
 Entered consumer business in 2017.
 Weak position in the industrial switchgear
segment.
 Small Market Share at the Global Level.
Threats
 Maximum revenue from a country ie. India
 Market dynamics keep on changing.
 Competition from Philips could make things
challenging.
 Slower than expected revenue growth and
profitability in Lloyd’s consumer business
poses risk to estimates and valuation.

Figure 3. SWOT Analysis of Havells

Havells alongside its brands, has earned the distinction of being the preferred choice brand of
electrical products for perceiving both individuals and industrial consumers both in India as well as
abroad. Havells offers a same quality items for both Indian and International markets. It is focused
and committed more on continuing powering the world market with its leading-edge advancements
and vitality proficient arrangements. As of now, over 90% of their products contributions are vitality
effective and fabricated in-house.

FAST MOVING ELECTRICALS GOODS INDUSTRY (FMEG)

The Global consumer electronics market is likely to follow stellar growth in the next few years.
During the two-year forecast period 2018-2020, revenues of the global consumer electronics market
are expected to reach US$ 2,976.1 Bn in 2020, registering a CAGR of over 15%. The FMEG (Fast
Moving Electricals Goods) industry, had seen a positive development over the recent couple of
years.

Expanding middle-class, changing lifestyle preferences, growing inclination toward using smart
electronic devices are among the primary factors driving the growth of the global consumer
electronics market. In addition, rising disposable income of consumers, coupled with the need for
Internet usage, will propel the demand for electronic devices over the forecast period.

2018

2018
-2018

“Growth in the Indian consumer electronics market can be attributed to increase demand from
households, changing lifestyles of individuals, easier access to credit, and rising disposable incomes,
coupled with government and corporate spending is anticipated to complement the positive demand
in this market.” (india-consumer-electronics-market, 2018) “The India consumer electronics sector
has attracted several strong investments in the form of merger & acquisition policies practiced by
key participants of the global market and other FDI inflows.” (india-consumer-electronics-market,
2018)

The India consumer electronics market size was worth USD 32.5 billion in 2018 and is expected to
grow further over the forecast period. India provides a worldwide opportunity for short to medium-
term growth in consumer electronics spending.

“Such digitally influenced sales measured by the report as the use of internet by shoppers during the
entire purchase cycle - from researching to buying - will impact 63% of total consumer durables sold
in India by 2023, the report said. That translates to $23 billion in sales over the next five years.”
(livemint, n.d.)
 Figure 4. Havells share price over 5 year; Source- google

 In the above graph, it is well evident that share price of Havells India is on rise with little ups and
downs, currently trading at 646.85 INR.
 Havells India's switchgear company jumped 19% against Rs.339 crore in Q1 FY18 and stood at
Rs.404 crore.
 Lighting and Fixtures recorded a 25% rise compared to Rs.205 crore in Q1 FY18 and stood at
Rs.257 crore. Cable business was also up by 8% to Rs.750 crore as against to Rs.636 crore in Q1
FY18.
 The company’s electrical consumer durables business jumped 33% and stood at Rs.476 crore as
compared to Rs.358 crore in Q1 FY18.
 Figure 5. Market size and sector composition; Source – IBEF 2017

 Appliance and consumer electronics (ACE) industry are likely to produce 9 per cent CAGR
during 2017-22 to grasp Rs 3.15 trillion (US$ 48.37 billion) in 2022 from Rs 2.05 trillion
(US$ 31.48 billion) in 2017.

 The consumer durables segment in India is predictable to raise 8.5 per cent in 2018-19.
Consumer durables index under the Index of Industrial Production grew 4.3 per cent year-on-
year in April 2018.

 Godrej group, Havells India, Micro Electronics, Blue Star and Videocon Industries are few of
the chief domestic players operational in Indian consumer durable market.

 Demand for consumer durables in India has been increasing on the back of rising profits; this
drift is set to remain like other factors such as rising rural incomes, increasing urbanization, a
growing middle class and changing lifestyles aid demand growth in the sector.

GOVERNMENT INITIATIVES

Developing awareness, extra convenient access, and changing routines have been the key
development drivers for the consumer market. The policies and regulatory frameworks of Indian
government, such as, unwinding of license rules and endorsement of 51 percent foreign direct
investment (FDI) in multi-brand and 100 percent in single-brand retail are a portion of the huge
development drivers for the purchaser showcase. FDI (Foreign Direct Investment) inflows into the
electronic sector remained at US$ 2.36 billion as directed, during April 2000 – March 2019 by The
Department for Promotion of Industry and Internal Trade (IBEF, 2018)
 Figure 6. Government initiatives; Source- IBEF 2017

"The NDA government, led by PM Narendra Modi, launched the Make in India Initiative in 2014 as
part of a renewed focus on revitalizing the manufacturing sector of the country. Since the launch of
this initiative, India has emerged as the fastest increasing significant economy with GDP growth
rates above 7.6% in 2015-16 and is forecast to develop above 7% by the IMF by 2020.” (opindia,
2019)

While Startup India is a government of India project. Another focus of this project is to discard
restrictive government measures within this domain, such as license Raj, land permits, foreign
investment proposals, and environmental clearances. It was arranged for sector promotion and
internal trade by the Department. (wikipedia/startupindia, 2019)

POTENTIAL LOW AREAS OF HAVELLS INDIA

Managing sales activities is always been a challenging task for any sales-oriented company like
Havells with their extensive sales undertakings. Often the challenge arises when the best fit
portability in sales intelligence, adopting best stocking sales distributed data, tracking the sales
performance, also preparing the sales force with the prospects and routines for their day to day
activity” (q3tech, 2017).

But when it comes to analyze, analyzing the sales figures are always been a tough and heavy time
involvement task in sales-oriented companies. Over the years, this had been done manually, and
often involves hundreds of employees in data collection and then final reporting. Which after that
often includes errors, redundancy in reports. Therefore, it then affects the quality decision making
and makes it a less effective study of sales number. Top business heads and executives are the
primary sources of such information which helps the managers to direct and motivate to work on
action-oriented direction.

Given the above statement, the case revolves around how Microsoft's Power BI acted as the platform
for providing efficient decision making to business heads, and help the managers to automate the
report making.

BUSINESS INTELLIGENCE AND DATA VISUALIZATION TOOL

Business Intelligence (BI) is a method driven by technology that seeks to collect and analyze
information in order to extract actionable ideas from it. These insights will assist you, your team, and
your business to create more informed business choices, supported by analyzes and numbers.
Leading businesses have noticed that it is not necessary to manage company data and content
independently from the remainder of information management. CEOs and executives acknowledge
more than ever that data-driven decision-making is crucial and that a "data-oriented" attitude can be a
competitive advantage.

That omnipresence of information drives executives to provide self-service BI instruments for their
company. Such tools enable staff to obtain appropriate, significant data from the huge collection of
their company. They allow staff to conduct advanced analyzes and gain perspectives even without a
powerful technical background.

WHY IS IT IMPORTANT
For a simple psychological reason, data visualization is essential: we are wired for visuals. Half of
our brain is devoted to visual tasks, and 90% of brain data is visual. Business leaders need the ability
to drill in the data easily to see where they can enhance their operational procedures and develop
their company. Visualization of data gives life to business intelligence.

Visualization is key to convey a message loaded with statistics as it succeeds in bringing to life and
understanding what you can get from complex, often seemingly unrelated collection of raw
information. It is thus possible to take choices and actions more readily and with a stronger
understanding of the large image.

POWER BI

PowerBi logo

Power BI is a cloud-based data analysis- visualization tool, which includes wide range of data
sources, which can be used for data analysis and reporting. It is a user friendly and simple that power
users and business analysts can work with it. Power BI is mature and powerful that can be used by BI
developers in enterprise systems for modelling scenarios and complex data mashup (K.Gowthami,
M.R. Pavan Kumar, Apr -2017). It works on Multi-platform such that one can use the dashboard on
mobile, on laptop, on Tablets and otherwise publish the dashboards on to the server with
authentication and permission by the creator. Thus, it empowers the business people. And help them
making and taking efficient decisions, which helps the business to grow.

SOLUTION

The company had leveraged technology to boost the market

reach further and simultaneously get made data of real-time business by our channel partners as
Dealers, Distributors, Retailers and Customers. Applicable use of data analytics captured through
technology has been a tool to build strategies to attain next-level growth within the company.
(management-discussions/3272, n.d.)

For driving business efficiencies, below are some digital initiatives undertaken as follows:

1. Salesforce Automation (SFA):

Sales Force Automation (SFA), is a in-house developed mobile-app with many features like geo-
tagging. A team of almost 3 500 sales reps daily visits on an average are 75,000 uniquely identified
retailers and approximately 7,000 channel partners directly on monthly basis and update their data on
the go. (management-discussions/3272, n.d.)

2. Distribution Management System (DMS):

“Distribution Management System (DMS), is a mini- ERP (Enterprise Resource Planning) billing
solution given to Havells distributors to cater retailers registered with Havells. Company has
successfully implemented DMS across the distribution network.” (management-discussions/3272,
n.d.)

It determines how the distributors are performing, through regular DMS usage, billing, to ensure
uniform distribution of products to retailers and to avoid any price discrepancy. It helps in capturing
the information required to manage secondary sales operations with very minimal efforts. It helps in
saving precious time of the Sales team & Distributor by providing readymade reports, thus reduce
the possibility of error.

3. Retailer App:

Havells had initiated an application specially designed for Havells retailers bringing a digital
platform, creating it one purpose of access for varied business-related info. Throughout this
year, we've got engaged with one.2 lac registered retailers in Sampark Loyalty Program.
It additionally features instant redemption of loyalty points directly transferred to their bank
accounts, gets real-time updates on pricelist and brochures, Sampark scheme updates and ledger of
balance points in scheme. (management-discussions/3272, n.d.)

All these technologies enabled the company to widen and deepen its distributor and other channel
partners. As with the help of the above applications and web portal, tracking the primary and
secondary sales became much more manageable. Automated reports are the next big step towards
efficient decision making, which help in understanding the overall picture of the sales with minimum
input. Hence for the same the company started using Microsoft's Power Bi Tool, a business analytics
service by Microsoft. It aims to provide interactive visualizations and business intelligence
capabilities with an interface simple enough for end-users to create their reports and dashboards.

Below is the Snapshot of the DMS sales Dashboard, where various visualizations used, such that;
 Depicting
revenue Total Pie Chart depicting
Filters primary Billed Primary sales (In Cr)

This
square Pie Chart
depicts depicting
Total Primary
DMS sales (In
Partners Cr)

Table
Bar Graph
distribution
used to show
the DMS showing the
Retailer by DMS
SalesOfiice USAGE
retailers’
trend
Figure 7. Snapshot of the DMS dashboards Source: Authors

 Here Pie Chart is used to depict the DMS contribution in Primary Sales, whereas Bar Graph
is used to show various Sales Offices and its DMS Retailer count. Such that this count helps
in analyzing the secondary sales made through retailers.
 In Right Bottom, a Table created between the Sales Office and the Months – This is done to
see the trend of DMS usage by the distributors. Such that it helps the company to check
whether the Distributor is regular in billing or updating information and thus helps in
categorizing them in the basis of usage.
 Whereas on Top Left of the snapshot, Total Primary billing count is shown. These total
Primary sales include Dealer – Distributor. Followed by Total DMS Partners and then
Primary sales of DMS Partners and lastly Secondary sales of DMS partners. Along with it,
Revenue is also shown.

HAVELLS OVER THE YEARS, 2013 – 2019

Havells India implemented the Business Intelligence tool in 2016, and since then transparency is
achieved to a next level, such that the company gets to track the sales and thus can trace the
loopholes and immediate action can take place.

Below is the year on year performance of the company, comparing after – before the tech
enablement in 2016.
 Figure 8. Year 2013- 19 comparison; Source – Company website

The picture above depicts, since 2013, the company was growing significantly yearly, but after the
implementation of DMS platforms, turnover shoot to 65 billion INR in 2017 followed by 82.6 billion
INR in 2018.

In 2019 Net turnover reached to 100.58 billion INR, through this we can say that the company is
growing significantly ever since they involve Business Intelligence tools.

CONCLUSION

Havells rather have different views on IT. Usually, people inspect IT as a support function and
thus may outsource it to vendors. For the company, IT is a strategic function and an intrinsic a part
of the business, and thus, we have kept it in-house. They had noticed recently that some
organizations had reviewed their decision of outsourcing IT to vendors. The role of IT
has modified considerably, and thus, IIT has to be more proactive in providing solutions to
varied business problems and challenges. In some firms, talent retention may be a major reason for
outsourcing the IT department, however in our case, there's no such issue.
Havells has, in some ways, pioneered the utilization of IT within the Indian electrical trade. (it-
havells-leading-light, n.d.)

Taking a big leap in IT, Havells connected its entire operations within the market place, as well
as dealers, branches, producing facilities, and management data systems. Our IT investments have
helped provide higher services and product to customers and better our relationships with our
partners and suppliers. A case in purpose is our client services portal that's additionally coupled to
our producing plants so all complaints and resolutions recorded. Moreover,
if there's any change needed, it's automatically taken care of throughout the manufacturing method.
All this has helped improve efficiencies, improve margins, and provide dealer and vendor
satisfaction. Our world-class plants are a benchmark within the industry. An investor looks at a
progressive company wherever his interest is safe which too for an additional extended amount.
Havells has been consistently giving higher results and endlessly upgrading its product offerings,
technology and manufacturing capabilities, therefore guaranteeing investor confidence. (it-havells-
leading-light, n.d.)

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