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DTDC Express slashes TCO by 30 percent annually by tech upgrade and cloud migration

DTDC Express, recently made a technology upgrade and migrated its applications to cloud, partnering with Capgemini. Both have a decade long relationship, which began in 2009, when Capgemini had set up the SAP platform for DTDC Express. The objective of cloud migration was to reduce the overall TCO, which was slashed by over 30 percent annually

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The Bengaluru headquartered $190 mn, DTDC Express was established in 1990, operating from 520 centres with 7 zonal and 20 regional offices. India’s second largest end to end logistics company has presence in 14 countries operating via 10500 franchisees, which makes it a company having the highest number of franchisees in India. The company covers small and medium parcels, supply chain, warehousing, ecommerce and e-fulfilment. DTDC handles close of 12.5 million parcels in a month and the company is ISO 9001 certified.

DTDC Express, made a technology upgrade and migrated its applications to cloud, partnering with Capgemini. Both have a decade long relationship, which began in 2009, when Capgemini had set up the SAP platform for DTDC Express. The objective of cloud migration was to reduce the overall TCO, which was slashed by over 30 percent annually.

Mrinal Chakraborty, EVP, Technology & Innovation, DTDC

Technology upgrade
Post the GST implementation, it was inevitable to move to the changed environment, “SAP had released the GST patches and it was required to refresh to a better environment,” says Mrinal Chakraborty, EVP, Technology & Innovation, DTDC. It was decided to move from on-premise to a private cloud environment with an upgrade to SAP Hana. This was done by 2017, post which the GST patches and the latest ECC version was integrated. The SAP infrastructure pre 2017 i.e from 2006 to 2017 was deployed in house. “This made us one of the few companies who could go live with GST compliant invoices in under 3 months after GST was rolled out,” informs Chakraborty.

It’s important to note that while SAP supports the backend operations of DTDC Express, the core operations is anchored by the Java based Core Transaction Billing System (CTBS), which along with the SAP and the process integrator was also moved to the cloud. The integration between the SAP and non SAP processes happens through the process integrator.

There are three major reasons for the technology upgrade. Firstly, as per the technology roadmap, the plan was to move to SAP Hana and the introduction of GST gave that opportunity to DTDC Express. Secondly, the entire workload maintenance and management can be outsourced without the need for engaging the inhouse human resource in the IT department. Lastly, post the migration, the availability of the SAP environment is better and bigger. The database architecture was old and it was required to move to the Hana environment, which gives 5x to 7x more performance. Before SAP Hana, the company was using SAP MaxDB.

Ananth Chandramouli, Head of Local Business Services – India, Capgemini

Given the GST requirements, it was necessary to move from Enhancement Pack (EH7) and above, and thus the migration was done from Enhancement Pack (EH4) to (EH8). “Moving to the private cloud environment is a more secure option. Its ensured that the servers are on private subnet, which doesn’t allow straight access to the root to the server. The migration began in Feb 2017 and completed in April, with all the applications,” says Ananth Chandramouli, Head of Local Business Services – India, Capgemini. A major benefit of this migration has been, apart from DTDC Express, the associated companies / franchisees have also become GST compliant. “We could move all our 10500 franchisees on GST. We can ask customers to provide their GST number without which, we cannot issue the invoice. This has brought in discipline and transparency in the way we operate our native billing and the govt’s e-way bill system,” says Chakraborty.

It was important to ensure minimum downtime during the migration and upgrade. “We ensured a mock drill is done with a copy on the production server. This threw up an estimation of the impact, when the final migration is done on the amount of downtime we would request DTDC to undertake. Three rounds of tests were conducted before going live,” says Chandramouli.

After GST and eway bill implementation, the business took a hit initially but then it took off significantly and has remained stable since then, “Over ninety two percent of DTDC’s payments receivable and payable have gone digital without any cash or cheque component. The company has become e-compliant. This had a direct impact on our cash flow, which is better and more visible, now. It’s not that we get a demand draft which will be encashed after a few days. All the payments now, being done via e-transfer reflects on the financials on the same day. Another major benefit is related to digitisation of e-invoices. Physical invoices have been done away with. No hassles of physically sending, receiving, storing of invoices. Thus days sales outstanding (DSO) has reduced significantly, which is a major achievement.” says Chakraborty.

Cloud migration: Critical success factors
  • ‘Migration without disruption’ Capgemini was involved in the building of the core CTBS system and they are also DTDC’s SAP support partner, thus process orchestration of connecting CTBS and SAP backend was seamless without ‘disrupting the ongoing business operations’
  • Cloud migration and upgrade is usually a one step process as prescribed by SAP but given DTDC’s requirements, MaxDB was migrated to the private cloud and then in step two, it was converted to HANA
  • Following the standard operating procedures for cloud migration as prescribed by SAP
  • Adoption of DevOps in plugging the gaps in what the business wants and what the developer thinks what the business wants. No separate testing of performance and security. It all happens simultaneously after the entry of DevOps. An all and all full stack development
  • Taking care of authorisation, authentication, etc in a cloud based project
  • Scalability and performance testing – Make sure the system pounds in the same way as it used to when DTDC Express was a 450 cr business to now when it is a $190 mn company to the growth roadmap set for 2022
  • Keeping the sustainability of the system scalability and infusion of new technologies, in mind results in increased business usage of the systems
  • Teams Involved: DTDC Express (6 members) – Project Management team, CFO (personally involved), VP – Finance
  • Capgemini: Six consultants acted as a bridge between the business team of DTDC and the IT team of capgemini; 2 subject matter experts (SMEs) from logistics industry with a consulting background; one project manager with technical expertise.

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