How Panasonic's Indian electric arm generated huge performance boost with cloud migration

Japanese electronics and technology major Panasonic (earlier Matsushita), which acquired the domestic electrical equipment brand Anchor Electricals in 2007-08, has come a long way in scaling up the electrical business in India. Panasonic Life Solutions that operates independently from separate group units dealing with other products such as appliances and electronics, has grown over tenfold since the acquisition.

The company has made significant strides in innovating with technology to remain competitive in a challenging market. Speaking on its digital transformation journey to TechCircle, Balbeer Singh, Chief Information Officer of Panasonic highlighted that in light of increasing competition and changing industry standards, the company is focused on enhancing its digital quality and operational efficiency.

Singh noted that the organisation encountered considerable challenges in ensuring consistent quality management, optimising production efficiency, and boosting customer satisfaction. Although the parent company was already utilising Oracle as its ERP system, its other divisions operated on disparate systems, which required consolidation.

“The presence of fragmented systems and manual processes impeded its ability to meet these objectives, highlighting the need for a comprehensive digital transformation strategy,” he said.

To address these issues, the electrical equipment firm adopted Oracle technologies to establish robust quality management systems and real-time analytics. Oracle solutions were implemented across the company’s manufacturing, supply chain, sales, finance, and logistics operations These solutions, according to Singh, enabled early identification and rectification of quality issues, thereby reducing waste and improving overall operational performance.

According to Singh, in the last two to three years, especially following the pandemic, the company further encountered difficulties with its on-premises Oracle system, which unexpectedly failed and led to sales losses.

The integration of Oracle's customer relationship management tools streamlined the processes for resolving field complaints and providing service support, thereby enhancing customer satisfaction.  

“We have successfully migrated to Oracle Cloud Infrastructure, resulting in a remarkable performance enhancement of approximately 50%. Additionally, our month-end financial closing process has seen improvements ranging from 50% to 60%, and we have not encountered any system-related issues since the transition,” informed Singh.

“Following our migration to Oracle Cloud, we further optimised our operations by integrating Oracle Fusion to streamline additional business processes, in collaboration with consulting major PwC for the implementation. This initiative commenced last year and is anticipated to extend over the next few years,” noted Singh.

With the enhanced performance, the company achieved stable sales and efficient manufacturing, even with limited inventory levels, which has favourably influenced customer satisfaction. “Our focus is also on digitisation and automation, starting with the deployment of an Oracle data warehouse to ensure our data is structured and clean. A proof of concept has been completed, and we plan to implement the data warehouse shortly, followed by the integration of AI and machine learning capabilities,” Singh said.

In addition to its core operations, the company employs customer-focused technologies, such as Salesforce CRM, to enhance its sales channels. “We are striving to standardize integrations through Oracle Integration Cloud, having already established connections with HDFC Bank and other partners,” Singh informed.

The company places a strong emphasis on safeguarding against cyber threats. According to Singh, “With assistance from Panasonic's headquarters in Japan and its Gurgaon office, we invested in various security measures, including data encryption, network security monitoring, and incident response capabilities to protect sensitive information, alongside conducting annual vulnerability assessments as part of our ongoing strategy.”

Speaking about the team composition, Singh said that the company’s IT team, comprising approximately 50 IT staff across infrastructure, application support, and regional offices, operates under a hybrid model.

“We prioritise customer-centric solutions and assess the return on investment for the solutions we implement, with plans for an increased technology budget in the upcoming fiscal year,” he said.

Panasonic is currently conducting comprehensive business process evaluations and gap analyses in collaboration with expert consultants, including PwC. Additionally, PwC and Oracle technologies have assisted Panasonic in maintaining stringent Planning and Design Review controls for new product development, enhancing vendor management, and ensuring adherence to technical regulations.

On the future technology roadmap, Singh said the company’s strategy for the upcoming 12 to 18 months prioritises data warehousing, analytics, artificial intelligence, and the optimisation of supply chain operations to minimise logistics expenses and sustain low inventory levels.

“We also plan to integrate the Internet of Things (IoT) and QR codes into our manufacturing processes and improve our sales strategies to remain competitive,” Singh said, adding that the company’s objective is to benchmark its performance against competitors and maintain a leading position in the market. It will also invest in both traditional analytics and generative AI concurrently.

A majority of Indian businesses are embracing cloud transformation as a critical enabler of AI adoption, according to the Indian findings of EY's Global Cloud Implementation.

Furthermore, market research firm IDC said in a report published in December 2024 that cloud adoption in India remains high, as businesses look to innovate and enhance productivity in their digital transformation journey. The Indian public cloud services market is expected to reach $25.5 billion by 2028, growing at a CAGR of 24.3% from 2023 to 2028.