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OVERVIEW
The Escorts Group is one of the India's leading engineering conglomerates that
stands tall in the high growth sectors of agri-machinery, construction, and material
handling equipment, railway equipment, and auto components. A pioneer in farm
mechanization in the country, Escorts has played a vital role in the agricultural
growth of India for over five decades now.
It is one of the leading tractor manufacturers in the country that offers a
comprehensive range of tractors with more than 45 variants starting from 25 to 80
HP. Three of its widely accepted and preferred brands of tractors include Escorts,
Farmtrac and Powertrac. Also, as a principal material handling and construction
equipment manufacturer, Escorts manufactures and markets a diverse range of
equipment which includes cranes, loaders, vibratory rollers, and forklifts. It is also the
world's largest Pick 'n' Carry Hydraulic Crane manufacturer.
As a leading mechanization manufacturer, Escorts has also been a major player in
the railway equipment business in India. The product offerings in this segment
include brakes, couplers, shock absorbers, rail fastening systems, composite brake
blocks and vulcanized rubber parts.
Escorts is also a renowned name in the auto components segment and is well known
for its auto suspension products including the shock absorber and telescopic front
forks. With continuous innovation and improvement in the manufacturing and design
technology, it has introduced new reliable products in the market.
Driven by technology since evolution, Escorts is much more than one of India's
largest engineering companies. It has been a harbinger of new technology, a prime
driver on the industrial front, introducing new products and technologies to
contribute to the key growth areas of the country. Over a million tractors and over
16,000 construction material handling equipment that has been made to perfection
at the state-of-the-art technology at Escorts and complemented by a highly satisfied
consumer base, which is a testimony to the manufacturing excellence of Escorts.
With its globally accepted manufacturing facilities and practices and relentless focus
on research and development, Escorts is in the league of premier corporate entities
in India.

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Escorts have a global technological and business collaboration with world leaders. It
has established competitive indigenous engineering capabilities globally with over
1600 sales and service outlets and footprints in over 40 countries. At a time when the
world is looking at India as an outsourcing destination, Escorts has rightly placed
itself and has emerged as a dependable outsourcing partner of world's best
engineering corporations looking forward to the outsourcing manufacture of engines,
transmissions, gears, hydraulics, implements and attachments to tractors and shock
absorber for heavy trailers. Escorts have, therefore, evolved as a leading Indian
multinational company in the world.
Escorts are fast on the path of an internal transformation, which will support it as a
key driver of manufacturing excellence in the global arena. In the drift to make it big,
Escorts is going beyond just adhering norms and setting new standards and
relentlessly pursuing them to achieve the desired benchmarks of excellence.

A leading agricultural equipment brand, Escorts Agri Machinery (EAM) offers the
widest range of tractors to suit the needs of every farmer and contractor. A part of
Escorts Group, EAM is one of the most awarded brands for it's trailblazing and
accessible technology which improves farming efficiency and productivity.
EAM currently provides technologically superior range of 12 HP to 75 HP tractors with
its two stars - Farmtrac and Powertrac. EAM has earned success and goodwill
amongst customers by empowering them to be successful cash crop producers and
other agricultural related professionals. EAM's widest offerings of innovative products
and services include a full line equipment from tractors to other crop solutions that
are complemented by customized financial services from an arena national and
regional financial service providers.
EAM's state-of-the-art plant at Faridabad is designed on the international model of
manufacturing facilities. The plant has been awarded various ISO certifications and
aggressively drives Health, Safety & Quality initiatives.
With a growing network of over 800 customer touch-points, EAM ensures the
satisfaction of the customer base of over 14,00,000 and also promises maximum
uptime of their tractors and equipment. The customer touch-points are well equipped
with the trained manpower to deliver best in class assistance to customers. Also, EAM
has a well-equipped training center in the outskirts of Bengaluru, which provides
dealers and technicians necessary training to keep them up to date on
troubleshooting and product care in terms of minimum turnaround time and quality of
work.

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Being the first agricultural machinery company in India to offer most appropriate and
advanced mechanization solutions to Indian farmers for enhancing crop productivity,
EAM has earned goodwill in the eyes of the customers. With a sound understanding
of the fact that farmers are increasingly adopting smart farming methods, EAM has
taken farm mechanization to the new level and has helped farmers to enhance
productivity as well as a quality of food grains resulting in reaping smarter returns to
farmers.
Thus, with the widest range of agricultural equipment and farm mechanization
solution, EAM has a huge potential and scope to unleash new avenues and cater to
the needs of emerging agricultural market.

INTRODUCTION /BACKGROUND

SAP has an integrated suite of products catering to various domains such as

Manufacturing, Logistics, Discreet Manufacturing, Banking, Insurance, etc.

In banking one of the requirements of banks are to finance the Supply Chain
called as Channel Financing. Channel Financing covers both the legs of
financing. The first leg covers payments to vendors and the second leg covers
the payments to the dealers.

Channel Financing covers the end-to-end financing in this supply chain

factoring a lot of components such as limits, regulations, crystallization of
bills, documents, net banking, etc.

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Banks involved
Two Banks (AXIS Bank and SBI) have shown interest towards this project. We
are going to develop a prototype and showcase it to the Banks.

OVERVIEW

Vision
To provide a solution on SAP for Channel Financing process.

Objectives

The core objective of Channel Finance is to provide

integrated commercial and financial solutions to the
supply and distribution channels of a given industry.
To draw out the end-to-process of Channel Financing.
To map it to the existing SAP Landscape. This means
taking modules working on diverse applications,
including SAP, and integrating them all using SOA, to
have Channel Financing in place.
To fill up the missing links or White Spaces in SAP in this
Process with Composites to be developed by
Intelligroup. To allocate resources to work on this
project.

SITUATIONAL ASSESSMENT AND PROBLEM STATEMENT

Current situation
Banks are currently using the conventional lending method, but

this method is not concerned about suppliers & dealers

financing activity. Here, independent activity is focused upon
and the lending is backed by collaterals.

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Problem
The conventional lending method leads to weak financials of the

supplier or the dealers may adversely affect the top & bottom
line of the financed firm (Company) due to reasons like delay in
supply, non-availability of credit, and delay in receipt of
payment.

Opportunity
Channel Financing involves financing supplier, manufacturing unit, buyer
(distribution unit) entire supply chain mostly discounting bills.

It extends market determined credit to supplier (vendor) & dealer

(distributor). It meets funds required for purchase & sales besides
production. It helps in sustaining seamless business flow and avoids
working capital related difficulties.

Channel financing opens up manifold opportunities due to which the banks

can make conscious efforts at popularizing this credit delivery mechanism.

Most banks require Channel Financing in full if not in parts; i.e. some
specific modules such as Dispute Management, Net Banking, etc.

Note: This solution can be given to NBFCs also

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IMPLEMENTATION STRATEGY

Project title
Channel Financing Using SOA.

Target Benefits for all the channel members

Benefits to Dealers/Distributors

a) Steady and cheaper source of Working Capital financing.

b) Channel partners can increase Sales through higher purchasing power.
c) Clean facility up to certain limits.
d) Simplicity of documentation and approval procedures.
e) High service and delivery standards compared to current neighborhood
Banker / Moneylender.

f) Channel partners may be able to increase profitability by availing of

cash discounts from Corporate.

Benefits to Supplier

a) This involves the liquidity position by availing finance at cheaper rate

based on the credit assessment of manufacturer.

b) There is no risk of non-payment by the buyer (manufacturer).

c) No documentation or formality.
d) Cost effective due to finer rate of interest.

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e) Supplier saves time & human resources for receivable management.

Benefits to Manufacturer / Principal customer

a) Pre sale working capital requirement shall come down.

b) Assured availability of Working Capital finance to their channel
partners at lower than current cost of credit.

c) Corporate can use Channel Finance as a marketing tool and strengthen

their relationship / reward loyalty of their Channel Partners.

d) Release of funds from the Balance Sheet resulting in improvement in

financial Ratios.

e) Conversion of Balance Sheet into an Off Balance Sheet liability.

f) Greater efficiencies in the Corporate receivable management and
cash management process.

g) Ability to introduce payment discipline with their Channel Partners.

h) Firm can concentrate more on their core competence i.e., area of
production & marketing their products besides saving time & cost
involved in arranging creditors.

Benefits to Bank

a) Bank will have increased data & customer base.

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b) Bank can understand purchaser profile and payment history of

borrower.

c) Simple monitoring of end use.

d) Risk is diversified & credit exposure norms are better observed.
e) In case of liquidity crisis these bills can be rediscounted with RBI.
f) Easy tracking for performance of banks at each leg of the channel
financing.

g) Need not to retrieve data and report from heterogeneous application

OUTPUT
Robust tested Channel Financing solution which will be the part of overall
Cash Management.

Phase 1:
Cash Management
Collection
Payments
Liquidity
Trade Finance
Channel Financing

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Phase 2:
a) Net Banking
b) Mobile Alerts

SAP AND INTELLIGROUP

a)
b)
c)
d)

SAP will take us to various banks to market this product.

Marketing will be handled by Intelligroup.
License fee will be given to SAP.
Intelligroup gets:
i.
Implementation
revenue. ii.
Support
process revenue. iii.
Annual
Maintenance
Contract (AMC).
iv.

Royalty for any process / objects developed by Intelligroup.

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MODULES INVOLVED IN PROJECT

a)
b)
c)
d)
e)
f)

BCA: Customer Account Management.

FS-CMS: Collateral Management.
FS-CML: Loan Management / Risk Assessment.
FSCM: Dispute Management.
RBD: Reserve for Bad Debts.
GRC: Governance and Risk compliance.

SAP ENTERPRISE SERVICE ORIENTED ARCHITECTURE (SOA)

Introduction
Enterprise SOA revolutionizes the design of business applications,
enabling the rapid composition of business solutions. With enterprise
SOA, you can encapsulate business logic and expose it as enterprise
services -- smaller functionality components that can be reassembled
quickly to form new innovative business solutions that meet changing
business requirements. Based on SAP Net Weavers SOA platform,
enterprise SOA provides you with business and industry-specific
context views through enterprise services and safeguards scalability,

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robustness, and governance for your IT. Enterprise SOA is therefore

your blueprint for an adaptable, flexible, and open IT architecture for
developing services-based, enterprise-scale business solutions.

Role of SOA in Channel Financing Process

i. To create new applications on top of existing enterprise

ii.

solutions.
To automate new or existing business processes. iii.
To increase the value of your current systems.
iv. To achieve greater flexibility while controlling technology costs.
v. To deploy innovative solutions to extend our business partner
networks.
vi. To improve our ability to link other applications to SAP solutions
through SOA.
The Main Use of SOA is Enterprise service bus, where it will work as
a communication channel like spoke and hub as shown in below
diagram:

Designing services via an ESB paradigm makes services modeled

according to a harmonized data model before implementation
takes place. This is called Outside-in approach, as the model that is
developed outside an application context is afterwards propagated
to the application systems for implementation.
This approach will eventually result in no or only few data mapping
requirements on the ESB as the semantically data model is

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harmonized across various provider and consumer applications

based on a commonly shared service model.
This is in fact one of the main differentiating factors between a
classical EAI and an ESB approach: EAI will heavily depend on data
transformations (mappings) on the middleware component; in a
service oriented architecture, the ESB ideally does not perform
tremendous amounts of data mappings ESB ideally does not
perform tremendous amounts of data mappings.

Here is the process of building this composite solution, explaining all the
artifacts from the Channel Financing Process:

Specifying Composite Application

Define the Business Process

Define the Process User Roles

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Define the Process Steps and Define the User Interfaces

Designing Composite Application

Service Identification
Service Decomposition
Service Mapping
Defining the Business Objects
Designing the Process for NTW BPM

Developing Composite Application

Developing the Service Layer

Service Provision Layer

Developing the User Interface Layer

Developing the Process Layer

Integrating in Enterprise Portal

Configuring Composite Application

Configuring CAF
Configuring Enterprise Portal

Transporting & Packaging Composite Application

Transporting CE (UI, BPM, CAF), EP artifacts.

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Architecture layers -- Technology Components

Portal / Internet access point - NTW EP

Composite - NTW CE (UI, CAF, BPM)

Service Provisioning - IS-Banking and other Backend applications,

Service Bus and Repository - PI / SOA Middleware / ESR

http://www.escortsagri.com/company/the-group.html

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