Chapter 5

Cloud Computing Strategy Design

for Myntra.com

Case Overview
The purpose of the case is to analyze and study the processes of Myntra, an
e-commerce vendor, and also understand the role of various factors which have
impact on these processes and the overall integration between IT and the processes.
Also to find solutions to integrate the present processes with cloud strategy to align
itself with the vision and mission of the company.
For the fulfilment of this objective we analyzed the data, processes and encapsulated our findings in the following chapter. Study of different departments and
the process within the company gave us a foundation platform and we integrated
those sub-processes in order to assimilate the overall major processes. We analyzed the different issues that might arise out of the different processes. We then
recommended few IT (cloud) strategic solutions for the issues with respect to the
big picture helping Myntra to achieve their goals in the near future and also streamlining their business. We also did a cost analysis and calculated ROI of IT solutions and architectural designs along with an outline to a brief road map for
implementation of the IT (Cloud) Strategy. We defined the Critical Success Factors
(CSF) important to achieve the overall goal. Change management and Risk management needed to be followed in order to implement the IT (Cloud) Strategy
effectively.

Introduction
Myntra was established by three IIT alumni Mukesh Bansal, Vineet Saxena and
Ashutosh Lawania in February 2007. It has its headquarters in Bangalore and has
three regional offices in New Delhi, Mumbai and Chennai.
It began its operations in the B2B (business to business) segment with the
personalization of gifts, which included mugs, caps and t-shirts.
Springer International Publishing Switzerland 2014
S. Mohapatra, L. Lokhande, Cloud Computing and ROI: A New Framework for
IT Strategy, Management for Professionals, DOI 10.1007/978-3-319-08663-7_5

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5 Cloud Computing Strategy Design for Myntra.com

In 2010, the company shifted its strategy from being a B2B to becoming a B2C
(business to customer) oriented firm.
Myntra.com is ranked among the top ten e-commerce firms in India. In the last
3 years, Myntra has become the most popular destination for personalized products
in the country. Myntra is known for its innovative and out-of-the box marketing.
It involves being the first one to start online coupons, promotion coupons, tying up
with top fashion and lifestyle brands in India like Reebok, Puma, Nike Inc., etc. so
as to offer a wide range of current seasonal merchandise. Undoubtedly it enjoyed
the first mover advantage in the e-tailing business.

Industry Analysis (PESTEL)

Political
High government investment in National IT infrastructure leads to faster, better
and more reliable Internet access for all users. It is the key for the e-commerce
industry.
Another aspect is 100 % FDI in retail. This will allow retailers like Wal-Mart to
enter the Indian market. This could be considered as a threat from substitutes.

Economic
With a rise in PPP, more people are getting Internet connections with the growing
economy. This would imply more online buyers. Another factor is that the
e-commerce industry thrives on giving promotional offers to attract customers.
It might be beneficial only if there are economies of scale. Logistics cost is one of
the vital factors which determines the profitability of the e-commerce industry.

Social
Increase in social networking e-marketer online has given Marketing the advantage to promote e-commerce. But at the same time, Product category risk and
financial risk decrease the popularity of online shopping. The e-commerce industry needs to win the confidence of the customer so as to gain market share and
increase customer base.
Another factor, the absence of the touch/feel has been detrimental to the
e-commerce industry in general.

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107

Technological
To increase the frequency of usethere has been a rapid development of high
speed network servicesalso leading to the increase in usability of media-rich
applications. Increase in telecommunications and information technologies for
Internet access has played an important role.

Environmental
The increased awareness of global warming has created a positive impact on
e-commerce industry. People prefer buying online according to their convenience.
Sites need to adopt the go-green strategy to attract consumers. Companies can
do that by changing their postage, work environment and packaging.

Legal
There is no uniform regulation governing the e-commerce industry. It is an impediment while dealing with customers all over the world.

Organization
VMG Framework
Vision:
Aims at providing a hassle free and enjoyable shopping experience to shoppers
across the country with the widest range of brands and products on its portal.
It is making a conscious effort to bring the power of fashion to shoppers with
an array of the latest and trendiest products available in the country.
Mission:
Giving customers the power and ease of purchasing fashion and lifestyle products online.
Goals:
To expand the logistics network in at least 45 new cities per quarter.
To fulfil 20,000/- orders per month from 5,000/- per month.
To reach 800 crores turnover mark by 2014.

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5 Cloud Computing Strategy Design for Myntra.com

Product extension

Introduction

Growth

Maturity

Decline

Time

Fig. 5.1 OLC

OLC
Right now Myntra is in the 2nd3rd stage. Reason being the processes are still in
progress. The Process Improvement Process is being implemented. For example,
Myntra recently bought Fitiquette, a developer of virtual fitting room technology and
a TC Disrupt finalist from Sep 2012. It intends to use Fitiquettes core product on its
retail site to drive more fashion purchases online. Moreover, acquisition is in full
swing. There have been two recent acquisitions by Myntra. The first one in November
2012 when it acquired New York based Exclusively, which has the private label vertical, Sher Singh. The most recent being Fitiquettea virtual fitting room (Fig. 5.1).

Strategy
The various strategies that should be employed to attain the targeted business goals
are corporate strategy, marketing strategy and HR strategy.
Corporate strategy involves the goal of reaching the 800 crores turnover mark by
2014, i.e. almost the double, to increase productivity, to provide better customer
serviceby increasing the service level agreement. It also involves introducing the
exchange policy in some cities. Moreover, it also involves building customer confidence in online shopping by providing relevant fashion solutions to the shoppers
and making online shopping easier for them. The metrics to measure the success of
the strategy are productivity (productivity = output/input) and increase in overall
market share.
The second strategy is Marketing Strategy. This strategy involves increasing
brand visibility by investing in brand promotion. It would involve investing 810 %

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109

of the sales revenue in brand promotion to develop the market. Moreover, it will also
include penetration in small tier-2 cities. To deepen its presence in the online space,
Myntra has decided to shift its focus towards tier-2 cities. It is observed that people
residing in tier-2 cities are more attracted towards promotional discounts, are price
sensitive. To cash in on that human tendency, Myntra has recently raised USD65 million through venture capital route for expansion. The metrics to measure the success
of the strategy are sales growth, existing customer retention ratio, budget allocation
for research and development. Sales growth is measured by the following formula:
Sales growth = ( Revenue this year - Revenue of previous year ) /
Revenue of previous year
The next strategy is the HR Strategy. Myntra, being an e-commerce firm, the
main focus of it is gaining customers confidence. HR Strategy involves incorporating better customer service through improved SLA by recruiting more people.
It also involves training and development so as to be abreast with latest technology.
The metrics that can be used to measure the success of the employed strategy are no
of people added per quarter, increase in customer satisfaction due to improved SLA,
employee productivity, average percentage of hike across departments.

Stakeholders
The various stakeholders of Myntra are customers, investors, employees, business
partnersSuppliers, Distributors, Collaborators and environment. The objectives
of customers are to get high value for money, good customer service and high quality products. Investors have the basic objective of getting a high ROI. Employees
want a good career progression and work-life balance. Similar to investors, business
partners want a high profit/ROI. The objective of considering environment as one of
the main stakeholders is to have a social ROI. It helps in identifying ways to improve
performance, and to enhance the performance of investments. It involves family,
society at large and the economic environment. It involves family, society at large
and the economic environment. Family implies work-life balance. Society wants
high employment, no degradation and no decay. The economic environment
involves GDP and FDI.

Functions
L0The Context Diagram
Myntra is an e-commerce website. The main entities it interacts with are the investors, employees, customers and the environment. Employees and Investors give their
valuable inputs to Myntra and only then the organization can operate successfully.
Myntra interacts with the environment and provides output to Customers (Fig. 5.2).

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Investors

Myntra Organisation
Customers

Marketing

Logistics

Operations

Finance

HR

Environment

Employees

Fig. 5.2 L0 for Myntra

Advertising &
Promotion

Sales Forecasting

Market Research

Pricing

New Product/
Category Launch

CRM

Fig. 5.3 L1 marketing department

The main departments identified are: Marketing, Logistics, Operations, Finance

and Human Resources.
Each of these departments interacts with each other for the organization to work
well as a whole. For example, The Marketing Department sends its information
about sales forecasting to the Finance Department so that they can accordingly work
on allocating the necessary capital.

L1 Diagrams
L1 involves Identification of the various processes and analyzing them with the
ETVXMF framework.

Marketing Department
Marketing Department consists of the following main processes: Advertising and
Promotion, Sales Forecasting, Market Research, Pricing, New Product Category
Launch and Customer Relationship Management (CRM) (Fig. 5.3).
Each of these processes, in turn interact with each other. For example, depending
on the input from the Advertising and Promotion functionthe Pricing team
decides the price of the products according to the packages/offerings.

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111

ETVXMF Framework for Sales Forecasting

Entry: At the beginning of each period (maybe monthly, quarterly, or half-yearly
depending on the inventory management).
Tasks consist ofgathering data, selecting the sales forecasting model, checking
the consistency or accuracy of the model after getting the results, finalizing the
forecast and finally, sending the results to other related departments like
Operations, Finance, etc.
Verification/Validation: Check whether the forecasted data was accurate by comparing the previous years actual sales with the forecasted data values.
Exit: Once the figures are finalized and orders are about to be placed in tandem
with the forecasted figure.
Metrics are Profit and Sales.
Feedback: ____________________________________________
ETVXMF Framework for Market Research
Entry: When there is a decision to launch a new product or category, to understand market share.
Tasks consist of Study market trends, understand consumer buying behaviour
through surveys, questionnaire, etc.
Verification/Validation: Check if the study of market trends resulted in increased
sales of that product or category.
Exit: Once the decided category is launched successfully and the sales are steady.
Metric: Increased turnover in sales of that particular category or an increase in
market share.
Feedback: ____________________________________________
ETVXMF Framework for Pricing
Entry: Once the vendor and the design of the product/category is decided.
Tasks consist of Negotiate on the purchase price, Check the demand for similar
products, Decide on promotional discounts or less price and Finalize the price
after calculating the profitability.
Verification/Validation: Check if the sales and the demand of the product are
steady with the decided pricing.
Exit: It is an ongoing process. Exit from the main pricing process will take place
once a price is agreed upon for those set of products.
Metric: Increased turnover in sales of that particular category.
Feedback: ____________________________________________

Logistics Department
Logistics Department consists of the following main processes: Inbound Logistics,
Value Addition, and Shipping and Delivery (Fig. 5.4).

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112

Inbound

Value Addition

Shipping &
Delivery

Fig. 5.4 L1 logistics department

Each of these processes, in turn interact with each other. For example, after the
Value addition stage, the order is sent to be Shipped and Delivered to the
Customer.
ETVXMF for Inbound Logistics
Entry: Arrival of customer order or the need for replenishment arises.
Task consists of the following stepsCheck if the required stock is available or
not, if it is below the required level, decide the product, quantity and the SKU
requirement of each category. Next comesselect the distributor, create invoice
and send it to distributor, run a quality check on receiving the merchandise and
finally perform warehouse management.
Verification/Validation: Check the quality of the goods received. Only if the merchandise passes the quality check, it is ready for storage or for sale.
Exit: When the products are certified OK and ready to be stored or dispatched
to the end user.
Metric: Efficiency of the entire process, Time taken to get the goods.
Feedback: ____________________________________________
ETVXMF for Outbound Logistics
Entry: Takes place when an Order Placement/Confirmation happens.
Tasks consist ofCapture the order details Quantity, SKU id, Price, Create the
entire delivery, delivery through 3PL or owndepending on the area (pin-code)
to be serviced. Check the 3PL contract and charges, on delivery 3PL collects the
exact amount (COD) or in case of pre-payment just delivers the order with the
signature.
The amount collected after COD order deliveries is to be sent back to Myntra
after deducting the commissioning fee. The website displays Order Delivered
Validation/Verification: Once the goods are safely delivered to the customer with
the packaging intact, the order verification process is completed.
Exit: When the customer receives the order and the website is updated with the
receivers details.
Metric: Time taken for the delivery, Success rate of CODs, delivery to the correct
recipient.
Feedback: ____________________________________________

Functions

Maintenance of
website &
customer
accounts

113

Order Creation

Payment
Processing

Order Tracking

Warehousing

Vendor Selection

Fig. 5.5 L1 operations department

Operations Department
Operations Department consists of the following main processes: Maintenance of
website and customer accounts, Order Creation, Payment Processing, Order
Tracking, Warehousing, and Vendor Selection (Fig. 5.5).
Each of these processes, in turn interact with each other. For example, Order
Creation will forward the Customer to Payment Processing.
ETVXMF for Order Creation
Entry: User browsing items on the website of Myntra and selecting some items.
Task: Order processing consists of multiple stepsSelect items with details:
Quantity, Size, Price, Do Cart Management, Checkout and calculate payment
amount on basis of user profile. Proceed to payment and finally send a confirmation e-mail from Myntra to the user regarding the placement of the order.
Verification/Validation: The order is successfully created. Order no is sent to the
user. Ease of placing an order will determine the number of new customers shopping with Myntra.
Exit: Successful order being placed or transaction failing.
Metric: Number of successful order creation in a month, Number of new customers, No of repeat purchasers.
Feedback: ____________________________________________
ETVXMF for Payment Processing
Entry: Payment details received by customer as part of order processing
Tasks: Check for the mode of payment as Net banking, Credit card or Debit Card,
COD. Proceed with payment processing in stages of authorization and verification and post the receipt except in the case of COD.
Verification/Validation: For each order, it is checked if successful payment transaction was possible or not.
Exit: Once the required amount is deducted from the customers account, the
process is completed by generating the transaction no and the order no and positioning the receipt.
Metric: No of CODs, No of pre-payment orders, Time taken to perform one
transaction, No. of failed transactions due to server errors or other reasons.
Feedback: ____________________________________________

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5 Cloud Computing Strategy Design for Myntra.com

Finance Department
Finance Department consists of the following main processes: Means of Financing,
Capital Budgeting and Cash and Credit Management (Fig. 5.6).
Each of these processes, in turn interact with each other. For example, Capital
Budgeting will help decide the Cash and Credit Management.
ETVXMF for Accounts Receivable
Entry point of this process is when the invoices are obtained by the
organization
Tasks consist of selecting the payment option, setting up reminders in case the
payment option is COD, receiving the payment.
Verification/Validation consists of checking whether the payment is received in
the banks account.
Exit: Once the figure in the invoice and that of actual cash payment is tallied and
the account settlement is confirmed.
Metrics: Amount in invoice = Amount actually credited to the organizations
account
Feedback: ____________________________________________

Human Resources Department

Human Resources Department consists of the following main processes: Employee
Engagement and Retention, Employee Performance, T&D, Compensation,
Administration and Performance and Recruitment (Fig. 5.7).
Each of these processes, in turn interact with each other. For example, Employee
Performance, T&D, Compensation will be involved in setting up the Employee
Engagement and Retention process.

Means of
Financing

Cash & Credit

Management

Capital Budgeting

Fig. 5.6 L1 finance department

Employee
Engagement &
Retention

Employee
Performance,
T&D,
Compensation

Fig. 5.7 L1 human resources department

Administration &
Performance

Recruitment

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115

ETVXMF for Training and Development

Entry: Business goals is set and the gap is identified
Tasks consist of multiple stepsInformation is gathered about the required and
available skill set of the employees. Create an action plan to reach the goals, offer
training programmes. Evaluate the employees and ensure they get an opportunity
to apply them.
Verification/Validation: The training programmes are checked for their relevance
and effectiveness.
Exit: Once the employees understand the tricks of the trade, the process is
completed.
Metric: Effectiveness of the training and development programmes in terms of
customer service and increase in sales.
Feedback: ____________________________________________

L2 Diagrams
1. Sales Forecasting
(Fig. 5.8)
2. Inbound Logistics
(Fig. 5.9)
3. Outbound Logistics
(Fig. 5.10)
4. Order Processing
(Fig. 5.11)
5. Payment Processing
(Fig. 5.12)
6. Accounts Receivable
(Fig. 5.13)
7. Training and Development
(Fig. 5.14)

Factors that Affect IT Strategy

There are basically three factors which affect IT strategy

Industry Characteristics
The penetration of Internet and therefore e-commerce is low in India in compared
to markets like the United States and the United Kingdom but is growing at a much
faster rate with a large number of new entrants. India has a vibrant cash economy,

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5 Cloud Computing Strategy Design for Myntra.com

Setting Goals for Forecasting

Start

Input

Gathering Data: Historical and

Current market scenario

Analysis of Data

Choose Forecasting model

Forecast & Evaluate

No

Agree on the
outcomes
Yes

Stop

Output
Send Data to Marketing & Finance
Departments

Fig. 5.8 L2 sales forecasting

as a result of which 80 % of Indian e-commerce tends to be COD, i.e. cash on

delivery. Demand for international consumer is growing at a much faster rate than
in-country supply from authorized distributors and e-commerce offerings. Hence,
direct imports constitute a large component of online sales.

Organization
Myntra was established by Mukesh Bansal, Vineet Saxena and Ashutosh Lawania
in February 2007, headquartered in Bangalore and has been funded by Venture
Capital funds like IndoUS, IDG and Accel Partners. Myntra.com is an aggregator

117

Functions

Input

Start

Customer Order/
Replenishment
Check Stock
present
No
Item, Qty,
Lead Time
(SKU)

Evaluation &
Selection of
Distributor

Create Invoice &

Send to Distributor

Yes
Receive Order
Good Receipt

Satisfied
Quality Check

No

Return Goods to
Distributor

Yes
Sort & Store
(Update)
Warehousing
Management

Stop
Output
Ready for Customers
order for Shipping &
Delivery or Stock
Management

Fig. 5.9 L2 inbound logistics

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5 Cloud Computing Strategy Design for Myntra.com

Start

Input
Order Placement
Confirmation

Customer Order
No, Details,
Item, Qty, Time,
Location

Create Delivery

Location service
by own or 3PL

Own

Myntra Service
Shipping &
Delivery

3PL

Not valid

Check 3pl
contract &
charges

Customer made
Payment/ COD

Valid
Send intimation to
3PL & inform
customer

Yes

Cash Payment
taken by 3PL
No
3PL Shipping &
Delivery
Payment received
at Myntra

Stop
Output
-Confirmed at
Myntra delivered
-Information
updated on website

Fig. 5.10 L2 outbound logistics

of multiple brands. Its business model is based on procuring current season

merchandise from various brands and making them available on the portal at the
same time as in respective retail brand outlets. In 2013, Myntra acquired a virtual
fitting room technology firm based out of San-Francisco Fitiquette.

Functions

Input

119

Start

User Browsing
Itemson
Myntra
Select Items with
details: Qty, size
Login into the A/c

Check for discounts on basis of

1.Loyalty Power
2.Coupon code
3.Promotional Discounts

No
Yes

Add to cart

Enter Shipping &

Delivery
Information

Continue
Shopping?

Yes

Recalculate
Payment amount
Payment Type
Decision

No
Debit/Credit
Edit Cart?

No

Checkout?
Payment
Fulfillment

Yes

COD

Yes
Add/Remove
ITems

Registered?
Stop
No

Output
E-mail receipt of
confirmed order

Create Profile
(registration)

Details stored

Database

Fig. 5.11 L2 order processing

Issues and Challenges

The major barriers are (1) resistance to technology, (2) implementation difficulties,
(3) security concerns, (4) lack of technology skills, (5) lack of potential customers,
and (6) internal and external barriers. Along with these cultural differences, incompatible B2B interfaces, organizational differences, international trade barriers, and
lack of standards mar the companys image at some point of time.

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5 Cloud Computing Strategy Design for Myntra.com

Input

Start
Inform 3PL of
order and amount

Payment
Details
provided by
Customer

Stop

COD

Payment Mode
Net Banking
Debit/Credit card

Output
Post/
order
placement
receipt
specifying
COD

Enter Card no.&

other details into
Payment Gateway

Myntra interfaces
with Payment
Gateway

Myntra directs to
Online Banking
Website
Verification Pin

Authorisation
Requested
Payment
Transaction
Success
Successful
Authorization

No

Transaction
Cancelled

Yes

Verification Pin

No
Post Message:
Transaction
Failure

Payment
Transaction
Success
Yes
Stop

Output
Posts Payment
Receipt
Containing
Order No.

Fig. 5.12 L2 payment processing

No

Yes

Myntra makes
Payment to Payment
Gateway as service
charges.

Stop

Output

Posts Payment
Receipt Containing
Order No.

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121

Input

Start

Receive Invoice

Output

End

Card/
Netbanking

Payment
Option

Receive
Payment
Cash on Delivery

Enter Invoice in
calendar with 7
days reminder

Set Reminder for

3 days

Receive Reminder

Clear the calendar

Fig. 5.13 L2 accounts receivable

Yes

Payment
Received

No

Remind the 3PL

partner

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Fig. 5.14 L2 training
and development

5 Cloud Computing Strategy Design for Myntra.com

Input
Set
Business
Goals

Start

Gather
Information: About
Employee Skillset
& Aspirations

Decide Skills your

Employees Need

Create an Action
Plan

Enroll Employees

Deliver Training

No
Employees in
Training Pass
Evaluation

Yes

Take Feedback

Employee Applies
New skill in the
workplace

Stop

Output
Effectiveness of T&D
on
- Customer
Satisfaction
- Sales

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123

Process Integration
The identified processes are now evaluated for integration across departments as
well as in the same department (if applicable) (Fig. 5.15).
For example, Order Tracking is to be integrated with Outbound Logistics. This
ensures that the details of the shipping and delivery are accessible to the Customer
for tracking the shipment.

Fig. 5.15 Process integration

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5 Cloud Computing Strategy Design for Myntra.com

Applications Integration
After integrating the processes across functions, depending on the business
requirements, there is a need for application integration. The approach used for this
is that the processes were determined and then applications were searched to integrate those processes. It takes into account the availability of best practices in industry. Some of the applications that can be used to integrate the processes are IBM
Tools, Teradata, CRM+, SAP, Microsoft Dynamics, SAP R/5, SAP Tally Kronos,
etc. (Fig. 5.16).

Applications

Processes

IBM Tools, TERADATA

Sales Forecasting

civiCRM,CRM+

Advertisement
Promotion

SAP,Microsoft Dynamics

Outbound Logistics shipping & delivery

SAP R/5
SAP, Tally

Payment processing
Capital Budgeting

iCMS, KRONOS

Administration
Employee Retention and Employee performance - & Performance
recruitment
T&D, compensation
Management

Fig. 5.16 Application integration

Warehousing
& Maintenance of website
and customer accounts
CRM
Order Tracking
Cash
&
Management
Pricing

Credit

Vendor
Selection

Technology Integration

125

Technology Integration
(a) Cloud Strategy:
Based on our analysis of Myntras business model and its growth aspiration, we
propose the following cloud strategy for Myntra. We will keep a cold site on
public cloud.
No.
1

Service type
Private IaaS

Private SaaS

Public/Hybrid PaaS

(b) Cloud Architecture

Private IaaS (Fig. 5.17).
Private SaaS (Fig. 5.18).
Hybrid PaaS (Fig. 5.19).

Fig. 5.17 Private IaaS

Customer Relationship Management

Master Data Management
Enterprise Management
POS Application
Real-time Reporting Application
HR Management application
Knowledge management
Analytics Applications (Big Data and Business Intelligence)
Backup and Restore

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Fig. 5.18 Private SaaS

Fig. 5.19 Hybrid PaaS

5 Cloud Computing Strategy Design for Myntra.com

127

Technology Integration

(c) Benefits of Cloud Computing to all Stakeholders

No.
1
2
3

Stakeholder
Investor and Promoter
Employee
Suppliers

Benefits
Lower upfront Investment and lower burn rate
Streamlined and centralized Processes
Transparency in data brings in Collaborative planning

Economies of scale:
Myntra is expected to grow at 70 % CAGR for the next 5 years. This will require
huge IT infrastructure to support the growth. Cloud provides increased volume output or productivity with fewer people. The cost per unit, project or product reduces.
Reduced spending from proposed cloud model:
Public cloud computing reduces the capex for IT infrastructure. Also private
cloud reduces spending because of removal of overlapping of IT infra. With the
proposed cloud strategy for Myntra, spending on IT will be substantially reduced.
Cheap workforce:
People can use cloud if they have access to Internet/VPN. Myntra can place its
workforce anywhere taking advantage of cheap workforce.
Minimize licensing new software:
With public computing pay per use model it is possible to grow without the
need to buy expensive software licenses or programmes upfront. This can help
Myntra to lower its burn rate.
Streamline processes
Cloud computing streamlines the processes hence makes it easier to do more
work done with less time with less people.
(d) Cloud ROI:
Assumptions:
We have assumed IT assets of Myntra to be 8 % of Total Assets, 12 % of
Operational Expenses are IT Operational Expenses, IT Assets are procured
every 3 years, Cost of IT Assets increases 20 % over 3 years, IT Operational
Expenses will rise 4 % every year Without Cloud and With Cloud, IT Operational
Expenses reduce by 5 % every year (Fig. 5.20).
Discount Rate: 10.0 %
Sensitivity Analysis
Sl. No.
1.
2.
3.

Operational expenses from Cloud

Reduction in Operational Expenses by 5 % Annually (Best Case)
Operational Expenses Constant throughout the period
Operational Expenses remains same as Non-Cloud Scenario

(e) Risk Analysis for Cloud Strategy

(Fig. 5.21)
(f) Roadmap for Cloud
(Fig. 5.22)

NPV (lakhs)
135.46
107.10
35.33

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5 Cloud Computing Strategy Design for Myntra.com

All Values in Lakh rupee

Non-Cloud Total Capex
OPEX
Total Expenses
Sales
With Cloud OPEX
Capex for cloud
Total Expenses
Sales
Benefit
NPV
107.10

Year 1
32
48
80
400
48
48
96.0
400
-16.0

Year 2

Year 3

Year 5

Year 6

58.08
58.08
1100
48

Year 4
38.4
63.9
102.3
1350
48

70.3
70.3
1600
48

77.3
77.3
1850
48

Year 7
46.1
85.0
131.1
2100
48

52.8
52.8
800
48
48.0
800
4.8

48.0
1100
10.1

48.0
1350
54.3

48.0
1600
22.3

48.0
1850
29.3

48.0
2100
83.1

Fig. 5.20 Cloud ROI

No.

Risk Identified
Data
availability
and business
continuity
(Per hr loss)

Impact
(In
Lakhs
Rs)

10

Probability

3.0%

Impact
factor

Risk Index Risk Mitigation

2.4

1. Using
multiple ISP's
(at least 3)

Annual
Cost Loss

30

7008

2. Maintaining
backup server

security
(Attacks)
( depends on
attack
severity)

Disaster
recovery
(Per day loss)

Data privacy
and security -

Record
retention
requirements

100

112

5.0%

0.1%

40

0.784

1. Frequent
updation of all
software
patches

1. Maintaining
hot and cold
sites in
different
geographies

15

20.0%

2. Mock drills
to testify the
operational of
cold sites
1. Setting up
compliance
office

15

20.0%

1. Increased
cost of storage

Fig. 5.21 Risk analysis for Cloud strategy

40

60

286.16

Remark
Cost<Annual
loss, Will
implement
Risk
Mitigation
plan
Cost<Annual
loss, Will
implement
Risk
Mitigation
plan

Cost<Annual
loss, Will
implement
Risk
Mitigation
plan
Cost<Annual
loss, Will
implement
Risk
Mitigation
plan
Cost<Annual
loss, Will
implement
Risk
Mitigation
plan

Department Scorecard

129

Cloud Roadmap
Aug13

Processes

Sep13

Oct13

Nov13

Dec13

Jan14

Feb14

Mar14

Setting up
cloud
infrastructure
Knowledge
mgmt
Creation/Generation
Codification
Usage
Transfer
HR
Management
HR Planning
Career Development
Compensation &
Benefits
Performance
Management
Training &
Development
Orientation
ERP

Billing
POS
Inventory
management
CRM
Sales
Marketing
Services

Fig. 5.22 Roadmap for Cloud

Department Scorecard
GOALS

To expand the logistics network in at least 4-5 new cities per quarter
To fulfil 20,000/- orders per month from 5,000/- per month.
To reach 800 Cr.turnover mark by 2014

ASSUMPTIONS

PIP is in full swing along with Acquisitions

Industry growth rate is 15%
Myntra is scalable enough to adopt the change

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5 Cloud Computing Strategy Design for Myntra.com

Figure 5.23
Consolidated Department Score Card

No.

Departments
Customer Relationship Department

1
Merchandizing Department

2
Operations Department

3
Vendor and SKU Management
Department

Marketing Department

5
6

Finance and Accounts Department

HR Department

7
Total

Fig. 5.23 Consolidated department scorecard

Functional Goals
Keep Store Managers on the Selling Floor,
Not Behind a Desk. Give Store Operations
the Right Information at the Right Time to
Make the Right Decisions.
Significantly reduce costs, eliminate the
expense of stock-outs and overstocks, and
make powerful, rapid decisions
Keep Store Managers on the Selling Floor,
Not Behind a Desk. Give Store Operations
the Right Information at the Right Time to
Make the Right Decisions.
Analyze Vendor Performance, Drive
Improvement, and Strengthen
Negotiations. Improve Performance Across
the Supply Chain
Online and social becomes a big factor in
deciding to make a purchase, new
techniques are emerging around cross selling, location-based marketing, in-store
behavior analysis, customer micro segmentation, sentiment analysis and
enhanced multichannel consumer
experience.
Returns, Fraud and Loss Prevention
Human resource and allocation of
resources to indiviual project and
assignments

Weight

20%

10%

10%

15%

20%
10%

15%
100%

Department Scorecard

131

132

5 Cloud Computing Strategy Design for Myntra.com

Department Scorecard

133

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5 Cloud Computing Strategy Design for Myntra.com

Change Management for Cloud Strategy

The organization would go through the following change curve during the change
management process:
The change curve moves through the following stages:
ShockThis is the initial stage of introducing the change and hence comes as a
shock to the employees. The employees are most resistant to change in this stage
(Fig. 5.24).
DenialThe employees do not want the new system and want to stick to the old
system.
FrustrationThe employees are frustrated in this stage because they are ignorant of
the new system. They do not encourage learning the new system too.
DepressionThis is the stage when the leaders role is most important. The employees should be motivated to welcome the change.
ExperimentsThe employees need to be trained and imparted knowledge about the
new system in the experimentation stage. The leaders should ensure to reduce
sources of confusion and anxiety.
DecisionsHere employees take the decision whether to accept or reject the change.
IntegrationIn this phase, changes throughout the organization are integrated for
successful completion of the entire process.

The Change Curve

7
2

Dental
6

3
1

Frustration

Decisions

Experiments

Shock

INFORMATION/
COMMUNICATION

Fig. 5.24 Change curve

Depression

EMOTIONAL
SUPPORT

GUIDANCE/
DIRECTION

Integration

Change Management for Cloud Strategy

135

With the implementation of new processes, different stakeholders are affected

and involved. The way they work and interact with each other will change. This
might create the apprehensions in them leading to resistance.
Before implementing the change management process, the following should be
kept in mind:
Find out, who all will be impacted by the change and how?
Employees will be the most impacted. As they have to go through trainings to learn
new skill sets as well as processes. This might increase their workload. Employees
also have to adhere to new policies as well as reporting standards.
Find out why they will create resistance?
One of the primary resistances might be due to the adoption of new technology.
With the use of new technology, resources with older technologies might be apprehensive of losing their jobs and hence might create resistance. Another might be due
to the new reporting procedures which might cause the employees to be more regular and punctual. One more potential resistance might be due to the increased workload because of increase in training activities to prepare them to work with the
changed system and process.
The Change Management process has to incorporate the following steps:
First of all we identify those processes which need to be modified and/or automated.
Then a cost benefit analysis and a feasibility test are performed and we check if
there are any integration issues with the existing system. In case there are no integration issues, we proceed with a detailed roadmap citing the milestones and the
estimated duration of the each intermediary step. We also provide necessary training
to the concerned staff who would be handling the system. The progress is being
monitored at regular intervals and we check whether the actual benefits achieved are
the same as envisaged. In case of integration issues, resolve them taking into consideration the opinions of the concerned stakeholders.
Certain key elements needed to be taken in order to ensure successful transition:
Firstly, management at the level above where the change takes place should play an
active and visible role throughout the transition period. Moreover, the direct supervisors of individuals concerned should be put to contribution. Overall leadership of
the operation should be entrusted to a top manager. On the whole, there should be
no change in priorities so long as the intended change has not been sufficiently integrated. And a mechanism parallel to the usual management mechanisms is put in
place to ensure that the project is managed and monitored. While, the affected staff
members are provided with tangible, close and sustained support, sufficient
resources are also made available to support the staff in its transition efforts. Finally,
Progress is regularly monitored in order to identify gaps, which are then rapidly
corrected.

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5 Cloud Computing Strategy Design for Myntra.com

Implementation Framework
Business Objective
Myntras long-term business strategy is designed to capitalize on the numerous
opportunities that exist in the e-commerce marketplace and related markets. They
strategically invest in product, technology, brand support and customer service to
improve their market positioning in an effort to achieve long-term growth and profitability and create shareholder value. In support of this strategy, they are investing
in operations on a wide basis while controlling the growth of operating expenses.
The main business objectives towards driving this project are acquiring new customers, improving customer service and providing high quality deliverables and
efficient supply chain management.

Business Process
Business Process is implemented based on priorities, which in turn are chosen based
on business requirements. Myntra being a rapidly growing e-commerce website
the CRM process is a highly critical process followed by Market Research and Sales
Forecasting. The next set of processes is Advertising and Promotion, Payment
Processing and Outbound Logistics.

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137

Roadmap

Critical Success Factors

CSF are the essential areas of activity that must be performed well if you are to
achieve the mission, objectives or goals for your business or project. As a common
point of reference, CSFs help everyone in the team to know exactly whats most
important. And this helps people perform their own work in the right context and so
pull together towards the same overall aims.

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5 Cloud Computing Strategy Design for Myntra.com

A CSF is not a key performance indicator (KPI). CSF are elements that are vital
for a strategy to be successful. KPIs are measures that quantify management objectives and enable the measurement of strategic performance. A CSF is what drives
the company forward, it is what makes the company or breaks the company. As staff
must ask themselves everyday What makes us the first choice of customers? and
they will find the answer is the CSF.
There are four basic types of CSF. They are:
1.
2.
3.
4.

Industry CSFs resulting from specific industry characteristics;

Strategy CSFs resulting from the chosen competitive strategy of the business;
Environmental CSFs resulting from economic or technological changes; and
Temporal CSFs resulting from internal organizational needs and changes.

All data of stakeholders in the master database are making information retrieval
instantaneous. We need to confirm that there is Single Data Entry point to store the
master data. Implementation of project is within the budgeted amount and stipulated
time without any major deviations or variability. We also assume that all the end
users are happy and satisfied with less number of complaints. Also all the users are
using the implemented system in the system with higher frequency. Assume
improved relations with Suppliers and vendors as an outcome of faster processes.
And the success of the project coincides with increase in productivity and efficiency
of the system.

Steering Committee
Any Cloud strategy implementation faces the biggest hurdle in the form of change
management. People are reluctant to adopt the new processes and the customers as
well pose stiff resistance. However, in order to have a smooth transition to the new
process, the roles and responsibilities should be clearly defined so as to have
accountability in the system (Fig. 5.25).

Senior Management Review

Role of VP-Human Resources
The main role of a VP-HR will be primarily to improve the recruitment process to
take motivated employees and reduce attrition. Also improve training and development to improve employee performance. Designing the salary structure for employees and review of compensation based on employees cost-to-company and revenue
generated per employee also falls under the gamut of responsibilities. Provide
incentives to reduce absenteeism and implement the performance appraisal process
and help the senior management in conducting the process.

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139

Critical Success Factor for Myntra

Critical Success Factor

Source of CSF

Primary Measures & Targets

Increase in the number of new users
Increase in customer retention

Increase in Customers
count

Increase in Sales
Increase in ROI

Environmental
(Targeting the
tier2 and 3
cities)

Increase in average time spent per user

Increase the Traffic Sales Conversion rate to >10%

Increasing the repeat

sales

Increase average basket size of customers to

bundling and dynamic buying recommendations
Zero Customer Complaints

High Quality Deliverable

Suppliers and Vendors
better relationship

Robust front end architecture for smoother

customer buying experience with lesser lag time (for
all gadgets and pc)

Provide personalized service

Industry
(Quality of work) Faster Clearance Process
Reliable supply of merchandising to cater to the
demand

Robust Master Data

Management
Acceptance of activity
tracker by stakeholders
Acceptance and use of
automated processes by
the employees and
peripherals

Business process re-engineering and linking the back

office systems to the cloud
Strategy
(Improve
timeliness of
deliverables)

MIS/ERP/CRM Accuracy,
efficiency and relevance

100% workflow management and activity tracker

Higher frequency of System Usage

Training and 99% automated data entry process and

analytics and metrics
Many Strategic Reports

Fig. 5.25 Critical success factors

Role of Head-Brand Marketing

The main responsibility of a BM-Head will be primarily to connect users with
brands in creative and most effective ways. Performing analytics through social
media to find consumer insights and current trends and leveraging these consumer
insights to influence product development also fall under the umbrella. He must also
oversee brand management and work on bringing new brands to the store while
improving social media presence and promotions in social media to improve brand
visibility.

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5 Cloud Computing Strategy Design for Myntra.com

Role of Chief Operating Officer

The main role of a COO will be primarily to coordinate with the CEO to decide on
the future direction of the company. Oversee periodic financial statements to ascertain the financial health of the company, to improve the inventory turnover rate,
oversee the design and implementation of labour schedules are some of the other
roles of the COO too. Improve the inventory management systems and look for new
opportunities and threats to the company also lie under the hood.

Role of Chief Strategy Officer

The main responsibility of a CSO will be primarily to assess the strengths/weaknesses of the current business strategy, develop a new business strategy, if needed.
Also to check the feasibility of the strategy and implement it across departments and
to cascade the strategy to the lower levels of the company, with appropriate incentives to align personnel goals with company goals falls under the gamut of
responsibilities.

Role of the Chief Technology Officer

The main role of a COO will be primarily to overview the current technologies used
in the companys products and services manage innovation in the company and
identify new and emerging technologies and their feasibility for implementation in
the company

Role of Chief Executive Officer

The main responsibility of a CSO will be primarily to lead, in conjunction with
the Board of Directors, the development of the companys strategy as well as
oversee the implementation of the Companys short and long-term plans in accordance with its strategy. He also has to act as a liaison between the management
and the Board, while communicating effectively with employees, Government
authorities, other stakeholders and the public. He also needs to determine the date,
place and time of the annual meeting of shareholders and to develop the agenda
for the meetings. On an overall basis he needs to keep abreast of all material
undertakings and activities of the company and all material external factors affecting the company.

Implementation Framework

141

Roles and Responsibilities

Roles
Steering Committee

Consultant

Users

Responsibilities
Drive the projectset goals and milestones
Oversee the adherences to the timelines
Organize and review the efficiency of the project
Resolve the exceptions generatedtechnology decision
The auditor to review the correctness of the process, procedures
and standards for the To Be Process
Validate the effectiveness and efficiency us of the process.
Compliance to Quality standards
To adhere to the processes and timelines.
Report any discrepancy spotted.
Undergo training for proficiency in use of system to achieve
optimum productivity.
Provide Feedback

Communication Protocol

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5 Cloud Computing Strategy Design for Myntra.com

Stakeholder Prioritization Matrix

High Influence Challengers: Outreach efforts should be designed to convert them to

champions. Simultaneously plan of countermeasures to help equalize/neutralize any
actions they might take that could potentially harm or sabotage the project should
be done.
High Influence Champions: Proactively leverage the positive inputs from these
individuals to further the business objectives and to build a strong support
foundation.
Low Influence Challengers: Maintain awareness of any awareness that could potentially harm the project, but put less energy into converting these challengers to
champions.
Low Influence Champions: Make an effort to ensure that the positive relationships
are maintained, but put less energy into further cultivating these champions.

Risk Management

143

Training
Initially the deliverables that are expected at the end of training are clearly identified.
After the deliverables are clearly defined, we identify the methods and assist in
coaching and training so required skills are developed. This would be done through
hands-on workshop for the user/employees. The employees need training for using
the cloud implementation (CRM/ERP/MDM, etc.). We also need to develop a training calendar and a review mechanism for the imparted training. In the meanwhile
we continue motivating and counselling the users through various channels to
reiterate the benefits of the new system and the process enablement.

Risk Management
Please refer the worksheet for detailed elaboration

Sl.
No.
1

Type of risk
Business
Risk

Risk due to unprotected

domain names which are
usurped by other
organizations

Risk identified
Regulatory changes
Using websites to conduct
illegal promotional games,
such as a sweepstakes or
contests
Impact on business due to
intellectual property lost due
to employees moving to
competitors
Products out-of-stock due to
poor communication with
operations
Insufficient integration of
e-commerce with supply
chain channels
Burn Rate, COD being one of
the factors

Impact (in
crore Rs.)
200

Probability
(%)
30

Impact
factor
8

Risk
index
480

18
crores

Data warehousing
and data mining for
store data
Usage of better
software packages
Have a strategic plan
with a timebound
investment structure
and have more
working capital
Continuous revival
and maintenance of
domain server

10
crores

Correct collection
and database for
intellectual property

2 crores

25
crores

5 crores

Cost
5 crores
10
crores

Risk mitigation plan

Strong Lobbying
Adaptive measure to
oppose policy
changes

Total
cost
75
crores

Remarks
Go with the
Risk Mitigation
Plan as the cost
of undertaking
is less than the
risk

Sl.
No.
2

Technology
Risk

Type of risk
Information
Risk

Risk identified
Content on web page
exposing web publisher to
libel, defamation of character,
slander
After unauthorized access to a
website, online information
about employees or customers
is stolen, damaged or released
without authorization
Credit card information
intercepted in transit is
disclosed or used for
fraudulent purposes
Information that has been
changed or inserted in
transmission is processed
leading to erroneous results
Software error and omission
risks causing unauthorized
access
Third party intercepts credit
card information in transit
causing breeches in security
for online payments
Insufficient bandwidth to
handle traffic
50

Impact (in
crore Rs.)
200

40

Probability
(%)
10

Impact
factor
7

120

Risk
index
140

4 crores

5 crores

Intellectual property
rights

Use of encryption
methods for data
transformation

Careful in third
party and payment
transactions

5 crores

2 crores

6 crores

50
lakhs

Copyright
infringement act
awareness

Selection and
maintenance of good
software vendor
Internet service
provider security

Cost
15
crores

Risk mitigation plan

Infrastructure
development and
maintenance plan

13
crores

Total
cost
24.5
crores

(continued)

Go with the
Risk Mitigation
Plan as the cost
of undertaking it
is less than the
risk

Remarks
Go with the
Risk Mitigation
Plan as the cost
of undertaking it
is less than the
risk

Sl.
No.
4

Business
Partner Risk

Type of risk
Competitive
Risk

(continued)

Putting suppliers out of

business line

Increased use of outsourcing

Risk identified
Change in the mode or basis
of competition to its own
disadvantage
Badly timed strategy

200

Impact (in
crore Rs.)
250

20

Probability
(%)
10

Impact
factor
5

240

Risk
index
125

Good relationship
with suppliers by
giving incentives
Agreements and
contracts are
maintained

Risk mitigation plan

Keeping track of
competitors
movement
Avoidance unusual
competition

1 crore

2 crores

5 crores

Cost
2 crores

3 crores

Total
cost
7 crores

Remarks
Go with the
Risk Mitigation
Plan as the cost
of undertaking it
is less than the
risk
Go with the
Risk Mitigation
Plan as the cost
of undertaking it
is less than the
risk

Conclusion

147

Conclusion
Myntra today faces numerous challenges which are synonymous with any growing
company. As Myntra had carved a niche for itself in the beginning, it was able to
manage its operations with ease. But with the deluge of numerous e-tailing websites, the company is losing its charm.
In order to grow to the next level, Myntra must re-engineer some of its processes
and bring in automation and cloud to manage its ever growing product line and
satisfy its evermore demanding customers. The implementation of cloud strategy
may be carried out in order to improve the processes, quality of service while
increasing the revenue (and profitability).
The suggestions made, if implemented, will drastically reduce the cost of operations for Myntra and at the same time free more working capital which is essential
for catapulting the company to a higher trajectory of growth. Also it would help the
operations of the company to be aligned towards its vision, mission and goals.