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LPG distribution space. A Fortune 500 company, HPCL recorded an annual turnover of over Rs 91,448 crores for the financial year ended March 2007. Currently, the company enjoys a 16 percent refining and marketing share in India and a strong market infrastructure. The company has successfully completed Asia's largest JD Edwards Enterprise One ERP implementation spanning about 400 locations and 4,000 employees across the nation. Need for ERP In a fiercely competitive petroleum industry, keeping partners happy is an imperative. But HPCL was slowly facing the heat from its dealers. The problem was its manual process that made human errors a big possibility. All this changed when HPCL implemented an elegantly simple SMS solution that helped the company improve efficiency and save the day. What was annoying was that the order processing was standard business practice. For dealers, placing an indent - an order which typically holds the amount of oil that a dealer requires was just another thing that needed to be done every so often. But the process was painful. Sometimes, dealers complained that when an HPCL official finally picked up the phone, he or she got their order wrong or recorded it on their systems incorrectly or misplaced their order. The epicenter of dealer unrest, however, was a terminal in southern India. With the increasing number of complaints it was getting, HPCL knew that if it neglected the problem, it could prove costly. So, the company conducted an internal study and the result has saved it a world of trouble. The implementation Plan The ERP implementation programme was started way back in 2000. The availability of a sound technical infrastructure was necessary for implementing such a large initiative. This meant building a centralised data centre where the servers and applications could be hosted as well as having efficient connectivity for all locations spread across India's geography. Around 400 locations had to be connected. One of the important initial tasks was to build a data centre equipped with servers and the related infrastructure required for rolling out applications. To start with, HPCL covered three locations within a month; ultimately, all 400 locations were completed over a period of twoand-a-half years. As each location was selected for inclusion, the related infrastructure (like WAN, lease lines, VPN and VSATs) was built simultaneously depending on the availability. The DC, based in Mumbai, was powered with adequate computing capacity to enable it to handle the expected growth in the wake of the ERP rollout. The company is now building another DC in Hyderabad, which is visualised as a primary DC. By the end of 2008, they moved their applications to Hyderabad. The company runs a refinery in Vizag and has also made significant investments in the state, so Hyderabad was a natural choice for the new DC. As HPCL enjoys a national presence, it was important to determine the path for the ERP
they were embedded into the existing set-up. and testing and liasioning with local people at the location. as newer options like RF and broadband networks entered the market. VSATs. VPN. Over a period of time. The company had set up a separate team for infrastructure building at each location.rollout. followed by other Maharashtra and Gujarat locations. Organizational Transformation. The ERP implementation at HPCL. The Enterprise Resource Planning (ERP) system is now operational on J. an Oracle product. BSNL was the only player in the connectivity space at that time. which included system configuration. The locations due for the 'Go-Live' stage in a particular month were given top priority and a 'work backwards' system was followed to arrive at separate tasks and their deadlines for those locations. ISO certification of Refineries and Supply Chain Management are some of the initiatives that broke new grounds. The company operates on BSNL's MPLS as well as a private service provider’s MPLS network for redundancy. for distant locations HPCL had to depend on VSATs. Based on the roll out schedule. Business Process Re-Engineering exercise. creation of Strategic Business Units. the lead time for infrastructure provision was calculated for each location. Planning and monitoring human resource mobilisation from various teams to various locations was a challenge for the company. however. Today. They came to the conclusion that the roll out should follow the logical movement of the product. more employees were inducted into the team and its size now expanded to 100 people. Thus. HPCL continually invests in innovative technologies to enhance the effectiveness of employees and bring qualitative changes in service. Balanced Score Card. the ERP roll out started with locations in and around Mumbai. RF links and broadband links. The infrastructure team had to reach the respective locations on the basis of the lead time available so that the roll out team could initiate the work as per schedule. . covered the entire footprint of all 400 locations. ERP implementation. they tried their best to get every possible and available means of connectivity. In addition to this. Competency Mapping. Post the completion of the first phase of the project. benchmarking of refineries and terminals for product specifications. a team of 100 consultants was also working from Capgemini’s side. Alignment of In-house and Vendor Teams The project was kicked off with a 25 member in-house team comprising representatives from all functional areas. and finally. applications for communication links.D. Several business processes were analysed for determining the points affecting the process look. HPCL has successfully integrated Information Technology in its activities at different levels. which was chosen to be the implementation partner for the project. This kind of systematic planning helped the company to reap the maximum benefits of its HR pool and consulting team.Edwards. HPCL’s network is a hybrid one powered by lease lines. with all its challenges and successes. finally saw the light of the day in December 2005 at an organisation-wide level. These tasks included procurement of hardware. As per their strategy. across the Corporation. It provided a connectivity platform for most locations.
commitment and support from the top management. At the end of the day. They used the concept of portals whereby the top management could quickly view the summarised information online. the monthly and quarterly closing was completed in about five days while the annual closing took a mere 10 to 12 days. Visibility Benefits for Top Management The ERP enabled the generation of various day-end MIS reports on a regular basis. refinery. They brought in that knowledge to add to the expertise of the IT team.the expertise of the internal team. and payments.e. the annual financial accounts closure would approximately take a month while the monthly closing would consume 15 to 20 days. . before the implementation. vendors and transporters on a real-time basis with the help of the Internet so that they can log in and check the status of loads. For example. They had experts from finance. marketing and LPG departments. The IT team went ahead and equipped the top management with Information portals to better their business visibility. procurement and employee benefits that were being implemented manually previously are now automated. This helped to revamp the way in which reporting was done to the top management. These were people who knew the business line. They realised that they could improve their transparency by making more information available to their customers. The implementation gave the company an opportunity to re-look at all its business processes from the beginning. The company is now looking at an IT-efficient growth strategy for the future. In the past year i. company-level perspective. They had to be prepared to take on the Shells and the Exons of the world. orders. The second major benefit of the centralised ERP implementation was that it compelled the company to look at various other services that could be offered to customers with the help of IT. a lot of transaction details were summarised and converted into a pre-packaged MIS before reaching the top management. A lot of processes like manufacturing planning. the right implementation partner. The HPCL ERP implementation can be exemplary to other large organisations wishing to derive benefits from IT adoption. HPCL had undertaken a Business Process Reengineering (BPR) study to ready the organization for post deregulation market conditions. ERP Drives Parivartan at HPCL Ever since the government of India announced deregulation of the oil industry in 2002. and effective project management practices. Factors That Shaped the Success Story The success of the implementation to four main factors .Business Process Speed Enhancement & Standardisation: Major Benefits Post implementation. 2007-08. This helped the project to gain a macro. the company has noticed substantial improvement in efficiencies.
Customized modules to suit HPCL processes have been developed for employee compensation & benefits and also payroll and both integrated with finance and HR modules of the software. the corporation parallely placed the order for the architecture components and set up the data centre at Mumbai. Team set up and implementation partner A multi functional team of 25 officers drawn from various functional departments was set up for undergoing detailed training on the JDEdwards ERP system and take up the implementation across the corporation. .. The contract for the Conference Room Prototype (CRM) and pilot implementation was awarded to Capgemini and Ernst & Young.One of the major recommendations of the BPR was the implementation of a world class ERP system. * Validation of as-IS processes * Finalization of the technical architecture and the hardware/software requirements * Finalization of interfaces/customizations * Configuration & testing of the Conference Room Prototype (CRP) for business processes of the Corporation * Roll out at the pilot locations Based on the technical architecture. The implementation of the ERP system would enable the corporation to meet the challenges of the emerging market scenario. manufacturing. finance and HR. The implementation partner was selected from the consulting partners of JDEdwards. After completion of the training. the team documented the As-Is processes of the corporation. in 2000-01. an ERP solution. This team strength was augmented over time especially in the rollout phase. Project Parivartan is HPCL’s initiative to implement Oracle s JD Edwards EnterpriseOne. The implementation covers all the modules of the ERP software viz. CRP and pilot roll out The pilot implementation project was divided into various phases. sales & distribution.
At the completion of the CRP phase a model for implementation of the JDEdwards software across all the locations was in place. and the other specified locations went live by July 2003. This testing was done by the users themselves under the guidance of the implementation team. lube manufacturing plant.The implementation at pilot locations was preceded by comprehensive simulation & testing of the solution by building a CRM. The first pilot location went live in Feb 2003. The film also contained messages from the top management including one from the chairman & managing director. a standardized template was refined so that it could be rolled out across all the locations. All HPCL business processes were simulated and tested here. The configuration & set-ups of the software were perfected to achieve the desired business results from the software solution. The pilot locations were selected to represent every type of location in HPCL. LPG plant. Hence. Several business processes were analyzed for determining the points affecting the process look & a detailed roll out plan for implementation across all locations of the corporation was prepared. They had made a short film depicting salient features of Project Parivartan. Before roll out. Even though the system was tested in the conference room prototype. Workshops were held with the officers and the staff to explain the rationale of the new system and take them on board in the whole exercise. This helped achieved twin . Based on the learning’s. depot. aviation service facilities were chosen as pilot locations. it was important to determine the path for the ERP rollout. A customized module was developed for compensation & benefits and employee payroll which was integrated to the core finance and HR modules. terminal. the system was put through further tests using location specific data. The central team visited the location to assess the infrastructure. a refinery. Thus. This helped improve credibility of the initiative as also it helped employees understand their role it. communication equipment as well as acceptance of the new system by the location workforce. and finally. Roll out across the corporation As HPCL has a national presence. followed by other Maharashtra and Gujarat locations. covered the entire footprint of all 400 locations. regional offices of retail. the ERP roll out started with locations in and around Mumbai. at each location. direct sales & LPG SBU. It was thought prudent that the roll out should follow the logical movement of the product. each location went through change readiness assessment exercise.
The entire roll out was completed without any delay. coexistence issues etc. The other part of the team would be left behind to support the users in case of any problems in working with the new system. and developments. Change management A change management programme was put in place to facilitate a smooth transition for the employees. HPCL took up the roll out across the locations from August 2003 based on the roll out plan. The corporation also encouraged pilot location visits. some innovative technologies like remote e-training have been used that have been found to be very effective in quickly reaching to the users across the length and breadth of the country. Champions were identified for the pilots. and conducted readiness surveys.objective of increasing confidence of the users in the system and preparing the users for actual working on the system. Comprehensive training imparted to the users during the implementation at any site is still being followed by refresher courses from time to time. A champion was normally a senior person who would champion the Parivartan cause among peers. The first form of communication was spearheaded through Parivartan News. requirements of team size/composition. The first of the next month. Extensive training was imparted to the potential users of the system. . Some of the users were given end-to-end process training for an in-depth understanding of the system. Typically. and be a one-point contact between the management and the employees. A few quick win solutions such as SMS messages to the dealers/distributors were implemented to increase the visibility of the system. This enabled them to perform the role of Key Users to provide support to the other users at the location. Every month a set of locations were taken up for roll out. Over 3000 man days of training have been provided during the last year to the end users of the system covering the functional and operational areas of the system. Apart from the traditional modes of class room training. It would carry out the set-ups & testing as described above. the system would go live. A part of the implementation team would proceed to the next location to repeat this cycle. a newsletter informing stakeholders about the project. train the users during the month. Number of locations to be taken up each month depended on the type of locations. The HR department organized basic computer training programmes. the implementation team would be at the location one month prior to go-live. Competitions were organized for the best pilot.
VPN and dial-ups. account transfer. FO and LPG tank trucks. These interfaces have made the operations simple and reduced the human intervention reducing human errors. This DRC mirrors the main server and would be in a position to take over in case of any disaster at the primary site as well as to enable any maintenance shutdown to the server. refineries. A state-of-the-art data centre in the Head Office at Mumbai hosts IBM enterprise servers which manage the entire data and applications in a centralized architecture. EFT or by cheque. radio links. The system has contributed to substantially reducing the time taken for closing the quarterly. New initiatives in Parivartan A multitude of IT-enabled solutions could be developed based on the foundation of the ERP system. The availability of on-line and real time information in these systems enables speedy decision making.e. E-banking initiative has been expanded to cover all payments to outside parties including vendors. i. Various such new initiatives have been implemented and sustained efforts continue to bring in more of these to reality. zonal offices. Standardization of business processes in the system has resulted in better management control. VSATs.Now. ERP platform also enables development of real time interfaces to the IT enabled systems of our various business partners. The payment is effected by the bank through ECS. Cost of operations can be tracked easily in the system which helps the managers in controlling them. the ERP system is in place in every location. The system helps the decision makers at various levels in taking timely business decisions based on on-line & accurate information that is available from the system. It has been interfaced with Maximo maintenance management systems at the refineries. The number of locations where the interface has been implemented is being increased as more and more terminals and depots are automated. improved responsiveness. and has been interfaced with the automation system at the marketing locations. E-payment has been rolled out to all locations. A separate Data Centre has been set up in Hyderabad for providing a back-up in the event of any physical contingency to the primary site. electronic weighbridges for weight based loading of bitumen. ISDN. Marketing & Corporate HQOs. half yearly and annual accounts. We have tied up with multiple banks to offer the service to the various categories of payees. reduced cycle times and could improve customer service. contractors and employees. The connectivity to the locations has been established by using various available communication channels such as leased lines. e-payment is helping the Corporation . Payment information flows seamlessly as ERP server communicates directly with the bank servers.
to bring about transparency in the payment process and also ensure timely payment to all vendors. It is being enhanced to provide a two way interface wherein the customer. A number of work flow based applications have been implemented for employee self service so as to speed up the process of benefits administration. in addition to seeing information. is also able to place indents for products. The corporation has completed a pilot for e-procurement which would gradually be expanded to cover procurement of a wider range of products and services. A portal for the transporters has been rolled out during the year to enable the transport contractors to access information pertaining to their transactions with the Corporation. Capital budgeting process for Non-plan projects has been captured in the system through workflow based application. dealers & distributors on their transactions with the corporation. the platform provided by the ERP system is being used for bringing in transparency. In the area of procurement. Similarly the system of hosting of tenders on the internet has also been implemented. . System for on-line vendor registration of vendors through the Internet has been implemented. A customer portal is being maintained which provides complete visibility to the direct customers.