Eprocurement – buying of goods / services i.e oilgian purchase from ramakrishan, lead consultant.

e-tendering

Ramakrishna knew that there were two ways to implement this solution: 1. to create the innovative solutions in-house; or 2.
to co-create the solution directly with the customer or involve the system integrators to design the solution.

The system integrators could provide quick solutions, but the ownership and productization of the solution would be
questionable in that case. This put Ramakrishna in a dilemma.

When OILGIAN decided to transform its business, SAP solutions helped them in standardizing processes. The key challenges
of this INR950 million deal were to standardize 200 business processes for around 13,000 users across 500 offshore and
onshore locations in just around 30 months. SAP was chosen, as it had experience with oil and gas production companies, and
SAP financials and human resource applications were already deployed in the organization. The personal computer (PC)-
based legacy system existed for materials management, project monitoring and maintenance planning with an oracle
database as the backend. In 2001, the Chairman and Managing Director of OILGIAN said that: The ERP package will enable
availability of information on a real-time basis and facilitate elimination of duplicate activities across business processes by
capturing data at its source point. This will in turn improve decision making, operation control, and cost efficiency.

The five stages of the project were project preparation, business blueprint, realization, final phase,

30 minutes confirmation time from vendors to confirm project

The e-tendering co-innovation project The business need

The fairness of a competent vendor selection and the improvement of corporate image were other two important factors to
adopt e-tendering.

The procurement policies that the government had put across ignited the need of OILGIAN to ensure that their procurement
process was transparent and fully auditable. The fairness of a competent vendor selection and the improvement of corporate
image were other two important factors to adopt e-tendering. The manual tendering process had been time-consuming, long
and expensive. The geographical and process constraints had been barriers to competitive bidding. The need for
centralization became all the more important, as procurement of services at most competitive prices was sought for in the
rapidly changing technological scenario. The e-procurement project was looked at as a major reform. The central vigilance
commission had issued security guidelines and checkpoints for considerations in e-procurement
(http://cvc.nic.in/CompcirculCTE.pdf : circular no. 29/9/09 and 18/04/2010).

OILGIAN wanted e-tendering to hold the log of activities by users which was accessible for audit at anytime. The year-wise e-
tendering amount increased consistently (Exhibit 6). The e-tender system needed to enable sharing of technical audit reports
at the vendor meet. The security through encryption with password on e-price bid was another important requirement which
would ensure that tender opening was done with simultaneous authentication by multiple opening officers at OILGIAN. The
added security through the use of digital signature with external device was also an additional requirement. This additional
security would ensure that the digital signature (USB token) was required by the dealing officer to publish or change tender
details. For example, a digital signature is a must, without which the price bid opening date cannot be changed in the tender
for initiation and opening.

The specific modules had to be implemented as per prioritization from OILGIAN. The government procurement guidelines
were not getting supported earlier by the PPS, which was configured on-demand for OILGIAN, and was further implemented
as a module.
e-Procurement was adopted by OILGIAN for the dual bidding process and the integration was done by ICICI bank for online
tender fee payment. Further, the details of the prioritized requirement were obtained from OILGIAN, and the SAP regional
implementation group and consulting team designed a solution which was as per the needs of OILGIAN.

OILGIAN mentioned the need for integration of documents from all stakeholders (project’s team, purchasers, legal advisors
and suppliers) in its requirement document. The need for necessary controls in solution was also emphasized. The team came
out with an innovative solution to integrate SAP C Folders which facilitates collaborative document management with
necessary controls. In addition to managing document collaboration in a controlled manner, the solution also helped organize
the documents in folders. The digital signature integration for files was another major requirement along with the capability
to handle multiple currencies. OILGIAN had to confirm as to whether the module being implemented by SAP was as per
their requirements. The solution looked to cater only to OILGIAN in the beginning, but when it was presented to the
SAPIBU for the public sector team, they quickly realized its global appeal and mapped the needs of global industry to the
PPS solution being developed. OILGIAN then also came up with additional requirements such as consignee-based pricing
conditions and masking of bidders identity during the process of reverse auction.

Vertical business, brand image , Once developed, the SAP–OILGIAN co-innovation solution became one of the most sought
after applications.

Ramakrishna was aware that there could be different business models that can be applied in a co-innovation scenario. The
exchange or the bartering co-innovation business model could be looked at as one where the two alliance partners
provided or shared resources to serve the clients effectively. The exchange model was not a highest value creator. In the
additive mode, the rare and complementary resources helped in receiving value and formed a fringed business model.
However, Ramakrishna found that the one that added value the most was the synergetic integration. The synergetic
integration model involved reinforced working, trust, independence and relationship alliance.
The deep domain knowledge, fusing of the resources and collaborative spirit were the important
components of the synergetic integration which create high value in the long term. The technical
capabilities included the collective IT capability of both OILGIAN and SAP, the technological
simplification by SAP, the adaptation of technology by OILGIAN, the IT-related support provided
by SAP and the learning capabilities extracted by both the alliance parties. The teams from
OILGIAN and SAP were excited by the potential of their innovation in bringing a change in Indian
public sector procurement and the fact that they were pioneers of this change.

SAP SRM 7.0 included some of the key features as a result of this co-innovation journey. The two-bid tendering
system allowed bidders to submit technical offers and price offers separately. It allowed purchasers to open
technical offers first and open price offers of shortlisted bidders from technical round later. The online tender
fee payment functionality allowed the bidders to participate in bidding without the need to visit tender
collection counters. Bidders
could now pay tender fee online and view the tender fee
confirmation details. The bid publication process became more user-friendly. The
bid-opening process was revamped and multi-currency configuration was enabled.
The version management of the bid was possible, clearly showing all the changes
done to bids. OILGIAN could also use the online reverse auction at the end of the
bidding cycle for dynamic and transparent price discovery. There was also provision
for bidders to propose alternate or substitute items.
The SAP public sector procurement solution was not only catering to the needs of OILGIAN but was also catching attention
of other public sector companies. The intellectual property of this solution stayed with SAP Labs. The e-tendering process
emerged as a predecessor to a more enhanced SAP SRM 7.0. Ramakrishna and his team wanted to document the whole
process to highlight the benefits of co-innovation. He further presented this to the top management to scale the learning
in upcoming projects.
You may also include your own branding into the platform for a consistent look and
feel, and to enhance team spirit and business loyalty.
As you scale your firm, you won’t have to worry about whether the software can keep
up with your expansion.
You’ll also be able to upgrade and manage the system in-house, using your own IT
staff, rather than rely on a third-party provider to solve any technical concerns.
Advantages

The primary advantage to building a custom ERP is that your team can keep doing what it’s currently doing --
only better. Unlike an off-the-shelf product, which may require your team to change its workflow in order to
use it, an ERP that’s made-to-order can be built around your existing workflow and incorporate your current
practices into it.

That doesn’t mean there won’t be any adjustments to your workflow, but at least they’ll be intentional ones.
From integrations with software that you’re currently using, to new tools that automate your existing practices,
a custom ERP can provide your team with more efficient ways to complete their everyday tasks.

These tasks can include everything from:

 Business intelligence
 Regulatory compliance
 Supply chain management
 Human resources (hiring, payroll)
 And more
Some ERPs even include elements of a CRM, although typically these are two different systems and should be
designed separately.

With a custom ERP, you can avoid features that confuse your employees and slow the system down, while
building customized modules for individual departments.

And if you’re dealing with confidential data that can’t be shared directly with all of your teams, you can assign
different access privileges to each department.

Some of these options may be available with off-the-shelf ERPs, but building a custom platform offers you a
greater degree of control.

You can even incorporate your own branding into the platform for a consistent look and feel, and to increase
team spirit and company loyalty.

As you scale your company, you won’t have to worry about whether the software can keep up with your
growth.

You can continue to add new technologies, such as artificial intelligence and machine learning capabilities, to
crunch your data and give you a competitive advantage.
You’ll also be able to update and maintain the system in-house, with your own IT team, rather than rely on a
third-party vendor to address any technical issues.

Disadvantages

Despite all the advantages of custom ERPs, they aren’t right for everyone. In particular, smaller companies may
have better luck with an off-the-shelf ERP. Why is that?

For one, custom ERPs take a lot of time and energy to develop. If you’re in a hurry to implement an ERP and
you don’t have time to wait for a customized piece of software, then it may be better to use an off-the-shelf
option rather than to have none at all.

And since custom ERPs haven’t been tried and tested on the market, there’s a greater chance of having
technical issues that you’ll need to troubleshoot down the road.

Your rollout may take longer and require more training, since you won’t be able to rely on third-party
documentation or employees who have used the software before.

If your budget is limited, then you may end up having to make a trade-off between the size and functionality
of your product and the quality.

Additionally, building your own software frees you up from a long-term commitment to a third-party platform,
but you may end up relying on your developer instead.

After all, you’ll need someone to create custom apps and other upgrades, and you’ll still be reliant on third-
party hardware.

That’s why it’s important to choose a trusted ERP developer like Zibtek who can guide you through the entire
process from start to finish.

The cost is the most important thing.

It’s no secret that custom ERP development can cost a lot of money, which is why many businesses don’t
consider it at all. But those same businesses may not realize just how much they’re spending on SaaS services
over the lifetime of their company.

For example, Microsoft Dynamics 365 costs up to $210 per user per month, with added costs for some licenses,
such as AI-powered apps. Depending on how many users you have, your monthly subscription costs can easily
rival the cost of a custom build.
An off-the-shelf ERP is cheaper to begin with, but if you continue to add new users each month, you may be
stuck paying higher fees and you’ll be trapped in the system.

The more your business grows, the more time and energy it will cost you to switch to a new platform. In the
end, you may decide to develop a custom ERP after all!

Instead of paying a monthly user fee, you could be investing in your own ERP from the start. An ERP should
last from 5 to 10 or more years before needing an overhaul, so it may be a sounder long-term investment.

Besides, an off-the-shelf product is only “cheaper” if you don’t take ROI into account. If what you really need is
a custom ERP, then that’s why you should invest in it.

If you buy an ERP with limited options that doesn’t meet your needs, you’ve spent less money, but will be
holding your business back from reaching its full potential.

Remember, the risks and benefits depend on your business plan and cash flow, so you should do the math and
compare your options before making a decision.

If you’re a small business with only one location and less than 30 users, then a custom ERP might be overkill.
But if you have revenue in the millions of dollars, have a hundred or more employees, or are planning on
rapidly scaling your company, then you may be a candidate for a customized system.
doing Vertical The manual tendering process had been time-consuming, long and expensive.

OILGIAN wanted e-tendering to hold the log of activities by users which was accessible for audit at anytime, security
encrypted credentials and two-bid tendering process.

Bringing Innovative change in Indian public sector procurement and the fact that they were pioneers of this change with
OILGAIN.

SAP SRM 7.0 included some of the key features as a result of this co-innovation journey. The two-bid tendering system
allowed bidders to submit technical offers and price offers separately. It allowed purchasers to open technical offers first and
open price offers of shortlisted bidders from technical round later. The online tender fee payment functionality allowed the
bidders to participate in bidding without the need to visit tender collection counters. Bidders could now pay tender fee online
and view the tender fee confirmation details. The bid publication process became more user-friendly. The bid-opening
process was revamped and multi-currency configuration was enabled. The version management of the bid was possible,
clearly showing all the changes done to bids. OILGIAN could also use the online reverse auction at the end of the bidding cycle
for dynamic and transparent price discovery. There was also provision for bidders to propose alternate or substitute items.
Ans1
Customizing an ERP programme refers to modifying it on a macro scale so that it
satisfies specific business or corporate requirements. Example- SAP Labs India: co-
innovation in public procurement system with OILGIAN.
Pros-
1. The primary advantage of developing a customized ERP is that the team may
keep doing what it’s now doing – only better, like Ramakrishna Potluri, Lead
Consultant of SAP.
2. Unlike a pre-packaged ERP system, which may demand the team to adjust its
workflow in order to employ it, an ERP that’s made-to-order may be created
around the current workflow and integrate the present practices into it.

3. A customized ERP will be built, developed and configured to the

organizations requirements i.e- OILGIAN in the case study and in similar
format as existing circumstances and as per current practice or as expected
practice if BPR is done to fit better practice of company.

4. Users will be comfortable and will be easy to use.All unique demand will be
taken care of-I.E - The fairness of a competent vendor selection and the
development of corporate image were other two major causes to embrace
e-tendering and e-procurement.

5. Any Non standard functionality will be produced if necessary or desired by

management or users with ease— The primary difficulties of this INR950
million transaction were to standardise 200 business processes for roughly
13,000 customers across 500 offshore and onshore locations in just under 30
months.
6. Redundant work or data input will be removed i.e The Efficiency increase
was the major key to e-procurement, since a lot of time is saved.

7. Since users or management may become involved in acquiring their desired with direct communication
with the developer, it will be easily accecpted and implementation will be fast—— The geographical
and process restrictions have been impediments to competitive bidding. The requirement for
centralization became all the more crucial, since procurement of services at most competitive costs was
searched for in the quickly changing technological landscape. The e-procurement initiative was looked
at as a fundamental overhaul.

CONS:
1. The Developer would miss the finest practised funcationally as comparison to SAP ERP etc.
2. Coding, Development and Customisation will be tiresome and long.
3. Since customized ERPs haven’t been tested and validated on the market, and there is a bigger chance
of having technical difficulties that you’ll need to address down the road.
SAP India so excited and put their efforts in developing the E-tendering system
because-
1. The SAP India is digitalizing the procurement process through the e-procurement program through customized
ERP and making tendering process time-saving, short and affordable and creating fairness of a competent vendor
selection and the improvement of corporate image by adopting e-tendering and architect a solution using the SAP
Business Suite platform for regional implementation and SAP Labs India: co-innovation in public procurement system
with OILGAIN which is a vertical business solution.
2. SAP India provides E-tendering that holds the log of activities by users which was accessible for audit at anytime,
security encrypted credentials and two-bid tendering process and they are the first in the market to create that and
also catching attention of other public sector companies.

3. SAP India made SAP SRM 7.0 features two-bid tendering system and allows bidders to submit technical offers and
price offers separately. The bid publication process became more user-friendly. The bid-opening process was
revamped and multi-currency configuration was enabled. The version management of the bid was possible, clearly
showing all the changes done to bids.
4. OILGIAN might also deploy the online reverse auction at the end of the bidding round for dynamic and transparent
price discovery. There was also option for bidders to submit alternate or substitute goods.

SAP India created the e-tendering process developed as a predecessor to a more advanced SAP SRM 7.0 and to highlight the
advantages of co-innovation and to scale the lessons in future projects-- (see Figure E6 for RFX-request for Information with
Encryption and decryption values) and they promote their own successful client(Oilgian-public company) delivered project
and gaining reputation in the market.