Oracle Customer Case Study

SEW Infrastructure Manages US$150 Million of Assets and Plans US$3 Billion Worth of Projects
Oracle E-Business Suite has significantly improved the way we manage our construction projects across India. The integrated system allows us to forecast and allocate the right resources to projects, track day-to-day execution, monitor asset performance, and it ensures end-to-end process visibility nationwide. Sidhartha Meka, Chief Information Officer, SEW Infrastructure Ltd Established in 1959, SEW Infrastructure Ltd is a leading and highly respected Indian infrastructure construction company that builds dams, barrages, canals, tunnels, pipelines, hydro and thermal power stations, metropolitan railways, as well as highways and buildings. Several of these projects are run in the build, operate, and transfer (BOT) and build, own, operate, and transfer BOOT (BOOT) financial models. The company employs over 6,500 full-time staff at project sites and regional offices in Hyderabad, New Delhi, Kolkata, and Vijayawada. It also has offices in Singapore and Indonesia. SEW owns and operates a coalmine and is building a port in Indonesia, to support its thermal power plants on the Indian east coast. In late 2007, SEW recognized the need to introduce an integrated enterprise resource planning (ERP) solution to replace its legacy financial, materials management, and other systems, which required significant manual intervention to operate and reconcile information from all functions in the company. SEWs projects are spread across India at many remote sites, which made it difficult to keep track of our day-to-day operations, said Sidhartha Meka, chief information officer, SEW Infrastructure Ltd. It often took a while to get basic information from each work site around the progress of projects, material consumption, pending work, and costs. We needed to find an integrated system to better manage the business and our subcontractor relationships.

SEW Infrastructure Ltd Hyderabad, India www.sewinfrastructure.com

Industry:
Engineering & Construction

Annual Revenue:
US$500 million

Employees:
More than 6,500

Oracle Products & Services:

Oracle E-Business Suite Release 12 Oracle Financials Oracle Procurement Oracle iProcurement Oracle Inventory Management Oracle Human Resources Oracle Payroll Oracle Self-Service Human Resources Oracle Enterprise Asset Management Oracle Process Manufacturing Oracle Projects Oracle Universal Content Management Oracle WebCenter Suite

Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published January 2011

Oracle Customer Case Study

Key Benefits:
Provided an integrated system that reduced the time required to audit the companys accounts and process payments Allowed accountants to keep up with tax laws that vary across several states in India Helped secure volume discounts from suppliers to the tune of 3% to 4% by centralizing procurement Helped manage US$150 million worth of assets, including plant, machinery, and construction equipment Maintained an up-to-date asset book Automated preventive maintenance alerts for all equipment Established a common payroll and performance evaluation model based on individual competencies and appraisals Improved the ability to allocate the right employee to the right role by recording all staff skill levels in a central database Enabled staff to view their pay slips and tax declarations and apply for leave online Helped managers plan material requirements, machine hours, and manpower requirements by giving them the tools to forecast the revenue according to the execution schedule Made it easier to share information internally by providing a central repository to store documents electronically

In mid-2009, SEW deployed Oracle E-Business Suite Release 12 to automate financial reporting, streamline supply chain management, and track real-time project execution. The company deployed Oracle Financials, Oracle Procurement, Oracle iProcurement, Oracle Inventory Management, Oracle Human Resources, Oracle Payroll, Oracle Self-Service Human Resources, Oracle Enterprise Asset Management, Oracle Process Manufacturing, and Oracle Projects. Additionally, the intranet was enabled using Oracle WebCenter Suite and Oracle Universal Content Management. Oracle E-Business Suite has significantly improved the way we manage our construction projects across India, said Meka. The integrated system allows us to forecast and allocate the right resources to projects, track day-to-day execution, monitor asset performance, and it ensures end-to-end process visibility nationwide. Saas on Private Cloud SEWs ERP implementation was set up as a private cloud from the beginning, which enables great flexibility in the deployment, monitoring, and scalability of business processes. The implementation is deployed on the software as a service (SaaS) model on the cloud, providing access to vendors and subcontractors. Subcontractors can adopt cloud computing as it eliminates the need for capital investments in hardware and facilities and leverages the complete capability and benefits of enterprise resource planning. Integrated System Automates Financial Processing Oracle Financials has provided SEW with an integrated system that reduces the time it takes to audit the companys accounts and process payments to material and equipment suppliers and subcontractors. Head office financial staff can analyze any piece of financial data from project sites across India in time. It previously took considerable time to transport CDs and USB sticks with the relevant financial data from each project site to the head office and reconcile the accounts. The system allows accountants to keep up with current tax laws. This is particularly useful in India as every state has its own set of tax laws.

Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published January 2011

Oracle Customer Case Study

Timely availability of financial data from nationwide projects gives us the capability to consolidate the balance sheet and forecast performance, said Meka. Earlier, we had to wait weeks for data CDs to arrive from remote locations, and it took tremendous effort to consolidate our accounts, work out taxes, and comply with statutory reporting commitments. Materials Costs Reduced, Data Entry Minimized SEW has more than 100 construction projects worth an estimated US$3 billion in progress across India. The company now uses Oracle Procurement to manage purchasing steel, cement, diesel, and other bulk materials used during construction. The system is also being used to purchase uniforms, safety equipment, goggles, and helmets for staff. Oracle Procurement enables a centralized purchasing function based on project execution plans to ensure timely availability of the right materials. Because we are purchasing centrally and not at a local level, we can get volume discounts from our suppliers, said Meka. We expect our materials costs to reduce by 3% to 4%. Oracle Inventory Management has enabled the company to implement bar coding each item used during construction projects to eliminate data entry errors. We can track inventory at all our stores nationwide and potentially make better purchasing decisions, said Meka. The system also a reduced need to maintain high-value spares in all locations due to the cross-project visibility of items available, allowing us to potentially source what we need. Measuring the Efficiency of Assets SEW uses Oracle Enterprise Asset Management to manage US$150 million worth of assets, including plant and machinery and construction equipment such as trucks, dozers, graders, excavators, and cranes. The system is also used to calculate depreciation on assets and maintain an up-to-date asset book. The routine preventive maintenance alerts are automated when the equipment needs to be serviced to avoid possible failure. The system also allows day-to-day tracking of fuel consumption on owned and hired equipment. For example, we can set an alert that will notify us when a truck is using fuel above thresholds, so our maintenance staff can address the issue, said Meka. On a US$100 million project, we
Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. Published January 2011

Oracle Customer Case Study

may spend US$20 to US$30 million on diesel alone, so fuel management is important for us, and being able to determine the efficiency of an asset in real-time is most helpful. Improved Staff Tracking Oracle Human Resources and Oracle Payroll have helped SEW centralize its human resources department. The integrated Oracle Human Resources and Oracle Payroll modules enable SEW to determine exactly how many people are working for the company on all remote sites at any given time, how much tax and other statutory obligations are to be paid, and what benefits need to be administered to staff. Previously it was hard for us to determine how many people, particularly contract employees, were working on various projects across the country, since HR management was localized at the project site, said Meka. Now we can administer a common payroll and performance evaluation model based on individual competencies and periodic appraisals. Managers also have a system where they can record each staff members level of skills, which improves their ability to allocate the right staff to the right roles. For instance, a manager may use the system to find an expert with specialized skill requirements for quality control, quality assurance, and quantity survey roles. Oracle Human Resources is also integrated with an employee badge scanning system that records when a staff member arrives in the office. The system automates the reporting of working hours for staff and contract workers for supervisors. Employees also use Oracle Self-Service Human Resources to view their pay slips, tax declarations, and absence management online. Ensuring Revenue Targets Are Met Oracle Projects enables SEW to forecast and meet revenue projections according to the project execution schedule. This helps managers plan material requirements, machine hours, and the manpower requirements that need to be mobilized and deployed to ensure revenue targets are met. The overall plan and execution of each project is tied into the initial revenue projections that top management is committed to, said Meka. We can do this by keeping track of the cost of each piece of work. For example, on a typical road construction project, we have about 4,000 activities each month that are billed
Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. Published January 2011

Oracle Customer Case Study

to the client. We are now able to determine our profitability at the activity level. The activities could be planned at a micro-level, activities that could be as simple as excavating a small pit. This data is used to build our information warehouse, which can be leveraged to improve our bid accuracy for future projects. SEW also uses Oracle Process Manufacturing to keep track of raw materials, production items, production costs, and plant operations. For example, we can track the cost of raw materials consumed to construct a kilometer of road based on the quantity of inventory consumed and the production delivered at the plant, said Meka. We previously used to record this information manually on paper, which was quite time-consuming for reconciliations. Instant Access to Important Documentation SEW uses Oracle Universal Content Management to store various types of documentation, including payment vouchers, invoices, warranty documents, equipment manuals, and other documents that are required for tax and statutory purposes. We have a lot of information on paper, which is now in electronic form as well, said Meka. For instance, all our insurance policies are now scanned and maintained digitally in Oracle Universal Content Management. It is now easier to prepare insurance claims as we can rapidly retrieve supporting documents such as policy proofs, invoices, and incident images from the Oracle Universal Content Management system. In addition, we use the system to store any documentation required for a bid. The business development team involved in the bidding process can easily share documents in a secure manner. Previously, this information used to be floating around the company via e-mails and on USB sticks, which sometimes meant important documents were difficult to locate and secure. Why Oracle? SEW evaluated offers from 26 vendors to provide an integrated ERP system before narrowing the field down to Oracle, Microsoft, and SAP. Oracle was selected due to its product strength in financial management and the support of open standards. We needed an application that suited our complex business,
Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners. Published January 2011

Oracle Customer Case Study

said Meka. Some projects are owned by us, some are joint ventures, and they are completed in various phases that last several years. Oracle E-Business Suite proved to be the best solution to manage our business processes. Because of the compliance with open standards, we are able to easily customize the applications based on the needs of our business. One of the reasons why we chose Oracle over SAP was because it was more cost-effective to customize on the Oracle platform, said Meka. SAP requires people with ABAP skills, which are quite expensive. Oracle requires people with SQL and some Java skills to develop screens using Oracle Application Development Framework and Oracle JDeveloper. Implementation Process The project was completed in two phases. During phase 1, which began in December 2008 and lasted for six months, SEW deployed Oracle Financials, Oracle Procurement, Oracle iProcurement, Oracle Inventory Management, Oracle Human Resources, Oracle Payroll, Oracle Self-Service Human Resources, and Oracle Universal Content Management. During stage two, which also lasted another six months, the company deployed Oracle Enterprise Asset Management, Oracle Process Manufacturing, Oracle Projects, and Oracle WebCenter Suite. Oracle Partner PricewaterhouseCoopers (PwC) assisted SEW with the implementation of all modules in the two phases. PwC mapped SEWs business processes to the core functionality of Oracle E-Business Suite modules. The systems integrator completed process mapping and other pre-go-live activities, such as data migration, testing, and end-user training before the system went live in mid-2009.

Established in 1959, SEW Infrastructure Ltd is a leading and highly respected Indian infrastructure construction company that builds dams, barrages, canals, tunnels, pipelines, hydro and thermal power stations, metropolitan railways, as well as highways and buildings.

Copyright 2011, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published January 2011