ERP Drives Parivartan at HPCL
By Sonal Desai
Mumbai, Nov 20, 2008 1539 hrs IST

Background

Ever since the government of India announced deregulation of the oil industry in 2002, HPCL had undertaken a Business Process Reengineering (BPR) study to ready the oraganisation for post deregulation market conditions. We had to be prepared to take on the Shells and the Exons of the world, said Nishi Vasudeva, executive director (IS) of HPCL.

One of the major recommendations of the BPR was the implementation of a world class ERP system, she said. The implementation of the ERP system would enable the corporation to meet the challenges of the emerging market scenario.

Project Parivartan is HPCL's initiative to implement Oracle s JD Edwards EnterpriseOne, an ERP solution. The implementation covers all the modules of the ERP software viz. sales & distribution, manufacturing, finance and HR. Customised 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.

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, in 2000-01. This team strength was augmented over time especially in the rollout phase.

After completion of the training, the team documented the As-Is processes of the corporation. The implementation partner was selected from the consulting partners of JDEdwards. The contract for the Conference Room Prototype (CRM) and pilot implementation was awarded to Capgemini and Ernst & Young,.

CRP and pilot roll out

The pilot implementation project was divided into various phases.

* 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 corporation parallely placed the order for the architecture components and set up the data centre at Mumbai.

The implementation at pilot locations was preceded by comprehensive simulation & testing of the solution by building a CRM. 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. At the completion of the CRP phase a model for implementation of the JDEdwards software across all the locations was in place.

A customised module was developed for compensation & benefits and employee payroll which was integrated to the core finance and HR modules.

The pilot locations were selected to represent every type of location in HPCL. Hence, a refinery, lube manufacturing plant, depot, terminal, LPG plant, regional offices of retail, direct sales & LPG SBU, aviation service facilities were chosen as pilot locations, said Vasudeva.

The first pilot location went live in Feb 2003, and the other specified locations went live by July 2003. Based on the learnings, a standardised template was refined so that it could be rolled out across all the locations.

Roll out across the corporation

As HPCL has a national presence, it was important to determine the path for the ERP rollout. Several business processes were analysed for determining the points affecting the process look & a detailed roll out plan for implementation across all locations of the corporation was prepared. It was thought prudent that the roll out should follow the logical movement of the product. Thus, the ERP roll out started with locations in and around Mumbai, followed by other Maharashtra and Gujarat locations, and finally, covered the entire footprint of all 400 locations.

Before roll out, each location went through change readiness assessment exercise, said Vasudeva. The central team visited the location to assess the infrastructure, communication equipment as well as acceptance of the new system by the location workforce.

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. "We had made a short film depicting salient features of Project Parivartan. The film also contained messages from the top management including one from the chairman & managing director. This helped improve credibility of the initiative as also it helped employees understand their role it. We had roped Boman Irani as the narrator," she said.

Even though the system was tested in the conference room prototype, at each location, the system was put through further tests using location specific data. This testing was done by the users themselves under the guidance of the implementation team. This helped achieved twin objective of increasing confidence of the users in the system and preparing the users for actual working on the system. Typically, the implementation team would be at the location one month prior to go-live. It would carry out the set-ups & testing as described above, train the users during the month. The first of the next month, the system would go live. A part of the implementation team would proceed to the next location to repeat this cycle. 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.

HPCL took up the roll out across the locations from August 2003 based on the roll out plan. Every month a set of locations were taken up for roll out. Number of locations to be taken up each month depended on the type of locations, requirements of team size/composition, coexistence issues etc. The entire roll out was completed without any delay.

Change management

A change management programme was put in place to facilitate a smooth transition for the employees.

The first form of communication was spearheaded through Parivartan News, a newsletter informing stakeholders about the project, and developments. The corporation also encouraged pilot location visits, and conducted readiness surveys. The HR department organised basic computer training programmes.

Champions were identified for the pilots. A champion was normally a senior person who would champion the Parivartan cause among peers, and be a one-point contact between the management and the employees. Competitions were organised for the best pilot.
A few quick win solutions such as SMS messages to the dealers/distributors were implemented to increase the visibility of the system.

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. This enabled them to perform the role of Key Users to provide support to the other users at the location.

Comprehensive training imparted to the users during the implementation at any site is still being followed by refresher courses from time to time, said Vasudeva. 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, 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.

Now, 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. Standardization of business processes in the system has resulted in better management control. Cost of operations can be tracked easily in the system which helps the managers in controlling them. The system has contributed to substantially reducing the time taken for closing the quarterly, half yearly and annual accounts.

It has been interfaced with Maximo maintenance management systems at the refineries, and has been interfaced with the automation system at the marketing locations, electronic weighbridges for weight based loading of bitumen, FO and LPG tank trucks. These interfaces have made the operations simple and reduced the human intervention reducing human errors. The number of locations where the interface has been implemented is being increased as more and more terminals and depots are automated.

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 centralised architecture. The connectivity to the locations has been established by using various available communication channels such as leased lines, VSATs, radio links, ISDN, VPN and dial-ups. 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. 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.

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, improved responsiveness, reduced cycle times and could improve customer service. ERP platform also enables development of real time interfaces to the IT enabled systems of our various business partners. Various such new initiatives have been implemented and sustained efforts continue to bring in more of these to reality.

E-banking initiative has been expanded to cover all payments to outside parties including vendors, contractors and employees. We have tied up with multiple banks to offer the service to the various categories of payees. E-payment has been rolled out to all locations, i.e. zonal offices, refineries, Marketing & Corporate HQOs. Payment information flows seamlessly as ERP server communicates directly with the bank servers. The payment is effected by the bank through ECS, account transfer, EFT or by cheque. e-payment is helping the Corporation to bring about transparency in the payment process and also ensure timely payment to all vendors.

A customer portal is being maintained which provides complete visibility to the direct customers, dealers & distributors on their transactions with the corporation. It is being enhanced to provide a two way interface wherein the customer, in addition to seeing information, is also able to place indents for products.

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. A number of work flow based applications have been implemented for employee self service so as to speed up the process of benefits administration. Capital budgeting process for Non-plan projects has been captured in the system through workflow based application.

In the area of procurement, the platform provided by the ERP system is being used for bringing in transparency. System for on-line vendor registration of vendors through the Internet has been implemented. Similarly the system of hosting of tenders on the internet has also been implemented. 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.