Petronet LNG Deploys SAP To Handle Complexity

by Amit Tripathi    Jan 18, 2005

Government owned, Petronet LNG Limited (PLL), has successfully deployed SAP R/3 4.7. While implementation of enterprise applications like SAP is quite common, the complexity of processes that the system is expected to handle makes it a very unique deployment.

Speaking to CXOtoday, Amitabh Sengupta, director-IT, Petronet LNG, said, “Since transactions are of very high value (one shipment is valued at a minimum of $ 8 mn) we wanted a robust solution with all internal controls built into it. Since controls on security of data are very crucial for us, we chose SAP for its multi-tiered architecture.”

Elaborating on the evaluation details, Sengupta says, “Oracle, Peoplesoft, and Ramco were the other ERPs considered. Initially we finalized on the kind of reports that management requires (which are of two categories namely statutory and business decision making). Next all the business processes were written down in detail (done by KPMG). Following this a fitment study was done to find out whether the system fits our requirement.”

“The idea was not to tamper with the system in terms of customization or addition of processes. If required we were ready to even revisit and re-engineer our processes to suit the specifications of the system. We adopted this approach so that handling and the upgrade of the system becomes easier in future,” added Sengupta.

Since PLL came into existence recently, it had engineering specific decision control systems (DCS) to begin with. The challenge was to map the DCS readings to the ERP.

Moreover, while receiving and storing LNG, cryogenics is followed in which a temp of -160 degree celsius is maintained.

Another aspect that makes PLL’s processes unique, according to Sengupta is, the trust and retention system (TRS) in the contract, which is highly complicated. Says Sengupta, “The complex TRS details have also been successfully mapped into the ERP.”

Thus the situation too is unique given that an enterprise is about to start off, has unique processes, and would use a system of the stature of SAP. So encountering challenges is what is natural in this case. Adds Sengupta, “Mapping our processes into the system in itself was a big challenge that was successfully carried out by our implementation partner Tata Consultancy Services (TCS).”

As far as people challenges were concerned, Sengupta decided to involve the entire team of end-users. This was again a huge task in terms of making everyone aware of business flow charts and stages of implementation. Sengupta informed that as the board of PLL comprised of members who hail from such enterprises that had already deployed some ERP system, the financial decision for the initiative was not that time consuming.

The company has currently purchased 40 user licenses with 20 more likely to be added in the coming year. The applications and the Oracle 9i database are being hosted on HP/Unix servers (seven servers have been purchased including that for disaster recovery as well).

The ERP has been rolled out to four locations of the company, which use 128 Kbps leased lines to access the database, with ISDN back up. According to Sengupta, the total initiative incurred an expenditure of Rs 10 crore that includes the software, hardware, support and maintenance, and connectivity charges.

The implementation was carried out in the PLL headquarters in New Delhi as well as at its LNG plant in Dahej, Gujarat with a total team size of 25 people, comprising of 16 functional consultants and nine technical consultants of TCS.

PLL is a company formed by the Government of India to import LNG and set up LNG terminals in the country. It is a joint venture promoted by GAIL, ONGC, IOC, and BPCL.

Tags: SAP