ISM Presentation Group 8
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Transcript of ISM Presentation Group 8
Implementation of SAP ERP in ONGC
Arpit Agarwal (B01)Rishikesh Ashar (B05)Ankur Gupta (B21)Aditya Nadimpalli (B38)Abhinav Pattarkine (B45)Praveen Rajagopalan (B47)Apoorv Singhal (B54)
About ONGC
ONGC was re-organized as a limited Company under the
Company's Act, 1956 in February 1994
The Government disinvested 2 percent of its shares through competitive
bidding in 1994.
During March 1999, ONGC, Indian Oil Corporation (IOC) and Gas Authority of India Limited (GAIL) , agreed to have cross holding in each
other's stock
In the year 2002-03, after taking over MRPL from the
A V Birla Group, ONGC diversified into the downstream sector
ONGC has also entered the global field through its
subsidiary, ONGC Videsh Ltd. (OVL)
ONGC used PC-based legacy
system for material
management, project monitoring and maintenance
planning
Information is as valuable as oil for any organization and sometimes harder to locate
ONGC felt the need for a solution
using IT to solve the problems in streamlining the
business processes, and
integrating all the information along
the enterprise’s core business
processes
ONGC spans across 10 countries
outside India- from Russia to
Venezuela
Pre ERP days
1996 – ONGC undertook Project Kuber for an integrated financial system
December, 1999 – ONGC started Project Shramik for automation of HR Modules
Shortcomings of piecemeal implementation of SAP
Lack of real-time information
Monthly reports generated were insufficient to take forward-looking managerial decisions
Need for integrating all functions of the company under one umbrella
Existing EnvironmentDatabase:Hardware:Operating system:
OracleHP, Compaq, IBM and SunMicrosoft Win NT, Sun Solaris, and Unix
Leveraging IT
Implementation Plan
ONGC had the IT mission to develop an integrated, flexible and standardized Information Technology architecture for fundamental competitive advantage.
The organization decided to realign its business processes to bring all the legacy systems under a common ERP.
The vision of the then C&MD Mr. Subir Raha to have “One organization, one data, one Information” ushered in a new era of organization-wide information sharing, and its use would enhance business efficiency.
ONGC before the implementation of project ICE monitored its activities on daily, monthly, quarterly and annual basis. This required comprehensive, exhaustive multi process based data integrated manually with each other.
In absence of any integrated online data systems, key executives always had to face time lags between the activity period and data availability, resulting in constraints in logical decision making.
This crisis led to creation of an IT landscape that was decentralized, comprising of multiple stand alone systems and packages. Evidently an integrated information system for good governance was missing.
ICE Project Objectives
Information Consolidation for Efficiency (ICE)
Optimization and standardization of business
Availability of information on real time basis
Elimination of duplication of activities
Facilitate information consolidation at corporate level
Availability of information at the right time
Integrating all business applications
Key Benefits of Project ICE
Better Decision Support
Better Operation Control
Effective Cost Management
Enabling Internal Performance Measurements (KPI’s and SLA’s)
Improved responsiveness to changing market / global conditions
Enabling Transformation
• Alignment to new Organisation Structures• e-Corporation
Chosen Partner: SAP – Why?
SAP had experience with
global Oil and Gas production companies
Solutions and services
complemented existing SAP
finance and HR applications
SAP Consulting blended expertise
with ability to improvise as
complexities of project required.
SAP consultants played a critical
role in Rollout and Education of users
Project ICE
First Major ERP exercise in Indian Oil & Gas Industry
23 SAP modules
To serve 23000 end users
27 months across 500 locations
Deep sea vessels in Bay of Bengal to Drilling Rigs in Rajasthan
150 project core team members, 60 SAP consultants, 4000 Sq.ft area data center
10 agencies with a cost of Rs 195 Cr
Started January 21st ,2002
What ICE Project is NOT!
It is NOT an “IT” Project
It is NOT a Technical or
Process Control System
It is NOT about writing program
codes and building database structures
It is NOT about modeling current
processes into an IT Package
It is NOT an approach to
look at Functions and Departments
The 1000 islands dilemma!
1,000 island solution
ProductionPlanning
Shop Floor execution
Mfg.Engineering
Purchasing
A/R
Inventory
General Ledger
Sales
A/P
EngineeringDesign
Controlling
What SAP did!
R/3
The R/3 SAP Framework
R/3Client / Server
ABAP/4
FIFinancial
Accounting
COControlling
AMFixed Assets
Mgmt.
PSProjectSystem
WFWorkflow
MMMaterials
Mgmt.
HRHuman
Resources
SDSales &
Distribution
PPProduction
Planning
QMQuality
Manage-ment PM
Plant Main-tenance
SMService
Manage-ment
ECEnterpriseControlling
CIN/ IS-Oil
Implementation• Constituted of 150 Project Core Team Members, 60 SAP Consultants, 18000 sq. ft Project Office,
4000 Sq. ft area data center with 22.5 TB storage capacities• ONGC implemented an enterprise-wide ERP implementation under Project ICE comprising 23
SAP modules• They adopted SAP R/3 to streamline and integrate its various functions• The data center is located in New Delhi• The project currently has 23000 end-users working on the system and using the employee self-
service (ESS) functionality under SAMPARC
Production and Planning (PP) • To track planned and actual costs of production processing of Crude Oil, Natural Gas• Facilitates real time updating of data, helps in calculating actual & standard costs at any stage in
the product cycle• Monitors real time production environment related to Materials & Products, as well as
customized report generation for faster decision making
Plant Maintenance (PM):• The PM module provides a system for the management and maintenance of technical systems
including the cost incurred in the planned and breakdown maintenance. • By being integrated with other modules it gives the cost of each maintenance activity. • It will also track various audit activities and their follow up actions in ONGC.
Implementation
Financial Accounting (FI)• This module Integrates General Ledger, Accounts Payable, Accounts Receivable with
all the sub ledgers synchronized with the G/L in an on-line, real-time manner. • The existing SAP customization KUBER is a stand alone module with only FI
functions. In ICE FI function is integrated with all the adopted R/3 modules starting from supply to the sales.
Sales & Distribution (SD):• SD module comprises of entire Sales & Distribution activities starting from sales
agreements to delivery and generation & printing of invoice in integrated sales process for all products of ONGC including scrap and services.
• It is integrated with financial accounting for account receivable management; material management and production planning for real time stock updating.
Implementation
Quality Management (QM)• QM module covers inspection of procured material, inspection of in-house
products, and generation of Quality certificate for issuing finished products to the Customers.
• Among many features, Vendor/Material complaints processing, quality clearance certificate for incoming material and for the products, failure analysis etc. shall be available through this system.
Business Information Warehouse (BW)• This module shall generate analytical and strategic reports for Business Analysis and
performance tracking including the Corporate Key Performance Indicators. • This would become the single, integrated, MIS System for ONGC.
Implementation Highlights
Converting Knowledge to Wealth
• The total deal for the implementation of the ICE project is Rs. 95 Crores
• Project ICE is one of the world’s biggest ERP (Enterprise Resource Planning) packages, across its 400 locations
• By the time the project was completed in May 2005, this new solution was available to a total of 23,000 users – 65% more than the user base originally planned
• This is the first major ERP exercise in the Indian Oil & Gas industry
• One of the largest in size the world , the project was very challenging in terms of complexity also. ONGC’s Exploration and Production (E&P) business is unique, different in many ways from other businesses of manufacturing, trading and services for which SAP is known best for
• This large and complex exercise has been completed within 30 months (from July 2002 to December 2004), which is a record of sorts
Implementation Highlights
• ONGC chose the hardest and most critical areas first: production and drilling to go live with. Idea was if hard target succeed then all the others would fall in line.
• The Mumbai Headquarters of ONGC was the first to go live in its exhaustive ERP deployment. First rollout was for 3,000 users. One key test was making the transition at the most challenging sites: offshore and onshore oil drilling platforms, where daily activity reports are required by 6 a.m. without fail.
• SAP Consulting blended expertise with ability to improvise as complexities of project required. Project team consultants from SAP played critical role in rollout and education of users. SAP used ONGC as training centers for its employees to learn about Oil & Gas industry
• The project management group also excelled in meeting the logistical challenge of connecting hundreds of sites across India – even on nomadic drilling rigs and seismic field parties.
• Innovative solutions included secure satellite and radio-based communication network access to offshore locations and other remote locations deployed through a tightly coordinated schedule between the ONGC project team and service providers.
Business Information Warehouse
BW Load Pack
DataStage ETL Components
DataStage ETL Components
E-Business Applications
Legacy Systems
VSAMRDBMS (DB2)
ADABAS
File
Non SAP Non SAP
SAPBW
BW Service API for SAPBW Service API for SAP
Siebel Siebel PeopleSoft
DataStage ETL Components
DataStage ETL Components
BAPI
...Oracle
A very important tool for Asset Managers and Business Managers to monitor performances and evolve business strategies
To summarize – the Functional ScopeStage 1
Financial Management (FI) Controlling – Costing (CO) Asset Management (AM) Materials Management (MM) Warehouse Management (WM) Sales & Distribution (SD) Quality Management (QM) Production Planning (PP) Product Costing (CO-PC) Joint Venture Accounting (JVA) Prod.Sharing Agreements (PSA) Offshore Logistics Mgmt (OLM) Plant Maintenance (PM) Project Systems (PS) Investment Management (IM) Funds Management (FM) Treasury Management (TM) Business Info. Warehouse (BW)
Stage 2 Enterprise Buyer Professional
Stage 3 Workplace for Key Business Managers
Stage 4 EDMS– Lifecycle Data Management
concept
Stage 5 Strategic Enterprise Management
Stage 6 Asset Lifecycle Costing
Add-On 1 UFSO/CRC Realignment
Add-On 2 HR Migration / Integration
Implementation Options
FI MM PM CFA PP IM
Application Area
Com
pany
Phase 1 Phase 2Corporate
Location 1
Location 2
Roll-out
Roll-out
Roll-out
Phased
FI MM PM CFA PP IM
Application Area
Com
pany
Corporate
Location 1
Location 2
Location 3
Big Bang
All together
Hybrid Approach for ONGC
ONGC is a large and complex organization – needs a hybrid approach
• Take all relevant functionalities of one or more mySAP Component
Stages
• Implement the functionalities of a given Stage in Pilot Location (Western Offshore) and then Rollout to Other Businesses
Phases
• SAP’s proven ASAP methodology shall be used and each Phase will be implemented in 5 major milestones• Project Preparation• Business Blueprint Design• Realization• Preparation to Go-Live• Go-Live and Support
Milestones
Go-live
Jul2002
Jan2003
Jan2004
Time line in Months Jan2005
Dec’04Oct’04Aug’04May’04
Nov’04North/ CentralOnshore
Nov’04
Sep’04EasternOnshore
Sep’04
Jul’04Southern Onshore +Corporate
Jul’04
Jan’04WesternOnshore
Jan’04
Sep’03WesternOffshore
Stage 3Workplace
Sep’03
Stage 4EDMS
Sep’03
Stage 6ALC
Nov’04
ICE Implementation Overview
Stage 2EBP
Mar’04
Stage 1mySAP
June’03 Common Design
Stage 5SEM
Nov’04
Geographical coverage
Western Offshore Western Onshore Southern & Corporate
Eastern Onshore Northern & Central
Vasudhara Bhavan Ahmedabad Chennai Sibsagar Agarthala
Uran Baroda Karaikal Sib.W.Shop Kolkatta-
Hazira Cambay Rajamundri Nazira RO
Nhava Supplu Base Mehsana Narsapur Stores Jorhat-DVP WBP
Offshore Rigs & Platforms Ankleswar Vizag S.Base Jorhat-GSD T & S
Juhu Helibase Jodpur Hyderabad Office Silchar Jammu
Maker Towers Location Stores Delhi Office
Bengal Chemicals Baroda W.Shop Dehradun
Priyadarshini IRS, Ahmedabad
Mahakali Caves, Andheri
T & S Office
Arcadia
Botwala Chambers
Panvel
12 Victoria Docks
Darukhana
Nirmal
IPSHEM, Goa
Estimated SAP user base in ONGC
MODULEWestern Offshore
Western Onshore
South & Corporate
Eastern Onshore
Central & Northern
Total Users
MM 1058 1416 890 690 141 4195
FI & CO 337 295 404 200 82 1318
PM 305 236 123 140 29 833
PS 157 88 156 40 28 469
HR 157 185 322 70 35 769
PP 40 -- -- -- -- 40
SD 10 10 22 5 5 52
TR & CFM 2 -- 15 -- -- 17
BW / SEM 80 55 135 30 20 320
JVA / PSA 10 -- 17 -- -- 27
8040
ProjectProject Team –
Full Time
Technical Project Manager… ONGC
Functional Project Manager… ONGC
Team LeadsTeam
LeadsTeam Leads
Integration Manager
ABAP Lead
Basis Lead
BW & Reports Lead
Lead Interfaces
Training Manager
Executive CommitteeProject Sponsor
Steering Committee
Program Manager…ONGC & SAPProject Manager… ONGC & SAP
ABAPDevelopers
Business Configurators
Business Analysts
Basis Team
Change Management
Team
Process Owners
Power User Team - Regional Business Analysts &
Configurators
Lead Internet Technology
Web Programmers
ICE Project Team Organization Structure
Post Implementation
Business Process Re-engineering
Improved, disciplined approach to accounting,
procurement and financial systems
Rapid acceptance and improved
performance by workers
Improved ability to compete through the strategic use of new IT
platform
Improved visibility of business processes
across different business functions from exploration to production to sales and offshore joint
ventures
Business Process Re-engineering: SCADA Project
Supplied 16 Data Centers including the corporate data centre across India to enable efficient operation of respective Assets.
UPS for all the 250 plus tier 1 control room of production and drilling SCADA along with FCBC for 85 no of remote RTU (Remote Terminal Unit) with solar chargers.
SAP, Epinet, VRC- Integrations of Real-time and History Data.
Disaster Recovery Solution for the corporate data centre
Business Process Re-engineering: SAP Project
More than 200 end-to-end, daily business processes were replaced, yielding unparalleled insights
Solutions met stringent regulatory controls
Redefinition of work roles and duties meant greater transparency and accountability
Daily and weekly reports facilitated real-time reconciliation
Using Built-In Checks to Ensure Compliance
Raising the Visibility of Critical Data
Reverse Auction process: Benefit of ERP implementation
Collect and compare price and bid information of various suppliers in a real-time
Open bidding environment
Ensured transparency in the tendering process and thereby generate confidence amongst the bidders.
Add speed to the process of procurement which will allow ONGC to source best in class technology
Recent Developments
Overseas joint ventures
Implement the employee self-service (ESS) functionality of the mySAP ERP solution
• Reach over 36000 users• facilitates employees to apply for leave, submit their claims, and view
their payment details online
Better equipped to manage the magnitude of the 21st century challenges.
Information on inventory, production of our finished goods, costing of goods andservices, operational reports like DPR’s and our performance reports etc. are nowavailable online.
Transparency is ensured by ready access to information on stock availability, purchase order status, funds utilization etc. This has enabled executives of the regions to get relevant information right at their desktops.
Corporate executives can view and identify at any time the productivity from the functional operations and can also identify the reasons for much higher and lower productivity.
Sales and production can also be monitored online with facility to draw profit and loss account and balance sheet sector ally instead of only company level reports.
In addition to this, there has been elimination of duplicate and redundant activities in caseof reporting chain where there were different levels of reporting consolidation before itcould be compiled at corporate level.
There has been reduction in material codes from 14.9 lakhs to 2.9 lakhs in the process of data cleansing.This has resulted in cutting down duplicate codes and has led to overall transparency instock availability.
Performance and Evaluation