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Leveraging ERP for value creation
An experience sharing session
24th
April 2016
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Bharat Petroleum - Company Profile
• BPCL - the second largest Oil & Gas downstream company in India with
sales volume of 27.2 million MT and annual revenue over US $31 Billion
• BPCL was formed in 1976 consequent to passing of Burmah Shell
Acquisition Act by the Indian Parliament
• Fortune 500 and Forbes 2000 list
• Top 10 distribution network in India – 4 refineries, 13 joint ventures, 9600
Retail Outlets, 2,400 LPG Distributors and 14,000 people strong
• Largest employer of sportspersons – 72 International & National level
players that includes 6 Olympians
• Major contributor to education and rain water harvesting projects in India
under “Corporate Social Responsibility”
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Our Business Lines
Retail
LPG
Aviation
Lubricants
Refining
Industrial & Commercial
Gas
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Supplies Materials
Finance
Sales
Logistics
E & P
Refinery
HR
Most Organizations, have “islands” of information in
the system
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Cash
Pay
Admin Inventory
Control
Voucher
Capex
Finance
Ledger Payroll
Master
Loans
Materials
Systems developed for specific requirements are like
loose pearls with their own independent values
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Materials Management System
Stationery Package
Materials Administration
Purchase
Orders Warehouse
Stationery
Dept.
Purchase
Orders
Receipts Bill
Payment Receipts Bill
Payment
Function based Software solutions lack cross functional
integration
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The value of an integrated solution is greater than
the sum total value of all the specific solutions
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Contract Management
Inventory Management
Accounts Payable
Materials Administration
Purchase
Orders
Warehouse Stationery
Dept.
Purchase
Orders
Receipts
Bill
Payment
Receipts
Bill
Payment
Process based Software solutions focus on the
functionality requirements of processes
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Need for IT Transformation
De-regulation
1997-98 Project CUSECS
Corporate Restructuring
IS Plan
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Flexible
• Able to change systems functionality to meet business needs
Integrated • Information should be entered only once and available for usage across
the organization
• All transactions and analysis should be based on same information
Standardized • Maintain certain minimum standards in processes across businesses to
ensure efficiency and effectiveness
What is Flexible, Integrated and standardized?
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ERP Modules
Optional
Modules
IS OIL
Product
Exchange/
Swaps
Oil dist &
accounting
BW
Business
Information
Warehouse
Finance Controlling Materials Mgmt.
Accts Receivable
Accts Payable
Asset Mgmt
Cash mgmt
GL
AR
AP
AM
CM
General ledger CCA
PC
OPA
PCA
Cost center
Accounting
Product
Costing
Order Project
Accounting
Profit Centre
Accounting
PUR
IM
IV
Purchasing
Inventory Mgmt
Invoice
Verification
Production Planning India Localisation Plant Maintenance
Sales & Distribution Project Systems Human Resources
FIFI COCO MMMM
PPPP PMPM
SDSDHRHR
Base Package
PSPS
CIN
PP-PI
Production
Planning in
Process
Industry
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Su
sta
in &
be
ne
fit Re
aliz
atio
n
Change Management
Training
End User Support
DDI
Pilo
ts
Co
nce
ptu
al D
esig
n
Pro
ject In
itiatio
n
Sta
bilis
atio
n
Ro
llou
t
The SAP Project was owned and driven by the Business
Corporate Functionality
6 m 6 m 12 m 3 m 6 m
Stages of SAP Implementation
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The ERP story
Challenges
• Size and Complexity
• Unchartered Path
• Change readiness
• Steep learning curve
• Resource mobilization
• Transition Management
Key enablers
• Strong executive commitment
• Business Ownership
• Value generation as key driver
• Investment in training
• Taking charge of the project
• Effective change management
Outcome
• Successful Oil& Gas implementation
• Quantified benefits
• Value added roles to back-end employees
• Setting the ERP culture
• Robust IT platform
• Knowledge driven end user community
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Project Governance – From Systems to Processes
Business Processes
ERPCC
SBUs/ Entities
Apex Council
Steering Committee
Internal Audit
Location Anchors
Process Forums
• Project approval
• Support & Participation
• Policy approvals
• Process improvements
Apex Board of Directors
• Governing body for projects
• Policy / key decisions
• Process and master data ownership
Steering
Committee Business/
Entity Heads
• Business experience
• Governance & controls
• Training investments • Team working attitude
ERPCC Business Experts
Process Forums
Master Governance
Councils GRC Council
Training Coordinators
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ERP Competency Centre: Ethos
Shared Vision
• We are the leading business process competency centre in the world
• We are a pool of experts generating value to the business using process innovation and new technologies
• We set global benchmark in project implementations
• We build our capacity on a continual basis to deliver our promise to the business
Domain Expertise
• Sound knowledge and experience in the relevant functional/ technical domain
• SAP certification in relevant module
• Ability and initiative for continuous learning
• Willingly share knowledge and experience with others
• Ability to proactively look for process improvements and come up with solutions
Culture
• Trusted Partner to the Business
• Collaborative decision making
• Knowledge based leadership
• Team with flat structure
• Proactive to the business needs
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Awards and Recognition
• Recipient of SAP’s STAR implementation award for setting benchmark in SAP implementation
• Member of SAP’s Global Industry Advisory Council for Oil & Gas
• Best Supply Chain Management User Award from NASSCOM
• Customer Excellence award from SAP for Real Estate Module implementation
• SAP ACE Award 2010 for “Best Run in Human Capital Management”
• SAP ACE Award 2010 for “Best run in Compliance”
• SAP ACE Award 2011 for “Best run Supply Chain”
• “Best ALM Excellence Award 2011 for PUBLIC SECTOR” in Indian Subcontinent
• SAP Certified Competency Centre – 5 times in a row
• Honouree CIO ASIA award for 2008
• Recognized as best SAP Reference customer in India
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Critical Success Factors
• Top Management Commitment
• Sustained Organizational Attention
• Quality & Speed of decisions
• Strong Project Management
• Project Resources
• Quality of Masters
• End user training
• Customer Competence Centre
• Communication
• Change Management
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• Implementation of ERP is less about Technology, more about People, Processes and the way people do work
• What makes an implementation successful is the way the change is managed by the Organisation
• Change Management works best when done internally
Change Management in ERP Implementation
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Product
Process
People
However if the underlying Processes and People are not in line with
the Organisation’s purpose, the Implementation can fail
Just like the iceberg what is visible is the Product
implemented in an ERP Journey
ERP Solution
The way of doing Business
The Water Line
The way people think and act
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Magnitude of change in ERP context
• Processes
• Manner of Documenting Transactions
• Roles
• Accountability across levels
• Control Mechanisms
• Boundaries and Structure
• Inter- Relationships
• Mind set
• The way of thinking and working with each other
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Signals of resistance to the transition
• Fault finding with the intended change in Business
Process
• Avoid participating in the programmes
• Not sponsoring resources to the Project
• Finding constraints rather than looking for solutions
• People getting stuck to their own view-points and
positions rather than the Purpose
• People not adhering to the commitments made
indicating lack of Sponsorship
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Key Change Management principle practiced in BPCL
“Push” Programs
Results
Required Actions Required
New Behavior New
Attitudes
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Generating Energy within the Team
Creating Ownership in the Organisation
Managing Change is about :
How did we Manage change in SAP Implementation ?
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Generating Energy in the Team
• Creating a Compelling Purpose for Project Team members
• Visioning workshop for Project Team members
• Capability Building
• Training & Certification of Team members
• Learning from implementation in other organisations
• Empowerment
• Operational freedom to the Team members
• Opportunity to self-select in area of passion
– Team Operating Principles
• Members with equal status
• Collective planning process
• Knowledge based leadership
• Top Management Support and Guidance
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Creating Ownership in Organisation
Involvement
Enrolment
Engagement
Ownership
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The Value Creation Journey in HR
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Key drivers for ESS
• Empower employees
• Generate positive user experience
• Increase visibility and
transparency in HR processes
• Achieve cost leadership
• Process standardization
• Shift role of HR from transaction
to transformation
• Develop centers of excellence and
capacities of people
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Portal Access to Labour employees
• Expanding the reach & convenience of self service offering to all
• Minimize dependence on HR for information
• Off Cycle statements
• Leave Balances
• Loan Balances
• Salary status of claims
• LTC details
• Online real time access to personal data
• Less-paper environment
• Enhanced accuracy & consistency of data with employee
feedback
• Positive user experience
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What is driving the Talent Management Strategy for
us now ?
What criteria should be used for identifying top talent employees?
Career & Succession Planning
Performance Management
Attraction, Development, and
Retention of Critical Workforce Segments
What are the critical workforce segments required for the company to succeed?
What development opportunities should be offered to employees?
What are the consequences of not meeting performance standards?
Who is our next generation of leaders?
What are the mechanics for giving feedback to employees about their performance?
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Myth Vs facts
Myth 1 ERP is an IT
initiative
Myth 2 IP is responsible for the project
Myth 3 Mediocre
performers are good enough
for the project
ERP is a business initiative
Best resources are to be deployed in the project
The entire organization is responsible for the project
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Myth Vs facts
Myth 4 People can work
on part time basis in the project
team
Myth 5 Investment in
training is optional
Myth 6 Go live marks the
end of the ERP journey
Project team member should be a full time member
Organization need to invest on training for long term sustenance
Go live marks the beginning of the ERP journey
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Myth Vs facts
Myth 7 There is not much benefit from ERP
for a Govt company
Myth 9 ERP is a panacea
for all our problems
Myth 8 ERP is complex to
learn
Sky is the limit in deriving benefit from ERP
With little bit of training & practice, one can comfortably work in ERP system
ERP is a business tool and people have to act on information
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• SAP is a Business solution and not an IT solution
• Users to first understand the new business
processes thoruoghly
• Ensure that end users take training seriously
• Encourage users to seek help from ERP team when
in doubt
• Ask the users to use standard reports
• Encourage users to share the benefits of ERP with
others
Process of creating ERP culture
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Role of IT Changes with Demonstrated Capability Level
Source : Gartner
