ERP Implementation in Hindustan Petroleum Corporation Limited (HPCL)

Company Profile HPCL is one of the largest national oil companies in India with revenues of more than US$22 billion. The main businesses include manufacturing and selling lubricants, importing and refining crude oil, transporting and marketing bulk products LPG. HPCL has more than 8,000 outlets, with a 26% market share in motor fuel sales and a 28% market share in LPG.

The traditional System & the Need to implement ERP HPCL has more than 430 of locations and across 2,000-plus users in the country. There was no synchronized connectivity with the respect to business operations of HPCL across its different locations. Hence, there was no real time up gradation process which leads to data duplication. HPCL observed a major flaw in its Order Processing System with respect to dealers. So there was a need of real-time, online-accessible information from across all the geographically diverse locations of the company and making it available within a centralized system. With the help of ERP implementation HPCL improved its efficiencies in the areas of customer receivables, managing credit and inventory, tracking and monitoring customer receivables, and providing enhanced service to customers and other stakeholders.

What did they do? HPCL successfully implemented Asia's largest JD Edwards Enterprise an Oracle product. The one ERP implementation spanning about 400 locations and 4,000 employees across the nation. The implemented ERP software covers all the important modules of the ERP that is finance module,CRM,distribution and sales, manufacturing and HR.

The Implementation Process Any successful ERP implementation process goes through 3 important stages. Stage 1: Pre-Implementation Stage. Stage 2: Implementation Stage Stage 3: Post-Implementation Stage The implementation Plan at HPCL: Stage 1: Pre-Implementation Stage Their understood their business need for implementing ERP. Before implementation HPCL conducted a detailed study of all its processes and mapped them according to it. Created a standardized template and models ( which is based on different types of HPCL locations) that were used by the HPCL team to roll out the applications to the rest of the locations. They did the cost-benefit analysis, checked their ROI.

Deliverables-They come with a plan for implementing ERP. Called for RFP. Stage 2: Implementation Stage The ERP implementation programme was started way back in 2000. For implementation 14 Pilot sites were identified in the first phase , which represented all the business verticals Pilot LocationThe pilot location can be the petroleum depot, lube manufacturing plant, refinery, terminal, LPG plant, regional offices of retail, direct sales & LPG SBU, aviation service facilities Capgemini Consulting India Pvt. Ltd. was chosen as the implementation partner There was a need of building a centralized data centre where the servers and applications could be hosted as well as having better connectivity for all its locations spread across the country. The related infrastructure (like WAN, lease lines, VPN and VSATs) was built simultaneously depending on the availability for each location which was selected for inclusion process.

Data Centre based in Mumbai was powered with adequate computing capacity to enable it to handle the expected growth in the wake of the ERP rollout. HPCL primary Data Centre is located in Hyderabad because the company runs a refinery in Vizag and has also made significant investments in the state, so Hyderabad was a natural choice for the new DC. For connectivity across its various locations HPCL uses VSATs, VPN, RF links and broadband links. The company operates on BSNL's MPLS as well as a private service providers MPLS network for redundancy.

Team set up and ERP Roll out across the corporation 25 members team drawn from various departments were undergoing training training on the JD Edwards ERP system and also they take up the implementation across the company. Team of 100 consultants was also working from Capgeminis side, which was chosen to be the implementation partner for the project. Role of the Implementation Team-Required to be at the location o1 month prior to golive of the software they are also required to carry out the testing & set-ups and train the users. When the training is completed the documents the AS-IS process of the company. Pilot implementation project was divided into various phases Validating the AS-IS processes Finalization of the technical architecture and the hardware/software requirements Clearing the interfaces and customizations Roll out at the pilot locations Before any implementation a proper simulation and testing of the solution is done. The company had set up a separate team for infrastructure building at each location. The infrastructure team had to reach the respective locations on the basis of the lead time available so that the roll out team could initiate the work as per schedule. The locations due for the 'Go-Live' stage in a particular month were given top priority and a 'work backwards' system was followed to arrive at separate tasks and their deadlines for those locations. The tasks included procurement of hardware, applications for communication links, and testing and liasioning with local people at the location. This kind of systematic planning helped the company to reap the maximum benefits of its HR pool and consulting team. The central team had to visit the location to assess the communication equipment infrastructure as well as acceptance of the new system by the location workforce.

Company conducted workshop to train employee about system The ERP system was put through also put to tests using location specific data. The testing was done by the users themselves guided by the implementation team.

The ERP implementation at HPCL was successfully done in December 2005 at an organisationwide level. Benefits: Major benefits can be seen in Business Process Speed Enhancement & Standardization of HPCL. Post implementation HPCL observed efficiency in its financial accounts closure time earlier it took almost a months while the monthly closing would consume 15 to 20 days. But now, it took about five days while the annual closing took a mere 10 to 12 days. With the help of centralized ERP they enhanced their customer service by providing transparency and by making more information available to their customers, vendors and transporters on a real-time basis with the help of the Internet so that they can log in and check the status of loads, orders, and payments. Now the processes like manufacturing planning, procurement and employee benefits that were being implemented manually previously are now automated. ERP implementation enabled the generation of various day-end MIS reports on a regular basis. The IT team equipped the top management with Information portals to better their business visibility. Hence giving more visibility benefits for fop management. ERP system helps the decision makers in formulating various business decisions timely based on on-line & accurate information.

Change Management Communication regarding new ERP implementation was speared through a newsletter which inform different stakeholders about the implementation project, and its developments. There were pilot visits and they conducted surveys too. Champions were identified for the pilots. Training was provides to the users of the system.. Refresher course to employees regarding system.

Factors that helped in implementation: The success of implementation goes to four main factors like: the expertise of the internal team; the right implementation partner; commitment and support from the top management; Effective project management practices.