EPS Assignment Report

EPS Assignment Report On

ERP implementation On Indian Oil Corporation

Name: Ankit Agarwal Roll No: 351 Course: MBA (tech) Specialization: Computer Science

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EPS Assignment Report

INDEX

Table of Contents

PageNumber

1. Introduction...... 3 2. Challenges and Opportunities 3 3. Scenario Before Implementing ERP.. 3 4. Stages of ERP implementation......................................... 4 5. The implementation Process .................. 4 6. Barriers for implementing of ERP........... 5 7. Steps taken for mitigation of project. 5 8Timescales.. 6 9. Benefits for implementing ERP 6

10.Conclusion.6 11.References.6

EPS Assignment Report

Introduction Indian Oil Corporation Limited is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India. Indian oil Corporation was started in 1964 with the merger of Indian Refineries and Indian Oil Company . The company is the world's 98th largest public corporation and the largest public corporation in India Indian Oil and its subsidiaries account for a 47% share in the petroleum products market, 34% share in refining capacity and 67% downstream sector pipelines capacity in India. The Indian Oil Group of Companies owns and operates 10 of India's 21 refineries with a combined refining capacity of 65.7 million metric tons per year. Indian Oil operates the largest and the widest network of fuel stations in the country. It has a started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 62.4 million households through a network of 5,456 Indian distributors.

EPS Assignment Report

Challenges and Opportunities: Supplying products and services to the customer at the least cost Optimization of the supply chain Forming alliances across the entire oil and gas business value chain. Combining of retail and direct consumer business by providing qualitative product. Increasing the financial profitability Remove cost performance bottlenecks Improve database consistency.

Scenario before implementing ERP: 1983-84 - company migrated into RDBMS 1988- IOCL started online transaction processing system 1992-93 -the company shifted to SCADA for their pipelines and then moved to the advanced processing system in its refineries to monitor operations Lack of integration of business functions Delay in Capturing and processing business information Inefficient Operation management Manually and paper based work Time consuming decision making process No communication b/w different divisions So to resolve the issues IOCL hired services of PWA (price Waterhouse Associates) at the cost of Rs 30.42 crores. Objectives: The main objective to hire the PWA was to develop a strategy which would combined together all the functions and the departments. Then PWA suggested to implement the SAP/R3.

Stages of ERP implementation:

EPS Assignment Report

The implementation Process: PWA implemented a Conceptual Technology Plan (CTP) for the IT re-engineering of the project. It helped to address the functional and operational requirements (performance, safety, reliability, compatibility, security and legislation of ERP Solution SAP/R3). The main Objective of IOCL was to implement ERP at 590 sites and cost to implement was Rs.95.95 crores. However the company has escalated their plans to implement ERP at 674 locations and cost to implement this was 275 crores. The project was mamed Manthan.. A steering committee was hired for the evaluating of Manthan. In 2000 the another committee Corporate Management Committee was hired to evaluate all aspects of Manthan. After implementation of ERP , benefits of the IOCL was 358 crores per annum and total benefit was 573 crores.

Barriers for implementing the ERP: Company failed to execute a long range strategy and plan Due to the heavy reliance on the Consultants and without giving emphasis on the inhouse staff, increased in the consultation fee. There is only one Committee for evaluating all the projects, so delay two and half years to implement the ERP. Due to non-availability of Leased Line Links and other technical problems SAP implemented only 429 sites. After implementation of ERP there was no effective system to monitor or evaluate the ERP.

EPS Assignment Report

Data recovery

Steps taken for Mitigation of the Project: Long term strategy under the corporate management committee Specialist training delivered to all the staffs To integrate the ERP system segregation of departments was broken. BPR program was used to detect the cross functional problems of SAP R/3.

Benefits of ERP implementation: inventory optimization (Rs.147 crore) reduction in transportation expenses (Rs.70 crore) saving in banking cash (Rs.33 crore) discount through accounts payable management (Rs. 30 crore), reduction in accounts receivable (Rs.12 crore), reduction in project implementation (Rs.11 crore) Reduction in communication expenses (Rs.9 crore). Improvement in order management Productivity improvement. Financial Cycle improvement Cash Management improvement Revenue increases On time delivery improvements

EPS Assignment Report

Conclusion: The report tells the importance of Enterprise Resource Planning (ERP) system and how ERP helps to optimize their inventory and also helps the firm to improve their business process and to standardize them. A successful ERP system helps a firm to achieve cost efficiency and increase the transparency. The report analyses how Indian Oil Corporation's strategy to deliver products and services to the consumer at the least cost. . This report highlights, the barriers to implement the ERP and how these problems were solved. Due to integration of all departments information is readily available and this information helps in better forecasting .

References: www.sap.com/malaysia/solutions/.../pdf/IndianOilCorp.pdf - Malaysia www.computerworld.in/.../iocl-saves-time-using-b2b-exchange-approach www.informationweek.in/.../IOCL_saves_close_to_Rs_45_crore_by_automating_pay ment_collection.aspx www.expresscomputeronline.com/20020826/storage4.shtml