ERP SAP Implementation at NTPC

Project By: Group 2

NTPC About the company

Vision
To be the worlds largest and best power producer, powering Indias growth.

Mission
Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society. largest Indian state-owned electric utilities company based in New Delhi, India. Government of India holds 84.5% NTPC's core business is engineering, construction and operation of power generating plants and providing consultancy to power utilities in India and abroad.
All India Coal Gas / Liquid fuel Diesel Thermal Nuclear Hydro RES 77648.88 14876.61 1199.75 93725.24 4120 36877.76 13242.41 NTPC 23895 3955 27850* -

Total

147965.41

27850*

Locations, divisions & operations

Its locations varied geographically Serial no. 1 2 Headquate r NCRHQ ER-I, HQ City Delhi Patna Its diverse business expanse varied operationally As per new corporate plan, NTPC envisages to have an installed capacity of 128 GW by the year 2032 with a well diversified fuel mix comprising 56% coal, 16% gas, 11% nuclear energy, 9% renewable energy and 8% hydro power based capacity; most of it would be based on carbon free energy sources. Hydro Power Renewable Energy Nuclear Power Coal Mining Power Trading Ash Business Power Distribution Equipment Manufacturing

3
4 5 6 7

ER-II, HQ
NRHQ SR HQ WR-I HQ Hydro HQ

Bhubaneshwar
Lucknow Hyderabad Mumbai Delhi

8 WR-II HQ Raipur The power generation plants under it are 19 Thermal-coal based 7 Coal based (owned by JVs) 8 Gas based 6 hydroelectric power projects including one in Bhutan

Joint Ventures of NTPC

It has formed Joint Ventures with :1. For Capacity addition

SAIL power Company Limited Tamil Nadu Energy Company Limited Aravali Power Company Private Limited Meja Urja Nigam Private Limited Ratnagiri Gas and Power Private Limited Nabinagar Power Generation Company Private Limited 2. For Services Alstom Power Services Utility Power Tech Limited National High Power Test Laboratory Pvt Ltd For Power Trading and Power Exchange

DIVERSIFICATION : To broad-base the business and ensure growth, diversification in areas Hydro power, Distribution, Trading, Coal mining, LNG etc. have been identified as priority areas. BACKWARD INTEGRATION- COAL MINING The policy changes provides an opportunity to NTPC to enter captive coal mining business. Pakri Barwadih in the state of Jharkhand and 5 more blocks (~40MTPA) have been allotted to NTPC, including two in JV with CIL. NTPC is exploring various other options including acquisition of stake in coal mines abroad for sourcing of thermal coal for addressing fuel security concerns.

National Power Exchange Limited (NPEX)

For Acquisitions
POWER STATIONS TAKEN OVER

3. For Coal Mining SCCL Global Ventures Pvt Ltd International Coal Ventures Pvt Limited BHEL Power Projects Transformers and Electricals Kerala Ltd Energy Efficiency Services Ltd CIL-NTPC Urja Pvt Ltd Anushakti Vidyut Nigam Ltd
YEAR 1991 1995 2000 2006 ORIGINAL OWNER UP Rajya Vidyut Utpadan Nigam Limited Orissa State Electricity Board UP Rajya Vidyut Utpadan Nigam Limited Central Electricity Authority

2x210 MW FEROZE GANDHI UNCHAHAR THERMAL POWER STATION 4x60 MW +2x110 MW TALCHER THERMAL POWER STATION Orissa State Electricity Board 4x110 MW TANDA THERMAL POWER STATION 705MW Badarpur Thermal Power Station Central Electricity

Strong presence across all verticals

Enterprise Asset Management

Project Management

Sourcing and Procurement

Human resource management

Billings and settlement

Finance and Reporting

Vendor Selection Process

Analyse the Business Requirements

Vendor Search

Request for Proposal (RFP) and Request for Quotation (RFQ)

Proposal Evaluation and Vendor Selection

Contract Negotiation Strategies

Vendor Evaluation Criteria

Function fit Technology

Company
Cost

Support

Direct software cost Hardware cost Annual support cost Implementation cost

Vendor and Business Requirements

Market Capitalisation Specific Qualifications and Working Conditions of Employees Integrated inventory, order processing, and accounting system Robust Payroll and Costing system Transaction history must be available online for a minimum of five years

Evaluation of Vendors against Requirements

Analysing Business and Vendor Specifications

Assigning a Performance Value to each Vendor

Calculating the aggregate score

Why SISL-Siemens Information Systems Limited

Leading "Systems Integrator and Total Solutions Provider" offering high-end consultancy in areas like Healthcare, Telecommunications, Manufacturing, Utilities, Public Sector & Government Good Track record in Implementing ERP solutions across the Energy and Utilities sector Has a partner tie up with SAP and also a center of excellence Quotation competitive with respect to other vendors SISLs previous experience of working with some of the major DISCOMs in the country gave it an edge Global network of 475,000 people, operating in over 190 countries

Contract Negotiation
Define Any Time Constraints and Benchmarks

Assess Potential Liabilities and Risks (How will implementation delays be handled? Whose insurance will cover contract workers?)

Confidentiality, non-compete, dispute resolution, changes in requirements

Various Processes at NTPC

Network Specific Functions
Network Documenta tion Network Calculation s Geographi cal analysis Technical Planning

Operations Functions

Market Related Functions

Work Order Mgnt. Procureme nt

Billing

Meter Reading

Energy Mgnt.

Dispatch

CRM

Pre-ERP Disparate Application Landscape

ERP Software Product Preferences

Power sector prefers SAP over PeopleSoft because of the provision of the Utilities vertical Experts in IT software development domain not present in power company Building software in-house is timeconsuming and will shift focus from core operations

NTPC should buy the software product from third party

As Is To Be Analysis
Pre-ERP System Constraints (As Is) Business Goals That NTPC Aimed to Achieve (To Be) Integration of Process/People/Location/technology Stable and secure system to support growing business needs Improve vendor management and reduce procurement cycle time Empower employees through progressive H.R practices Effective asset management and maintenance tracking across the organization

Multiple systems with varying process maturity Legacy applications could not handle new requirements Duplication of vendor codes and lack of system support for new modes of procurement Lack of systems to provide employees with data access Limited ability to accurately track O&M costs and conduct systematic asset maintenance plans

Limited visibility into inter unit inventory

Increased visibility into inventory levels

Scope
The Scope of the Project as envisaged by the company :
Business Areas

Services Coal Mining Power Trading Power Exchange

Locations Head Office Regional Offices Factories Warehouses Area Sales Offices Systems Interface to Internal Systems Interface to External Systems (e.g. Tata Chemicals)

Manufacturing
Accounts (incl. Costing) Production Planning and rest of manufacturing processes

Functions

Purchase and Inventory

Sales and Distribution Plant Maintenance Quality Assurance HR

Asset Management

Genesis of the Project

Define Business Strategy
Organizational Restructuring and Business Process Reengineering Long Term Business Strategy, HR Strategy and IT Strategy

Develop Supporting IT Strategy

Selecting the right approach towards home-grown , best of the breed or COTS

Selecting the right IT Partner

Evaluate and award contract to the best ERP solution provider SAP selected as the IT platform

Pilot Implementation
Whole suite of SAP applications across 5 locations First pilot project live in 10 months

Complete Rollout
Rolled out across 25 locations

RoadMap

ERP Transition

Implementation of an ERP and transitioning from legacy systems requires that not only the system be ready but the organization and its people to be ready on many levels. The following aspects are to be considered in the transition phase

Technical Infrastructure Application Software

Data
Organization Operational Third parties Users

Project Initiation
The objective of this phase is to find the package that is flexible enough to meet the companys need or in other words, a software that could be customized to obtain a good fit.
For example :- Improve vendor management and reduce procurement cycle time Reduce engineering & construction cycle time Once the packages to be evaluated are identified, the company needs to develop a selection criteria that will permit the evaluation of all the available packages on the same scale.

Project Initiation
To choose the best system, the identification of the system that meets the business needs, and that matches the business profile.

It is better to have a selection committee that will do the evaluation process.

Considering the constraints involved:1.Limited visibility into inter unit inventory levels 2.Limited ability to accurately track O&M costs and conduct systematic asset maintenance plans

Project Planning Phase

This is the phase that designs the implementation process. Time schedules, deadlines, etc. for the project are arrived at. The project plan is developed in this phase. Establish the Core Pilot implementation of all the modules at 5 locations Build global template to align organizational processes Go live in 10 months from the date of project kick-off In this phase the details of how to go about the implementation are decided. The project plan is developed, roles are identified and responsibilities are assigned.

Project Planning Phase

The organizational resources that will be used for the implementation are decided and the people who are supposed to head the implementation are identified. The implementation team members are selected and task allocation is done. The phase will decide when to begin the project, how to do it and when the project is supposed to be completed. The phase will also plan the What to do in case of contingencies; how to monitor the progress of the implementation; The phase will plan what control measures should be installed and what corrective actions should be taken when things get out of control. The project planning is usually done by a committee constituted by the team leaders of each implementation group headed by CIO.

List of Modules Requirement for NTPC ERP Implementation

Production Plan

Operation Management

Security Monitoring Management

Electric Belt Scale

Bi-Ticket Management

DCS Net-Gate

Technics Monitoring

Salary Accounting

Transportation Management

Finance Reports

Storage Management

Purchase Management

Fuel Management

Equipment Accounting Management

Equipment Fault-Removing Management

Equipment Reliability Management

Human Recourse Management

Environment Protection Management

Management Inquiry

System Management

ERP configuration and set up

Corporate planning Project s
Engineer ing & QA Contract s
Site procureme nt materials

Operati ons

Mainte nance

Fuel Manage ment

Comm ercial

Finance, Human Resource R&D, TCM, IT Rehabilitation and Resettlement Legal & Secretarial Safety, Security, Vigilance Consultancy Corporate communications Employee Health Environment

Why SAP?
Worlds largest ERP product company with proven track record

Support for easy setup and ongoing changes

Predictable long term financial cost with buying only what is needed

Multiple channel access using mobile, computer and other platforms

Complete integration of people, Information and Business processes

Integrates existing IT investment without data loss

Solution Architecture-MySAP Business suite SAP R/3 enterprise

my SAP Product Lifecycle Management (mySAP PLM)Engineering and design and management of on going engineering changes

mySAP Supplier Relationship Manager (mySAP SRM)eProcurement

mySAP Supply Chain Management (mySAP SCM)

mySAP Customer Relationship Manager (mySAP CRM)

Strategic Enterprise Management (SEM)

Industry Solution for Utilities covering Energy Data Management, Billing & Contract Management (mySAP Utilities)

Platform and Integration Components - SAP NetWeaver Application platform for all SAP solutions - SAP Web Application Server (SAPWAS) Information Integration- mySAP Business Intelligence (mySAP BI)

Access Integration - mySAP Enterprise Portals (mySAP EP)

Process Integration -mySAP Xchange Infrastructure (mySAP XI)

Third Party Product-Powermaster from Siemens, Optibiz software technologies & RWE npower

ERP data migration

Existing Data
Materials 30000+items Transaction Data Master data material and Service Plant 15000+ equipments Equipment Master and Task list List of activities Employees Employee data Finance Accounting data Operations Plant parameters history data Vendors: 5000+vendors 5000+vendors

Migration architecture
Extract data from source system
Data cleansing, transformation and harmonization Data migration and Accounting

Renter
incomplete transaction

Data Validation

Auditing data migration Documentation

Challenges and points of failures in Data Migration

Lack of proper methodology Improper classification of data Unrealistic scope Lack of understanding of the tools Inattention to data quality

Lack of experience
Heterogeneous transition between two different platforms

Extended Role Based Access Control

Permission
Obligation

access to one or more objects in the system. DB System :create/delete or insert record Accounting app.:rights such as account creation/deletion, credit/debit

NTPC researchers have to fill up his/her personal information before s/he can have the rights to read or download white papers.

Environmental or System Requirements

Condition
Condition Obligation Permission

Policies at NTPC

Need to know Need to Share Trust Integrity

Whether the user needs to know? An accountant might need to know the current status of a consignment dispatch Whether information sharing help? Finance and Manufacturing can share inventory levels to forecast costs Trusted parties are allowed sharing. CFO & CEO are allowed to share anything Data modified by authorized individuals? Leave status of employees can be changed only by NTPC-HR

ERP Testing
Initiate planning and gather requirements Define test goals and select appropriate tests Identify functionality test cases Develop modular test components Set up a test lab Understand and leverage the smoke test Execute regression tests Analyze defects and create test reports.

Change & Change management strategies

ERP helpdesk

Processes

Roles & Responsibilities

Deployment of power users

NTPC Change management

User Involvement

Work culture

Attitude and mindset of people

End user training

Components in change management

GAP Analysis: As Is and To Be analysis

Job Assignment: Individuals to To Be jobs

HR Alignment: Create new job descriptions and hiring Communications plan: Notifying existing employees about the transition Transition strategy and budgets: Decision to do In-house or Out house

ERP Closure

Clear Pending Items after referring BRD of NTPC Finalize knowledge transfer to the different departments of NTPC Document the lessons learnt Go-Live Support by a SISL tech team Establish on-going quality and testing strategy Conduct performance tuning

Benefits achieved
Implementation of Works Bill processing

Centralized Payroll and Employee Self Service for 25000 employees

Energy Billing as per availability based tariff

Implementation of Fuel management functionality to meet business requirement of capturing and handling data

Vendor Collaboration-Both Internal and External

E tendering and Reverse Auctions

Claims , travel and Loans Processing automated and workflow cycle optimized

The Major Risks

The Risk of High Initial Cost Changeover from Old Legacy System to new ERP System Collapse of the new System Non customization of ERP software to existing business processes Improper integration of modules Non availability of Bandwidth / internet facility at remote rural areas Employees not at ease with the new System

The Mitigation Process by NTPC

Pre Implementation
Awareness of the new system Proper communication and Information dissemination among the NTPC workers across multiple sites Data Validity Infrastructure readiness and Worker/Manager training across levels.

During ERP Implementation

Data migration from NTPC legacy to ERP System Alignment of the ERP System to NTPC s vision

Post ERP Implementation

Live Support by SISL Customization of features by SISL as per NTPC demands Change Control via regular and periodic information disbursal Continuous NTPC User Staff and Executive Training to put them at ease Involvement of NTPC top Executives right from day 1

What led to the Success- The NTPC Way

Ensuring Top management Commitment and Support (CEO and CFO) Ensuring that the Businesses owns the process to be implemented (Enterprise Asset management, Sourcing & Billing etc.) Assess and address policy change proactively

Hiring Consultants (SISL)who have had prior experience in the same industry

Regular awareness programs through change agents and process anchors Improve and adapt the rollout approach based on ground realities (e.g.: Data Centre, Training)

Make realistic and detailed estimates on the effort needed to migrate existing legacy data

NTPC recognized as the Best Run BusinessSAP ACE