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Business Process Re-Engineering at ONGC

ONGC is India's largest oil and gas company with over $22 billion in market capitalization. It produces over 80% of India's oil and gas through operations at 500 offshore and onshore locations with 33,000 employees. Prior to implementing SAP, ONGC used legacy systems that made data collation, consolidation and analysis difficult. To standardize over 200 business processes across 13,000 users, ONGC implemented a $950 million SAP ERP system over 30 months, integrating business operations and providing real-time data availability and process optimization. The SAP implementation helped achieve over 200 redesigned end-to-end processes, real-time reporting, electronic transactions, and improved transparency, accountability and productivity.

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Chandrakant Pawar
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475 views20 pages

Business Process Re-Engineering at ONGC

ONGC is India's largest oil and gas company with over $22 billion in market capitalization. It produces over 80% of India's oil and gas through operations at 500 offshore and onshore locations with 33,000 employees. Prior to implementing SAP, ONGC used legacy systems that made data collation, consolidation and analysis difficult. To standardize over 200 business processes across 13,000 users, ONGC implemented a $950 million SAP ERP system over 30 months, integrating business operations and providing real-time data availability and process optimization. The SAP implementation helped achieve over 200 redesigned end-to-end processes, real-time reporting, electronic transactions, and improved transparency, accountability and productivity.

Uploaded by

Chandrakant Pawar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ONGC

A case of Business Process


Reengineering with IT

Summary:

ONGC, a fortune 500 company is the flagship


company of India

Has a market capitalization of over USD 22


billion

They carry out all the activities such as

It contributes more than 80% of India's oil and


gas production

Operations include :

7 basins, 33,000 employees with more than 500


offshore and onshore locations.

Pre-ERP days of ONGC

Project Kuber, started in 1996 for its finance


function.

Thereafter in 1999, it started another project,


Project Shramik for all HR modules

ONGC used PC-based legacy systems for


material management, project monitoring and
maintenance planning

Issues & challenges faced by ONGC

Collation, consolidation and analysis of operational


data were difficult and time consuming

Standardize more than 200 business processes for


13000 users across a total of more than 500 offshore
and onshore locations all in under 30 months

Cleanup and migrate huge data from legacy systems


and hard copies

The system deployment could not upset the


operations within ONGC

Replication and configuration of data in real time via


satellite and by linking existing systems.

Project objective
Objective for SAP implementation

Optimization & standardization of business


process

All local and offshore business operations of


ONGC had to be integrated into a single ERP

Availability of information on real time basis

Higher visibility of operations to improve


productivity

More efficient processes with higher visibility


of cost

Integration & extension of value chain

Solutions
SAP solution and services

mySAP.com e-business solutions was proposed


to be implemented over the next 30months
across 5 regions of ONGC for over 8500 users

Solutions covering financials, corporate


management, business intelligence, supplier
relationship management and other critical
operations of ONGC.

Why SAP?

SAP had the experience with global oil and


gas production companies

Solutions of the business complemented


existing SAP finance and HR applications

Implementation plan and


Roll-out

SAP India signed the largest ever deal in


ONGC

The deal worth Rs.950 crores would provide


comprehensive IT enabled system for the PSU

It was also the largest consulting deal for SAP


Asia Pacific.

mySAP business suite and the SAP for oil


and gas solution portfolio, including the SAP
strategic enterprise management (SAP
SEM) application, SAP business information
warehouse component part and SAP portal
were implemented.

Were designed to integrate with existing


finance and HR solutions used

The implementation also includes other SAP


solutions, such as collaboration projects
suite, supplier relationship management and
upstream oil and gas exploration and
production solutions

Project team consultants from SAP played a


critical role in the roll out and education of
users

By the time the project was completed in May


2005, the team had added other geographical
locations and functions to the implementation,
making new solutions available to total of
13000 users-65% more than the user base
originally planned.

The system was implemented in corporate


center in New Delhi with a back up in
Mumbai.

Business Process
reengineering

A business process is a collection of activities


which together produce something of value to a
customer

e.g. Customer Order Entry

Reengineering is the fundamental rethinking


and radical redesign of business processes to
achieve dramatic improvements in critical,
contemporary measures of performance, such
as cost, quality, service, and speed.

What to re-engineer:
BPR changes processes, and not functions,
departments, geographies or tasks.

IT in BPR

Shared

data base, making information available


at many places.

Decision support tools, allowing org to be


centralized and de-centralized at the same time.

Automatic identification and tracking, allowing


objects to tell where they are, instead of
requiring to be found.

BPR achieved through IT


in ONGC

More than 200 end to end processes were replaced


with redesigned processes.

The new process yielded insight into operations,


real time reporting on E&P, inventory, FA , &
accurate and efficiently delivered data.

The new solution meant that paper based contracts


& vendor payments were complemented by
electronic transactions.

The daily & weekly reports replaced the quarterly


reports & facilitated real time reconciliation.

Process-oriented redefinition of work roles and


duties were assigned and this resulted in
greater transparency and accountability.

The co sends out the payments for the


purchased products & service only after the
verification of invoice.

Benefits achieved by ONGC


after SAP implementation

Improved and disciplined approach to accounting and


financial system

Availability of critical data online for all levels of


management.

Launch of Reverse auction process, first PSU to do so.


Termed as live action cockpit the system enables
ONGC to collect and compare price and bid information
of various suppliers in real time.

The reverse auction will ensure transparency in the


process

ONGC also implemented employee selfservice (ESS) functionality of the mySAP ERP
solution, expanding its reach to 36,000 users.
The ESS codenamed Samparc which facilitates
employees to apply for leave, submit their
claims and view their payment details online.

Improved visibility across the enterprise across


the globe

Improved ability to compete through the


strategic use of new IT platform

Increased productivity of the employees

Questions!

Do you agree with the arguments made in this


case in support of the BPR provided by IT in
business? Why or Why not?

How has SAP implementation helped achieve


BPR?

What strategic advantages has ONGC been


able to gain by relying on IT and IS ?

Other companies that have used IT


strategically and gained competitive
advantages/

THANK YOU !!

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