Professional Documents
Culture Documents
INTRODUCTION
Being a progressive organization, BPCL was one of the earliest one in the energy sector to implement the Enterprise Resource Planning. Enterprise Resource Planning is the ability to leverage business and IT Strategy together to increase its effectiveness and efficiency of technology initiatives. Therefore to establish ERP, organization must choose and measure the project on three criteria: a) Does it increase revenue b) Does it cut costs c) Does it increase performance efficiency The synergies in an organization are driven by its three elements: People, Process and Technology. Combined the three elements determine the culture of an organization. Any alteration in any one of the elements my lead to a substantiated affect on the organizational culture and hence its performance. Therefore, it is imperative to align all the parameters in the direction to synchronize the organizational culture. Enterprise resource planning is not simply a set of technological tools, but a revolution of the enterprise approach to fabricate strategy to address the business requirements that realize cost savings, performance improvement, and if possible, new innovative source of revenue. Why BPCL forms a classic case of the ERP implementation because at the very early stage of the project only, it realized the fact that applying the technology to solve complex challenges multiplies the impact and visibility of the problem unless it is harmonized with the people and processes. BPCL realized that implementing technology first is a temporary fix to the problem in a complex business environment.
Fig 1: Three Pillars of Organizational Culture
ERP
PEOPLE
PROCESS
TECHNOLOGY
Fig 2: ERP Implementation: Making People understand, getting process maps from them and then implement the technology. The BPCL WAY
technological transformations, the project management team should also schedule not only for the technological planning and implementation but also for people and processes transformation.
This effectively means that the team should plan for the entire organizational restructuring.
organizational structure. Any alteration in the height with one pillar (here technostructure) would essentially mean proportionate alteration in the height of other pillars i.e. top management followed by Strategic Business Units viz., Refinery, Retail, LPG, Lubricants, Industrial & Commercial, and Aviation; support staff (Finance, HR, Information Systems and Marketing).
Top Management
Refinery
Retail
LPG
Lubricants
Aviation
SUPPORT FUNCTIONS
Information
Finance
HR
System
Marketing
The organizational restructuring was also evident as the company was now moving from the status quo to customer centric approach of business. ERP implementation involves broader organizational transformation processes involving business processes, with significant implications to the organizations management model, organization structure, management style and culture, particular to people. The mammoth organization change owing to ERP resulted to BPCL towards a shift from a fragmented function based organization structure to a processed one served by an integrated system.
Fig 4: Mintzb erg s O rganiz ational Model
1.IS PLAN
Identify Business Aspirations Map Existing Business System Future needs based on Customer focus, Integration, flexibility & Resource-Optimization IS Process Anchor
2. SELECTION OF ERP PACKAGE Mapping of Major Processes (Over 600) with processes experts Development of Detailed Requirement List
5. TWO PHASE
Modules to implement Conceptual Design & Planning (CDP) PWC, 6 Months Detailed Design and Implementation (DDI)
3.
QUANTITATIVE BENEFITS Estimated Benefits : INR 42 Crore per year Maximum Benefit achieved through Inventory Management:15.41 Crore Reduction in Working capital Reduction in Account Receivables Days
6. CD&P
All stakeholders together Capacity Planning Network Planning System Landscaping Authorization Management
4.
PROJECT ENTRANS Driven towards Enterprise Transformation ERP Business Initiative driven towards Customer Focus Project Steering Committee (PSC) involving Heads of SBUs, Finance, HR & IS To Integrate Interfaces DDI KEY DELIVERABLES Pilot Implementation : 6 Phases Realization of Qualitative and Quantitative Benefits Detailed Process Design & Configuration Data Migration Integration Testing Development & Interfaces Basis & Authorization for Transactions PILOT IMPLEMENTATION Identification of Pilot Sites IT Readiness of Location and Proximity with Project team ISSUES IDENTIFIED: Some Simple Tasks turned Complex Requirement of Formalization Configuration Problems Staff more Stressed with SAP
7. DDI
SAP implementation by InHouse Team Development of In House SAP Consultants ( over 70) SAP India to Assist Schedule -24 Months for all the offices and Units of the organization
8. DDI OBJECTIVE
Execute the Implementation in phases Effective Network Planning and Parallel Execution of Phases Pilot Run to Measure the Efficiency of the Critical Business Processes
9.
10.
CHALLENGES
Key Challenges: Integration of Business by replacing fragmented system Turn BPCL into a learning organization Emerge as a leader in the deregulated environment Incorporate flexibility & agility to respond to the dynamic environment
The implementation of ERP was not an easy task. There were many challenges to deal with. The first and foremost challenge was to integrate the existing culture of the organization with the Enterprise Resource Planning. The second challenge was to drive the traditional way of working organization within the toward
Departing understand Employees the
undocumented processes for the business efficiency. The mere existence of the same
the business activities was a critical face up to. Also there was a threat in the employees that ERP implementation would be succeeded by layoffs. However, with layoffs goes away the knowledge and information that an employee holds. leaving employees have deep domain expertise and knowledge and they understand the undocumented
processes ERP
implementation makes doing the job much harder for new employees.
functions of the organization-information that can be lost-but, in addition, the mere existence of those same undocumented processes makes doing the job much harder for new employees. BPCL could foresee the problem and made sure that employees stay with the company and also that there are no layoffs. Another major challenge was to ensure the integration of the functions and to interlink the SBUs through proper interfaces. Project Steering Committee was constituted for the purpose. Roll out of ERP countrywide was yet another test for BPCL owing to poor network support because the feeble links to most of the BPCL locations could not support the on-line SAP transactions. One of the major challenges was and is still existent is of standardization of the processes and hence minimized scope for innovation in the processes.
Measurement of Success of ERP implementation was the real challenge. How can one start a project when the desired outcome of the project is not known? One of the pertinent questions which exist in project management is when to count a project as success- when the project got successfully implemented or when the project after implementation has served the purpose? How to determine parameters? the the success
Yet the real test was of measurement of success of ERP implementation. One of the pertinent questions which exist in project management is when to count a project as success- when the project got successfully implemented or when the project after implementation has served the purpose. Identification of the success parameters of the projects was not clear and the benchmarking of the success parameters was yet to be done.
Operational Benefits
a) Reduced cycle time for key business activities b) Increased productivity c) Implementation of online performance Metrics However, implementation of successful performance metrics requires thorough evaluation of the risks associated and the expected benefits to accrue. This can be incorporated through benchmarking with existing industry performance across globe localized to Indian Context. Nevertheless, BPCL successfully implemented SAP ERP at 160 of its 200 locations and is rated as one of the most successful projects. The success of the project is mores so important owing to the bureaucratic environment prevailed and lack of political will.
Benchmark
Fig 6: Factors Determining Performance Metrics
Fig 5: Com mod itiz atio n of ERP. So urce: Nich olas G. Carr, May 2003, Harvard Business
Benefits
Evlauation
Performance Metrics
Risks