BPR EXPERIENCES IN INDIAN INDUSTRY

1.MAHINDRA & MAHINDRA

M&M's BPR In the mid-1990s, India's largest multi utility vehicle (MUV) and tractor manufacturer M&M was facing serious problems at its Igatpuri and Kandivili plants in Maharashtra. The plants were suffering from manufacturing inefficiencies, poor productivity, long production cycle, and suboptimal output. The reason: highly under-productive, militantly unionized, and bloated workforces. The company had over the years been rather lenient towards running the plants and had frequently crumbled under the pressure of union demands. The work culture was also reportedly very unhealthy and corruption was widespread in various departments. Alarmed at the plant's dismal condition, Chairman Keshub Mahindra tried to address the problem by sacking people who allegedly indulged in corrupt practices. M&M also tried to implement various voluntary retirement schemes (VRS), but the unions refused to cooperate and the company was unable to reduce the labor force. During this period, M&M was in the process of considering the implementation of a Business Process Reengineering (BPR) program throughout the organization including the manufacturing units. Because of the problems at the Igatpuri and Kandivili plants, M&M decided to implement the program speedily at its manufacturing units. M&M's management was not surprised to learn that the unions expressed extreme displeasure at the decision to implement BPR and soon went on a strike. However, this time around, the management made it clear that it would not succumb to union demands. Soon, the workers were surprised to see the company's senior staff come down to the plant and work in their place. With both the parties refusing to work out an agreement, observers began casting doubts on the future of the company's grand plans of reaping the benefits of BPR.

Mahindra & Mahindra Ltd. (M&M) was the flagship company of the Mahindra group, one of the top ten industrial houses in India. The company's history dates back to 1945, when two brothers, J.C.Mahindra and K.C.Mahindra, decided to start a business of general-purpose utility vehicles. The brothers formed a company, Mahindra & Mohammed Ltd., in association with their friend Ghulam Mohammed. In October 1947, the first batch of 75 jeeps was released for the Indian market. In 1948, the company was renamed Mahindra & Mahindra Ltd. Over the next few decades, the group promoted many companies in areas as diverse as hotels, financial services, auto components, information technology, infrastructure development and trading to name a few. Though M&M had established itself in the markets and was among the leading players in many of the segments it operated in, it realized that some of its businesses were not closely related to its core business. This realization marked the beginning of the biggest change exercise since the company's inception. In 1994, a major restructuring exercise was initiated as part of a BPR program. M&M introduced a new organizational model, in which various divisions and companies were regrouped into six distinct clusters of related businesses, each headed by a president. M&M's core activities, automotive and tractors were made autonomous business units. The other activities of the group were organized into infrastructure, trade and financial services, telecommunication and automotive components. According to company sources, the whole exercise was intended to develop a conceptual map to provide direction for the future growth of various business lines. It was decided that, in future, the group would confine its expansion to the identified thrust sectors. The two main operating divisions of the company were the automotive division, which manufactured UVs and LCVs, and the farm equipment division, which made tractors and farm implements. The company employed over 17,000 people and had six state-of-the-art manufacturing facilities spread over 500,000 square meters.

The plants were situated at Kandivili (MUVs and Tractors), Nasik (MUVs), Zaheerabad (LCVs, Voyager, three-wheelers), Igatpuri (Engines) and Nagpur (Implements and tractors) M&M's Experience with BPR By the mid 1990s, BPR had become a popular tool globally, with many leading organizations implementing it. However, when M&M undertook the exercise, it was still a new concept in India. M&M's workforce, as mentioned earlier, resisted this attempt to reengineer the organization. Soon after the senior staff began working on the shopfloors, the first signs of the benefits of BPR became evident. Around a 100 officers produced 35 engines a day as compared to the 1200 employees producing 70 engines in the pre-BPR days.

After five months, the workers ended the strike and began work in exchange for a 30% wage hike. As the situation returned to normalcy, BPR implementation gained momentum. M&M realized that it would have to focus on two issues when implementing the BPR program: reengineering the layout and method of working, and productivity.

2. SBI
The implementation of the Tata Consultancy Services (TCS) BaNCS system at the State Bank of India (SBI) represents the largest core systems project ever undertaken. The success of this project should encourage other large banks to begin projects to modernize their core systems. The use of a UNIX-based platform to process more than 100 million accounts daily demonstrates that tier 1 banks can use a mainframe alternative for their core processing. Although TowerGroup expects that the majority of these banks will continue to rely on the IBM mainframe for core processing, they can fully consider the benefits of utilizing a UNIX-based platform.

SBI's achievement demonstrates that attention to critical factors is crucial in implementing new core systems. The bank's senior management commitment, business line involvement, project team staffing and empowerment, and extensive employee training were all key contributors to the success of the project. Management also recognized the need for a proven systems integrator that possessed in-depth expertise in both business and technology. Core systems modernization has allowed the State Bank of India to centralize computer processing and operations functions, offer new banking products to all the citizens of India, reverse a trend of customer attrition, and consolidate its affiliate banks. Additionally, the bank can now further expand its product offerings and improve customer service. TowerGroup believes that several critical factors contributed to the success of the SBI core implementation effort: Senior management commitment. The project was driven by the chairman of SBI, who met every month with the information technology (IT) and the business sector heads. The chairman monitored the overall status and ensured that sufficient resources were allocated to the project. TCS senior managers were thoroughly committed to the project as well and periodically met with the SBI chairman to review the project status. Staffing and empowerment of project team. The core banking tea m consisted of the bank's managing director of IT acting as team head and 75 business and IT people selected by the bank. TCS also staffed the project with approximately 300 IT professionals trained on the BaNCS system. Importantly, the SBI business people were viewed not just as contributors to a key project but as future bank leaders. This team reported to the SBI chairman and was empowered with all decision-making authority. Ownership by business heads. The regional business line heads were responsi ble for the success of conversion of their respective branches and reported the status to the chairman. Thus, the business heads' objectives were aligned with those of the project team. Focus on training. SBI used its network of 58 training centers acr oss India to train employees on the new system. TCS personnel first educated approximately 100 SBI professional trainers,

who then trained 100,000 SBI employees at the centers; the remaining employees trained at their respective job sites.

Benefits of New Core Systems Implementation The new core system has resulted in benefits throughout the bank for both the customers and the employees of SBI. For example, the new core banking system has allowed the bank to redesign processes. It established 400 regional processing centers for all metro and urban branches that have assumed functions previously performed in the individual branches. The bank recently reported that business per employee increased by 250% over the last five years. The bank has achieved its goal of offering its full range of products and services to its rural branches. It delivers economic growth to the rural areas and offers financial inclusion for all of India's citizens. Implementation of the TCS BaNCS system has provided the bank with the ability to consolidate the affiliate banks into SBI. In fact, the bank recently completed the consolidation of State Bank of Saurashtra into SBI. The bank has reversed the trend of customer attrition and is now gaining new market share. Completion of the core conversion project has also allowed the bank to undertake several new initiatives to further improve service and support future growth. These initiatives include the deployment of more than 3,000 rural sales staff, redesign of over 2,200 branches in the last fiscal year, opening of more than 1,000 new branches, establishment of a call center, and an active plan to migrate customers to electronic delivery channels.

3. ONGC
When Oil and Natural Gas Corporation Limited- India's largest oil exploration and production company- set out to completely transform its business, it turned to SAP solutions and services. As a result, the company was able to overcome the challenge of standardizing business processes across its 500-plus locations. At the same time replication of data and configuration

in real-time via satellite as well as linking to existing systems was also required. Thats where ABB with SCADA (Supervisory Control and Data Acquisition) ONGC, a fortune 500 company, is the flagship company of India; and making this possible is a dedicated team of nearly 33,000 professionals. With market capitalization over USD 22 billion, ONGC contributes more than 80% of India's oil and gas production. The company has adopted progressive policies in scientific planning, acquisition, utilization, training and motivation of the team. It has a unique distinction of being a company with in-house service capabilities in all the activity areas of exploration and production of oil & gas and related oil-field services. ONGC used PC-based legacy system for material management, project monitoring and maintenance planning. Information is as valuable as oil for any organization and sometimes harder to locate. ONGC felt the need for a solution using IT to solve the problems in streamline the business process, and integrate all the information along the business process of enterprise core business. ONGC spans across 10 countries outside India- from Russia to Venezuela. Database: Oracle Hardware: HP, Compaq, IBM and Sun Operating system: Microsoft Win NT, Sun Solaris, and Unix Challenges: Transform Business Operations. Collation, consolidation, and analysis of operational data were difficult and time consuming. Standardize more than 200 business processes for 13,000 users across a total of more than 500 offshore and onshore locations- all in under 30 months. Cleanup and migration of huge amount of data from legacy systems and creation of data from hard copies. Create one of the largest data centers in Asia Pacific for SAP. Replication of data and configuration in real-time via satellite as well as linking to existing systems was also required. The system deployment could not upset current operations within ONGC, rendering the need for outstanding ABB coordination and customer relations.

 Multiple simultaneous implementation teams were organized by ABB in India, Canada, Germany and Switzerland all coordinated in one ABB team. The SAP project was slated to be completed in 30 months including a stabilization phase. In 2000, ONGC started project ICE- Information Consolidation for Efficiency- achieve global standards in operations and introduce new business processes. This was called One Organization, One Data, One Information. Today the real-time data is becoming part of management dynamics in reaching business conclusions. Keeping this as an imperative, ONGC aims to take maximum advantage of the state-of-the art technology in SCADA for leveraging productivity and thereby profits. The move towards ERP package was to enable the availability of information on a real time basis and the elimination of duplicate activities across business processes by capturing data at the source point. This will, in turn, facilitate decision support, better operation control, and efficient cost management. Overall ONGC has kept aside Rs 1000 Cr to invest in IT. In addition to Rs 95Cr invested in SAP implementation, ONGC is also looking to invest Rs 45Cr every year towards software implementation. Another Rs 600 crore in project for a communication and control network. Objective for SAP implementation: Optimization and standardization of business processes. Higher visibility of operations to improve productivity. More efficient processes with higher visibility of costs. Integration and extension of value chain Other objectives of Project ICE: Integrate all scientific systems: Integration system to provide the data validation to ensure correct numbers are sent to integrated systems. The rest of the amount will be spent on EPNet, its exploration and production network, being implemented in two phases by Schlumberger.

 The companys hardware investment would relate high power computing systems and PC clusters and grid computing using several PC clusters. SAP India signed its largest ever deal in India ONGC for implementation of the ICE (Information Consolidation for Efficiency) project. The deal worth Rs 950 million ($19 million) would provide a comprehensive IT-enabled system for the oil and gas PSU right from its well heads all the way to its boardrooms. It was also the largest consulting deal for SAP Asia Pacific. In terms of sheer size (with 8,500 licensed users across ONGC) it would be Asias largest ERP project. The Automation system was integrated with the SAP is must to ensure the error free production, Sale numbers reporting on day to day basis. The project management group also excelled in meeting the logistical challenge of connecting hundreds of sites across India even on nomadic drilling rigs and seismic field parties. Innovative solutions included secure satellite and radio-based communication network access to offshore locations and other remote locations deployed through a tightly coordinated schedule between the ONGC project team and service providers. Main reason for ONGC to think about such LARGE architecture o Efficient Real time Monitoring of the Production and Drilling Parameters across all the assets in India o Remote control of the production well in case of Offshore platform o Facilitate offline analysis of the Valuable/ High Producing Wells through third party E&P Applications. Provide summarized information to the management for effective decision making o Total Facelift in the day to day operation of ONGC Production and Drilling facility to improve the efficiency. More than 200 end-to-end, daily business processes were replaced, yielding unparalleled insights into operations, real-time reporting on oil exploration and production, inventory, financial analysis, and accurate and efficiently delivered data. Solutions met stringent regulatory controls (considering its state ownership), yet remain adaptable enough for users throughout the company. Redefinition of work roles and duties meant greater transparency and accountability. Daily and weekly reports replaced quarterly data and facilitated real-time reconciliation. Using Built-In Checks to Ensure Compliance: To make sure the change management happened without any problem, the new solution meant that paper-based contracts and vendor payments were complemented by electronic trans- actions workers had to begin using the new system. Also, to ensure compliance and data integrity, the project team

implemented built-in checks to make sure users followed the correct procedures when entering data and identifying themselves. For example, in the area of procurement using SAP business intelligence functionality the team built in validations to ensure that users could place a purchase order only with an approved requisition and available budget. In addition, the company now sends out payments.