SAP Business Transformation StudyUtilities – Power Generation

INDRAPRASTHA POWER GENERATION COMPANY LIMITED (IPGCL)JOURNEYING TO OPERATIONAL EXCELLENCE WITH SAP® SOLUTIONS

Key Challenges• Integrate people, processes, and power

plants across the entire business• Improve operational and management

decision making with better access to accurate data

• Automate manual and paper-based processes

• Adopt best practices for generation company

• Optimize the performance of aging assets

Implementation Best Practices• Strong and resolute support from man-

agement throughout the implementation• Formation of core team of key people

representing functional areas to support the project from conceptualization to implementation

• Extensive training for core-team members and end users

• Involvement of all key stakeholders during documentation business processes

Financial and Strategic Benefi ts• Automated creation of request for quotes

from purchase requisitions, eliminating manual data entry by personnel in con-tracts and materials (C&M) department

• Gained complete visibility into asset maintenance history and spare-parts movement

• Reduced effort required to manage pre-ventive maintenance schedules

• Streamlined performance appraisal pro-cess with online performance manage-ment function

• Decreased manual effort required to carry out transfers and promotions of executives

Why SAP Was Selected• Demonstrated understanding and exper-

tise in the power generation industry• Integrated solution that supports best

practices for power generation companies• One-stop solution for transactions and

reporting through the use of interactive dashboards

• Integration of business processes

Total Cost of Ownership• Completed the implementation across

the entire organization in 7 months by knowledge transfer and training from SAP Consulting to build an internal team that supports postimplementation requirements

• Eliminated manual processes, spread-sheets, and duplicate efforts with auto-mated and integrated applications

Operational Benefi ts Key Performance Indicator Impact

Procurement lead timeSingle tender -58% (from 128 to 54 days)Limited tender -46% (from 147 to 79 days)Open tender -51% (from 283 to 140 days)

Adherence to preventive +5% to 10%maintenance schedule

Accuracy of cost distribution Improved between preventive and from 80%breakdown maintenance to 99%

Time for vetting indents -80% (from 5 to 1 day)

Effort to maintain fault -100% register, docket filing, (from manual toand work permit filing automated process)

QUICK FACTS

Industry Utilities – power generation

Revenue Rs15.3 billion (US$328 million)(FY 2007–2008)

Employees 1,400+

Headquarters New Delhi, India

Web Site www.ipgcl-ppcl.gov.in

SAP® Solutions and Services SAP® ERP application, SAP NetWeaver® Process Integration offering, SAP Pro-ductivity Pak application, SAP Solution Manager application management solu-tion, SAP BusinessObjects™ business intelligence solutions, services for SAP BusinessObjects solutions

Implementation PartnerSAP Consulting

Indraprastha Power Generation Company Limited (IPGCL) is a government-owned utility that generates and sells electricity to distribution companies in the state of Delhi, India. IPGCL implemented the SAP® ERP application to provide much-needed integration for pro-curement and maintenance opera-tions along with business tools for effective decision making.

www.sap.com/contactsap“SAP ERP has helped us integrate and streamline operations across our power

plants, leading to increased visibility into data and better informed decision

making. It has also optimized resources and reduced paperwork.”

A.K. Handa, Deputy General Manager (ERP & IT), Indraprastha Power Generation Company Limited

Indraprastha Power Generation Company Limited (IPGCL), a govern-ment-owned utility in the state of Delhi, India, took over the generation business from erstwhile DVB w.e.f. on July 1, 2002. Its associate company, Pragati Power Corporation Limited (PPCL), was incorporated on January 9, 2001. The main function of IPGCL-PPCL is the generation and sale of electricity to power distribution companies operating in Delhi.

Establishing an Agile and Integrated Organization

Business drivers, such as paper-based processes and a lack of integrated data, prompted the company to look for soft-ware that could help drive excellence across the organization. IPGCL-PPCL implemented the SAP® ERP application to support operations, and other SAP software, such as SAP BusinessObjects™ business intelligence (BI) solutions, to deliver decision-making tools to management.

A team of 12 employees from functional areas across IPGCL was assisted by consultants from SAP Consulting who provided expertise, knowledge transfer, and training for the core team and end users. With strong support from man-agement, the team completed the implementation in seven months.

Creating the Road to Excellence

The road to excellence was built on improvements in the areas of procure-ment, maintenance, HR, and finance. Using an automated procurement process, employees create indents

(requests for equipment and supplies) in SAP ERP, often using historical data from previous purchase orders or approved indents for cost estimation. This not only decreases the time needed to create indents but also speeds up the vetting process. This entire process can be completed within one day, down from five days.

On the plant maintenance side, where each plant has approximately 600 pieces of equipment, IPGCL has standardized maintenance procedures across all plants. Online maintenance schedules have reduced the effort for monitoring adher-ence to schedules. Furthermore, 100% cost allotment of labor and spare parts during maintenance has improved the accuracy of cost allocation, maintenance history, and spare-parts movement.

The HR function has seen improvement through the use of the payroll engine in the SAP ERP Human Capital Manage-ment solution, which reduced manual efforts and unified payroll processing. Online performance management func-tionality replaced traditional manual per-formance management, resulting in improved satisfaction for managers and all other staff. Transfers, promotions, and the employee skills database are now maintained online. Using self-services offered in a portal, employees can update personal data, such as address and dependent status, thus freeing the time that HR employees used to spend main-taining this data.

With the SAP ERP Financials solution, the finance function has up-to-date cost records. The software supports adher-ence to company policies and procedures,

while role-based access to an integrated financial application helps improve data consistency and security. Thanks to better and faster means of communica-tion, no time is lost in the delivery of paperwork such as requests and notes.

Ready to Generate More Benefits Through BI

IPGCL-PPCL is now looking to extract intelligence from its integrated SAP solutions. The company has already implemented SAP BusinessObjects BI solutions. IPGCL-PPCL is also exploring the option of implementing the SAP Supplier Relationship Management application for supplier collaboration, specifically reverse auctions, which can help the organization achieve savings in procurement. In addition, IPGCL-PPCL is looking at software that can help the company become a paperless business. Clearly IPGCL-PPCL is on the road to becoming an integrated, intelligent, and agile enterprise.

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