oil company group 3 final

8/6/2019 Oil Company Group 3 FINAL

1/28

By,

THE SPARTANSSangeetha

Lisa

Swaroop

Shepherd

Sathish


2/28

Globally Renowned Public Sector oil company

Primary products crude oil and its finishedproducts

Sales turn over- 100,000 crore

Number oflocations -99

Founded in 14 August 1956

Headquarters: Dehradun, India

Employees: 32,826 (2010)


3/28

Fortune Global 500: Rank 413

Contributes:

77% of India's crude oil

81% of India's natural gas production

Videsh the international arm- investments in

Vietnam, Sakhal

in and Sudan


4/28

Oil

Corporation

Finished

Products

International

Markets

Retail

Channels

Refining

CrudeOil

Domestic

Markets

Finished

goods &

packaged

goods

Marketing

Transpo

rtation

Transpo

rtation


5/28

PROJECT OBJECTIVES

Optimization and standardization of business

processes

Higher visibility of operations to improveproductivity

More efficient processes with higher visibility

of costs

Integration and extension of value chain


6/28

Primary objectives

Nation wide inventory visibility and control

thereby

Visibility of cost at product quality sectionlevel

Better product mix decisions through

profitability analysis at margin level


7/28

Before US

Manual Procurement taking up to 60 days

Inventory management using standalone software

Provisional billing

Decentralized pricing system

Accounts managed using MS Excel

Unstandardized process

Decentralized credit management

Complicated account setting and decentralized vendormanagement.


8/28


9/28

Thorns on Our Way

Streamline the supply chain network and reducetime to market

Build competitive advantage

Training

Technical challenges

Customization and data conversion

The role of implementation partner in changemanagement

Need for standardization


10/28

WE AIMED AT.

Protect and expand market share

Rapidly shift people to free market,

commercialfocus

Integrate organization and decision making

Acquire ,develop, empower and retain

knowledge resources

Effectively manage new investments

Optimize transportation costs


11/28

Project ICE

ICE : (Information Consolidation for Efficiency)

Converting Knowledge to Wealth

Aimed at consolidating the IT efforts in the

implementation of Enterprise Resource Planning(ERP) package on SAP

one of the worlds biggest ERP (Enterprise ResourcePlanning) packages across 99 locations

Project was very challenging in terms of complexity First major ERP exercise in the Indian Oil & Gas

industry


12/28

Projects Magnitude

constituted of 150 Project Core Team

Members,

60 SAP Consultants,

18000 sq. ft Project Office,

4000 Sq. ft area data center with 22.5 TB

storage capacities to be built,

involving over 10 agencies with an estimated

cost of Rs.1950 million


13/28

Project Team Organization

Core Team Size

Phase 1: IP= 35

Client = 35

Phase 2: IP =45Client =75

Executive

Committee

Steering

Committee

Executive Sponsor

Project Manager

(Consultant)

Project Manager

(Client)


14/28

Need for ERP?

ERP: Integrate Data Process Of The Organization

Why ERP?

We consider the Business Process and not the

function alone. Eliminates redundancy by integrating all the

stand alone systems.

User friendliness

Open Platform Easier for Corporate Control

Helps Implement Standardization


15/28

Why SAP??

German global software cooperation

Largest enterprise software company

Revenue -12.464 billion USD

Around 7 0 % market share in India

SAP has experience with global oil and gas

production companies


16/28

What we did?

Total time: 36 months

SAP R/3 implementation at 99 sites

PHASED APPROACH

2 sites gone live 15 more sites (2 refineries and one large

marketing complex) went live on January 1, 2013

Number oflicensed users: 800

Modules implemented: Phase 1: SD, FI, CO, (PA), MM, QM

Phase II: FI, CO, MM, PP, PM


17/28

Phase 1

Number oflocations -70

Project duration -8 months

Go live date November 1 ,2012

Core team size IP=35,client =35

Modules implemented-FI,SD CO (PA),MM,QM


18/28

PHASE 2

Number oflocations 1

Project duration- 9 months

Go live date-January 1,2013

Core team size- IP =45,client 75

Modules implemented FI,CO,MM,PP,PM


19/28

Critical Success Factors

Top management commitment

Training-core team and end user

Communication and change management

Risk assessment and mitigation

Scope control

Data conversion Standardization


20/28

Benefits

Procurement cycle reduced from 60 days to 21

Online visibility of inventory

Removing traditional billing and reconciliationmethods.

Centralized pricing

Standardization of the process

Efficient and centralized credit management

Faster vendor settlement of bills with integration ofprocurement process

Accurate and timely reconciliation of customeraccounts


21/28

Performance after ERP

Natural gas production increased by 5%

Net profit increased by 71 % in last quarter

Annual net profit increased by 4 %

Market share increased

Overall efficiency increased

ONGC bags awards on best financialperformance and corporate goverence


22/28

PHASE 1

CASH LIBERATION

IMPLEMENTATION

Nation wide inventoryvisibility and control

facilitating decisions for

inventory reduction

Online Credit Check

RESULT

Facilitating better

receivable management.

Facilitating better

receivable management


23/28

VALUE

ENHANCEMENT

IMPLEMENTATION

Better delivery compliance

through on-line availability

check

RESULT

Greater customer

satisfaction

Better product mix

decision through

profitability analysis at

net realization level.


24/28

PHASE 2

CASH LIBERATION

IMPLEMENTATION

Consumption based

planning for MRO items

RESULT

Reduce inventory for

MROs


25/28

CASH LIBERATION

IMPLEMENTATION

Visibility of cost of

Product Quality

Section Level

RESULT

Facilitation cost reduction

measures


26/28

VALUE

ENHANCEMENT

IMPLEMENTATION

Profitability Analysis At

Margin Level

RESULT

Better product mix

decision

Faster monthly account

closure (5th of every

month)


27/28

After ERP


28/28

RECOGNITION

Special jury award for best projectwith the

largest SAP implementation in Asia

International project management awardfor

excell

ence in project management practicesby IPMA

oil company group 3 final

Documents