ERP – SAP Implementation at NTPC

Project By:

Group 2

All India NTPC

Coal 77648.88 23895

Gas / Liquid

fuel

14876.61 3955

Diesel 1199.75 -

Thermal 93725.24 27850*

Nuclear 4120 -

Hydro 36877.76 -

RES 13242.41 -

Total 147965.41 27850*

Mission

“Develop and provide reliable power, related products and services at competitive prices,

integrating multiple energy sources with innovative and eco-friendly technologies and

contribute to society.”

Vision

“To be the world’s largest and best power producer, powering India’s growth.”

• largest Indian state-owned electric utilities company based in New Delhi, India.

• Government of India holds 84.5%

• NTPC's core business is engineering, construction and operation of power generating plants

and providing consultancy to power utilities in India and abroad.

NTPC – About the company

Locations, divisions & operations

Serial

no.

Headquate

r City

1 NCRHQ Delhi

2 ER-I, HQ Patna

3 ER-II, HQ Bhubaneshwar

4 NRHQ Lucknow

5 SR HQ Hyderabad

6 WR-I HQ Mumbai

7 Hydro HQ Delhi

8 WR-II HQ Raipur

As per new corporate plan, NTPC envisages to have an

installed capacity of 128 GW by the year 2032 with a well

diversified fuel mix comprising 56% coal, 16% gas, 11%

nuclear energy, 9% renewable energy and 8% hydro

power based capacity; most of it would be based on

carbon free energy sources.

• Hydro Power

• Renewable Energy

• Nuclear Power

• Coal Mining

• Power Trading

• Ash Business

• Power Distribution

• Equipment Manufacturing

The power generation plants under it are

• 19 Thermal-coal based

• 7 Coal based (owned by JVs)

• 8 Gas based

• 6 hydroelectric power projects including

one in Bhutan

Its locations – varied geographically Its diverse business expanse – varied operationally

Joint Ventures of NTPC

It has formed Joint Ventures with :-

1. For Capacity addition

• SAIL power Company Limited

• Tamil Nadu Energy Company Limited

• Aravali Power Company Private Limited

• Meja Urja Nigam Private Limited

• Ratnagiri Gas and Power Private Limited

• Nabinagar Power Generation Company

Private Limited

2. For Services

• Alstom Power Services

• Utility Power Tech Limited

• National High Power Test Laboratory Pvt Ltd

• For Power Trading and Power Exchange

• National Power Exchange Limited (NPEX)

DIVERSIFICATION : To broad-base the business and ensure

growth, diversification in areas Hydro power, Distribution,

Trading, Coal mining, LNG etc. have been identified as priority

areas.

BACKWARD INTEGRATION- COAL MINING

• The policy changes provides an opportunity to NTPC to

enter captive coal mining business. Pakri Barwadih in the

state of Jharkhand and 5 more blocks (~40MTPA) have

been allotted to NTPC, including two in JV with CIL.

• NTPC is exploring various other options including

acquisition of stake in coal mines abroad for sourcing of

thermal coal for addressing fuel security concerns.

3. For Coal Mining

• SCCL Global Ventures Pvt Ltd

• International Coal Ventures Pvt Limited

• BHEL Power Projects

• Transformers and Electricals Kerala Ltd

• Energy Efficiency Services Ltd

• CIL-NTPC Urja Pvt Ltd

• Anushakti Vidyut Nigam Ltd For Acquisitions

POWER STATIONS TAKEN OVER YEAR ORIGINAL OWNER

2x210 MW FEROZE GANDHI UNCHAHAR THERMAL POWER

STATION 1991 UP Rajya Vidyut Utpadan Nigam Limited

4x60 MW +2x110 MW TALCHER THERMAL POWER STATION

Orissa State Electricity Board 1995 Orissa State Electricity Board

4x110 MW TANDA THERMAL POWER STATION 2000 UP Rajya Vidyut Utpadan Nigam Limited

705MW Badarpur Thermal Power Station Central Electricity

Authority 2006 Central Electricity Authority

Strong presence across all verticals

Enterprise Asset

Management

Sourcing and Procurement

Billings and settlement

Finance and Reporting

Human resource

management

Project Management

Vendor Selection Process

Analyse the Business

Requirements

Vendor Search

Request for Proposal

(RFP) and Request for Quotation

(RFQ)

Proposal Evaluation and Vendor Selection

Contract Negotiation Strategies

Vendor Evaluation Criteria

Function fit Technology

Company Support

Cost

• Direct software cost

• Hardware cost

• Annual support cost

• Implementation cost

Vendor and Business Requirements

Market Capitalisation

Specific Qualifications and Working Conditions of

Employees

Integrated inventory, order processing, and

accounting system

Robust Payroll and Costing system

Transaction history must be available online for a

minimum of five years

Evaluation of Vendors against

Requirements

Analysing Business and Vendor Specifications

Assigning a Performance Value to each Vendor

Calculating the aggregate score

Why SISL-Siemens Information Systems Limited

Leading "Systems Integrator and Total Solutions

Provider" offering high-end consultancy in areas like

Healthcare, Telecommunications, Manufacturing, Utilities,

Public Sector & Government

Good Track record in Implementing ERP solutions across

the Energy and Utilities sector

Has a partner tie up with SAP and also a center of

excellence

Quotation competitive with respect to other vendors

SISLs previous experience of working with some of the

major DISCOMs in the country gave it an edge

Global network of 475,000 people, operating in over 190

countries

Contract Negotiation

• Define Any Time Constraints and Benchmarks

• Assess Potential Liabilities and Risks (How will implementation delays be handled? Whose insurance will cover contract workers?)

• Confidentiality, non-compete, dispute resolution, changes in requirements

Various Processes at NTPC

Operations

Functions

Work Order Mgnt.

Procurement

Energy Mgnt.

Dispatch

Network Specific

Functions

Network Documenta

tion

Network Calculation

s

Geographical

analysis

Technical Planning

Market

Related Functions

Billing

Meter Reading

CRM

Pre-ERP Disparate Application

Landscape

ERP Software Product Preferences

Power sector prefers SAP over PeopleSoft because of the provision of the ―Utilities‖ vertical

Experts in IT software development domain not present in power company

Building software in-house is time-consuming and will shift focus from core operations

NTPC should buy the software product from third party

As Is – To Be Analysis

Pre-ERP System Constraints (As Is) Business Goals That NTPC Aimed

to

Achieve (To Be)

Multiple systems with varying process

maturity

Integration of

Process/People/Location/technology

Legacy applications could not handle

new

requirements

Stable and secure system to support

growing business needs

Duplication of vendor codes and lack

of system support for new modes of

procurement

Improve vendor management and

reduce

procurement cycle time

Lack of systems to provide employees

with data access

Empower employees through

progressive H.R practices

Limited ability to accurately track O&M

costs and conduct systematic asset

maintenance plans

Effective asset management and

maintenance tracking across the

organization

Limited visibility into inter unit

inventory

levels

Increased visibility into inventory levels

Scope

Business Areas

• Services

• Coal Mining

• Power Trading

• Power Exchange

• Manufacturing

Functions

• Accounts (incl. Costing)

• Production Planning and rest of

manufacturing processes

• Purchase and Inventory

• Sales and Distribution

• Plant Maintenance

• Quality Assurance

• HR

• Asset Management

Locations

•Head Office

• Regional Offices

• Factories

• Warehouses

•Area Sales Offices

Systems

•Interface to Internal Systems

•Interface to External Systems (e.g.

Tata Chemicals)

The Scope of the Project as envisaged by the company :

Genesis of the Project

Define Business Strategy

• Organizational Restructuring and Business Process Reengineering

• Long Term Business Strategy, HR Strategy and IT Strategy

Develop Supporting IT Strategy

• Selecting the right approach towards home-grown , best of the breed or COTS

Selecting the right IT Partner

• Evaluate and award contract to the best ERP solution provider

• SAP selected as the IT platform

Pilot Implementation

• Whole suite of SAP applications across 5 locations

• First pilot project live in 10 months

Complete Rollout

• Rolled out across 25 locations

RoadMap

ERP Transition

Implementation of an ERP and transitioning from legacy systems

requires that not only the system be ready but the organization and its

people to be ready on many levels.

The following aspects are to be considered in the transition phase

Technical Infrastructure

Application Software

Data

Organization

Operational

Third parties

Users

Project Initiation

The objective of this phase is to find the package that is flexible enough to meet the company‘s need or in other words, a software that could be customized to obtain a ‗good fit‘.

For example :- Improve vendor management and reduce procurement cycle time

Reduce engineering & construction cycle time

Once the packages to be evaluated are identified, the company needs to develop a selection criteria that will permit the evaluation of all the available packages on the same scale.

Project Initiation

To choose the best system, the identification of the system that meets the business needs, and that matches

the business profile.

Considering the constraints involved:-

1.Limited visibility into inter unit inventory levels

2.Limited ability to accurately track O&M costs and conduct systematic asset maintenance plans

It is better to have a selection committee that will do the evaluation process.

Project Planning Phase

This is the phase that designs the implementation process. Time schedules, deadlines, etc. for the project are arrived at. The project plan is developed in this phase.

Establish the Core

Pilot implementation of all the modules at 5 locations

Build global template to align organizational processes

Go live in 10 months from the date of project kick-off

In this phase the details of how to go about the implementation are decided. The project plan is developed, roles are identified and responsibilities are assigned.

Project Planning Phase

The organizational resources that will be used for the implementation are decided and the people who are supposed to head the implementation are

identified.

The implementation team members are selected and task allocation is done.

The phase will decide when to begin the project, how to do it and when the project is supposed to be completed.

The phase will also plan the ‘What to do’ in case of contingencies; how to monitor the progress of the implementation;

The phase will plan what control measures should be installed and what corrective actions should be taken when things get out of control.

The project planning is usually done by a committee constituted by the team leaders of each implementation group headed by CIO.

List of Modules Requirement for NTPC ERP

Implementation

Production Plan Operation

Management

Security Monitoring

Management

Electric Belt Scale

Bi-Ticket Management

DCS Net-Gate Technics

Monitoring Salary

Accounting Transportation Management

Finance Reports

Storage Management

Purchase Management

Fuel Management

Equipment Accounting

Management

Equipment Fault-Removing

Management

Equipment Reliability

Management

Human Recourse

Management

Environment Protection

Management

Management Inquiry

System Management

ERP configuration and set up

Corporate planning

Projects

Engineering & QA

Contracts

Site procureme

nt materials

Operations

Maintenance

Fuel Manage

ment

Commercial

Finance, Human Resource

R&D, TCM, IT

Environment

Employee Health

Corporate communications

Rehabilitation and Resettlement

Legal & Secretarial

Safety, Security, Vigilance

Consultancy

Why SAP?

Worlds largest ERP product company with proven track record

Support for easy setup and ongoing changes

Predictable long term financial cost with buying only what is needed

Multiple channel access using mobile, computer and other platforms

Complete integration of people, Information and Business processes

Integrates existing IT investment without data loss

Solution Architecture-MySAP Business suite

– SAP R/3 enterprise

my SAP Product Lifecycle

Management (mySAP PLM)-

Engineering and design

and management of on going engineering

changes

mySAP Supplier

Relationship Manager (mySAP

SRM)—e-Procurement

mySAP Supply Chain Management

(mySAP SCM)

mySAP Customer

Relationship Manager

(mySAP CRM)

Strategic Enterprise

Management (SEM)

Industry Solution for

Utilities covering

Energy Data Management,

Billing & Contract

Management (mySAP Utilities)

Platform and Integration Components - SAP NetWeaver

Application platform for all SAP solutions - SAP Web Application Server (SAPWAS)

Information Integration- mySAP Business Intelligence (mySAP BI)

Access Integration - mySAP Enterprise Portals (mySAP EP)

Process Integration -mySAP Xchange Infrastructure (mySAP XI)

Third Party Product-Powermaster from Siemens, Optibiz software technologies & RWE npower

ERP data migration

Materials

• 30000+items

Transaction Data

• Master data material and Service

Plant

• 15000+ equipments

Equipment Master and Task list

• List of activities

Employees

• Employee data

Finance

• Accounting data

Operations

• Plant parameters history data

Vendors: 5000+vendors

• 5000+vendors

Extract data from source

system

Data cleansing, transformation and

harmonization

Data migration and

Accounting

Renter incomplete transaction

Data Validation

Auditing data migration

Documentation

Existing Data

Migration architecture

Challenges and points of failures in Data

Migration

Lack of proper methodology

Improper classification of data

Unrealistic scope

Lack of understanding of the tools

Inattention to data quality

Lack of experience

Heterogeneous transition between two different platforms

Extended Role Based Access Control

• access to one or more objects in the system.

• DB System :create/delete or insert record

• Accounting app.:rights such as account creation/deletion, credit/debit

Permission

• NTPC researchers have to fill up his/her personal information before s/he can have the rights to read or download white papers.

Obligation

• Environmental or System Requirements

Condition

Condition Obligation Permission

Policies at NTPC

• Whether the user needs to know?

• An accountant might need to know the current status of a consignment dispatch

Need to know

• Whether information sharing help?

• Finance and Manufacturing can share inventory levels to forecast costs

Need to Share

• Trusted parties are allowed sharing.

• CFO & CEO are allowed to share anything Trust

• Data modified by authorized individuals?

• Leave status of employees can be changed only by NTPC-HR

Integrity

ERP Testing

Initiate planning and gather requirements

Define test goals and select appropriate tests

Identify functionality test cases

Develop modular test components

Set up a test lab

Understand and leverage the ―smoke test‖

Execute regression tests

Analyze defects and create test reports.

Change & Change management strategies

NTPC Change

management

ERP helpdesk

User Involvement

End user training

Deployment of power

users

Processes Roles &

Responsibilities

Work culture Attitude and mindset of

people

Components in change management

GAP Analysis: As Is and To Be analysis

Job Assignment: Individuals to To Be jobs

HR Alignment: Create new job descriptions and hiring

Communications plan: Notifying existing employees about the transition

Transition strategy and budgets: Decision to do In-house or Out house

ERP Closure

Clear Pending Items after referring BRD of NTPC

Finalize knowledge transfer to the different departments of NTPC

Document the lessons learnt

Go-Live Support by a SISL tech team

Establish on-going quality and testing strategy

Conduct performance tuning

Benefits achieved

Implementation of Works Bill processing

Centralized Payroll and Employee Self Service for 25000 employees

Energy Billing as per availability based tariff

Implementation of Fuel management functionality to meet business requirement of capturing and handling data

Vendor Collaboration-Both Internal and External

E tendering and Reverse Auctions

Claims , travel and Loans Processing automated and workflow cycle optimized

The Major Risks

The Risk of High Initial Cost

Changeover from Old Legacy System to new ERP System

Collapse of the new System

Non customization of ERP software to existing business processes

Improper integration of modules

Non availability of Bandwidth / internet facility at remote rural areas

Employees not at ease with the new System

The Mitigation Process by NTPC

Pre Implementation

• Awareness of the new system

• Proper communication and Information dissemination among the NTPC workers across multiple sites

• Data Validity

• Infrastructure readiness and Worker/Manager training across levels.

During ERP Implementation

• Data migration from NTPC legacy to ERP System

• Alignment of the ERP System to NTPC s vision

Post ERP Implementation

• Live Support by SISL

• Customization of features by SISL as per NTPC demands

Change Control via regular and periodic information disbursal

Continuous NTPC User Staff and Executive Training to put them at ease

Involvement of NTPC top Executives right from day 1

What led to the Success- The

NTPC Way

Ensuring Top management Commitment and Support (CEO and CFO)

Ensuring that the Businesses owns the process to be implemented (Enterprise Asset management, Sourcing & Billing etc.)

Assess and address policy change proactively

Hiring Consultants (SISL)who have had prior experience in the same industry

Regular awareness programs through change agents and process anchors

Improve and adapt the rollout approach based on ground realities (e.g.: Data Centre, Training)

Make realistic and detailed estimates on the effort needed to migrate existing legacy data

NTPC recognized as the Best Run Business-

SAP ACE