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SAP & ABB SCADA implementation at ONGC. IT investment in ONGC
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1 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
The BPR story at ONGC – A success story
IM Group 2: Anjana, Chetan, Prachi, Puneet, Rajesh & Swapnil
2 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Summary
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. That’s 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.
3 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
4 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Table of contents Pre ERP days
Existing Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06
Challenges: Transform Business Operations . . . . . . . . . . . . . . . . 06
IT initiatives by ONGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07
Business Process Re-engineering plan . . . . . . . . . . . . . . . . . . . . . 09
Project Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The Implementation phase
Implementation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Implementation Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Post Implementation
SCADA System Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Business Process Re-egineering changes . . . . . . . . . . . . . . . . . 19
Reverse Auction process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Pre ERP Days
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.
6 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Existing Environment 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
7 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
IT Initiatives by ONGC: Move towards Business Process Re-engineering
8 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
EPINET Sites & Networking
EPINET- Salient Features
Client-Server computing
environment
User friendly database
application S/W
POSC compliant data model
Extensive GUI capabilities
Fast data communication
Network
Concurrent data
accessibility
Multilevel data security
Integration with Seismic &
Electro log archive & Asset
database
9 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Business Process Re-engineering (BPR) implementation
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.
“The project is all about data capture as part of all transactions. If there is an invoice drawn up somewhere it is
automatically fed into the system as data, so is a pay slip or the day’s measurement of oil from a well ...and the beauty
is that it would all be available on tap" Subir Raha, chairman & managing director, ONGC.
10 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Project Objective
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 company’s hardware investment would relate high power computing systems and PC
clusters and grid computing using several PC clusters.
11 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
SAP Solution and Services
The mySAP.com™ e-business solutions proposed to be implemented over the next 30 months across
five regions of ONGC for over 8,500 users, include solutions covering financials, corporate financial
management, business intelligence, supplier relationship management, enterprise portals (for
workplace), upstream oil and gas requirements, strategic enterprise management and product
lifecycle management.
The ONGC was already using a human resource package (Shramik) and financial package (Kuber) from
SAP.
Reasons why SAP was chosen:
SAP Project Management services of the SAP consulting organization
mySAP™ Business Suite family of business solutions
SAP for Oil & Gas solution portfolio: SAP has experience with global oil and gas production
companies
Solutions and services complemented existing SAP finance and human resources applications
12 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Implementation
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 Asia’s largest ERP project.
13 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Implementation Plan
Comprehensive implementation of mySAP Business Suite and the SAP for Oil & Gas solution
portfolio, including the SAP® Strategic Enterprise Management (SAP SEM®) application, SAP
Business Information Warehouse component (part of the SAP NetWeaver® Business
Intelligence component), and SAP portal.
The implementation also includes other SAP solutions, such as the Collaboration Projects suite,
as well as supplier relationship management and upstream oil and gas exploration and
production solutions.
The enterprise-wide project was designed to integrate with existing SAP financials and human
resource solutions used in more than 500 ONGC locations. SAP solutions support ONGC’s
exploration, production, maintenance, procurement, finance, payroll, sales, offshore logistics,
joint ventures, treasury, and quality management processes, including the monitoring of key
performance indicators.
14 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Implementation highlights
Project started with clear motto of "One data, one system".
As far back as 1996, the company undertook Project Kuber, wherein it implemented SAP R/3
ERP (Enterprise Resource Planning) system for its finance function. Thereafter, in Dec 1999,
ONGC started another project, Project Shramik, where it deployed SAP for automation of all HR
modules including payroll and administration. ICE implementation started in mid 2000 and it
went live in 2004
The project was envisaged by core design and engineering team of ONGC under the initiative of
Chairman of ONGC Limited. It had best brain from different departments working on it- text
book example of best practice. The team looked like mini ONGC- the perfect team.
The western offshore business division (Headquarter at Mumbai) of ONGC was the first to go
live in its exhaustive ERP deployment. The first rollout was for 3,000 users in the company’s
offshore operations centered at Mumbai. One key test was making the transition at the most
challenging sites: offshore and onshore oil drilling platforms, where daily activity reports are
required by 6 a.m. without fail.
Instead of trying a ‘soft’ target first, ONGC chose the hardest and most critical areas first:
production and drilling to go live with. This required processes and actions had to be
15 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
documented in a standardized format and recorded in a time-bound period. Idea was if hard
target succeed then all the others would fall in line. First day of a quarter as a go-live date.
By the time the project was completed in May 2005, the project team had added other
geographical locations and functions to the implementation, making new solutions available to
a total of 13,000 users – 65% more than the user base originally planned.
SAP Consulting blended expertise with ability to improvise as complexities of project required
Excellent knowledge transfer from collaboration with SAP consultants
Project team consultants from SAP played critical role in rollout and education of users
SAP used ONGC as training centers for its employees to learn about Oil & Gas industry
The ABB SCADA system was deployed in 179 onshore servers, 8 offshore servers, 2 plants in tier
1, and 13 redundant servers in Tier 2 control centers. As well, the system will be implemented
in the corporate centre in Delhi with a backup centre in Bombay.
The ABB SCADA project covers 157 offshore platforms and 247 onshore installations, pipelines
and 2 processing plants with a cost of approximately 100 Million dollars.
Enterprise Wide SCADA for all Production and Drilling Facility of ONGC Spread across India and
in Arabian Sea.
16 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
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.
o 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
17 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Post Implementation
From its earliest interactions in the project,
SAP Consulting quickly recognized that Project
ICE meant far more to ONGC than simply the
implementation of new hardware and
software. And this realization affirmed
ONGC's decision to use SAP Consulting in the
first place.
What ONGC had in mind was a total
transformation of its business, and the SAP
track record and experience with customers in
oil and gas industries worldwide was a key
reason ONGC believed SAP Consulting was up
to the job. And the partnership was a great
success.
18 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Fig 1: ONGC SCADA System Architecture implemented by ABB
19 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Business Process Re-engineering
Improved, disciplined approach to accounting, procurement and financial systems
Rapid acceptance and improved performance by workers
Improved ability to compete through the strategic use of new IT platform
Improved visibility of business processes across different business functions from exploration to
production to sales and offshore joint ventures
Business Process Re-engineering: SCADA Project
Supplied 16 Data Centers including the corporate data centre across India to enable efficient
operation of respective Assets.
UPS for all the 250 plus tier 1 control room of production and drilling SCADA along with FCBC
(Float cum boost charger)for 85 no of remote RTU (Remote Terminal Unit) with solar chargers.
SAP, Epinet, VRC- Integrations of Real-time and History Data.
Disaster Recovery Solution for the corporate data centre.
20 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Business Process Re-engineering: SAP Project
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
21 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
for purchased products only after invoice verification. Likewise, payments for services are made
only after service entries have been completed and the project’s progress has been updated.
Raising the Visibility of Critical Data: A key benefit of the new solution is that it creates high
visibility for critical data. The new solution ensures that critical operational data is available
online for all levels of management.
Reverse Auction process: Benefit of ERP implementation
One of the benefits of using SAP was the launch of Reverse Auction process, first PSU to do so.
Termed as "Live Action Cockpit" (LAC), the system will enable ONGC to collect and compare price and
bid information of various suppliers in a real-time, open bidding environment. The reverse auction will
ensure transparency in the tendering process and thereby generate confidence amongst the bidders.
It will also add speed to the process of procurement which will allow ONGC to source best in class
technology. On the basis of the pilot project it is estimated that reverse auction will be able to accrue
a cost saving of nearly 10 percent.
The reverse auction process enables supplier selection process by facilitating vendors worldwide to
participate in the bidding process seamlessly.
22 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
Ready to explore new ventures
The potent combination of a new business culture supported by a new IT tool and the flexibility to adopt new business innovations, along with an in-house leadership capability, prepares ONGC to explore new frontiers, including joint ventures overseas. ONGC has also implemented the employee self-service (ESS) functionality of the mySAP ERP solution, thereby expanding its to reach to cover 36,000 users, making it one of the largest ESS implementation in India. ESS – christened “SAMPARC,” meaning “connect” –facilitates employees to apply for leave, submit their claims, and view their payment details online. For ONGC, SAP solutions have equipped the world’s second-largest oil exploration and Production Company with the reliable, available data it needs to manage the magnitude of the 21st century challenges it will face.
23 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
“At end of the day, SAP Consulting excelled,
I must say. They gave us a good support and
tried to understand our business to deliver
the product we were looking for”
KS Jamestin, General Manager and Head of
Project, ICE, ONGC
“ONGC strongly believes in adopting world-
class processes and technologies to
generate better value for its
stakeholders.On the basis of the pilot
project it is estimated that reverse auction
will be able to accrue a cost saving of nearly
10%.”
Mr. U.N. Bose, Director (T&FS), ONGC
"Our plant maintenance solution now has a service history
and a method of capturing the total cost of ownership.
Decisions are made faster and are more informed by data
from across the entire organization.”
KS Jamestin, General Manager and Head of Project, ICE,
ONGC
24 The BPR story at ONGC – A success story
A n j a n a * C h e t a n * P r a c h i * P u n e e t * R a j e s h * S w a p n i l
IM Group 2
References
With interaction with few ONGC employees who were involved in implementation
http://infotech.indiatimes.com/articleshow/943355.cms
http://www.brplindia.in/news_erp_sap.htm
http://www.sapendusers.com/oilIndia.php
http://www.ongc.net/press_release1_new.asp?fold=press&file=press112.txt
www.sap.com
www.Abb.com
Various news items from sites like NDTV, rediff etc
Various reports available on public domain