ERP SAP Implementation at NTPC

Project By:
Group 2

NTPC About the company

Vision
To be the worlds largest and best power producer, powering Indias growth.

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.
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.
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*

Locations, divisions & operations

Its locations varied geographically
Serial
no.

Headquate
r

City

NCRHQ

Delhi

ER-I, HQ

Patna

ER-II, HQ

Bhubaneshwar

NRHQ

Lucknow

SR HQ

Hyderabad

WR-I HQ

Mumbai

Hydro HQ

Delhi

8
WR-II HQ
Raipur
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 diverse business expanse varied operationally

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

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

2006

Central Electricity Authority

705MW Badarpur Thermal Power Station Central Electricity

Strong presence across all verticals

Enterprise
Asset
Management

Project
Management

Sourcing and
Procurement

Human
resource
management

Billings and
settlement

Finance and
Reporting

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

Network
Specific
Functions

Market
Related
Functions

Work
Order
Mgnt.

Network
Documenta
tion

Billing

Procureme
nt

Network
Calculation
s

Energy
Mgnt.

Geographi
cal
analysis

Dispatch

Technical
Planning

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 timeconsuming 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

Increased visibility into inventory levels

Scope
The Scope of the Project as envisaged by the company :
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)

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 companys 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.

It is better to have a selection

committee that will do the
evaluation process.

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

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

Project
s

Engineer
ing & QA

Contract
s

Site
procureme
nt
materials

Operati
ons

Finance, Human Resource

R&D, TCM, IT
Rehabilitation and Resettlement
Legal & Secretarial
Safety, Security, Vigilance
Consultancy
Corporate communications
Employee Health
Environment

Mainte
nance

Fuel
Manage
ment

Comm
ercial

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)eProcurement

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

Existing Data
Materials
30000+items

Transaction Data
Master data
material and
Service

Equipment Master
and Task list

Plant
15000+
equipments

List of activities

Employees
Employee data

Finance
Accounting data

Operations
Plant parameters
history data

Vendors:
5000+vendors
5000+vendors

Migration architecture
Extract data
from source
system

Data cleansing,
transformation and
harmonization

Data migration
and
Accounting

Auditing data migration

Documentation

Renter
incomplete
transaction

Data
Validation

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

Permission
Obligation

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

NTPC researchers have to fill up his/her

personal information before s/he can have the
rights to read or download white papers.

Environmental or System Requirements

Condition
Condition

Obligation

Permission

Policies at NTPC

Need to
know

Whether the user needs to know?

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

Need to
Share

Whether information sharing help?

Finance and Manufacturing can share
inventory levels to forecast costs

Trust
Integrity

Trusted parties are allowed sharing.

CFO & CEO are allowed to share anything
Data modified by authorized individuals?
Leave status of employees can be
changed only by NTPC-HR

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

ERP
helpdesk

Processes

Roles &
Responsibilities

Deployment
of power
users

Work culture

NTPC
Change
management

Attitude and
mindset of
people
End user
training

User
Involvement

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 BusinessSAP ACE