ERP SYSTEM IN NTPC

Birla Institute of Management Technology 1

ACKNOWLEDGEMENT

It is not possible to prepare a project report without the assistance &
encouragement of other people. This one is certainly no exception.

On the very outset of this report, we would like to extend my sincere & heartfelt
obligation towards all the personages who have helped me in this endeavour.
Without their active guidance, help, cooperation & encouragement, we would
not have made headway in the project.
We are extremely thankful and pay our gratitude to our faculty for his valuable
guidance and support on completion of this project in its presently.
We extend our gratitude to for giving us this opportunity.
We also acknowledge with a deep sense of reverence, our gratitude towards our
parents and member of our family, who have always supported us morally as
well as economically.
At last but not least gratitude goes to all of our friends who directly or indirectly
helped us to complete this project report.
Any omission in this brief acknowledgement does not mean lack of gratitude.

Thank You






CONTENTS
ERP SYSTEM IN NTPC

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Topics Page No.
Acknowledgement. 2
Contents. 3
Company Profile.... 4
Why ERP for NTPC.. 5
First ERP project in NTPC 6
Pilot Locations... 7
Various Modules 8
SAP Implementation.. 9
Benefits... 10
Current ERP used... 11
Level of need analysis. 12
Problems faced by NTPC 13








ERP SYSTEM IN NTPC

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Company Profile

Indias largest power company, NTPC was set up in 1975 to accelerate power development in
India. NTPC is emerging as a diversified power major with presence in the entire value chain
of the power generation business. Apart from power generation, which is the mainstay of the
company, NTPC has already ventured into consultancy, power trading, ash utilisation and
coal mining. NTPC ranked 337
th
in the 2012, Forbes Global 2000 ranking of the Worlds
biggest companies. NTPC became a Maharatna company in May, 2010, one of the only four
companies to be awarded this status.
The total installed capacity of the company is 41,184 MW (including JVs) with 16 coal based
and 7 gas based stations, located across the country. In addition under JVs, 7 stations are coal
based & another station uses naptha/LNG as fuel and 2 renewable energy projects. The
company has set a target to have an installed power generating capacity of 1,28,000 MW by
the year 2032. The capacity will have a diversified fuel mix comprising 56% coal, 16% Gas,
11% Nuclear and 17% Renewable Energy Sources(RES) including hydro. By 2032, non
fossil fuel based generation capacity shall make up nearly 28% of NTPCs portfolio.
NTPC has been operating its plants at high efficiency levels. Although the company has
17.75% of the total national capacity, it contributes 27.40% of total power generation due to
its focus on high efficiency.





WHY ERP FOR NTPC ?
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Enterprise resource planning (ERP) systems are commercial software systemsthat can be
defined as customizable, standard application software which integrates business solutions
for the core processes (e.g. product planning and control, warehouse management) and the
main administration function (e.g. accounting, human resource management) of an
enterprise.

Enhance productivity, flexibility and customer responsiveness:
By integrated core business processes together in one single application, it
helpscompany maximize the efficiency of business process across the entireorganization.
Plant manufacturing can produces product faster. Increase on time delivery,Increase
productivity, Increase ability to forecast demand to supplies, Increase ordercapacity, and
improve customer service (Customer Relationship Management (CRM)).

Eliminate costs and inefficiencies:
Using an ERP system to standardize business processes can dramatically improve
companys operation. ERP enable company to manage relationship with vendor results
inlower cost for purchased items. Better resource management results in more inventory turns
and decrease the level of inefficiencies.

Data consistency:
Because an ERP system integrates all business management functions, itdecreases level of
inconsistency information from different systems. Thus, byusing ERP system, managers can
gather correct information and make a right decision.

Extend your business using the Internet:
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By integrating all business functions together in one system, it increases ability of a company
to use internet as part of the business strategy. Web-enabled technology allows you to access
information, sell product, run business processes, and communicate with customers and
partners at any time and from anywhere in the world.

Existing IT Scenario:

ERP aimed at improving the existing IT scenario by providing large number of online
applications that can be served by it. NTPC wanted to overcome the problem of Limited
integration and Varying technology.


User Expectations:

SAP implementation being User friendly ,Integrative and Reliable fulfilled the users
expectations.



IMPLEMENTATION OF ERPFIRST INSTANCE:


Project Lakshya : The first implementation of ERP in NTPC.

The basic information is as follows:

SAP Implementation Project:Project Lakshya
Implementation Partner:SAPIndia Consulting Siemens Information Systems
No. of SAP Users:9000 ECC & 25000 ESS
Core Team Members :70 ( Full Time )
SAP Consulting Team :75 (Peak)


Implementation Scope:
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ECC6.0( ERP package used)
SRM
BI
Netweaver Platform (EP)
XI
RWE npower for Operations module

PROJECT INFORMATION: PILOT LOCATIONS

Ramagundam
Faridabad
Koldamincl Hydro RHq
Corporate Center
NCR Hq
















VARIOUS MODULES USED IN SAP IN NTPC ARE AS FOLLOWS:

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FI Finance
CO Controlling
MM Material Management
PS Project System
PM Plant Maintenance
QM Quality Management
SRM Supplier Relationship Management
PP Production Planning
SD Sales & Distribution
LDM Lifecycle Data Management
IS-U Industry Solution - Utilities
HCM Human Capital Management
BW Business Warehouse
BPS Business Planning & Simulation








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ASAP METHODOLOGY OVERVIEW ( FOR SAP IMPLEMEMTATION)



PROJECT
PREPARATIO
N

Project
organization
and standards

Prepare project
Charter

Initial project
Planning

Training for
project
team and
Process
Owners

Technical
requirements
planning

Prepare
executives
BUSINESS
BLUEPRINT

Customer
requirements
gathering in
interviews


Questionnaires
andmodels assist
tocreate the
Business
Blueprint

Level 2
training

System
installation

Management
review of
BusinessBluepri
nt

REALIZATIO
N

Baseline
Configuration

Final
Configuration/In
te
gration Test

Design,
develop
and
testinterfaces,
reports,and
conversions
FINAL
PREPARATION

Go-live plan

End-user
Training

Integration,
volume and
stress testing

Establish
internal help
desk

Data migration

Cut-over to
Productiveenvironme
nt
GO LIVE
AND
SUPPORT

Application
support

Verify
accuracy of
productive
system


Measureme
nt
ofbusiness
benefits



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BENEFITS:

1. Intergarted system- Integration of Process, People and Location: All the
departments within a company can be linked via a single computer system that will
make record keeping, data analysis, financial predictions and cost-benefit analyses
much simpler.

2. Reduction in procurement cycle time- The time gap between the receipt of the order
and the delivery of the product is called cycle time. If an organization has an ERP
system, at the click of a button, the system checks the availability of items, sends
information to all the concerned departments, takes approval, and delivers the product
within minutes. Thus, the ERP system helps reduce cycle time.


3. Employee productivity- The advantage in terms of individual employees in light of
the central computing power and the real-time data management is very obvious.
Whereas previously, an employee or a department may have spent considerable time
backing up their own data, submitting it in different forms to different parts of the
organization, and maintaining the software to manage the data, all of this can now be
done by simply entering the new or updated data into one central system. ERP can
also be used to automate a lot of repetitive manual tasks associated with the data that
employees may have had to do manually in the past. Through such a series of small
cuts in time usage during the working day, a large overall amount of time can be saved
for each employee. This opens up schedules for work on other tasks, and hence boosts
productivity.

4. Visibility of stock items and materials across the organisation- Due to a centralised
system there is clear visibility of all the materials and stock items that are there in the
companys inventory.


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5. Centralised payroll- NTPC currently has a 13 member payroll team which manages
the payroll of the entire organisation. Only 13 people managing the payroll of a large
organisation like NTPC is only possible because of a successful ERP system.

6. Centralised fuel payments- The details of all the fuel payments are centralised in one
database, which makes the information transparent and easy for verification as well as
for keeping a check on the payments.

7. Stable and Secure system to support growing business needs

8. Reduction in engineering and construction cycle time.

9. Standardisation of process and data consistency.

10. Effective collaboration environment.

11. Effective Employee Self Service system for employees- Through ERP an effective
ESS service is provided to the employees where they can easily update their
information and also see information relevant to them like salary, etc.


















ERP SYSTEM IN NTPC

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CURRENT ERP USED AND FUTURE PLANS-
Current ERP used by NTPC is SAP-ECC.6.0. However, it is now planning to upgrade it to
SAP-ECC.6.6.
THE IDEA OF ERP IN NTPC-
In the early 1990, NTPC was using a number of online applications and then in late 1990 it
was using oracle based web based application.
In 2002- AT Kearney, suggested an organisation transformation exercise for 4 components as
NTPC was diversifying into coal mining and power.
IT STRATEGY
BUSINESS
HUMAN RESOURCE
ORGANISATION RESTRUCTURING
So it was thus decided that for the better working of the company it should implement and use ERP.

LEVEL OF NEED ANALYSIS-
1. While conducting the need analysis certain parameters were considered-
Reduction in inventory carrying cost
Procurement cycle lead time
Reduction in commission expenses
Reduction in paper
2. Due diligence calculated the NPV and IRR for NTPC indicating the need for and
implementation and use of ERP system.
3. There was a need for automation of all the business functions in the organisation.
4. Seamless integration
5. Analysis of reporting

COST OF ERP IN NTPC-
APPROX 100 crores.

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PROBLEMS FACED BY NTPC-

1. User training-While implementing an ERP system the members of the project team
need to develop such knowledge and skills that will enable them to establish how to
best use the functionality for the operation and maintenance phase. Since the members
of the project team will become the trainers of other employees, they need to develop
the skill to be able to formulate and deliver a training course. They should understand
the basic concepts of ERP and also how to perform the day-to-day activities in the
ERP system.


2. Data migration issues- ERPs are implemented to streamline not just the Business
Processes of the organizations but to streamline the way data is captured and
utilized. Large numbers of ERP implementation fail because not much attention is
paid towards the entire process of data migration. Data Migration though is a part of
the entire ERP implementation; it is and should be considered as a separate project in
itself. The problem begins when the company overlooks the challenge of populating
the data with legacy data and the data migration activity is left to the last minute and
end up dropping data from the legacy system straight into the new system.

3. Acceptance of changed processes- Effective implementation of ERP requires
establishing five core competencies, among which is the use of change management
strategies to promote the infusion of ERP in the workplace. If the ERP system faces
resistance from the employees it would lead to a failure.






ERP SYSTEM IN NTPC

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STEPS NTPC SHOULD HAVE TAKEN FOR OVERCOMING THE
PROBLEMS-
Change management strategy along with ERP.
Master data preparation activity should start in advance.
The top management should provide its full support without which ERP system
cannot be implemented.
The concept of Train the trainer should be used. As intensive training is needed
for ERP and it is not possible to train each and every employee therefore a few
people should be trained in a way that they can further train a group of people.