HMEL Refines Business Processes With SAP ERP

A joint venture between state-run Hindustan Petroleum Corporation Limited and Mittal Energy, HMEL is a formidable player in the crude oil and petroleum sector. The company has plans to come up with a state-of-the-art refinery at Bathinda, Punjab, for which it has kept aside an investment budget of almost Rs 19,000 crore.

To effectively streamline its business processes and integrate all its systems on one common platform, HMEL decided to implement SAP’s ERP solution. Was there really a need to deploy an ERP solution? Sandeep Shirodkar, VP-Service Industries, SAP APAC and Japan, says, "The biggest challenge was to integrate HMEL’s business processes and systems under one common platform. This being the first refinery constructed by HMEL, manual planning of projects and cost control made the process extremely tedious. The company also needed to focus on managing several contracts, the complexity of the project, cost and financial loss due to increased inventory cycle time and inaccuracies in data."

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The solution from SAP is designed to provide financial management, on-line availability of information, integration across the organisation, standardisation of business processes to improve efficiency and productivity and effective utilisation of resources.

Why SAP ERP?

Let us now examine what made HMEL go in for a solution from SAP as compared to other vendors. V Anantharaman, vice president-Finance, HMEL, says, “SAP’s expertise in the Indian oil and gas sector made it a natural choice for us to consolidate and standardise our business processes and controls end-to-end. SAP solution capabilities will provide us with a scalable and flexible platform to facilitate asset creation and streamline the inventory and finance functions. The software solution will provide us with the ability to incorporate best practices in the industry.”

Also, the ERP will help HMEL make informed decisions by offering instant access to accurate and timely business information, enabling robust content and digital asset management capabilities and promoting transparent governance in the organisation.

Hurdles on the Way

Perhaps, the only challenge that HMEL faced while adopting the solution was linked to customisation of the ERP to suit the company’s internal business processes. Implementation partner Wipro; however, helped overcome this challenge by utilising SAP’s in-built best practices, which mandate minimum customisation to the original solution. The project was successfully completed within a record time of 119 days.

Benefits

Apart from long-term benefits like cost reduction and improvement in efficiency, there were several benefits that HMEL realised by using SAP’s best practices. Some of them are:

- Use of a proven methodology that leverages a re-usable prototype approach to implementation

- Thoroughly documented scenarios that detail both business and technical perspectives

- Proven pre-configurations for SAP solutions

- Guidelines for adapting SAP techniques to meet the organisation’s specific requirements and for using these techniques to develop customised SAP and non-SAP hosted solutions

"This implementation of SAP ERP at HMEL is not only going to give the company a solid foundation to build its business upon but will also lead to capital cost control, accuracy and imbibing of best business practices," says Shirodkar.

The Road Ahead

Till date, HMEL has implemented modules like SAP FICO, MM and HR from the ERP solution; the Governance, Risk and Compliance (GRC) solution, Document Management System (DMS) and Business Intelligence (BI) solutions.

The company further plans to implement solutions like MII (Manufacturing, Integration and Intelligence), IS-Oil Downstream, Supply Chain Management (SCM), Supplier Relationship Management (SRM), BOBJ, Process Integration (PI) and Adobe in the months to come.