Indraprastha Power Generation Company (IPGCL) is a government-owned utility that generates and sells electricity to distribution companies in Delhi, India. IPGCL implemented the SAP ERP application to provide much-needed integration for procurement and maintenance operations along with business tools for effective decision making.
IPGCL took over the generation business from erstwhile DVB w.e.f. on July 1, 2002. The main function of its associate company, Pragati Power Corporation (PPCL) is the generation and sale of electricity to power distribution companies operating in Delhi.
“SAP ERP has helped us integrate and streamline operations across our power plants, leading to increased visibility into data and better informed decision making. It has also optimized resources and reduced paperwork,” said AK Handa, deputy general manager (ERP & IT), Indraprastha Power Generation Company.
Establishing an Agile and Integrated Organization
Business drivers, such as paper-based processes and a lack of integrated data, prompted the company to look for software that could help drive excellence across the organization. IPGCL-PPCL implemented the SAP ERP application to support operations, and other SAP software, such as SAP Business Objects business intelligence (BI) solutions, to deliver decision-making tools to management.
A team of 12 employees from functional areas across IPGCL was assisted by consultants from SAP Consulting who provided expertise, knowledge transfer, and training for the core team and end users. With strong support from management, the team completed the implementation in seven months.
Creating the Road to Excellence
The road to excellence was built on improvements in the areas of procurement, maintenance, HR, and finance. Using an automated procurement process, employees create indents (requests for equipment and supplies) in SAP ERP, often using historical data from previous purchase orders or approved indents for cost estimation. This not only decreases the time needed to create indents but also speeds up the vetting process. This entire process can be completed within one day, down from five days.On the plant maintenance side, where each plant has approximately 600 pieces of equipment, IPGCL has standardized maintenance procedures across all plants. Online maintenance schedules have reduced the effort for monitoring adherence to schedules. Furthermore, 100 percent cost allotment of labor and spare parts during maintenance has improved the accuracy of cost allocation, maintenance history, and spare-parts movement. The HR function has seen improvement through the use of the payroll engine in the SAP ERP Human Capital Management solution, which reduced manual efforts and unified payroll processing. Online performance management functionality replaced traditional manual performance management, resulting in improved satisfaction for managers and all other staff. Transfers, promotions, and the employee skills database are now maintained online. Using self-services offered in a portal, employees can update personal data, such as address and dependent status, thus freeing the time that HR employees used to spend maintaining this data. With the SAP ERP Financials solution, the finance function has up-to-date cost records. The software supports adherence to company policies and procedures, while role-based access to an integrated financial application helps improve data consistency and security. Thanks to better and faster means of communication, no time is lost in the delivery of paperwork such as requests and notes.
Ready to Generate More Benefits Through BI
IPGCL-PPCL is now looking to extract intelligence from its integrated SAP solutions. The company has already implemented SAP BusinessObjects BI solutions. IPGCL-PPCL is also exploring the option of implementing the SAP Supplier Relationship Management application for supplier collaboration, specifically reverse auctions, which can help the organization achieve savings in procurement. In addition, IPGCL-PPCL is looking at software that can help the company become a paperless business. Clearly IPGCL-PPCL is on the road to becoming an integrated, intelligent, and agile enterprise.
Its key Challenges are:
- Integrate people, processes, and power plants across the entire business
• Improve operational and management decision making with better access to accurate data
• Automate manual and paper-based processes
• Adopt best practices for generation company
• Optimize the performance of aging assets
Implementation Best Practices
• Strong and resolute support from management throughout the implementation
• Formation of core team of key people representing functional areas to support the project from conceptualization to implementation
• Extensive training for core-team members and end users
• Involvement of all key stakeholders during documentation business processes
Financial and Strategic Benefits
• Automated creation of request for quotes from purchase requisitions, eliminating manual data entry by personnel in contracts and materials (C&M) department
• Gained complete visibility into asset maintenance history and spare-parts movement
• Reduced effort required to manage preventive maintenance schedules
• Streamlined performance appraisal process with online performance management function
• Decreased manual effort required to carry out transfers and promotions of executives
Why SAP Was Selected
• Demonstrated understanding and expertise in the power generation industry
• Integrated solution that supports best practices for power generation companies
• One-stop solution for transactions and reporting through the use of interactive dashboards
• Integration of business processes
Total Cost of Ownership
• Completed the implementation across the entire organization in 7 months by knowledge transfer and training from SAP Consulting to build an internal team that supports post implementation requirements
• Eliminated manual processes, spreadsheets, and duplicate efforts with automated and integrated applications.
Operational Benefits Key Performance Indicator Impact
Procurement lead time
· Single tender -58 percent (from 128 to 54 days)
· Limited tender -46 percent (from 147 to 79 days)
· Open tender -51 percent (from 283 to 140 days)
· Adherence to preventive +5 percent to 10 percent
· Accuracy of cost distribution Improved
· between preventive and from 80 percent
· breakdown maintenance to 99 percent
· Time for vetting indents -80 percent (from 5 to 1 day)
· Effort to maintain fault -100 percent
· register, docket filing, (from manual to
· and work permit filing automated process)