The reasons behind BPCL’s decision to implement the SAP R/3 ERP solution against the backdrop of the company’s IT initiatives that began in 1996
BPCL intended to capitalize on the power of its retail network by offering value-added services, including retail outlets, automated teller machines (ATMs), and internet kiosks, to enhance its emphasis on the retail sector and its non-fuel revenues. The business understood how crucial IT projects were to maintaining its position in the market in the post-APM environment. In 1996, BPCL started implementing IT plans into action (Mohanty et al., 2022). The corporation was divided into six strategic divisions as part of the company’s restructuring exercise: retail, aviation, lubricants, industrial & commercial, liquefied petroleum gas (LPG), and refinery. BPCL also put in place several apps to make it easier to retrieve information from corporate databases, such as intranet applications that let staff members access and modify personnel records, including contact information and payment information, directly on the intranet.
The “Query by Mail” (QBM) feature was also launched, allowing remote users to extract commercial transactions from business systems. This method made it possible to plan database queries for the evening to save WAN bandwidth. The communication infrastructure significantly lowered communication costs. Reports state that compared to 1998, savings on lengthy landline connections were reduced by only 30% in 1999(Mohanty et al., 2022). Supporting organizations, including information systems, accounting, human resources, strategy, and brand management, were merged with these SBUs. This reorganization was created to assist the company in concentrating on particular consumer segments and meeting their unique needs. The business also understood that it was required to unify the entire organization and streamline its operations. The business opted to deploy ERP at that time. Through ERP, the business planned to make decisions in real-time and respond to client needs more quickly. The goal was to demonstrate service differentiation, keep clients, and support the growth of all the company’s industrial & commercial customers’ businesses. Additionally, BPCL sought to strengthen its focus on retail by fully utilizing IT projects.
The ERP implementation exercise at BPCL and the infrastructure utilized for the same
The company’s “Project CUSEC” (Client Service and Satisfaction) had to deal with the discrepancy between refining and marketing, and the ERP implementation was a component of that project. Because big oil businesses worldwide were already using SAP R/3 with success, the company chose it (Mohanty et al., 2022). Additionally, it was the only package that included packages tailored specifically for the oil industry and India. BPCL chose Coopers and Lybran as its consultants for the planning phase of the deployment of SAP R/3 (Mohanty et al., 2022). The consultants closely coordinated their efforts with internal functional expertise at the business. In April 2000, the implementation’s first phase got underway. All of the company’s branches were connected to a centralized connectivity cloud by redesigning and reorganizing the network already in place. By connecting servers and workstations to routers and switches, this was accomplished. BPCL understood that the success of an online business would depend on security.
Internet Scanner, Real Secure, Floodgate, Sun Ultra firewalls, and Web Trend and Web Sense were used by BPCL to assure security. Compaq Proliant 1600 servers were used to install web servers in Bangalore and other large cities. The quality control server ran tests to change and modify the SAP components (QAS). New features and adjustments were produced on the Development Server before being transferred to the Quality Assurance Server for quality checks. A Sun Firewall Compaq Proliant NT system, an SCO box, and other servers were all incorporated into the server architecture. Each location’s Cisco 2610 routers are connected to a switch from the Cisco 1900 family for distribution. Additionally, BPCL has set up a data repository with query-by-mail and business objects. The business also adopted a Tivoli Enterprise System Management solution.
The benefits reaped by the company as a result of the exercise
The first of BPCL’s e-business efforts, which allowed I&C clients to see the progress of their purchases online, was made possible thanks to SAP R/3. This helped the business keep its existing clientele and draw in new ones. The management of inventories was BPCL’s significant benefit from the ERP deployment, according to business sources. Before adopting ERP, the company’s monthly inventory inspections regularly caused delays in order processing. However, this issue was resolved as a result of ERP. With the ability to now access inventory and receivables information, cash management also became simpler.
The collaboration between the various divisions was put to the ultimate test in 1999–2000 with the launch of the Petrocard. Petrocard was a 4K microprocessor smart card that was accepted at shops throughout the nation. By March 2001, over 20,000 transactions per day were being made at BPCL’s retail locations across the nation by over 2.5 lakh Petrocard users. Petrocard’s success dispelled all skepticism regarding BPCL’s ERP deployment. Then, to make it simpler for transport companies to keep track of the location of their products, BPCL also launched the Fleet card. Additionally, the corporation integrated the system with its refinery’s manufacturing execution system.
The prerequisites for a successful ERP implementation
If a company’s higher management does not provide enough support, your ERP adoption could fail. ERP installation is a strategic choice that requires significant money, time, and resources. A company’s infrastructure is strategic since it will determine how you manage operations. For instance, you will not need separate hardware or hardware support tasks if you use the cloud. Software as a service can be used to implement an effective ERP (SaaS). Things such as an on-demand ERP system could be helpful because you only have to pay a subscription fee to access cloud-based ERP solutions.
It is also crucial to remember that some ERPs might not provide support for all processes from various modules or departments within an organization. A company’s decision to deploy an ERP system is a significant one. Additionally, if you choose ERP systems because of the guaranteed development regarding both value and volume, these systems will benefit you greatly in the long run. However, due to the time and money required, establishing an ERP is a word many people find more terrifying. More than anything else, the dread is brought on by unfavorable exposure and lack of knowledge about the topic.
The future of the ERP market in the UAE
From 2023 to 2027, the UAE E-Resource Planning Market is anticipated to expand steadily. The ERP framework is an example of a standardized procedure and data model that aids in fusing many operational and administrative business activities into one cohesive system. It supports the management of critical end-to-end real-time business activities, such as accounting, finance, supply chain management, purchasing, order management, risk management, and compliance. As a result, it boosts productivity, reduces risks, fosters greater teamwork, and better supply chain management. Several businesses currently offer cloud-based ERP solutions to help businesses cut operating and capital costs (Basel & Ibrahim, 2020). Component, end user, function, development type, enterprise, geographical distribution, and competitive environment are the key segments that describe the enterprise resource planning industry in the UAE. The market is split into services and software based on components.
During the forecast period, 2023–2027, the software sector is anticipated to hold the most significant market share. Because it improves operational effectiveness, lowers production costs, and allows for widespread circulation of data, there should be an increase in the product’s demand among significant businesses (Basel & Ibrahim, 2020). The market is divided into cloud-based and on-premises deployment types. The market segment with the largest share over the forecast period, 2023–2027, is cloud computing (Basel & Ibrahim, 2020). Cloud solutions allow companies to store data online and provide tools for data restoration in the event of data insecurity. The market is split into financial, human resources, inventory management, supply chain, customer management, and other categories based on function. In the forecasted 2023–2027, the finance segment is expected to have a sizable market share.
Organizations in the financial services industry rely on cutting-edge, scalable technologies to ensure compliance with regulatory data requirements and to enable segment expansion. The market is divided into various categories based on the end user, including retail, BFSI, healthcare, manufacturing, government & utilities, technology & telecom, and others. In the forecasted market period (2023–2027), the healthcare category is expected to have a sizable market share. An important aspect driving market expansion is hospitals’ ability to maintain patient records effectively (Basel & Ibrahim, 2020). Depending on the organization, the market is split into small, moderate, and large segments. The large enterprise sector has the largest market share in the forecasted market period (2023-2027). Large businesses’ significant investments in cloud-based and ERP technologies, which fuel segmental growth, are to blame for this.
References
Basel, A., & Ibrahim, A. (2020). Operational Efficiency and the Adoption of Accounting Information System: A Comprehensive Review of the Banking Sectors. Web.
Mohanty, P. K., Sekhar, S. F. C., & Shahaida, P. (2022). Determinants of ERP adoption, user satisfaction, and user engagement. International Journal of Information System Modeling and Design, 13(1), 1–16.