Indian Oil Corporation:

Project Manthan
Introductions

Brow Frowed and J.K Puri {the executive director

of optimizations} sat back in his New Delhi
office to take stock of the complexity of the
issues he faced.
That is….
 Wanted to create competitive advantage.
 Deregulated oil and gas sector in INDIA.
 Not used IT in proper way.
Implement Project MANTHAN.

-It is a IT based re-engineering

-It will 8 years to complete the project
- It had been planned in two phases
 The first involving 99 sites.
 The second in over 500 sites.
 Introduction contd……

Problems in Project MANTHAN

 Public sector undertaking & DEREGULATION :

After independence in 1947…

the 1950s & 1960s saw the emergence in India of

several public sector undertakings & govt. control
in core industry sector

from micro electronics to aircraft manufacture.

 Problems in PSUs
-Average ROCE=3.4% and COC=8.7%

In 1992, the Indian govt.-as part of a decisive

move to stimulate the economy of INDIA,
Govt. decided to deregulat.
 Oil industry deregulation :

Since 1976, the oil industry had operated under

the government-controlled administered price
mechanism {APM} for petroleum products.

A strategic planning group set by the Indian Govt.

Recommended for the deregulation of this sector.
With the commission of the Jamnagar refinery
by Reliance Industries in the late 1990s.
-Shifted from Deficit refinery to Surplus
refinery
 Indian oil corporation ltd….

Incorporated in 1959 as Indian Oil CompanyLtd.

It merged with Indian Refineries Ltd to from Indian

Oil Corporation Ltd.(IOCL).

IOCL was mainly into refining, transporting and

marketing of petroleum products throughout the
country.
IOCL had a divisional structure based on
business lines that reflected the individual
companies before merger.

In fiscal year 2002, it was ranked 191.

Ranked 500 in Fortune Global.
 Information technology at IOCL:

 EDP was introduced in 1966.

 In 1986 Personal computers (PCs) was introduced.
 Mainframe with a distributed data processing

environment.
 The first online transaction processing program

was implemented in 1989.

Used various legacy software in different
divisions:

 TDM for marketing department.

 PDM for operations.
 FMS for finance department.
 MMS for material management system.
 OMNIS for online maintenance & inspection

system.
EDP in IOCL worked through microcomputers
and PC based platform.

Vast quantity of data was collected

-the information was scattered
-only specific need of the divisions are met
-since system was not integrated, data as
whole was not available.
Problems in it system:

 Technology gap.
 Y2K .
The problems and
alternatives
Problems because of poor time
response
 hardware configuration and installation,
 database design and installation, the way SAP

had been implemented (i.e. the amount of

customization that had been done),
 the nature of the processes as well as their

loads (i.e. transactions and reporting load)

 communication bandwidth limitations.
Alternatives
 schedule all reporting and batch jobs after
hours when the transaction load was light.
 sensitize end-users, using the SAP message

service whenever response time increased.

 remove the reporting load from the database

server and shift it to a business warehouse

server.
The dilemma
 Challenging to identify which factor were the
bottlenecks.
 Whether or not to proceed as planned with

implementation at the remaining sites.

 which of the existing group of vendors

should be brought in to help.

 company’s acquiring of SAP R/3 before

others would prove to be a sustainable first-

mover advantage in the deregulated
environment.
 Added load of new sites going live, the
response time problem could worsen.
 delays in processing transactions could result

in poor customer relations.

The future course
 Recommendations regarding the job profile
of the IS department and its personnel at
various locations.
 Unaware about how the IS personnel would

respond to their changing roles and

responsibilities.