Hindustan Construction Company (HCC), one of India’s oldest infrastructure development companies recently implemented SAP’s mySAP ERP package to streamline its operations in geographically dispersed areas and integrate key business processes throughout the organisation.

HCC, which mainly focuses on infrastructure projects such as building nuclear and thermal power plants, bridges, dams and roads has been in existence for over 80 years with operations spread throughout the Indian geography. Majority of its contracts come from the government and the company has multiple projects running simultaneously in different locations at any given time. Most of these projects are located in remote corners of the country where it is not always easy to exercise absolute control over the proceedings.

Early FoxPro days

Prior to deploying the ERP, the company was running a series of homegrown FoxPro-based systems across its various departments. These decentralized legacy systems were fairly inflexible and were not yielding desired efficiency across different processes. Hence, in order to keep a tab on all its endeavors and gain end-to-end visibility into the various systems, the company decided to replace its entire legacy system with an off-the-shelf ERP offering.

"The need for an ERP was felt mainly because of our multi-location operations. As most of our projects are located in remote areas, it becomes very difficult for us to know what’s happening on a regular basis. Also, the nature of our business is such that it requires us to have maximum visibility and exercise absolute control over the processes and systems related to each project. Our previous systems were not delivering these capabilities to us. It is for these reasons, we felt that we felt the need to upgrade our IT," said Satish Pendse, CIO, HCC.

ERP vendor shortlisted

To decide upon the ERP, HCC formed a cross-functional task force comprising of personnel form its different departments. The team looked at the offerings form vendors including Oracle, Baan, and even some construction specific ERP offerings. However, after carefully evaluating their specific requirements, the team selected mySAP from SAP.

IBM was roped in as the implementer for the project, while HP provided the necessary hardware infrastructure. The project began on the 1st January 2006 and HCC was able to roll out the ERP at its first four locations in August 2006.

The system runs on HP’s Itanium based machines with UNIX as the operating system (OS). The database tool being used for the ERP is Oracle 10i.

ERP live at first four locations

The four locations to go live on the new ERP included HCC’s head office in Mumbai, its engineering workshop in Panvel and two locations in Lucknow. Once, these four locations went live, HCC stabilized the systems for a couple of months and then rolled out the ERP to another 13 locations in different parts of the country. For connectivity HCC is using leased lines, radio VPNs and VSATs.

Along with the mySAP business suite, HCC also deployed SAP’s data warehousing solution and document management solutions. In addition to this, it also deployed SAP’s Industry Solution for Engineering Construction & Operations (IS-ECO).

Usage optimized

Currently, there are about 615 users using the system. To ensure optimized usage of the new ERP, HCC trained its users extensively before the roll-outs and also created an internal support and maintenance team to look after the system.

Of the various sites that have gone live with the ERP, two are located in Kargil where HCC is currently constructing a dam for the Indian government. The roll out at Kargil has made it the highest point in the world where an ERP is running.

This IT initiative is expected to cost an estimated 25 crores to HCC, over the course of next three years. Pendse believes that the investment being made is just as the returns of the initiative are going to provide the company with tools which will significantly increase its growth.

According to Pendse, "The domestic infrastructure industry is experiencing an unprecedented boom. This is only going to accelerate in the coming years, as the government continues to invest heavily in building world-class infrastructure to attract global investors. This is creating tremendous opportunities for service providers like us. However, the key to success in this environment is going to be efficiency, both in terms of operations and service delivery. IT is an extremely effective tool that can facilitate both of these and support the quantum growth of the organization."