Mehasana, a small town in the Western state of Gujarat, India is a little known place for use of Information Technology. At the Oil and Natural Gas Corporations (ONGC) site here, drill managers are busy rigging oil in an efficient manner.

Thanks to the enterprise resource planning system that links this remote site with the headquarters in Dehradun. For drill managers at ONGC technical assistance is now just click away. Drill managers can observe their peers’ performance in other drill sites across India.

Thus setting a competitive spirit among the employees, resulting in increased productivity.

For instance, a few hundred miles away from Mehsana is Ahmedabad, the largest city of Gujarat. Over here another team of ONGC’s drill workers are working in a more efficient manner compared to those at Mehsana. Managers from both the sites hook-up and discuss tips on good practices, to be replicated at the Mehsana site to gain similar productivity levels.

ONGC, with a net income of $10 billion, has more than 40,000 employees working in over 10 countries. The IT infrastructure helps the company knit together those disparate operations, turn its global scale and gargantuan size to its advantage. In the process the technology has helped ONGC also to save money. The cost advantage has helped the company aim even higher- from running its newly set up oil retailing businesses to exploration in countries as diverse as Sudan, Egypt and Russia among others.

“The Enterprise Resoure Planning (ERP) has certainly helped in efficiency. With yearly capital budgets of $2.2 billion and operation costs of $8.2 billion, implementing ERP has been of great help to us,” says Amitava Kaviraj, Executive Director, Chief Corporate Planning at ONGC.

And he is right. Saving costs is imperative to any company operating in the oil sector and ONGC is no exception. ONGC isn’t the only Indian oil company adopting IT, but it’s the one moving fastest. “With about 76 onshore and 24 offshore oil drilling projects, saving even one percent is of benefit to us. Earlier it cost us $60,000 per week to solve problems and now it has reduced to a day and half, so one can imagine the cost we save,” says Kaviraj.

As the Mehsana-Ahmedabad experience points, ONGC has already made sharing knowledge online a critical part of business efficiency.

Kaviraj illustrates that as operations are spread throughout the country, solving problems become difficult especially when a specialized team is not available. “Today all issues relating to operations come to a central depository where a technical team helps solve problems.” Being a public sector company, ONGC is no stranger to company hierarchy, which often led to problems not getting solved for months after being reported.

“Earlier we had communication problems as they used to work in hierarchy, now they do it online,” he says
ERP has also led ONGC to monitor and project costs for a particular project. Earlier costing was executed in cyclical manner and quarterly or half yearly results were not disseminated to the grass root level.

“But now whenever any activity is undertaken, employees know what is the cost incurred and time taken immediately, instead of waiting for a year or six months and this helps them in gearing up and work; it also lets them know how much an employee has contributed to loss and profit, how much he has cost to the exchequer,” Kaviraj adds. Earlier this year, ONGC was ranked 265 in the Forbes 2000 list leading the pack of Indian companies.

As employees work, they try to compete with each other, which only add to the value of work, be it at operational level or organizational level. Kaviraj says manpower is crucial to the smooth functioning of a company and on the spot analysis of their performance is there for all to see. This helps the employees improve efficiency. ERP has even helped the company prepare analytical graphs of the exploration site and compare data. “We have started feeling the heat,” Kaviraj adds.

To become more competitive, ONGC has appointed an international consultant to examine the gains and loss of the company. The consultant will also advise on the best practices adopted by international oil companies like BP, Exxon and Mobil to increase standards in the global market. “We must know how high is the sky for our best interest and practices.”

Such examination has helped ONGC learn from international oil companies about inventory management. “With the help of inventory management we now know what is the consumption, what oil or gas stock is available at which place and where they should be marketed,” says Kaviraj, adding that with the absence of an effective inventory management, it was difficult to know about the stocks for almost a month. “But today stock details and graphs are available at the click of a button.”

But the ERP project, which took 30 months to be implemented, was a challenge for the company, which thrived on legacy systems. “Making the employees understand the system was a bit of challenge for me. I told the employees that dependence on the legacy system has its own share of demerits.” Kaviraj says he personally called the team, explained them the benefit of the new system, and they were trained to handle the system in a simple way. It was implemented not in one go but departmentally. And despite apprehension from the employees, the project was rolled out only after 90 percent of the employees were convinced. However, 10 percent were still apprehensive about the system. “After rollout we arranged a three month training camp for the employees and offered 24X7 support to the employees,” says Kaviraj.

With this rollout, out went the company’s hierarchy level. Paper work was reduced to minimal. In came a transparent organization with a mixture of understanding and administrative decisions. One interesting aspect of the ONGC IT team is that the 150-team members come from a business background.

According to Kaviraj, the IT team should have knowledge of business, as they know the needs of the company better.

“IT makes me competitive. It is an enabler and provider of an edge in India. It will help me succeed at a time when MNC and private Indian companies are using IT maximum,” says Kaviraj.
It will take patience, concentration and much more hard work for the IT to reach its full potential and drill a steady stream of oil producing gushers for ONGC.