Customer Solution Case Study
/ / India’s Largest Oil Company Reduces Total Cost of Ownership by 30 Percent
Improves Customer Satisfaction Substantially
Overview
Country or Region: India
Industry: Oil and Gas
Customer Profile
Indian Oil Corporation Ltd., a Fortune 500 company, is engaged in transporting, refining and marketing of petroleum products. It is India's largest company by sales with revenues of INR 271,074 crore (U.S$60.91 billion) and profit of INR 10,221 (U.S.$ 2.29 billion) crore for the year 2009-10.
Business Situation
Venturing into the polymer business required IOCL to deploy an infrastructure, which would allow the company to build the edge in a fairly mature market dominated by large, entrenched players.
Solution
Working with Mahindra Satyam, IOCL implemented a fully functional Customer Acquisition, Retention and Enrichment (CARE) platformfor customers, channel partners and the customer’s field force.
Benefits
Lowers total cost of ownership by 30 percent
Helps measure success
Reduces cycle time
Improves customer service levels
Increases transparency and control / “We’ve optimized the CARE solution to reduce complexity and cost so that it easily adapts to the changing needs of the business. With support from Microsoft, we were able to reduce our total cost of ownership (TCO) by 30 percent.”
S. Mitra, Executive Director, Indian Oil Corporation Ltd.
Indian Oil Corporation Ltd. (IOCL), an energy major operating as the largest company in India in terms of turnover, saw an opportunity to capture a place for itself in the polymer market. To achieve this, IOCL worked with Microsoft in association with its partner Mahindra Satyam to deploy a fully functional Customer Acquisition, Retention and Enrichment (CARE) platform. The CARE solution consists of an integrated stack of Microsoft business applications including Microsoft SharePoint Server 2007, Microsoft Commerce Server 2009, Microsoft Dynamics CRM 4.0, Microsoft Dynamics AX 4.0, Microsoft BizTalk Server 2009, and Microsoft SQL Server 2008. Executives across the company now view the same tactical and operational information, which enables them to gain business insight to drive improved decision making. Additionally, the solution reduces cycle time by approximately 3 days and the total cost of ownership by 30 percent. IOCL believes that the new solution will result in better customer service and ultimately higher revenues.
Situation
Indian Oil Corporation Ltd. (IOCL) is India’s flagship national oil company with business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to exploration and production of crude oil and gas, marketing of natural gas and petrochemicals. It is the leading Indian corporate in the Fortune 'Global 500' listing, ranked at the 125th position in the year 2010. With over 34,000-strong workforce, Indian Oil has been helping to meet India’s energy demands for over half a century.
To achieve the next level of growth, Indian Oil is currently forging ahead on a well laid-out road map through vertical integration— upstream into oil exploration & production (E&P) and downstream into petrochemicals – and diversification into natural gas marketing and alternative energy, besides globalization of its downstream operations. As part of its downstream diversification and de-risking initiatives, Indian Oil is foraying into the highly competitive polymer business with a U.S.$ 3 billion investment - to address the Indian and overseas markets.
Polymer is a commodity business with the market characterized by large scale, fluctuating prices of products that are indexed to global prices on a weekly basis. The key factors for building market traction and success are big scale of business, careful segmentation and targeting of customers, aggressive marketing coupled with savvy price management – all backed by excellence in customer service.
India is projected to become the third largest consumer of polymers in the world by 2011 and the polymer consumption in the country is predicted to witness double digit growth for the next 5 years. The polymer categories such as polyethylene and polypropylene will account for almost 75 percent of the polymer consumption in the country. IOCL polymer plant in Panipat produces these grades of polymers.
The petrochemical vertical in the country has few players and the polymer market presents a great growth potential. This business is estimated to grow to a volume of INR 12,000 crore in future and will require a paradigm shift in the way customers are approached. The business model for this new business will be unique and business partners will play a very important role in this new business model. It will follow a customer centric approach and will require business partners and customers to be approached in a new way completely different from what IOCL has done so far for the conventional petroleum business.
Keeping in mind these challenges, the goal is to be perceived as a company that is fair in trade practices and is easy and convenient to do business with. This will be a crucial differentiator; to build the edge in a fairly mature market dominated by large, entrenched players.
The vision was to leverage the enterprise-wide SAP ERP system for the polymer business at the back end and build an Extended ERP solution for customers, channel partners and the customer’s field force.
Solution
The first step for IOCL was to create a centralized administrative structure to address its core IT infrastructure issues. IOCL decided to address these problems by standardizing on the Microsoft Server Product Portfolio. To craft a solution, it chose to deploy the Active Directory technology and Microsoft Exchange System for its centralized mail and messaging.
The company worked closely with consultants from Microsoft Consulting Services to determine how best to implement a new infrastructure based on Microsoft Server System integrated server software, and to create an architecture that served its needs.
IOCL achieved a unified, integrated enterprise network by installing Active Directory services and Exchange systems. The new architecture is not only more stable but also easier for IT staff to administer. It provides better security and access to needed resources, and makes users more efficient and productive. With this solution IOCL is improving the reliability and security of its global desktop environment. In this process IOCL also moved to a single unified mailing system and migrated there 8000 users from IBM Lotus Notes to Exchange 2010.
Moving ahead, for IOCL to capture the potential of the polymer market, it was absolutely necessary to implement a fully functional Customer Acquisition, Retention and Enrichment (CARE) platform. Microsoft Corporation in association with its partner Mahindra Satyam collaborated with IOCL’s petrochemical division to deploy this CARE solution.
The CARE solution consists of an integrated stack of Microsoft business applications including Microsoft SharePoint Server 2007, Microsoft Commerce Server 2009, Microsoft Dynamics CRM 4.0, Microsoft Dynamics Axapta 4.0, Microsoft BizTalk Server 2009, and Microsoft SQL Server 2008.
As polymer marketing was a new venture, IOCL wanted to leverage the existing SAP ERP infrastructure, by extending it beyond the enterprise, to acquire-retain-enrich customers for this business. The envisaged CARE platform was thus implemented to provide these capabilities and also to integrate with the current SAP ERP system.
The following functionalities are part of the CARE project:
Customer Acquisition
Order to Cash Cycle
Channel Management
Field Force Management
Complaint Management
Knowledge Management
Business Intelligence
Planning and Demand Forecasting
Exports
Credit Management
Product Extension
Product/Touch Point Search
Payments
SAP Configurations
CARE-SAP Integration
IOCL turned around the existing business processes mapped in SAP ERP to face the customer. Customers and partners can now create, change and display business transactions as self-service. The CARE solution brings together all the stakeholders in the business.
IOCL’s sales force has a single dashboard view of all their distributor’s interactions and information including orders, credit, and inventory. It now has the tools to better service their customers and ensure higher satisfaction levels.
Distributors for petrochemical products now have a streamlined and standardized process interface to do business with IOCL. This also brings in a high degree of compliance and transparency in the operations. And with tight integration with SAP ERP, reconciliation and payments are faster and accurate.
Customers now are able to view product information, order products, track shipments, manage payments, view order history, and interact with IOCL’s customer care and sales force.
Operations management challenges like managing inventories with distributors, warehouse shipments and order management are completely eased as a result of implementing the CARE solution.
The CARE stack integrates with SAP through BizTalk Server. The integration includes real time flows (e.g. customer registration, orders) and batch uploads (e.g. credit data).
As part of future development, IOCL plans to look at warehouse management system, terminal automation and yard management, transportation management, and complaint resolution through interactive voice response systems (IVRS).
“With the implementation of the CARE solution, we now have a robust, flexible, scalable, state-of-the-art web-based solution to manage customers and conduct transactions,” says A V Raghunadhan, Zonal Manager (South), IOCL. “CARE delivers on a crucial piece of the marketing strategy, i.e. leveraging technology to initiate and build strong relationships with the customers and the trade.”
Benefits
With the CARE solution, IOCL is able to achieve business objectives and serve customers with a reliable, scalable solution.
Lowers Total Cost of Ownership by 30 Percent
IOCL has taken a cautious approach to the adoption of new technologies. The Microsoft environment provides a scalable, secure, and highly available infrastructure on which IOCL can deploy and run its business-critical application.
“We’ve optimized the CARE solution to reduce complexity and cost so that it easily adapts to the changing needs of the business,” says Mathew George, Chief Manager, Polymer Marketing Head, IOCL. “With support from Microsoft, we were able to reduce our total cost of ownership (TCO) by 30 percent.”
Helps Measure Success
IOCL sees its deployment team using the new solution to enhance the quality, and help ensure the success, of the business. For example, at the highest level, the executives now can view overall and detailed business information using the Microsoft Dynamics CRM. They have more and better information than they’d have had otherwise.
Sales managers at IOCL take advantage of Microsoft Dynamics CRM and the accurate, complete account and sales information to understand what goes on in the field and help representatives plan the most fruitful account strategies.
“Our team has embraced the solution,” says Sunil Singh, Deputy Zonal Manager (North) IOCL. “They use it to consistently enter and manage opportunities. It is the most effective solution we’ve ever had.”
Reduces Cycle Time
“Self service on indenting, acknowledgement of goods received and several other activities online have resulted in approximately 3 days reduction of cycle time,” says Mathew George.
Apart from extending the ERP beyond just enterprises and to the channels, the solution also provides self service processes for distributers and customers. Additionally, it improves deliveries, invoicing and account reconciliation thus improving overall service efficiency.
100 Percent Gain in Order Processing Efficiency
In a semi-manual process, order processing could take up to 3 days. Now with the CARE portal in place, information flow has been streamlined to complete the process in less than two hours. The increase in efficiency impacts the overall performance of the company with bringing down the time to market and eventually improving cash flow and the bottom-line of the company.
Improves Customer Service Levels
IOCL now has the IT capabilities needed to facilitate its new business direction. “The CARE platform helps us to dramatically design and implement new business processes,” says S.C. Meshram, Executive Director (I/C), Petrochemicals, IOCL. “It will help us to improve the level of service we can deliver to customers by changing how we work.”
Increases Transparency and Control
The new solution gives customers and partners the ability to have near-real-time insight into its financial transactions. From a central portal they can see all the details thus increasing efficiency. For example, sales information is visible to the corresponding Field Officers and Regional Managers, hence it’s easy to monitor and manage the sales process efficiently. The portal also allows customers and partners to view their credit and debit balances online, making financial management simple and transparent.
Microsoft Dynamics
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systemsthat your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
For more information about Microsoft Dynamics, go to:
About Mahindra Satyam
Part of $11.1 billion Mahindra Group, Mahindra Satyam is a leading information, communications and technology (ICT) company providing top-class business consulting, information technology and communication services. Leveraging deep industry and functional expertise, leading technology practices and a global delivery model, it enables companies achieve their business goals and transformation objectives. With development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore and Australia, it serves numerous clients, including several Fortune 500 companies.