Presented by Mr Arun Balahrisgnan

HR Round Table organized by ISPe

BUSINESS PROCESS RE-ENGINEERING AT HPCL

OIL INDUSTRY IN 1990's

STRUCTURE AT HPCL

LIBERALISATION - A NEW AWAKENING

CHANGES IN HPCL

BPR OBJECTIVES

MAJOR CHANGES INITIATED

SCENARIO - 2003

HPCL - 2003

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OIL INDUSTRY IN 1990's

All major products regulated by OCC / Govt.

Profitability determined by permitted returns (12% Post Tax)

Market Share determined by Govt. / OCC

Imports of Crude & Products determined by Oil Economy Budget (OEB)

Planning (Corporate, Investment in Mktg & Ref. facilities etc) prerogative of OCC

Product shortages in Market3 of 13

STRUCTURE AT HPCL

Organization structure in line with market requirements

Focus on meeting Govt. Guidelines

Customer at a distant horizon

Strong focus on Project implementation to ensure continued profitability

Distribution key function of marketing

Command & Control Structure

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LIBERALISATION - A NEW AWAKENING

Severe Foreign Exchange crises in 1990's leads to Liberalisation of the Indian Economy

Oil Industry becomes focus area for change in view of large investments required to meet energy demand

Marketing of Lubricants and other products de-regulated in early 1990s

JVC's in the Refinery Sector and Licensing of Private Sector Refineries

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CHANGES IN HPCL

Govt. sponsored industry reports indicate impending changes in Indian Oil Industry

HPCL (in 1995) introspects on preparedness to meet external challenges

Resorts to periodic structural changes to enhance speed of decision making

Identifies need for external help

Appoints Anderson Consulting (now Accenture) to carry out Business Process Re-Engineering

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BPR OBJECTIVES

Visualise the structure of Indian Oil Industry in the next decade

Study the possible effects of private and MNC competition

Identify Focus Areas in Refining & Marketing

Re-Design Organization structure to meet the new, emerging requirements

Learnings from other countries to be used

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MAJOR CHANGES INITIATED

In search of the elusive customer :

defining the customer

understanding customer requirements

providing economically viable options

Re-designing the organization structure to focus on customer requirements :

Formation of SBU's

Redefining jobs

Reduction in hierarchical layers8 of 13

MAJOR CHANGES INITIATED

Re-vitalising processes for faster, better decision making :

Enhanced financial limits at all levels

Delegation of authority & responsibility

Tools for better decision making

Implementation of ERP system for :

Better Customer Service

Accurate & timely transactions

Updated data for decision making 9 of 13

MAJOR CHANGES INITIATED

Focus on Profitability :

SBU's become profit centres

are self contained units

extend across the value chain

Specialization for better customer service

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SCENARIO - 2003

Refining sector de-regulated in 1998

Marketing de-regulated in 2002

Private sector Refining a force to reckon with

Retailing rights available with a number of companies

Traders & end consumers free to import their requirements

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HPCL - 2003

SBU structure in place

ERP under implementation

Better focussed to meet customer requirement & Competition

Remarkable upgradation in employee competencies

Many successes, some failures

A very profitable, best managed company

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Shri M.B. Lal, Chairman, HPCL, receiving the “BEST MANAGED COMPANY AWARD” (instituted by “BUSINESS TODAY” & “A T KEARNEY”) from Shri Jaswant Singh, Hon’ble Minister for Finance.