ORGANISATIONAL CHANGE AND

DEVELOPMENT

Term Paper

On

NATIONAL THERMAL POWER

CORPORATION

Submitted To: Submitted By:

Ms.Pooja Ashmita Mondal

BBA-MBA (int.)

Sem-6th

RR1710A06

3020070020

Contents

1. INTRODUCTION TO NTPC

2. ACQUISITION OF TANDA PLANT BY NTPC

3. MAIN OBJECTIVE OF NTPC TO ACHIEVED

4. THE GENESIS OF PROJECT ‘LAKSHYA’

5. IMPLEMENTATION CHALLENGE

6. MAJOR CHANGE IN NTPC

7. NEED AND FORCES OF THE CHANGE

8. RELEVANCE OF MODEL OF CHANGE

9. CHANGE IN WORKFORCE AND CULTURE

10. ROLE OF LEADFERSHIP

11. BARRIERS OCCUR DURING CHANHGE

12. HOW DID ORGANISATION PLAN ITS CHANGE

13. HOW THE EMPLOYEES WERE KEPT MOTIVATED TO ACCEPT THE

CHANGE?

14. CRITICALLY EVALUATE THIS CHANGE PROCESS IN THAT

ORGANIZATION

15. WHAT OD INTERVENTIONS DID THE ORGANIZATION CHOOSE IN THE

ENTIRE PROCESS AND HOW WERE THEY IMPLEMENTED?

16. STUDY OF THE RESULT OR AFTER EFFECT OF THE ENTIRE PROCESS

17. SUGGESSTIONS REGARDING THE CHANGE AND OD INTERVENTIONS

INTRODUCTION OF NTPC

NTPC Limited (Formerly National Thermal Power Corporation)

is the largest power generation company in India. Forbes Global

2000 for 2009 ranked it 317th [1]

in the world. It is an Indian public

sector company listed on the Bombay Stock Exchange although at

present the Government of India holds 84.5%(after divestment the

stake by Indian government on 19october2009) of its equity. With a

current generating capacity of 31134 MW, NTPC has embarked on

plans to become a 75,000 MW company by 2017. It was founded on

November 7, 1975.

NTPC's core business is engineering, construction and operation of

power generating plants and providing consultancy to power utilities

in India and abroad.

The total installed capacity of the company is 31134 MW (including

JVs) with 15 coal based and 7 gas based stations, located across the

country. In addition under JVs, 3 stations are coal based & another

station uses naphtha/LNG as fuel. By 2017, the power generation

portfolio is expected to have a diversified fuel mix with coal based

capacity of around 53000 MW, 10000 MW through gas, 9000 MW

through Hydro generation, about 2000 MW from nuclear sources and

around 1000 MW from Renewable Energy Sources (RES). NTPC has

adopted a multi-pronged growth strategy which includes capacity

addition through green field projects, expansion of existing stations,

joint ventures, subsidiaries and takeover of stations.

NTPC has been operating its plants at high efficiency levels.

Although the company has 18.79% of the total national capacity it

contributes 28.60% of total power generation due to its focus on high

efficiency. NTPC’s share at 31 Mar 2001 of the total installed

capacity of the country was 24.51% and it generated 29.68% of the

power of the country in 2008-09. Every fourth home in India is lit by

NTPC. 170.88BU of electricity was produced by its stations in the

financial year 2005-2006. The Net Profit after Tax on March 31, 2006

was INR 58,202 million. Net Profit after Tax for the quarter ended

June 30, 2006 was INR 15528 million, which is 18.65% more than for

the same quarter in the previous financial year. 2005).

Pursuant to a special resolution passed by the Shareholders at the

Company’s Annual General Meeting on September 23, 2005 and the

approval of the Central Government under section 21 of the

Companies Act, 1956, the name of the Company "National Thermal

Power Corporation Limited" has been changed to "NTPC Limited"

with effect from October 28, 2005. The primary reason for this is the

company's foray into hydro and nuclear based power generation along

with backward integration by coal mining.

National Thermal Power (NTPC) the 138 position in 2009

10 Indian companies make it to FT's top 500

CHANGES OCCUR IN NTPC

• SAP implementation across NTPC and change management

initiatives

Rolling out an ERP throughout an organization is one of the

largest and toughest exercises before an IT team. And, usually,

all of an organization's resources get so absorbed in ensuring its

successful deployment that other IT initiatives are sidelined.

Highlights

The new system is being leveraged to conduct crucial activities

such as management committee meetings

It was ensured that do’s and dont’s were circulated among all

project heads and repeated at the start of such meetings.

Dinesh Kumar, executive director at NTPC, India's largest

power company, decided he wasn't going to be a statistic. Last

year, as his team was neck deep in rolling out a SAP

implementation across NTPC and change management

initiatives were in full swing, Kumar decided to introduce a

collaborative framework across the enterprise. This would not

only help with change management, he reasoned, but also take

the organization beyond the ERP deployment, enable increased

productivity and reduce costs.

Part of the collaborative framework was audio and video

conferencing that would enable the company to reach out to all

its employees. Change management for the ERP required a lot

of interaction with all users and the audio/video conferencing

facility would come handy.

"A major challenge was getting people to adapt to the

technology. To ensure we had really effective conferencing, do's

and dont's were circulated among all project heads and repeated

at the start of such meetings," says Kumar.

Post the rollout, the new system is being leveraged to conduct

crucial activities such as management committee meetings,

project monitoring, and reviews of upcoming thermal or hydro

power generating projects. Management committee meetings

take place regularly across all of the organization's 40 locations

with over 150 participants taking part simultaneously.

Stakeholder Views

The system has ensured that hierarchy and geographical distance

don't come in the way of capturing ideas and figuring out ways

to harness themDinesh Kumar, Executive Director.NTPC

"The conferencing initiative not only helps us save costs and

time but also helps us in coming together to find speedy

solutions to critical issues that need to be tackled immediately

during various stages of upcoming projects. It has also ensured

that hierarchy and geographical distance do not come in the way

of capturing ideas and figuring out ways to harness them," says

Kumar.

"That should go a long way in reducing the lead time in meeting

the XI Plan target of achieving 50,000 MW by the end of 2012,"

he adds.

ACQUISITION OF TANDA PLANT BY NTPC

The acquisition of Uttar Pradesh State Electricty Board’s Tanda

Plant at Ambedkar Nagar, U.P.India, by NTPC in the year 2000.

ARTICLE

SAP implementation across NTPC and change management

initiatives

Set up in 1975 with 100% ownership by government of India

• The largest power generation company in India, with

comprehensive in-house capabilities in building and operating

power projects

• Current operating capacity ≈30,000 MW (including JV). 16,680

MW under construction

• 18 coal based and 8 gas based power plants ; 3 hydro projects

under construction

• Forward & Backward Integration

• Developing coal mines for captive use

• Exploring oil/gas blocks in consortium with partners

• Subsidiaries (5 nos.) & JV companies (10 nos.) For taking up

generation, power trading, distribution business and for setting

up of small hydro plants (<250 MW)

NTPC – Today

OWNERSHIP

• Government owns 89.5%

• Foreign Institutional Investors (FIIs) own 4.90 % and 5.60 %

owned by domestic institutions & public

SIZE

• Gross Revenue of INR 416370 Million (USD 9253 mn) – 2007-

08

• Net profit of INR 74699 Million (USD 1660 mn) – 2007-08

• One of the five largest Indian companies with a market cap of

more than INR 1,80,000 Crore ( USD 40 bn)

• Net worth of INR 48,000 Crore + (USD 11 bn)

• Total assets of INR 80,000 Crore + (USD 18 bn)

STATURE

• Ranked # 1 independent power producer in Asia in 2007 (by

Platts, a division of McGraw-Hill companies)

• The fourth largest generating company in Asia

• 411th largest company in the world (Forbes ranking – 2007) –

jumps up

83 positions from the 494th rank in 2006

Key Considerations behind the ERP Project

MAIN OBJECTIVE OF NTPC TO ACHIEVED

• Integration of Process/People/Location Stable and secure system

to support

• growing business needs

• Improve vendor management and reduce procurement cycle

time

• Reduce engineering & construction cycle time

• Empower employees through progressive H.R practices

• Effective asset management and maintenance tracking across

the organization

• Increased visibility into inventory levels

PRE SYSTEM CONSTRAINTS

• Multiple systems with varying process maturity

• Legacy applications could not handle new requirements

• Duplication of vendor codes and lack of system support for new

modes of procurement

• Pockets of automation resulted in limited ability for project

teams to collaborate

• Lack of systems to provide employees with data access

• Limited ability to accurately track O&M costs and conduct

systematic asset maintenance plans

• Limited visibility into inter unit inventory levels

Pre-ERP Disparate Application Landscape Did Not Support

NTPC’s Business Goals

• Integration

• Enterprise wide visibility

• Single version of “truth”

• Senior management reporting

• Financial closure & reconciliations

• Material codification and inventory management

• Employee empowerment through self service & knowledge

management

The Genesis of Project ‘Lakshya’

• Project Start May 2006

• Pilot Go Live June 2007

• Roll Out Completion Aug 2008

Define the Business Strategy

• Organisation restructuring and business process reengineering

• Long term business strategy

• HR Strategy

• IT strategy

Develop a Supporting IT Strategy

• Define the IT strategy/roadmap and select the right approach

• Home grown

• Best of breed

• Standard off-the shelf application

Select the right IT Partner

• Evaluate and award the contract to the best ERP solution

provider

• Selected SAP as the IT platform for NTPC

• Awarded the contract to SAP Consulting & SISL to implement

the project

Pilot Implementation

• Implemented the whole suite of SAP applications across 5

locations

• First pilot projects live in 10 months

Complete Rollouts

• Rolled out the application to across the rest of the 25 locations

Project Lakshya: Executing the Roadmap

Establish the Core

• Pilot implementation of all the modules at 5 locations

• Build global template to align organizational processes

• Went live in 10 months fromthe date of project kick-off

Stabilize and Roll-out

• Global template roll out for remaining 25 units completed

• Centralized SAP payroll and claims and reimbursements for all

25000 employees

Transformation

• Optimize processes

• Leverage SAP best practices

• Real-time visibility

• Centralized procurement

• Center of Excellence

Project Lakshya: Major Achievements

• End to end mapping of all the business process from Concept to

Commissioning & Post Commissioning stage of a typical Power

Station, using various SAP functionality

• Introduction of internal and external (vendor) Collaboration for

various Engineering and non-engineering activities

• Creation and standardization of Engineering knowledge-base

and introduction of “Building block” concept for re-use of

design & shorter project development time

• Implementation of “Fuel management” functionality to meet the

business requirement of capturing, tracking and handling of data

relating to fuel company as well as the Railways

• Energy Billing as per Availability Based Tariff in IS-U

Implementation of ‘Works Bill Processing”

• Centralized Payroll and employee self service for all the 25000

employees across diverse locations

• Visible and immediate benefits from e-tendering and reverse

auctions enabled by the SRM platform

• NTPC specific enhancements along with work-flows in Claims

and reimbursements, Leave travel concession (LTC), Loan

application

Learning's From the Project

IMPLEMENTATION CHALLENGE

• Big Bang Implementation Approach

• Large and Diverse Users Across Locations

• Aggressive Implementation Timelines

• Material Codification

• Organization Change Management

• Infrastructure Planning

• End User Training – Train the Trainer Model

HOW NTPC ADDERESS IT

• Ensure top management commitment and support

• Ensure business owns the processes to be implemented

• Assess and address change management proactively

• Hire consultants with prior experience in similar

area/industry

• Improve and adapt the rollout approach based on ground

realities (e.g.: Data Centre, Training)

• Make realistic and detailed estimates on the effort needed to

migrate existing legacy data mp Finance & Reporting

IMMEDIATE BENEFITS

FINANCE AND REPORTING

• Reduction in books closure cycle time

• Seamless reconciliation improved accounting efficiency

• Access up-to-date cost records

• System-enforced consistency in adherence to policies/ std.

procedures across all locations

• Management dashboard with complete overview of business in

a single screen powered by SAP

PROJECT MANAGEMENT

• Real-time tracking of key project activities and milestones

• Reduction in project coordination effort

• Better project execution visibility helps identify and eliminate

potential bottlenecks

HUMAN RESOURCE MANAGEMENT

• Better Employee satisfaction

• Enabling employees to manage/ track transactions in self-

service mode has significant productivity benefits

• Centralized payroll management has enhanced HR productivity

- 9 FTE’s can now handle payroll against 40 – 50 earlier

ENTREPRISE MANAGEMENT

• Rationalization of asset item codes

• Complete visibility into asset maintenance history and spare

parts movement

• Monitor overhauling and OPI (schedules, costs, material

availability, sequence of activities etc.) by leveraging SAP

capabilities extensively

• Spares purchased cost reduction achieved through visibility of

common spares across plants and centralized PO process

BILLING AND SETTLEMENT

• Real-time visibility into cash-flows

• Uniform bills created for customers drawing power from various

divisions/ locations through centralization of commercial billing

function

• Eliminated errors and revenue loss by standardizing plant level

interpretation of billing clauses and terms

ASSESTS OPERATION AND MAINTENCE

• Improved corrective maintenance visibility and maintenance

effectiveness through creation of General Maintenance as a

separate category

• Better analysis of equipment maintenance history due to detailed

and relevant drop down list (in coded from) for users to record

the observations

• Ability to ascertain cost (material, services, manpower)

accurately for the various maintenance activities e.g.

preventive, breakdown, overhauling etc.

• Split Valuation for three different stages of material possible

(New, Refurbished, Refurbish able)

• Eliminated manual entries in measuring book (MB)

• Enhanced visibility in to equipment usage history for every

installation

• Easy access to all documentation related to the equipment such

as drawings, protocols, specifications etc

• Automatic generation of Store Issue Voucher through mtc.

Order

• Online approval of ABB

• Ability to trigger purchase activity in advance for next 2 fiscal

years

• OPI calculation based on approved ABB data and tracking of

PR generated from the system

• Accurate visibility in to inventory at various storage locations

• Automatic creation of notification in case of abnormal condition

Beyond ERP - The Road Ahead…..

• In order to have e-Governance, NTPC is considering

implementation of SAP

• Governance and Risk Compliance (GRC)Access Control

• Process Control

• Risk Management

• SAP Master Data Management (MDM)

• To effectively Manage various SAP, Non-SAP and legacy

content

• Deliver a single version of information inter and intra-enterprise

MAJOR CHANGE IN NTPC

• SAP implementation across NTPC and change management

initiatives

Rolling out an ERP throughout an organization is one of the largest

and toughest exercises before an IT team. And, usually, all of an

organization's resources get so absorbed in ensuring its successful

deployment that other IT initiatives are sidelined.

NEED AND FORCE OF THE SAME CHANGE

• Multiple systems with varying process maturity

• Legacy applications could not handle new requirements

• Duplication of vendor codes and lack of system support for new

modes of procurement

• Pockets of automation resulted in limited ability for project

teams to collaborate

• Lack of systems to provide employees with data access

• Limited ability to accurately track O&M costs and conduct

systematic asset maintenance plans

• Limited visibility into inter unit inventory levels

Due to above constraints of pre ERP system a new system was

installed that is SAP to overcome above problems in the

organization.

RELEVANCE OF MODEL OF CHANGE

In this change they follow Kurt lewin model. It is a three stage change

model tool which is helpful in understanding the change situation

Stage 1: unfreezing

• Provision of psychological safety

This is done by NTPC by explaining to all employees the benefits of

new technology SAP. If individuals knew what was happening and

appreciated the long term objectives of the organization, they would

be willing to face and solve the immediate problems and difficulties

associated with the task. Therefore, a series of meetings were held

with various groups of employees at all levels.

Stage 2: changing through cognitive restructuring

• Identifying with new role model and mentor

Eminent management consultants IT trainers and some top

management employee they were act as mentor for employee

which help them to adopt this major change by providing

training and seminar and conducting group discussions with

employee regarding this change.

Stage 3: refreeze

• Significant relation

To create an atmosphere in which all employees, irrespective of their

status and functional background, could freely discuss and contribute

their suggestions. At each stage of implementation, these ideas were

incorporated and plans modified accordingly. This gave the

employees a sense of involvement and belonging to the organization.

It is true that this somewhat slowed down the pace. Some thought that

this process of mass education was taking more time than necessary;

but it was considered essential to carry the organization and people in

any change rather than thrust changes on them to maintain pace. So

through this they create a significant relationship with their employee

by allowing them to suggestions for change process.

CHANGE IN WORKFORCE AND CULTURE

After having adopted a technological based change

• They totally change their mission ,objective and vision

• They now starting mainly focusing on technological

advancement and employee found it easy work on it and

understandable

• Now employee work with more involvement because the

company create the family oriented and motivating environment

through group discussion at each level of the organisation so

that we can came to know that what they aspect from this major

change.

ROLE OF LEADFERSHIP

As we know that only mentors and consultant can create the

motivational environment so in this company it is created by IT

trainers and top management by telling them regarding the benefit of

this new technology and motivating each level of employee of

adopting through group discussion and by giving them training

regarding this change.

BARRIERS OCCUR DURING CHANGE

• As this a new technology in the organisation so employee get

insecure regarding it that how we are going to operate it because

they don’t know anything about that technology.

• Employee also feel insecure if they are not able to cope with this

new technology SAP then they are going to thrown out of the

organisation.

So above all factor cause negative impression in the mind of the

employee regarding new technology so they resist it.

HOW DID ORGANISATION PLAN ITS CHANGE

• First all they find out the constraints of pre ERP system.

• Then they find out that the present ERP system did not

support NTPC business goals.

• Then they design new Lakshya project which help in

implementation of new technology SAP.

How the employees were kept motivated to accept the

change?

• The employee of the organization kept motivated by

telling them the benefits of this integrated management

system.

• Through group discussion and meetings at each level is

conducted to know the suggestion of employee regarding

this change and implementing them.

Critically evaluate this change process in that organization

• As we that this change is a successful change because of

change plan and strategies used by top management and

they rightly focused on change agent that is employee by

different motivating strategies

• From the immediate benefits in different divisions like

� Fiancé and reporting

� Billing and settlement

� Human resource management

� Project management

� Assets and operation management

We can find out that this new technology is very beneficial

for the organisation

What OD interventions did the organization choose in the

entire process and how were they implemented

Here we use technological strategies attempt to change an

organisation design by implementing new technology. And here the

technological strategies used for total organisation system

intervention because here we change the whole management structure

of the organisation. Here new type technology is used whole

organisation to remove the constraints of pre technological system.

Study of the result or after effect of the entire process.

After implementing this OD Intervention and organization

change process we were pleasantly surprised to find out the

various benefits to the different divisions and department of the

NTPC had so from above fact we conclude that SAP is the

successfully adopted technology by NTPC.

Suggestions regarding the change and OD intervention used.

• As this change mainly focus on external factor like techno

logical advancement and expansion of business they

should also focus on internal factor for change process

because they are also important for successful

implementation of change in organization

• They can also use TECHNOLOGICAL STRATEGIES in

intergroup intervention by applying them in different

division of the organization. By making groups in that

particular organization for more frequent adaption of

change in that division of organization which form great

organization i.e. NTPC

SOME IMAGES OF NTPC