Hindustan Construction Company (HCC) : Catalyst for Leadership

With the construction sector seeing a revival in recent years owing to
investments, HCC realized that they needed to upgrade their project controlling
systems for visibility into the current projects.

With rapid growth came the challenge of managing it. The information
management was unorganized making access to information and informed
decision-making a herculean task. The margins too were increasingly thinning due
to increasing price of raw materials and increasing price cuts from competition.
A new business model was the need of the hour that would help in diversifying
and improving profitability and growth rate.

Challenges Ahead

Says Satish Pendse, CIO, HCC, "Being an eighty-year-old company, existing
processes were not always in line with modern management practices, and we
realized the need for a change management exercise to effect the proposed
changes."

HCC wanted the implementation to be spread across its various locations,
including remote locations in Kashmir. However, the company was clear on what
they expected from their IT systemit had to support operations across remote
locations and fulfill the demands of a growing business.

The solution was to help HCC gain competitive advantage by adopting the best
practices. HCC needed a solution that will help it closely monitor projects and
help in faster and sharper decision-making. Equipment and tools management was
one parameter HCC seriously evaluated while choosing the solution.

Rolling Out

After zeroing in on the broad objectives of the system, HCC began the
process of selecting the right solution from a global brand that could fit well
with the requirements of the infrastructure industry.

Considering that SAP had a solution that could help in equipment and tools
management, HCC opted for it. Further, SAP ERP had powerful tools available for
efficient costing and execution of projects. The solution was localized for
India, enabling HCC to meet the statutory norms defined by the government. Even
the payroll system was customized for India. The scope of implementation covered
a wide range of business functions.

For rolling out the implementation, IBM was chosen. Apart from ERP, SAP was
also chosen for engineering construction and operations. The initiative, called
Sankalp, had management support and despite the logistical complexity of the
project, the implementation was completed ahead of schedule, ie in seven months.

This was an incredible achievement, given the magnitude and complexity of the
task. "Project sites like those in Jammu & Kashmir are testing grounds for the
companys IT initiative. Moving large equipment typical of the construction
industry to such inaccessible areas can be daunting. The SAP implementation
helped our project managers to anticipate such situations more easily and source
their requirements well in advance," says Pendse.

While the business processes in finance and HR have been streamlined, on the
other hand, project management at sites has increased. Post the implementation
of SAP ERP, HCC today has better control on equipments and tools at project
sites, thereby, increasing capacity utilization and cost optimization.

Cost implications across the sites have become clearer improving control over
projects as information is seamlessly available for decision. There is improved
transparency of available stock as demand can now be better forecast by
analyzing usage trends with the solution.

Stuti Das

stutid@cybermedia.co.in