Nationwide roll-out of changes in the LPG accounting and distribution system was announced by the Ministry of Petroleum and Natural Gas on 14th of September, 2012. A serious challenge was thrown to the IT team of Indian Oil by changing the entire architecture from distributed to centralized, covering 6500 distributors (approx) across India. The architecture, modalities and changed business logic were to be redefined and implemented in two months which was earlier estimated to be an effort of two years.
The answer to curbing diversion of subsidized LPG and other irregularities was to invest in the right technology to identify the source and then putting in place business rules and processes resulting in prompt enforcement. The solution used was a data integration product -`Informatica PowerCenter Real Time Edition’ with an in-house developed Java-based application.
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INDSOFT was initially developed on a distributed architecture wherein each distributor premises were designed to have a locally stored database which is accessible through a front-end application. The software was also designed to generate an end-of-the-day file to be automatically transmitted to a central server hosted by IOC. The files accumulated at the central server from various distributor sites were used for generation of various periodical reports and monitoring. This solution had several limitations and shortcomings, however. Information was not available in the central system in real-time. The system only allowed retrospective detection of irregularities or malpractices. For example, detection of diversion of a domestic connection to a commercial establishment could only be determined on a post-facto analysis of the distributor’s operations. The local database is owned by the distributor and prone to tamper, misuse of data. There was no support for encryption. Auto-deployment of new software versions were not possible and therefore it was difficult to prevent manipulations at remote end.
The management at IOCL was not getting an accurate picture of the sales that were happening at distributor sites in a timely fashion. There were rampant malpractices such as diversion of subsidized LPG and manipulation of sales figures. The challenge that Indian Oil faced was that the subsidy was meant to be provided via their distributor network, whose overall size being 6500 spread across the country, was pretty complex, with almost 60% of them based in remote locations with bad connectivity (dial-up connections) & having a standalone software which was vulnerable to intended or unintended alternation of data and frequent corruption of the local database. It was also important to ensure that no duplicates arise.
What was deployed: A centralised architecture was set up with the help of Informatica PowerCenter Real Time Edition and an in-house Java-based front-end was developed for the client end.
After deployment: The move from distributed to centralized reduced the implementation cost to one third of what was estimated and because of getting accurate and complete sales data in real-time, an enormous amount of savings took place. The transaction time has reduced from 48 hours to less than 2 hours and the deviation of LPG consumption is down to 10%. This has also led to a centralized platform for Aadhar-based subsidy.
Implementation partner: In-house project
Project Head’s Perspective: Projjal Chakrabarty, ED, Information System-Indian Oil Corporation
How did you convince the key stakeholders for rolling out this project?
The key stakeholders were convinced on the ground that a new application was required because of the following reasons: Information was not available on a real-time basis. The system only allowed retrospective detection of irregularities or malpractices. For example, detection of diversion of a domestic connection to a commercial establishment could only be determined on a post facto analysis of the distributor’s operations. The local database was residing with the distributor, with a possibility of inadvertent /accidental or in some cases intentional alteration. Full control on authorizations was not available for conducting business processes.
Auto-deployment of new software versions from a remote central site was not possible and it was extremely difficult to prevent unauthorized changes in local software versions. Hence, the key stakeholders saw value in a project which would ensure real-time data validation and aggregation and offered a very secure business platform.
How did you overcome user resistance for using this deployment?
User resistance was overcome because of a multi-pronged approach:
- The management circulated a clear mandate on the introduction of a new system with new benefits.
- Change management involved a methodical training program. Training sessions were conducted at regular intervals often through the in-house developed video tutorial and audio /video conferencing as it was felt that the user required a different level of understanding and approach as his level of competence with the system improved.
- The design ensured that the look-and-feel of the front-end remains the same (unchanged) as the old one but with several changes in the architecture and back-end operations/validations. Hence, the user resistance was kept at a minimum, at the same time ensuring the new system to be more user-friendly with several additional features benefiting his routine operations.
What is the next big IT project that you’re working on?
We are looking at building a shared database among the chief oil marketing companies for LPG consumers so as to adopt an integrated approach towards satisfying customer requirements. We look towards improvement of delivery timelines.
According to you, what was the most critical success factor for this project?
The project was planned in an extremely detailed manner and monitored closely on the ambitious deadlines proposed. From designing a suitable architecture, to sourcing technology followed by a fast-track development process, every detail was thrashed out at various levels ensuring that there was no ambiguity or disconnect between the stake holders. This led to a concerted team approach from both business and IT, which enabled a very successful implementation.
The solution was deployed in two months. The centralized architecture, based on the Informatica platform, helped reduce the cost of implementation & roll-out by 1/3rd from the initial estimate. The architecture was backed by Informatica’s proven data integration platform. The central system exercises complete administrative control over the business processes and data. There is a central license server in place for distributor registration (using the client software). Seamless data synchronization mechanism between thousands of distributor sites and the central server as and when Internet connectivity is available is another benefit. Automatic deployment of upgrades and patches to multiple sites is now possible. The solution is highly scalable and allows seamless integration with increasing number of distributor sites and number of transactions per site. It also allows integration with external data providers and consumers such as other oil marketing companies and State Banks for critical government projects (e.g direct cash subsidy). Decreased costs by integrating and delivering data at the right time, in the right format is another benefit.