BSNL to spend Rs500 crore on ERP; Oracle, SAP queue up

BSNL to spend Rs500 crore on ERP; Oracle, SAP queue up

New Delhi: State-run Bharat Sanchar Nigam Ltd, or BSNL, India’s biggest phone company, plans to deploy an enterprise-wide business software costing up to Rs500 crore to integrate its finance, procurement and human resource (HR) functions, as it seeks to respond quicker and compete effectively with private sector rivals such as Bharti Airtel Ltd.

A senior BSNL executive said the company is looking to have around 13 modules of what is called enterprise resource planning or ERP software. Besides finance, supply and HR functions, the software will be used to deal with materials and real estate management, ensure quality, derive business intelligence, and help operationalize an enterprise portal.

“The ERP project is expected to get over by December 2009," said the executive, who did not wish to be named because the plan to buy the software is not complete.

The company’s “IT cell is already working on ERP implementation for entire BSNL and an RFP (short for request for proposal) is under preparation," according to a BSNL circular, dated 15 October. The note has set October as the deadline for floating the ERP tender.

Government sector enterprises such as the ministry of finance, Oil and Natural Gas Corp. Ltd, BSNL and Indian Railways will spend nearly $3 billion or Rs11,850 crore this year on buying new software, hardware and services, according to research firm Frost & Sullivan. Such mega-sized plans help make the spending in the country on software and hardware wares the fastest growing in the world.

The railways plans to float a $1 billion tender for its ERP project, which will have an expected user base of more than 1.6 million.

Companies such as Oracle Corp. and SAP AG, two of the biggest business software vendors in the world, will be bidding for BSNL’s ERP project once a tender is floated, said a person familiar with the development, who did not want either himself or his employer to be identified.

Bharti Airtel and Idea Cellular Ltd run Oracle’s software for integrating work around HR, finance and material management. An Oracle India Pvt. Ltd spokesperson said she could not immediately comment on the BSNL project.

A tech expert said BSNL would likely prefer to implement a ready-to-go ERP software rather than build up the application from scratch despite having a 500-member-strong IT team located at Pune.

“Building an ERP could take few years depending on how much time is consumed in understanding the needs," said Rajdeep Sahrawat, vice-president of trade body National Association of Software and Service Companies or Nasscom. “It makes sense for them to look at packaged solution from Oracle or SAP."

In August, BSNL announced a Rs574 crore outsourcing deal with country’s biggest software company Tata Consultancy Services Ltd for developing next generation billing systems. While the firm’s ERP implementation plans may be late when compared with its private sector rivals, “the new solution may be aimed at phasing out existing software solution acting as islands of data in BSNL’s regional circles across the country", said Sahrawat.

“The objective of ERP system is to improve the information flow to facilitate better decision making at BSNL," said the internal BSNL note circulated at the company’s recently concluded “circle heads" conference in New Delhi.