IT automation and application of IT systems in port infrastructure

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IT Automation Ports Infrastructure -
Critical Analysis of ERP Implementation

Contents
Executive Summary.......................................................................................................................................3
IT/ICT Application in Ports Sector.................................................................................................................4
EDI Network and Connectivity..................................................................................................................4
Structured LAN and Campus Network......................................................................................................4
Intelligent Video Surveillance ...................................................................................................................4
Wireless (RF) Connectivity ........................................................................................................................5
RFID based Container tracking..................................................................................................................5
VOIP & Corporate Internet Telephony .....................................................................................................5
ERP ............................................................................................................................................................5
ERP Modules .............................................................................................................................................6
Critical Success Factors of Automation.......................................................................................................10
Critical Success Factors of ERP Implementation.........................................................................................10
Case Study: SAP Implementation at Adani Enterprise Pvt Ltd....................................................................12
Company Brief.........................................................................................................................................12
SAP Implementation Requirement.........................................................................................................13
Problems during SAP implementation at Adani .....................................................................................13
Conclusion...................................................................................................................................................16
Bibliography ................................................................................................................................................17
Annexure 1: Visit to Adani Port...................................................................... Error! Bookmark not defined.

Executive Summary
To effectively manage various evolving port activities, which involve optimum resource utilization
supported by timely and accurate information, it is important to deploy state-of-the-art technology
practices at port and community level. IT and ICT in Ports infrastructure helps gaining efficiency and
productivity in business operations. IT/ICT applications provide real time information and help in
improving decision making process and in turn lead to efficient port operation.
The ERP application is Enterprise Resource Planning (ERP) software that helps in seamless integration of
its various departments and business operations. It caters to the back office operations like Finance,
Costing, Materials & Inventory management, Maintenance, Quality, Sales, etc of the organization.
ERP Systems are one of the most widely used and misunderstood IT systems that are available today.
ERP is the concept of building applications which are fully integrated, that can be used to automate
many of the routine functions of running the company. Companies typically purchase these systems in
an effort to consolidate their data and information flow into one system or database. In an environment
that is currently not running ERP systems, the data is decentralized into many smaller subsets of system,
servers and/or databases. By having everything separate, it limits the amount of integration and
collaboration that can be done. IT functions such as disaster recover, data warehousing, backups and
data updates must be done on each individual system, rather than on one ERP System.
There are many examples of successful implementations of ERP Systems in ports infrastructure, but
unfortunately, almost as many examples of unsuccessful ones. A tremendous amount of planning needs
to be done prior to bringing this type of system in house, to ensure that it will really meet the business
objectives of the company, while not forcing unwanted processes on departments that are not inclined
to change the way they do business.
ERP implementations are full with tales of lost millions and withdrawals after implementation. Many of
the most experienced IT organizations have failed.
This report highlights the ERP implementation and its critical success factors. Adani Ports implemented
SAP ERP in the year 2009. This implementation was a great success. This report highlights the learning of
the ERP implementation. It includes ERP implementation approach and challenges faced during
implementation.

IT/ICT Application in Ports Sector
Operational performance and resource utilization (including equipment and labour handling) at Indian
ports is currently not at par with those of international ports
India's port operations lag international standards, especially in adopting new technologies and
practices, whether it is cargo handling, evacuation of cargo, customs clearance, tracking, hinterland
connectivity, innovative logistics practices, etc. IT and ICT can be used in following areas.
• EDI Network and Connectivity
• Structured LAN and Campus Network
• Intelligent Video Surveillance
• Wireless (RF) Connectivity
• VOIP & Corporate Internet Telephony
• RFID based Container tracking
• IT systems like ERP
EDI Network and Connectivity
The EDI deployment’s primary objective was to level the existing paper mountains and automate
processes. This was essential to facilitate the work of Customs officials and businesses involved with
imports and exports. Single point access to Customs and Central Excise officials was required for this.
Structured LAN and Campus Network
Structured LAN and campus network provides the critical backbone of a communication system and IT
infrastructure.
Intelligent Video Surveillance
Video Surveillance has come a long way from analog CCTV system to DVR and now IP. IP-Surveillance
has emerged as an attractive alternative to the DVR as it provides a bridge to enter the Digital World
with the ultimate solution of a high performance, low-cost Digital Video Surveillance and monitoring.
Video Surveillance is the term given to the monitoring of behavior of any kind via videos. The
surveillance includes simple, relatively no or low technology methods such as direct observation,
observation with binoculars, cameras, CCTVs, postal interception, or similar methods. The greatest
impact of video surveillance is the large number of organizations involved in surveillance operations.
Video surveillance is changing nowadays. CCTVs, Digital cameras and IP interfaces are being used for
longer retention periods at higher resolution.

Wireless (RF) Connectivity
Today Enterprises are experiencing a rising tide of network traffic that is overwhelming the typical
connections. With enterprises standardizing on Fast Ethernet and Gigabit Ethernet (GbE) network
speeds, the paltry 2-megabit connections between most buildings are heavily restricting throughput to
overcome we have wireless.
RFID based Container tracking
Radio Frequency Identification (RFID) is an automatic identification method, relying on storing and
remotely retrieving data using devices called RFID tags or transponders. An RFID tag is an object that can
be attached to or incorporated into a product, animal, or person for the purpose of identification using
radio waves. Chip-based RFID tags contain silicon chips and antennas. Passive tags require no internal
power source, whereas active tags require a power source.
VOIP & Corporate Internet Telephony
VoIP is Voice over Internet Protocol and is also called IP Telephony, Internet telephony, Broadband
telephony, Broadband Phone and Voice over Broadband. It is the routing of voice conversations over the
Internet or through any other IP-based network. VoIP, or Voice over Internet Protocol, is a method for
taking analog audio signals, like the kind you hear when you talk on the phone, and turning them into
digital data that can be transmitted over the Internet. Voice over IP protocols carry telephony signals as
digital audio, typically reduced in data rate using speech data compression techniques, encapsulated in a
data packet stream over IP.
VoIP facilitates tasks that may be more difficult to achieve using traditional networks. The voice over
internet protocol provides an ability to transmit more than one telephone call down the same
broadband-connected telephone line. This makes VoIP a simple way to add an extra telephone line to a
home or office. VoIP can be secured with existing off-the-shelf protocols such as Secure Real-time
Transport Protocol. It is necessary to encrypt and authenticate the existing data stream only.
VoIP is location independent, and it only needs an internet connection to get a connection to a VoIP
provider. VoIP phones can work from anywhere with a sufficiently fast and stable Internet connection.
VoIP phones can integrate with other services available over the Internet, including video conversation,
message or data file exchange in parallel with the conversation, audio conferencing, managing address
books and passing information about whether others are available online to interested parties. The VoIP
user may use a VoIP Pulse to Tone Converter, if needed. Fixed delays cannot be controlled but some
delays can be minimized by marking voice packets as being delay-sensitive.
ERP
Enterprise resource planning (ERP) is business management software—usually a suite of integrated
applications—that a company can use to store and manage data from every stage of business, including:
• Product planning, cost and development
• Manufacturing and inventory management

• Supply chain management
• Human resource
• Finance and accounting
• Marketing and sales
ERP provides an integrated real-time view of core business processes, using common databases
maintained by a database management system. ERP systems track business resources—cash, raw
materials, production capacity—and the status of business commitments: orders, purchase orders, and
payroll. The applications that make up the system share data across the various departments
(manufacturing, purchasing, sales, accounting, etc.) that entered the data. ERP facilitates information
flow between all business functions, and manages connections to outside stakeholders.
ERP Modules
ERP has broadly following modules in general.
(www.sap.com, 2014)
As the following graph shows, the primary candidates for ERP software were SAP, Oracle, Microsoft,
Epicor, and Infor:

As per report (Solutions, 2013),
• Over 50 percent of projects experienced cost overruns
• Over 60 percent experienced schedule overruns
• Fully 60 percent of respondents received under half of the expected benefit from their ERP
implementation
This chart summarizes the top-level results:

According to the (Solutions, 2013), 53 percent of ERP projects exceeded their budget:

Regarding schedule, 61 percent of respondent ERP projects went beyond planned time duration:

Payback period. The survey reports an average payback period of 25 months (down from 32 months in
2009). The graph below shows that over half the respondents did not recoup their costs or were unsure:
Critical Success Factors of Automation
Why ERP implementations fail? In a recent survey by (Srivastava, 2009), information technology
managers identified three primary reasons for the failure of all IT-related projects:
 Poor planning or poor management (cited by 77 percent)
 Change in business goals during the project (75 percent), and
 Lack of business management support (73 percent)
Critical Success Factors of ERP Implementation
Since ERP is an IT-related project, the above are valid reasons for explaining ERP implementation
failures. But more specifically, ERP implementation failures fall into 10 categories as per (Srivastava,
2009):
1. Poor leadership from top management
If top management is not strongly committed to the system, does not foresee and plan for the profound
changes necessitated by ERP, or does not actively participate in the implementation, the
implementation has a high likelihood of failure. The implementation of ERP must be viewed by top
management as a transformation in the way the company does business.

2. Automating existing redundant or non-value-added processes in the new system
The integrated environment of the new ERP system will require the organization to do business in a
different way Therefore, existing business processes need to be reengineered from the bottom up to
dovetail with the ERP structure and requirements.
3. Unrealistic expectations
Many companies grossly underestimate the amount of resources, time, and outside assistance required
to implement and run the new system. Moreover, managers and workers frequently assume that
performance will begin to improve immediately because the new system is complex and difficult to
master, organizations must be prepared for an initial decline in productivity after the new software is
put into operation. As familiarity with the new system increases, the expected improvements will come.
But management must be prepared for initial waves of frustration.
4. Poor project management
Managers are often surprised by the scope, size, and complexity of an ERP implementation. As a result,
management sometimes does not initiate the necessary level of detailed project management planning
and control.
5. Inadequate education and training
Top managers and all system users must be fully educated so they understand how the ERP system
should be integrated into the overall company operation. All users must be trained to take full
advantage of the system's capabilities. A failure to educate and train all relevant personnel will
guarantee implementation problems.
6. Trying to maintain the status quo
People have a natural tendency to be comfortable with the status quo and may be fearful of changes
brought about by any new system, especially one as pervasive as an ERP system. They may fear that the
new system will make their jobs more difficult, reduce their importance, or even cost them their jobs.
People are also afraid to fail. And ERP systems may create a great deal of uncertainty in some people as
to whether or not they will be able to perform their jobs as well as they did under the old system. Some
front-line staff may be uncomfortable with the realization that with better information, upper
management can keep better track of what they are doing and the money they are spending.
7. A bad match
Some of the biggest ERP system implementation failures occur because the new software's capabilities
and needs are mismatched with the organization's existing business processes and procedures. An ERP
system that is not designed to meet the specific business needs of the company can cause tremendous
problems. A significant mismatch between the technological imperatives of the system and the existing
structure, processes, or business needs of the organization will generate widespread chaos. Less severe
mismatches between business processes and software requirements will merely create significant
problems for implementers and users.
8. Inaccurate data
Data entered into an ERP system may be used throughout the organization. Because of the integrated
nature of ERP, if inaccurate data is entered into the common database, the erroneous data may have a
negative domino effect throughout the enterprise. Inaccurate data can lead to errors in market
planning, production planning, material procurement, capacity acquisition, and the like. If a company

with inaccurate data just forges ahead under the assumption that data errors will be corrected when
they are spotted, the ERP will lose credibility. This encourages people to ignore the new system and
continue to run the company under the old system.
9. ERP implementation is viewed as an IT project
If the implementation is treated as simply an IT project, the ERP system will never realize its full
capabilities. In such cases, it is likely that the technology will be deployed in a vacuum, business
processes will not be properly reengineered and aligned with the software requirements, and staff will
resist using it.
10. Significant technical difficulties
Every ERP implementation will encounter a certain number of problems. These difficulties can include
bugs in the software, problems interfacing with existing systems, and hardware difficulties. Normally,
such problems simply contribute to the organization not achieving its target goals. However, if technical
problems go unresolved or are poorly managed, they can doom the implementation
Case Study: SAP Implementation at Adani Enterprise Pvt Ltd.
As per the study conducted by (Shah, 2013), ERP implementation at Adani Enterprise Pvt Ltd has been a
great success. They also faced few challenges and following case represents the learning of the ERP
implementation at Adani Enterprise Pvt Ltd.
Company Brief
Adani Enterprise Pvt. Ltd. (AEL) is one of the leading trading houses in India. It has been operating for
over 20 years and has the coveted “five star export house” status, which has been granted only to a few
export houses by the government of India. AEL’s business space is inbound/outbound trade as well as
domestic trade in India and it presently accounts for >1 % of India’s imports and exports. It currently
serves ~200 major clients through 17 global offices and trades in 35 commodities. On the volumes front,
its imports are >10 mnmt and exports >2 mnmt. In FY06, it chartered ~247 ships, underscoring its size &
scale of operations. It is one of the largest players in thermal coal, iron ore, ferrous scrap and edible oils
trading. For ensuring high reliability & short turnaround time, AEL has set up dedicated logistical and
handling facilities for certain commodities like iron ore, coal, grain, fruits and vegetables, etc.
Business Challenges
Adani Group was facing various business challenges. They are summarized as below.
 Do this as a single implementation yet focus on implementation of each company as in isolation
 Multiple Decision centers & leadership styles
 Different Organizational objectives
 Aligning people to a common viewpoint, highest level of alignment
 Different Locations
 Multiple and Disparate legacy systems
 Tremendous resource crunch
 Limited experience for such a mammoth
 Large Team management
 Massive logistics effort

SAP Implementation Process AT ADANI
Source: (Shah, 2013)
SAP Implementation Requirement
 Use of best practices to achieve common processes & use of ASAP methodology
 Single SAP instance for multiple companies
 Establishment of Central Master Data Cell
 Integration with back-end systems (i.e. Terminal Operating systems, Port Management system,
Navis)
 Mapping of complete range of assets of port & railway infrastructure
 Single Window service orientation using SAP Portal for SEZ
 Special Process development for SEZ
 Central Authorization management service
 Central Expert implementation and helpdesk team
 Solution Manager as the focal Helpdesk management tool
 Funds Management, Investment Management & Profitability Analysis successfully implemented
 Highly scalable server and network architecture setup
Problems during SAP implementation at Adani
1. Failure to Re-Design Business Processes to Fit the Software.

Avoid customization. Many companies "go to war" with the package and try to make it meet their
business process requirements, only to lead the way to huge cost overruns and project failure in some
cases. Rather than attempting to modify the software, Adani re-engineered their business processes to
be consistent with the software, and this has proved to be critical to the project's success. It is important
to re-design business processes to be consistent with system specifications. One of the most difficult
and time-consuming aspects of the project was the creation of a "bridge" between the SAP and legacy
applications, and this resulted in extensive time and cost delays. If modifications are necessary, establish
an up-front agreement between IT and user managers with respect to what is to be modified.
2. Insufficient Training and Re-Skilling
Due to the rushed schedule, some modules testing were skipped. Besides, the system was not properly
tested to identify its shortcoming in handling large amounts of orders. There was inadequate testing and
insufficient time to debug the system to ensure its functionality. Adani invested heavily in training and
re-skilling their developers in SAP software design and methodology. They gave training to their
employee in three stages. Cost for training of each employee was around 2 lacs but employee were
unable to grasp at their pace. Most firms emphasized the investment in the training, re-skilling, and
professional development of the IT workforce. In the experience of various companies, training costs
were higher than expected.
Figure 1: Employees Technical Expertise at Various Stages of SAP Implementation
3. Lack of Senior Management Support
Top management is expected to provide support in the areas of committing to the SAP project,
sufficient financial and human resource, and the resolution of political problems if necessary. Limited
financial support contributed to a rushed SAP implementation process, project team members were
overloaded and thus high staff turnover rate, ineffective knowledge transfer, and political problems
occurred. Insufficient commitment could lead to political problems which hindered the implementation
process (causing poor BPR, widespread user resistance to change and low user satisfaction). Without
question, top management support is critical to the success of a project. It is important to achieve the
support of senior management for accomplishing project goals and objectives and aligning these with

strategic business goals. At the time of ”Go Live” due to cost and time over run senior management was
not supporting the new system.
4. Standardization
Another "risk factor" which is closely associated with the software itself is insufficient adherence with
the standardized specifications that the software supports. Use a common data model and common
data definitions to drive common business processes. At Adani they have their vendor names and
communication address in different style and formats so at the time of implementation it was one of the
biggest challenges which they face during system standardization phase.
5. Lack of "Business" Analysts and Retain Qualified SAP Systems Developers
One of the critical workforce requirements for the project was the ability to obtain analysts with both
"business" and technology knowledge. Instead of 200 "programmers" with average skills, the SAP
project demanded and could be accomplished with 20 of the "best and brightest" analysts. However,
retaining these professionals was a significant problem because of their market value. At Adani also they
face same problem, they train their employee for six months and after training many employee ran
away due to their increased market value.
6. Lack of Integration
In terms of factors conducive to project failure, one of the main factors associated with failure is lack of
integration. The project needs to be based on an enterprise-wide design. You can't start with "pieces,"
and then try to integrate the software components later on. It is important to use a "federal" approach;
define what is needed at the enterprise-level, and then apply it to the business unit level. A phased-in
approach is superior to the "big-bang" all-at-once approach.

Conclusion
It emanates from the above study that ERP system links together organizational strategy, structure and
business processes with the IT systems. It is important to communicate what is happening, including the
scope, objectives and activities of the ERP project. Similarly appropriate staffing and personnel shortfalls
need to be checked carefully. In case of inadequate internal expertise, it is recommended that
organization should hire consultants for technical and procedural challenges in design and
implementation of specific application modules. Instead of large number of programmers with average
skills, it would be better to have few business consultants those who have specialized expertise in their
specific domains. It is very important to create a perfect project management plan keeping in mind the
project size & structure, skill set available, experience of the company, etc. to avoid high project cost
and time over runs. System design is highly dependent on client server/ distributed network
implementation and object oriented methodology used in various modules and components design.

Bibliography
(n.d.). Retrieved Jan 18, 2014, from Port Automation: www.portautomation.com
Shah, H. S. (2013, Jun). scribd.com. Retrieved January 18, 2014, from scribd.com: scribd.com
Solutions, P. C. (2013, January). www.panorama.com. Retrieved January 15, 2014, from
www.panorama.com: www.panorama.com
Srivastava, R. (2009). Learning from Failed ERP implementation. apps2fusion.
www.sap.com. (2014, January 15). Retrieved January 15, 2014, from SAP Website: www.sap.com

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