NNPC reviews multi-billion SAP electronic management contract

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The controversial multi-billion Naira enterprise resource management solution project by the Nigerian National Petroleum Corporation is currently undergoing a technical audit and review.

The project implementation review, which began more than a fortnight ago, was to enable a special team constituted by the NNPC management to ascertain why the system initiated to help deepen accountability in the NNPC, failed to function optimally.

The Managing Director (West Africa), SAP Africa Region (Pty) Limited, Kudzai Danha, who confirmed the commencement of work on the project by the technical team, did not give much details on the extent it has gone so far with the assignment.

“Yes, we (SAP West Africa) were invited by NNPC to help review the deployment of the system,” Mr. Danha said.

“What they (NNPC) want them to do is to ascertain why the entire system is not working the way it is supposed to.”

A top NNPC official who requested not to be named, because he was not authorised to speak on the issue, said the exercise was to enable the team find out the loopholes in the system, particularly what was responsible for it not to function like similar systems by other companies.

“The team was asked to review the implementation of the entire SAP deployment right from inception and identify areas in the system that could be updated to align with the demands of the latest technology systems,” the source said.

The SAP Enterprise Resources Planning was initiated in May 15, 2007 by the then Olusegun Obasanjo administration to help promote transparency in the operations of the NNPC as part of the overall reform agenda in the country’s oil and gas industry.

But, PREMIUM TIMES in an exclusive report in October, exposed how the electronic solution deployed by most global organisations to monitor real-time operations and processes of a network of their subsidiaries and affiliates worldwide, became a spin project for some crooked top officials.

The report was based on the findings of a February 2015 SAP ERP implementation review report by the corporate audit department of the NNPC, which showed the deployment of the solution in all the subsidiaries and affiliates of the corporation remained largely ineffective.

Despite spending about $70.66 million and €6.06 million as well as N820.089 million, almost double the total amount approved for the entire project (about $36.75million), the review report noted that the SAP ERP solution in NNPC was a massive failure.

“There seems to be a disconnect between the business units (users of different SAP solutions) and the SAP PMO (project management office) as per the completeness of deployment and usability of the solution,” the report noted.

“While SAP PMO considers SAP program as having been completed and closed, most business units are still grappling with challenges, ranging from incomplete deployment, lack of integration amongst modules and usability,” the report stated.

Few days after PREMIUM TIMES’ expose, the then Group General Manager, SAP/IT Department, Surajdeen Afolabi, whose department handled the project since 2007, was sent on indefinite suspension by former Group Managing Director of NNPC, Ibe Kachikwu, over the scandal.

Details of the review report by NNPC were unflattering commentaries of Mr. Afolabi’s role in the deployment of the entire system.

A new General Manager, ITD/SAP, Inuwa Danladi, was appointed to head a seven-man special SAP Team, with specific mandate to undertake a comprehensive audit and review of the entire project implementation.

Other members of the review team include the Manager, Education & Value Realisation SAP, Chinwe Ezeonyim; Manager, SAP Solution Integration SAP, Owolabi Aibana; Manager, SAP Upstream, Ashu Ayuba; deputy Manager, SAP COE, Kolawole Tope; deputy Manager, SAP Technical Infrastructure, Olumuyiwa Coker, and SD Team Leader, Patrick Obi.

The constitution of the committee followed the recommendation in the implementation review report that the NNPC SAP ERP project would “never function effectively, except it was dismantled and deployed afresh.”

The review report had stated that so far only five of NNPC’s subsidiaries and strategic business units (SBUs) have the system functional, but without integration with the other subsidiaries and affiliates.

The partially functional subsidiaries and SBUs included the Nigerian Petroleum Development Company, NPDC; Pipelines and Products Marketing Company, PPMC; Integrated Data Services Limited, IDSL; NNPC Retail Limited, Crude Oil Marketing departments, COMD and Warri Refinery and Petrochemical Company, WRPC.

Group General Manager, Group Public Affairs Department of the NNPC, Ohi Alegbe, confirmed to PREMIUM TIMES on Tuesday that the team has since commenced work on the system.

“The review team are still working on the system,” Mr. Alegbe said. “They have not reported back to management on its findings yet. May be by the end of the month (November) it will complete its assignment and submit the report.”

Source: Premium Times