NNPC reviews controversial SAP management contract

NNPCThe Nigerian National Petroleum Corporation (NNPC) has launched a technical audit and review of the controversial multi-billion Naira enterprise resource management solution project.

The Managing Director (West Africa), SAP Africa Region (Pty) Limited, Kudzai Danha, who confirmed the development, explained that the project implementation review, 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. “We (SAP West Africa) were invited by NNPC to help review the deployment of the system. What they (NNPC) want them to do is to ascertain why the entire system is not working the way it is supposed to,” Danha explained.

Group General Manager, Group Public Affairs Department of the NNPC, Ohi Alegbe, also confirmed that the team has since commenced work on the system.“The review team are still working on the system. 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,” Alegbe said.

The SAP Enterprise Resources Planning was initiated on 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.

However, in an exclusive report in October, Premium Times, an online newspaper, 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.

By Olisemeka Obeche (with agency reports)

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