1. Ramco ERP on Cloud –
Trends driving progressive change in EPC Industry
For Engineering, Procurement, & Construction (EPC) webinar series
of Ramco ERP on cloud, dated 9 September 2015
2. Evolution in EPC
Agenda
Trends driving progressive change in EPC Industry
Mega Trends and challenges
1 2
3
Our solution
•Project life cycle features map
•Solution BPC
•Alleviating overruns
•Optimize resources utilization
•Fund management
•PM mobility
•Differentiators
•Evolution in EPC practice
•Growth prospects
Construction –
Infrastructure sector
Power sector
•Mega global trends in
EPC vertical
•Contemporary industry
challenges in EPC vertical
3. Evolution in EPC (Engineering, Procurement,
& Construction) Industry vertical
4. CONSTRUCTION
Evolution in EPC practice
Proliferation of contractor centric liabilities in EPC projects
ENGINEERING
PROCUREMENT CONSTRUCTION
CONTRACT
CLIENT
PMC
30 YEARS
Evolution in
EPC practice
contracting
strategies
2015
1985
ENGINEERING
PROCUREMENT PMC
STRATEGY I
STRATEGY II
+
CLIENT SET UP ITSELFTHIRD PARTY OUTSOURCED
CLIENT SET UP ITSELF
STRATEGY III
THIRD PARTIES OUTSOURCED
ENGINEERING
PROCUREMENT CONSTRUCTION PMC
+
+ + +
STRATEGY IV
THIRD PARTIES OUTSOURCED BUT IN A CONSORTIA OR JV OF EPC COMPANIES
ENGINEERING
PROCUREMENT CONSTRUCTION PMC
+ + +
DecreasingdirectionofProjectmanagementeffortsfromClient
DirectionofimprovedEPCriskssharingacrossprojectstakeholders
+
++ + 1993
2000
2008
HIGH BUSINESS
OWNER FOCUS
ON PMC WITH
OUTSOURCED
E&P ACTIVITIES
E1
E2
E3
PROJECT RISKS
AND
ACCOUNTABILITY
DELEGATED TO
CONTRACTORS
EXTERNAL
STAKE HOLDERS
SIZE LIMITED TO
A CONSORTIA
AND EQUITABLE
RISK SHARING
EX= Evolution
milestones
5. Growth prospects
Global construction infrastructure sector
• In 2014, the
global
construction
industry is
estimated to be
worth US$ 9.4
trillion, which is
expected to
grow to just
under US$ 12
trillion in 2020
representing a
compound
annual growth
rate (CAGR) of
4% (FIGURE 1)
6. Growth prospects
Construction infrastructure sector – Asia/MENA/Latin America
Aging infrastructure in advanced economies and the need to fill infrastructure gaps in developing economies will be
the main drivers for construction investment growth over the coming years
Source: Brooking Institute, World Atlas, IMF (Pie charts)
7. Growth prospects
Construction infrastructure sector - ANZ
The value for construction industry is equivalent to
$40bn in New Zealand, spread across residential
($20bn), commercial and social assets ($15bn), and
infrastructure ($5bn)
Engineering construction was the equivalent of 7.1% of
Australia’s GDP at the end of 2012, a stunning rise from
1.9% of GDP a decade ago (as illustrated above by Deloitte
Australia)
2018
Engineering Construction as a share of the GDP
Australia
8. Growth prospects
Power sector – India, UAE, Africa regions specific
22GW
INDIA
High energy demand
1.2+ billion population
$100 billion opportunity
-24X7 power across India
Improved climate of
investment
Surplus renewables
power demand
20 Years PPA (Power
Purchasing Agreement)
Power generation Solar –
100 GW, Wind – 60 GW
Year
2020
25
Solar
Parks
AFRICA
Potent demand – 600 m
Africans without power
$20 billion commitment
from private sector
Reformed climate, policy
for Power sector for PPP
Sub Saharan power to
attract $1.25 trillion invst
25 Years PPA (Power
Purchasing Agreement)
East Africa power gnrtn
Geothermal 15 GW
UAE
Energy demand to surge
up to 60GW in 2023
$90 billion investment
requirement
Promotion of Energy
conservation policies
Vision 2020 – Power +
Water plants run on Solar
25 Years PPA (Power
Purchasing Agreement)
Power gnrtn 120 GW
(Total), 41 GW (Solar)
Year
2020
$30MLLN
CONSTRUCTION
FACILITY
Waste into
Energy
10. Trends and challenges
Trends in EPC vertical
• With the global outlook
resorting to alternative
contingent plans for producing
& distributing energy
• There is rising interest as well
as investments as catalyst for
growth of the Renewables
Energy (RE) space
1
RISINGINVESTMENTINNICHE
RENEWABLESENERGY
Of total investment in the Twelfth FYP is
expected to come from private players. In
addition, several government schemes &
initiatives facilitate the entry of large
independent power producers and
encourage FDI in Renewables Energy sector.
The sector provides a lucrative opportunity
for EPC companies.
88
%
• Global entry – in emerging economies tapping
growth potential and bringing in global project
management expertise; Congenial – Policies and
framework
• Players include but not limited to: Samsung (Korea),
Leighton (Australia), Bechtel (US), UEM and IJM
(Malaysia)
• Carbon footprint and emissions – Norms integrated
as per quality and OHSAS systems
• Environmental engineering –
Rising demand
for environmental engineering
2
GLOBALIZATION–GLOBALEPC
PLAYERSENTRY;
ENVIRONMENTALENGG
3
ROLEDIVERSIFICATIONSIN
THEEPCSECTOR
• Fit-for-purpose – Emergence of
capital project contract
management systems
• Easy integration
• Connected stake holders – Common
contract communications platform
• Disruptive technology enablers –
bringing in cognitive and
precognitive ERP rendering
algorithm engines for transactions
4
CAPITALPROJECTCONTRACT
MANAGEMENTSYSTEMS
• Influencing increase in EPC IT spends – Processing
power, Faster wireless data connectivity, Mobility,
Cloud solutions, and Cheaper/more expansive data
storage
• Most Engineering/EPC firms showing inclination
towards a more strategic IT approach as projects
increasingly become more complex,
mobile and cloud dependent
5
INCREASEINITSPENDS
INSINUATIONSINEPC
COMPANIES WITH
$250 MILLION
REVENUE
1.10
%
COMPANIES WITH
$10 BILLION
REVENUE
EPC –
CONSTRUCTION
INDUSTRY
STATISTICS FOR
%IT SPENDS
1.60
%
11. Trends and challenges
Challenges in EPC vertical
• Scoping feasibility – From scattered individual silos-
based systems to Cloud technologies or integrated
on Premise
• Integrated PMIS with – Procurement, Finance
systems
1st
• EPC lump sum contracting strategy – Emergence of claims
due FEED latent errors
• Higher change order requests – High reviews
• Higher Dispute/conflict resolution use cases
2nd
• New contractual related technology challenges – Dynamic
operating EPC ecology
• Flexible ERP footprint – “Review” and “approval” or
“reject” processes that govern the decision-making around
change orders & ambiguous interface situations
3rd
ERP
40
% EXCEEDING
ALLOCATED
BUDGET
10
%EXCEEDING
ALLOCATED
CYCLE TIME
MEGA EPC
PROJECTS
STATISTICS FOR
OVERRUNS
473
PROJECT MANAGERS
AND ENGINEERS
RESOURCES
CRUNCH
STATISTICS IN 000s
NOS.
FOREMEN
TECHNICIANS
SUPERVISORS
473
946
953
• Dispute/conflict resolution, accessing the true audit
trail of decision making and efficient access to all of
the evidence for a case is essential in negotiating the
case and minimizing the associated cost with
concision and clarity
4th
• Delay – Environment clearances, land acquisition
• Regulatory challenges – Restrictions on entry of
international operators
• Elongated wait – Project opportunities
• Time overruns – Project completion
• Project inflationary cost escalations
6th • Availability of long-term financing?
• Precarious financial position of developers limiting
capacity to borrow funds
• Aggressive bidding rendering the project unviable
5
th
14. 3
Lessons Learnt
Project
ClosureAccounts payable
Accounts receivable
Milestone based payments
Project schematics, As built, Costing, Profitability
Resources, team mobilizing
Project schedule and plan
Our solution
Features mapping across a typical project life cycle management
Resources, team profiling, deployment
WBS
Financing, cash flow, budget
Objectives
Project charter
Project initiation
e-Procurement
CRM
Lead management
PROPOSAL + PROJECT LIFECYCLE MANAGEMENT (EPC)
1
2 BID NO-BID APPROVALS
4
GO NO_GO
(POST ITERATIONS)
PROJECT
MONITORING/
REVIEW
6
• Fully Integrated ERP for EPC with Real time Project Management
Procurement, Site inventory, HR, Finance & Costing
• Inbuilt Dashboards and Analytics
• Single Version of Truth on cloud as well as on premise
• Track your milestones on time & every time
• Perform Ageing Analysis and Dunning
• Track Customer Payment Receipts
• Track Project Costs Periodically
• Track project profitability
• Perform FSN Analysis to control site inventory costs
• Trigger alerts for mission critical tasks for delays / Over runs
• Enable robust workflow for escalation management
• Fix project budgets
• Track budget Vs Commitments
• Monitor Budget Vs Actuals Project wise and Companywide
• Integrate with MS Project
• Integrate with Prima Vera
• Integrate with Emails SMS Gateways
• Review your Activity based subcontracting POs
• Check Contractor Job Performance
• Check deliveries , quality and effect payments
END-2-END ERP SOLUTION FOR
COMPLETE PROPOSAL, PROJECT
MANAGEMENT + CO-ORDINATION
FOR PROJECT PROGRESS TRACKING
+ CUSTOMER INVOICING
SUPPORTING DIFFERENT
PROJECT COSTING
METHODS + PROFITABILITY
FOR PROJECT RELATED
ALERT TRIGGRANCES AS
PART OF MONTORING +
CONTROL
5
PROJECT REVIEW AND
LESSONS LEARNT POST
CLOSURE AS PER KAIZEN
INTEGRATION
CAPABILITIES WITH STD
INDUSTRY PM TOOLS
15. Our solution (Project management)
Quick Dashboard – Alleviating time and cost overruns
PROJECT
MANAGEMENT
DASHBOARD
QUICK INFOGRAPHIC STATS – COST +
PROFITABILITY ALLOWING IMPROVED
CONTROL OVER PROJECT COSTS
QUICK ENLISTING OF MATERIALS, MAN/MACHINE RESOURCES
TABS WBS ID WISE FOR SELECTED PROJECT FROM TOP TABLE WITH
CONSUMPTION DETAILS, BALANCE, AND AVAILABLE INVENTORY
PROJECT LISTINGS FOR A LOCATION AND DETAILS TAB WITH COLOR CODED
FLAGS FOR VARIOUS ATTRIBUTES ASSOCIATED WITH PROJECT PROGRESS VIZ.
SCHEDULE, COST, PROFITABILITY, EFFORTS, MATERIALS CONSUMPTION
16. Our solution (Project management)
Quick Dashboard – Effective utilization of resources
QUICK INFOGRAPHIC STATS – ABOUT THE S CURVE SHOWCASING
THE RESOURCES UTILIZATION WITH DETAILS ON CONSUMPTION,
PLANNED, BOP QUANTITIES ENLISTED ALONGSIDE
QUICK LINKS PROVIDING STATUS QUO AND INTEGRATED INFORMATION ABOUT
PROJECT PARAMETERS VIZ. PROJECT PROGRESS REPORTING, MILESTONE, WBS,
PROFITABILITY REPORT, GANTT CHART (VIA INTEGRATION WITH MSP/PRIMAVERA)
17. AR invoice Hub – Manage receivables centrally (Effective management of funds)
To Do List Quick launch
Bulk invoice processing
Processing of Individual
document
Easily Accessible
Additional Actions
18. AP invoice Hub – Manage payables centrally (Effective management of funds)
To Do List
One Touch Creation of
invoice/ Copy
Bulk Processing of
Invoices
Easily Accessible
Additional Actions
Quick launch
View of Document
details on select of
the To do items or
by Search
Processing of Individual
document
19. Report Scheduler
18 Pre-Built Reports could be modeled in
Customer’s required Layout/ Format,
for Statutory / Internal Reporting Purposes.
Generate
Report
21. At Ramco, we
Hub it
Prompt it
Thumb it
Mail it
ZERO UIpowered by
Genie| Gestures | Speech
or just an e-mail
Era of cognitive & adaptive solutions
Ramco’s design philosophy aligned to this revolution
22. While on the move, If you want to
purchase a Part?
pull up the maintenance due list ?
apply for leave?
Approve purchase for an critical part?
Inquire work package status while talking to a customer?
.
.
.
You Log on to the system
Travel through the menu screens
Carry out the transactions
And then….Pull up the desired document/information
Mail it
23. With Ramco Mail it
.
.
.
.
just send an e-mail
Ramco’s intelligent ERP will do it all for you…
Raise a PO
Assign an employee for a procurement enquiry
Inquire Stock availability
And much more…
Mail it
26. Mobility is thumb rather than type
Thumb it
When you use Ramco Mobility
Solutions
most probable is defaulted
recent ones are listed
click is Way, Selection is Preferred,
data entry … Minimal….
Thumb it
27. Payment Hub
Hub it
Payment Hub crunches following in one screen
• 3 Unique Functions
• 6 different Document types
• 25 different Activities
• 40 Main and Mandatory UIs excluding links
• 43 actions across different document types
To-Dos – for User
efficiency
Document Search
Document overview
Document Details
Value Summary
Task based Security
Single / Bulk actions
Quick Launch
Supplier details
Links to take Actions
Links to related
reports
Set preferences to work
Action by Exception
Quick Payment
processing
Flexible Query options
All in One page
User Collaboration
Hub it
28. Prompt it | Ramco Genie Prompt it
Suppliers
recommended
User can
accept or ignore the
recommendation
Some recommendation:
• An open contract exists.
• Create a Release slip
• Approved quotation exists
• Create a Purchase Order
• Create an RFQ
• Stock Available in another location
• Stock blocked by another division
30. browser desktop tablet phone watch glass
Internet Explorer
Safari
Chrome
Firefox
Windows 7.0
Windows 8
Windows 10
Android
iPad
iPhone, iPod
Android Phones
Pebble
Gear
Google Glass
Delivery : Deploy
Everywhere : Anywhere
On Premise On Cloud
Private
Public
Hybrid
32. Thank you
Immersive Experiences, Enchanted Customers
Copyright 2015, Ramco Systems Limited. Information subject to change. All rights acknowledged.
The contents and information contained in this brochure are intended for general marketing purposes only and should not be relied upon by any person as being complete or accurate. Ramco Systems Limited, its
group, employees, agents and other representatives will not accept any liability suffered or incurred by any person arising out of or in connection with any reliance on the content of or information contained in this
brochure. This limitation applies to all loss or damage of any kind, including but not limited to, compensatory, direct, indirect or consequential damage, loss of income or profit, loss of or damage to property and
claims by third party.
Thank you,
contact@ramco.com
33. Ramco ERP on Cloud –
Trends driving progressive change in EPC Industry
For Engineering, Procurement, & Construction (EPC) webinar series
of Ramco ERP on cloud, dated 9 September 2015
