NNPC’s SAP: Has it become a drain pipe?

The Nigerian National Petroleum Corporation (NNPC) has again invited fresh bids to provide support services for its Systems, Applications, Products (SAP).
The platform was initiated to deepen accountability in its business processes.
The SAP enterprise resources planning system is an electronic management solution initiated by the Obasanjo administration in 2009 to monitor operation of a network of NNPC subsidiaries and affiliates irrespective of their locations.
But, NNPC’s implementation of the system since 2009 did not play the role it was built for as investigations revealed that the project was taken advantage of by some of the Corporation’s top officials to steal several billions of Naira.
Business Times learnt that some of NNPC’s top officials decided not to join the network, choosing instead to operate independently and making it difficult to monitor their activities.
The automated system comprising different modules for standard business, financial, contracts management and personnel information, data and processes to ensure effective operations of the entire business value chain ended up in the hands of the wrong people, becoming a veritable tool for more corruption rather than a solution.
The stand-alone SAP solutions in the human resources, crude oil marketing and finance departments malfunctioned, as a result of duplications in hardware, data baseline and operational system in the silos without proper integration.
According to the implementation review report by NNPC’s corporate audit department in February 2015, the system deployed in some strategic business units (SBUs), took almost double the amount set aside for it in the first place.
The project was approved by late President Musa Yar’adua for about $36.75 million. However, the report said financial records revealed disbursements by NNPC, as at January 2015, to be about $70.66 million, excluding additional €6.06 million and N820.089 million for other expenses.
The saddest part is that the implementation of the SAP platform failed.
According to the Minister of Petroleum Resources, Ibe Kachikwu, the project had to be reviewed. He said some key personnel were removed.
“There was nothing wrong with the SAP initiative. It remains a fantastic idea. But, I must say its implementation had issues we are trying to fix because it failed to meet our corporate objectives and targets. That is why we had to review the project and remove the personnel who were in charge and replace them with new ones. I assure you we will fix it,” Kachikwu said recently.
Recently, NNPC called for tenders for the provision of consolidated SAP support service to the system it has been using for its human resources, logistics, industry solution, finance and payroll system, an indication that it wants to spend another fresh amount of money on the project.
The advert said the Corporation was “desirous of consolidating SAP support services for effective governance & control, standardization of operational procedures, measurable value addition and operational efficiency.”
The publication was for SAP technology companies with the capacity to provide functional and technical support services on the entire NNPC SAP landscape, including maturity build, business process optimization and capacity development.
The services also cover organizational change and value management, license management and optimization, help desk assistance, corrective maintenance and enhancements/configuration changes.
“The consolidated SAP support service shall consist of a central support for common solutions and zonal support for line of business solutions common to the SBUs in the zones, in line with the NNPC SAP COE central and zonal support organization,” the publication said.
Deadline for submission of tenders was December 6, 2016.
This means that by now, bidders list would have been concluded and the Corporation is already on the road to picking the winner.
Although the Minister promised that it would now serve the purpose for which it would be built, however, stakeholders remain skeptical whether the big shots in the Corporation would allow their activities to be checked.
When the activities of the top shots responsible for the embezzlement in the corporation are checked, this means for money for Nigeria, and of course, more developmental projects.
But if it again fails like its predecessor, this means going round in a circle, and of course, another huge financial loss to Nigeria.