Delhi International Airport takes off with IBM and SAP

Founded in 2006, Delhi International Airport Ltd (DIAL) is a public-private partnership initiative with a 30-year mandate to finance, design, build, operate and maintain Indira Gandhi International Airport in New Delhi. The company is a joint venture between the GMR Group, the Airports Authority of India, Fraport AG, Eraman Malaysia and the India Development Fund.

The airport had previously been managed by the Indian Air Force, and then by the Airports Authority of India. During these periods, a number of different IT systems had been deployed, and as a result, DIAL inherited a complex and disparate IT infrastructure.

“One of our mandated responsibilities is to rationalize and modernize the airport’s IT landscape, and we soon realized that the financial management systems should be our top priority,” explains Mr. T. S. S. V. L. Narayana, Associate Vice-President – Finance at DIAL. “We had a number of legacy systems that were not fully integrated with each other. As a result, our financial processes involved considerable manual effort and paperwork, and there was little transparency or traceability. To gain more control of the airport’s finances, we needed an integrated, centralized ERP solution.”

IT and finance experts from DIAL’s constituent companies worked together to decide on the best way to proceed with an ERP strategy. Several of the experts had experience with Oracle Financials, so initially an Oracle solution was discussed as an option. However, the group decided to evaluate a number of other products as well before making a final decision.

“When we looked at all the options, it was clear that most of the main ERP vendors could offer the functionality we needed in terms of core financial processes,” says Mr. Narayana. “However, in terms of integration, SAP ERP was the outstanding product – and this made us reconsider our initial inclination towards Oracle.”

Finding a partner
DIAL wanted to deploy the new SAP ERP application and integrate it with its existing ICMS cargo management solution and its Airport Operation Database (AODB). The company also wanted to find and deploy a new aeronautical billing solution. DIAL needed to find a partner capable of managing these integration projects.

“We needed a partner that was not only technically capable, but could also help us manage business change,” comments Mr. Narayana. “The members of DIAL come from a range of different industry backgrounds, from both the public and private sectors – we wanted a partner that could help us decide on the best approach and manage the whole project from end to end.”

After considering a number of major systems integrators, DIAL chose to work with IBM Global Business Services.

“We looked for partners with the best blend of technical skill, financial know-how, business experience and commitment,” says Mr. Narayana. “IBM Global Business Services was an ideal fit for the requirements of this project.”

Another advantage of engaging with IBM was its previous experience of ERP implementations in the airport industry. As a result of its work on previous airport ERP projects, IBM was able to utilize its Airport Process Model, a framework for planning and designing the business processes according to best practices. In addition, IBM had developed a solution called BlueSky for aeronautical billing – and DIAL realized that this solution would be an ideal add-on for the SAP ERP environment.

“IBM also helped us understand the best practices for airport IT, and organized visits to Frankfurt, Amsterdam, Berlin and Paris airports to show us the best way to proceed with the project,” comments Mr. Narayana. “ERP is ERP, whatever industry you are in – but the specific experience of the IBM team helped us gain confidence that this was the right approach.”

Implementing the solution
Leveraging the IBM Airport Process Model, IBM Global Business Services conducted a detailed requirements-gathering exercise, based on workshops, interviews, feedback sessions and team-building exercises conducted with stakeholders and users at DIAL.

With the planning stages complete, IBM designed and deployed a solution based around SAP ERP 6.0 with financial accounting, controlling, materials management, sales and distribution, project systems, investment management and real estate functionalities. The SAP ERP landscape runs under IBM AIX on IBM Power Systems servers, delivering sufficient performance to support 200 users.

IBM then helped DIAL implement the BlueSky solution, and integrate it with the AODB using the SAP NetWeaver Process Integration component. IBM is also developing a fully automated custom interface between the financial accounting functionality in SAP ERP and the ICMS cargo management system; currently, the data is exported, normalized and imported into the SAP ERP application for processing.

By combining data from IBM BlueSky, and the SAP sales and distribution and real estate functionalities, DIAL can now easily process all revenue-related information in the SAP application environment. Meanwhile, the investment management and project systems functionalities handle business scenarios from investment proposals through to asset capitalization.

“The benefits of integration are immense,” says Mr. Narayana. “Previously, for example, we had very little control over inventory and billing – especially for cargo – and billing processes could take up to 15 days. By helping us integrate our financial systems into the SAP ERP landscape, IBM Global Business Services has improved transparency across all our major financial processes and cut the billing process to just two days – an 87 percent improvement. We are very much looking forward to the completion of the automated ICMS interface, which will optimize these processes even further.”

Document management and workflows
IBM has also helped DIAL introduce document management system and workflows into the SAP application environment, to minimize paperwork and accelerate approval processes.

“Before, we had to circulate paper copies of important documents to all the different departments for approval – and in a large organization, that can take several days,” explains Mr. Narayana. “Now the documents are all held electronically and the workflows send them to the relevant people automatically – so approvals can be obtained in five minutes, an improvement of more than 99 per cent.”

Moreover, with a single repository for all documentation, there is almost no risk of important files being lost or damaged, and search functionalities mean that any document can be retrieved quickly. Since Indian legislation requires all financial documentation to be retained for eight years, the document management solution will also saves considerable physical storage space in the years to come – not to mention the auditing and compliance benefits.

Mr. Narayana concludes: “IBM Global Business Services has provided an end-to-end SAP ERP solution that delivers real operational benefits – cutting paperwork, accelerating business processes, increasing transparency, reducing risk and facilitating compliance. As we move towards completing the integration of our systems, we expect to see further improvements.”