Despite the fact that the domestic IT space is seeing a lot of interest with the Indian software majors like Infosys, TCS and Wipro aggressively focusing on the IT demands of public sector units (PSUs) and other government entities, a report by Comptroller & Auditor General of India (CAG) has found major discrepancies and loopholes in the existing IT infrastructure of major PSUs like Air India, Coal India Ltd (CIL), Bharat Electronics Ltd (BEL) and ONGC along with five others which have resulted in loss of public money along with inaccurate data and insecure systems.
For instance, Air India?s frequent flyer programme was found to be faulty as it allowed manual intervention of data. The national carrier, which is facing a severe financial crunch, allowed redemption of mileage points earned even when enough points were not available on credit.
Coal India?s CoalNet programme meant for data sharing between coal ministry, CIL and its subsidiaries, which cost the company around Rs 40 crore, was not implemented completely in any of the subsidiary companies even after seven years. In the case of defence ministry?s Bharat Electronics Ltd, the enterprise resource planning (ERP) project was found to be vulnerable to unauthorised access to data.?
In its audit of nine PSUs under five ministries, CAG has found that ERP systems were not customised to the specific requirements of the company, the users of the programmes lacked adequate training. Moreover, business continuity plans and IT security policy were either not in place and or were deficient.
In case of BEL, which is a strategic defence service sector unit, the company on recommendations of IT services provider TCS, decided to implement an ERP programme to have organised information online with SAP India and hired another IT firm Wipro to implement it. The cost of the project was Rs 3.87 crore (for SAP) and Rs 5.67 crore for Wipro.
However, the system was not implemented fully. The system was also vulnerable to unauthorised access to data. ??it was observed that there were no improvements in the company?s performance after implementation of ERP in October 2006, as envisaged?,? said the report. Moreover, Wipro was paid Rs 32 lakh even before the project was implemented fully.
Similar was the case with Coal India, where despite the fact that only 21 modules were implemented against total 117 modules in Phase I, Rs 6.55 crore was paid to IIT. The CoalNet programme was aimed at standardisation of process, platform, technology and application across the corporate level of the coal industry.
?Inadequate monitoring of the implementation resulted in slow pace of implementation and ultimately led to the foreclosure of the agreement with the implementation agency ? IIT. Thus, the implementation of CoalNet remained unfruitful even after seven years and spending of Rs 39.58 crore,? said the report.
Gail India Ltd, which switched over to a SAP ERP system in August 2005, failed to implement input controls, validation checks and supervisory controls which resulted in unreliable database. ?Non-rationalisated user roles and authorisations to critical combinations and sensitive transactions posed the risk of misuse and manipulation,? noted the report. Similar input controls and validation checks were found missing in material management module of SAP ERP system implemented at Indian Oil Corporation.