The Comptroller and Auditor General of India has found deficiencies in the implementation of Enterprise Resource Planning (ERP) system of public sector undertakings, including Hindustan Aeronautics, GAIL India, ONGC and Oil India.
ERP is a one-point source of information that can be used within an enterprise for various business functions like manufacturing, supply chain management, financials, projects, human resources and customer relationship management.
In its report for 2006-07 tabled in the Lok Sabha on Thursday, CAG said though PSUs installed standard ERP systems, they were not being optimally utilised owing to which standalone systems and manual interventions continue. Also, business continuity and disaster recovery plans, and IT security policies were either not put in place or were malfunctioning.
Questioning the credibility of the data collected through the system CAG said, ?Weakness in input controls and validation checks did not ensure completeness, reliability and integrity of data. ERP modules users lacked awareness on accessibility input of correct data and security of the system?.
In case of Hindustan Aeronautics (HAL), CAG found the selection process of ERP software ?Not transparent, as the implementation partner was also involved as consultant in assessment and finalisation of software. The company did not obtain the system design documentation and was wholly dependent on the vendor, resulting in additional burden of recurring expenditure.?. The company had also not formulated IT policy, including security policy. Physical and logical controls were also found to be weak. HAL had implemented the system on pilot basis on three sites to enable faster decision-making.
Bharatiya Reserve Bank Note Mudran (Private) Limited in Bangalore, CAG found, had invested Rs 13.98 crore on the software to minimise cost in manufacturing and distribution and improve quality. However, it was found to be lacking in encryption and validation of data with digital signature, ?Though secrecy of information by the company was of utmost importance?, the report stated. GAIL India did not map vital business requirement. It lacked proper customisation and underutilised the solution, the CAG found. ?The underutilisation of the system compromised the basic objectives of leveraging information for competitive advantage,? CAG said. ONGC was found to have faulty cost accounting and incorrect flow of cost to accounting documents.