Project ARCUBE : Defining Roles, Rosters and Responsibilities and Cadre Review and Career Path

1
Project ARCUBE Defining Roles, Rosters and
ResponsibilitiesandCadre Review and Career Path
Presentation to ASTO CWC31st Jan 1st Feb, 2006
2
BACKGROUND FOR PROJECT ARCUBE
Structure
ü

• CRC

Processes
Improved Performance for ONGC
ü

• ICE, SHRAMIK, IMPETUS,

People

• Project ARCUBE

3
THE THREE STEPS ARCUBE
Effectiveness
Efficiency

• Well defined and enforced KPIs

• Manning norms optimised

• Roles clearly defined for Asset, Basin, Services,
  Support functions and shared services

4
PROJECT VISION AND OBJECTIVES
5
PROJECT STRUCTURE
Role

• Provide overall leadership and review
• Sign off on final recommendations

Executive Committee
Steering Committee

• ED-Head KDMIPE
• ED-Corporate Planning
• ED-Chief DS
• ED-AM Neelam Heera
• ED-Head Hazira
• GGM-BM Western Onshore
• GGM-Chief HRD (Project Sponsor)
• GM-HR (Convenor)
• McKinsey Leadership

• Debate recommendations at steering committee
  meetings
• Present findings and recommendations to EC
• Identify and provide resources
• Lead communication across ONGC

• Day-to-day programme management
• Coordinate and facilitate activities
• Leverage organisational knowledge
• Lead analyses and develop recommendations

Core Team
ONGC HRG McKinsey project team
Site Teams

• Represent the project at work sites
• Lead analyses and data gathering for location
• Ensure ground realities captured
• Communicate and implement analyses and
  recommendations

• Site sponsor (e.g., L1 Manager)
• Site steering committee (e.g., Virtual Corporate)
• Site working team (3 4 members)
• ONGC McKinsey Project team members

6
APPROACH ADOPTED FOR EACH STUDY LOCATION

• Focus on understanding relevant best practice
  companies manning numbers, work practices and
  processes
• Present uncompromised benchmarks to the
  Steering Committee to serve as a mirror
• ONGC senior management to decide which gaps to
  bridge and pace of change
• Create acceptance of best practice benchmarks
  through intensive communication

7
OVERALL PROJECT TIME LINE
Confidence-building measures

• Wave 2 locations
• Onshore Basin Baroda
• Onshore Asset Mehsana
• IOGPT/IEOT
• RO Baroda
• CWS Baroda

• Wave 1 locations
• Offshore Asset NeelamHeera
• Basin Western Offshore
• Service Offshore Drilling

Ongoing support
Project plan and approach
Wave 3 locations
Wave 4 locations

• BS Asset

Onshore assets

• MRPL

MH Asset

• Offshore logistics

Services
Implementation of select Wave 1 initiatives
Support functions

• Corporate
• support

Subsidiaries

• Others

Institutes
Forward bases
Aug, 04
Sep, 04
Dec, 04
Mar, 05
Aug, 05
Jun, 05
EC Meeting Feb 19
EC Meeting June 16
Key Ex July 10
Well June 15
Drilling April 27
Steering Committee Ist Meeting Oct 17
Steering Committee IInd Meeting Feb 15
Steering Committee IVth Meeting Dec 22
Steering Committee IIIrd Meeting Jul 19
8
APPROACH ADOPTED FOR EACH UNITASSETSBASINS,
INSTITUTESSERVICES,SUPPORT FUNCTIONS
9
APPROACH ADOPTED

• A best practice equivalent synthesized for each
  unit
• With a clear understanding of work practice
  changes needed to bridge manning gaps
• Identify initiatives for pilot implementation to
  help in
• Demonstrating the workability of the proposed
  recommendations.
• Demonstrating that this approach leads to
  improved performance.
• Allowing fine tuning of the initial
  recommendations
• Clear job cards are being developed for each
  role

10
A BEST PRACTICE EQUIVALENT HAS BEEN SYNTHESIZED
FOR EACH UNIT (NH SURFACE TEAM EXAMPLE)
ESTIMATE
In-house/Contract
Equivalent best Practice Oil Major
Neelam Heera Current
286/270
186/270
556
456
379
10
0
2
65
13
4
3
532
139/240
35/30
262/270

• Base teams

• ATS team

• Chemists

• Does not exist allocated to area teams

• Electrical instru-mentation

10

• Base team

• Team

• Team

• Chemists

• Production
• Controlroom
• Well head team

12
3
2
11
33
9
2

• Production
• Controlroom
• Well head team

25
18/15
54
15

• Mecha-nical instrumentation

• Maintenance
• Routine

34
110
40/70
212
32

• Maintenance
• Mech.
• Elec.
• Instt.

39

• Safety

97/115
17/15
4
32
26
5. Others
45/170
215
Major differences (relative to ONGC)

• Safety

• Overall 80 people less in key positions
• 97 vs. 75 in maintenance
• 54 vs. 25 in production control
• 34 vs. 15 in well-head team
• 20 vs 12 in ATSM, Sp Pool and Chem

4
5. Others
221
66/155
Source McKinsey Expert Interviews Team analysis
11
WITH A CLEAR UNDERSTANDING OF WORK PRACTICE
CHANGES NEEDED TO BRIDGE MANNING GAPS (NH
SURFACE TEAM EXAMPLE)
Key difference
How benchmark companies manage

• Single multi-skilled cadre for routine
  maintenance on platforms
• Specialised team for mechanical and electrical
  maintenance, on one platform shuttles between
  platforms
• Instrumentation team embedded in electrical and
  mechanical teams

in maintenance

• Single control room for entire asset
• Requires about 8 people per shift in 3 shifts vs.
  4-5 people per shift per platform in NH due to
  more monitors/ alarms/controls
• Well head team responds if manual intervention on
  platform is required

in production control room

• Each platform visited only once a month
• Optimisation process remote controlled
• Maintenance of equipment not frequently
  required/outsourced

in well head team

• ATSM A team of 8-10 people for 2 process
  complexes for designing maintenance strategies,
  and technical specifications for rate contracts
  annually
• Specialist Pool These functions integrated with
  the Base Team, no separate pool
• Surface Chemistry No separate Incharge for 2
  chemists

in ATSM, Sp Pool and Chem
12
AND CLEAR JOB CARDS DEVELOPED FOR EACH ROLE
(OFFSHORE SURFACE MANAGER EXAMPLE)
Job id
50000058
Task id
60000058

• Responsible for operation and maintenance of
  Asset and other field installations as per
  Performance contract and ensure execution of
  production plan

• Asset Manager

• Base office

• Approve, monitor and review SLAs/performance
  contracts for entire surface team
• Finalise and monitor budget utilisation vis-à-vis
  completion of activities
• Coordinate with services for work plan
  finalisation, changes in work plan and other
  operational issues
• Finalise/approve deployment of resources
  including manpower, equipment etc to different
  installations/platforms/sections and maintenance
  activities to ensure optimum utilisation of
  resources
• Plan for introduction of new technologies related
  to optimisation of process at different
  installations
• Coordinate with Institutes for the implementation
  of RD Institutes recommendations
• Plan/approve level of outsourcing
  approve/obtain approval for contracts
• Ensure implementation of safety
  guidelines/observations of the statutory bodies
  regarding safety. Liaison with outside agencies
• Any additional activity assigned in combination
  of above activities or separately by the senior
  on need basis

• Q1-Production
• Experience 3 years as area manager
• Certification/training

• Production

• E5-E7

13
SHIFT FROM EXISTING TO BEST PRACTICE MANNING ON A
PRIMARY PRODUCTION GGS (ONSHORE)
Manning

• Only need to change norm to people 2 per shift
  Actual workload is 5 hours (lt1 person, per
  shift)
• Monitor well-pressure at meters within GGS every
  hour 10 min 8 80 min
• Take tank readings, pump fluid out and switch
  test separator to next well 45 min 2 90 min
• Check water in bath-heater every hour and replace
  1/day5 min 8 30 min 70 min
• Check scrubber pumps every 2 hours 5 min 4
  20 min
• Log readings and errors in DPR/ ICE 30 min
• Call base in case of major problems (as needed)

Existing
GGS with only primary processing
Reduce Chemistry

• 30-50 well-head connections
• 0-4 separators
• 0-2 test separators
• 0-3 bath heaters
• No heater-treaters
• No setting or storage tanks

Reduce RTC crew
Reduce GS (general shift)
Improve reliability and multi skilling

• Automation (flow meters and remote data
  collection) makes RTC installation monitoring and
  GS well monitoring redundant
• Critical alerts attended to by FMP members who
  are on-call
• Minor alerts logged and attended by multi-skilled
  operator/ mechanic next day

Manning without automation changes
Remove RTC crew reduce general shift
Best practice manning

• 1 Installation manager
• 1 multi skilled operator/mechanic
• 1 working hand/helper

Covered separately Needs work-practice
charges, but no additional automation Source
Mehsana Surface Team expert interviews team
analysis
14
DRIVERS OF MANNING DIFFERENCES FOR FIELD PERSONNEL
ONGC surface assets
Best practice

• Keep people and equipment on standby for any
  emergency - system reliability must be ensured
• Manning levels in installation-wise and central
  maintenance teams driven by peak demand
• Maintenance primarily on breakdown

• Ensure reliability through extensive planning
  supported by shared teams with low response
  times
• No dedicated maintenance personnel at
  installations
• More predictable demand (mainly preventive
  maintenance against a continuously updated plan)

• Management by rule
• Continuous monitoring, sampling and testing at
  all well-heads and installation equipment
• Standby equipment in case of failure

• Management by exception
• Intervention only in case of a problem
• Minimal sampling and testing at well heads and
  equipment
• Standby storage in case of failure

• Limited automation
• Well head readings taken manually on a schedule
  (every 4-5 days)
• Pressure meters (when present) at flow line entry
  points to signal major failures

• Fully automated
• Flow meters at well-head and post test-separators
  eliminates physical monitoring/ sample collection

Source Mehsana Surface team expert interviews
team analysis
15
SUMMARY ASSETS INITATIVES
Top 3 initiatives

• Significantly lower manning at installations to
  create smaller, more accountable teams through
  targeted automation and multi-skilling
• Create highly skilled central maintenance unit
  responsible for breakdown and base level of
  preventive maintenance
• Strengthen sub surface especially in non GG
  disciplines

16
BASIN FIVE KEY ISSUES STUDIED FOR GG TEAM
Structure, staffing and roles
Objective Enabling the creation of a high
quality, high skilled, high performing GG team
Systems and processes
Accountability
Skills and capabilities
Supporting infrastructure
17
DIFFERENCES ON SKILLS AND CAPABILITIES
Best practice
Current practice at ONGC
18
COMPARISON OF PACE OF EXPLORATION ACTIVITY ACROSS
DIFFERENT AREAS
Size of circle indicates prognosticated reserves
in MMT iip
High potential areas with relatively better track
record of accretion
Typical international depletion curve
Areas with low potential and poor track record of
accretions
80 in 20 years
Need to redeploy manning to accelerate
exploration activity in high potential areas
Mumbai High DCS
50 in 10 years
Prognosticated reserves actually accreted Per cent
H-P-B
Tapti-Daman
Ratnagiri
Saurashtra
Kutch
Kerala-Konkan
Years since exploration started
Source Exploration survey 2001-02
19
BEST-PRACTICE COMPANIES LINK MANNING TO EXPERTISE
REQUIRED FOR EXPLORATORY ACTIVITY IN THAT
PARTICULAR AREA
A sample framework for analyzing skill demands
for area teams

• -

• Experience of specialized 3D modeling software,
  and AVO / DHI etc.

3D
Guidelines for staffing need to be customized
according to prospect inventory in that area
ILLUSTRATIVE
Type of seismic data available

• -

• Experience of similar stratigraphic analysis key
  skill is guarding against over-analysis

2D
Stratigraphic
Structural
Type of traps expected
20
BEST PRACTICE EXAMPLE EXPERTISE PROFILING AT
EXXON MOBIL
Proficiency levels
Skill area
Level 1
Level 2
Level 3
Level 4

• 5 critical skills
• 3D seismic interpretation
• Structural Geology
• Seismic stratigraphy
• Reservoir modeling
• Sequence stratigraphy

• 6 important skills
• Regional geology
• Play assessment
• Prospect assessment
• Reservoir geology
• Seismic mapping/modeling
• Formation analysis/production operation geology

• 9 specialist skills
• Geophysics operations
• Geophysics processing
• Geophysics applications
• Gravity/magnetics
• Geology operations
• Formation evaluation/ petrophysics
• Geochemistry
• Biostratigraphy
• Environmental/regulatory geology

21
QUESTIONNAIRE FOR SKILL MAPPING DEVELOPED BY
WESTERN OFFSHORE BASIN
SAMPLE
Source Western Offshore Basin McKinsey experts
22
PEER REVIEWS TO BE USED BY AREA TEAMS EXTENSIVELY
Key gap
Process flow for prospect selection
Best practice
ONGC current practice
Objective and tone of the meeting
Objective and tone of the meeting

• Approval and evaluative

• Approval and evaluative

4

• Approval and evaluative

• Approval and evaluative

3

• Collaborative, non-evaluative
• Includes perspectives from outside basin

• Approval and evaluative
• Consists of perspectives from within basin alone

2
1

• N.A.

• N.A.

Not a true peer-review Source Interviews with
ONGC McKinsey experts
23
ONGC TO MOVE TOWARDS AREA OWNERSHIP BELOW BLOCK
LEVEL
Best practice Area teams with area level
(mini-basin manager concept) accountability
ONGC Project teams with project level
accountability
Project teams
Area teams
P1
A1
P3
A3
P2
A2
P4
A4
P5
A5
24
SUMMARY BASIN INITATIVES
Top 3 initiatives

• Move to smaller, mini-basin manager structure
  to ensure focus and accountability
• Extensive skill mapping to help identify
  initiatives to improve technical excellence
• Peer review of wild cat prospects

25
INSTITUTES BROAD GOVERNING PRINCIPLES FOR
INSTITUTES
Issue
Description
Best practice examples

• Focus on undertaking routine interpretation
  projects for basins and assets (e.g., 80 of BSG
  time goes to interpretation projects in KDMIPE)

• Focus on developing improved interpretation
  techniques
• 25-33 of time on routine analyses/support for
  existing businesses
• 66-75 of time on researching technologies for
  value-creating improvements in existing businesses

• Clear demarcation between institutes, assets and
  basins, for e.g.,
• Only basin team is responsible for generating
  prospects with expert group providing consulting
  support on demand
• Only ES design responsible for developing bid
  package

• KDMIPE reservoir group functions overlaps with
  IRS, geophysics function overlaps with GEOPIC,
  basin study group overlaps with Basin GG teams
• IOGPT process group function overlaps with design
  group of Engineering Services (ES)

• Research companies have rigorous process for
  measuring and developing domain experts
• Skill profiling to track experts
• Specialist track personnel typically associated
  with research activities that require high level
  of knowledge
• Ranking process through independent review
  committee used for incentives and promotion

• Few domain experts as there is no system to
  measure, develop expertise

• Limited user orientation in project conception
  and delivery
• No end product responsibility

• User satisfaction measured and fed in as input in
  performance evaluation
• Active role of user in budget management

26
SUMMARY INSTITUTE INITATIVES
Top 3 initiatives

• Remove role overlaps between Institutes, assets,
  basins and services
• Build specialist pool to create gurus
• Initiate transfer pricing/ budgeting system to
  improve service KPIS

27
DRILLING TWO KEY QUESTIONS ON MANNING OF
DRILLING RIGS
Do we have the right number of people?
Are the people we have suitable for front-line
drilling operations?
28
SUMMARY OF MANNING NUMBERS FOR JACK-UP RIGS
OPERATED BY DIFFERENT OIL COMPANIES
ONGC Rigs
115
115
Used as bench mark
113
110
110
Cementing
109
108
107
Mud
Crane Operators
Radio Officer
Materialsman
94
93
Barge Engineer
Welder
82
Electrical Maint
78
74
74
Mechanical Maint
Cementing
Mud
Crane Operators
Radio Officer
Roustabouts
Materialsman
Barge Engineer
Welder
Electrical Maint
Mechanical Maint
Roughneck
Roustabouts
Roughneck
Derrickmen
Derrickmen
Driller/Asstt Driller
Driller/Asstt Driller
Tool/Tour Pusher
Tool/Tour Pusher
Gulf of Mexico
BG India
AGIP/Elf West Africa
C/H
Sagar Pragati
Sagar Vijay
Sagar Samrat
Sagar Jyoti
Sagar Shakti
Sagar Ratna
Sagar Uday
Sagar Gaurav
SagarKiran
SagarBhus-han
Not including medic, catering,
housekeeping, geologists, directional drilling,
logging, Rig Sup, Engg. Sup support all
numbers are for 4 crews on 14-day on-off Source
Discussions with McKinsey experts ONGC
employees interviews with Noble, Jindal,
Transocean, BHI, BJ, Schlumberger, BG, Cairn
Website Oilcareers.com,
www.earthworks-jobs.com
29
MANNING FOR 10 OWNED RIGS ADJUSTED FOR SUITABILITY
ESTIMATE
Right manning as per benchmark
Ideally Suited Availa-bility
Potentially unfit
Current Avai-lability
Under Qualified
Suitable Availability
Too senior
Surplus/ (Deficit)
Role

• Tool pusher

20
22
22
2
22

• Tour pusher

20
23
3
19
1
(19)
20

• Driller

40
45
1
2
42
2
44

• Asstt Driller

40
62
19
29
14
(26)
43

• Topman

40
86
65
21
(19)
21

• Rigman

120
180
96
15
69
(51)
84

• Roustabouts

160
203
148
55
(105)
55

• Crane Operator

40
40
35
2
3
(37)
3

• Mechanical I/c

20
23
1
11
11
(9)
22

• Mechanical Crew

20
126
73
2
22
29
9
51

• Electrical I/c

20
20
2
11
7
(13)
18

• Electrical Crew

20
66
18
22
26
6
48

• Welding

40
33
20
13
(27)
13

• Barge Safety crew

20
19
1
18
(2)
18

• Materials Mgmt.

20
20
20
0
20

• Radio Officer

20
17
17
(3)
17
Total
660
985
455
31
131
368
499

• Overall 50 overmanning compared to benchmark
  manpower (985 vs. 660)
• However, after adjusting for potentially unfit /
  Under qualified, actually short of suitable
  manpower by 161 (25 of benchmark manpower)
• Real deficit, after also adjusting for too
  senior 311 (47 of benchmark manpower)
• Unsuitable employees to be re-skilled /
  redeployed 636 (65 of existing manpower)

Not including mud / cementing crews, and
shore based Rig Manager, Engineering
Superintendent, Office Support, sub sea and
marine crew Best practice companies follow
a rigorous process of testing fitness we have
currently used agegt40 as a proxy for
fitness Source Drilling Services, Mumbai
Region Interviews with McKinsey and external
experts
30
FITNESS TEST FOR RIG CREW
BACKUP
Fitness tests done by best practice companies

• For all personnel
• With one arm transport 50-60 pound object up
  stairs of 40 steps/ 120 feet distance
• With two arms transport 100 pounds over 25 feet
  distance
• Climb a vertical ladder 150 feet
• All except maintenance crew
• Push with arms 100 pounds of sustained force for
  4 second period
• Pull with arms 100 pounds of sustained force for
  4 second period
• Swing sledge hammer 25 times through an overhand,
  underhand, and side arm motions
• Maintenance crew only
• Physical dexterity necessary to perform all four
  functions

Key challenges for ONGC

• How should ONGC tailor these tests for Indian
  circumstances?
• How can we ensure that tests are conducted
  objectively?

Source Interviews with Noble Drilling Services,
Jindal Drilling Services, and ONGC employees
Website Oilcareers.com, www.earthworks-jobs.com
Discussions with McKinsey experts
31
SUMMARY DRILLING SERVICES INITATIVES
Top 3 initiatives

• Add physically fit people in key operating
  positions (e.g., rig man, top man) through
  in-house selection/ contract labour
• Introduce fitness test (tailored to ONGC) to
  allow only physically fit, smaller crew at the
  rig
• Multi-skilling of technicians for routine
  maintenance

SUMMARY WELL SERVICES INITATIVES
Top 3 initiatives

• Flexible role definitions for the operating crew
  with multi skilling and smaller crew size
• Central, specialised, on-call maintenance unit
  for break down and base preventive maintenance
• Transfer of ownership of well completion and
  testing to drilling

32
HR DETAILED BENCHMARKING DONE BY FUNCTION
In-house
Outsourced
FTEs
Best practice equivalent
Functions
Approach
5,460

• Corporate - Establishment, Manpower planning
  cell, Recruitment Promotion, Regional Training
  Institutes, ONGC Academy, IR, Grievance, Trusts
• Local - Establishment, Retired employees cell,
  RP, Loans Advances, Welfare, IR, Training,
  Diary Despatch

• 100 benchmarked using OBI benchmarks
  validation using BNA, Saratoga benchmarks

Core HR functions
338
1,629
100

• Estate, Health Services, corporate communication,
  Legal, Hospitality, Land Acquisition, Shramik cell

• Benchmarks used from different sources as
  appropriate OBI, CGHS, CPWD

934
1,685
Non-core HR functions
1,678

• Sports, official language, liaison office, SC/ ST
  PH Cell, corporate parliamentary affairs

• Not benchmarked

• Not applicable

461
OBI McKinsey Overhead Benchmarking
Initiative BNA Bureau of National Affairs,
United States Govt., Saratoga Saratoga
institute (PwC) Full Time Equivalent Source
SHRAMIK team analysis
33
MULTIPLE SOURCES CONFIRM GAP
INDICATIVE
Detailed breakup available
HR FTEs per 1,000 employees
ONGC
OBI median
Saratoga median
BNA median
OBI Top Quartile
For core HR functions only Source SHRAMIKOBI
- McKinsey Overhead Benchmarking Initiative
(2005) Bureau of National Affairs (2003)
Saratoga Institute(2004) team analysis
34
BRIDGING 80 OF THE GAP WILL NEED THREE
INITIATIVES
Description of the initiative
Impact of different initiatives on total HR FTE
Per cent
FTE
Current FTEs

• Leverage full impact of ongoing automation
  initiatives such as ICE
• Eliminate paper trail by making necessary changes
  (e.g., appropriate authorization)

ICE implementation

• Redesign of process flows that leverages SAP
  power (e.g., all rule based activities automated)
• Automate activities such as record keeping,
  forwarding of files
• Create and encourage use of web based interface
  for multiple employee services (e.g., leave
  application)

Process simplification
Consolidation of back-end
Decreasing ease of implementation

• Single national shared service centre for
  web-based payment and personnel data
  administration

Potential target

• Additional activities such as loans and advances
  offered to employees
• Complexity and state level variability of labour
  and IR laws forces multiple locations
• More verification stringent norms in PSUs

Adjustments for ONGC specific workload
Benchmark
For the core HR functions only -includes both
HR professionals and allocated assistants,
secretaries attendants etc. Source SHRAMIK
McKinsey Overhead Benchmarking Initiative
McKinsey experts Interviews team analysis
35
WAY FORWARD FOR HR
Model HR work centre
Complete rollout
Work centre driven

• Leverage ICE implementation for the following
• Migration of emloyee data to online databases
• Removal of paper trail
• Create self-service user interface

Initiate process simplification by removing non
value adding activities (e.g., record keeping and
communication forwarding

• Improve service KPIs
• Cycle time for claims settlement
• User satisfaction index for colony maintenance

Drive HR policy initiatives discipline and
level rationalization , specialist Track and
skill inventory
Centrally driven
Consolidaton of different trusts to eliminate
duplication
Centralise backend processing for loans and
advances and claims
Centralise establishment function
36
WAY FORWARD FOR FINANCE
Model finance work centre
Complete rollout
Work centre driven
Leverage ICE implementation to eliminate paper
trail
Simplify process flows (e.g., eliminate non value
added activities, use of travel expense cards)
Improve service KPIs average transaction time
for claims settlement
Next phase of automation online fund transfer
for suppliers and employees complete migration
of all historical data
Centrally driven
Introduce shared services centre to consolidate
transactions based activities such as accounts
payable, recoverable, payroll and Personnel
Claims Settlement
37
WAY FORWARD FOR MM
Model MM work centre
Complete rollout
Work centre driven
Transit from component level repairs and self
procurement to integrated package maintenance
with component supplied by OEM / OES
Central driven
Hire employees with professional qualification in
finance and management with purchasing experience
to Improve the quality pool at MM
38
OVERALL SUMMARY OF ARCUBE FINDINGS
Overall themes

• Substantial improvement opportunity across
  roster, roles and responsibilities across areas
• Significant over-manning vs. benchmark across all
  areas
• Over manning is clouding genuine need for
  resources in critical areas, e.g., rig operating
  crew in drilling, sub surface team
• Not a narrow HR issue
• Size of the benefit is likely to be very large
• Inefficiency, especially in support functions,
  holding back operating performance
• Large opportunity to improve work practices
  around five themes
• Elimination of redundancies/ waste, e.g., ICE for
  paper trail elimination, removal of role overlaps
• Extensive multi-skilling, e.g., routine
  maintenance at platform
• Foster technical excellence, e.g., skill
  inventory
• Cascade accountability and ownership to all
  levels, e.g., area team structure
• Automation and upgradation of infrastructure

39
PILOT IMPLEMENTATION

• Number of initiatives have been identified for
  implementation.
• These initiatives have identified the steps that
  could be taken within the existing systems and
  rules.
• These initiatives would help in -
• Demonstrating the workability of the proposed
  recommendations.
• Demonstrating that this approach leads to
  improved performance.
• Allowing fine tuning of the initial
  recommendations
• In order to eventually move to the best
  practices, some systems and regulations would
  need certain modifications and therefore, the
  best practice state would be arrived at after the
  necessary supporting changes have been effected

40
Cadre Review Abolition/ Merger /
Re-definition of Disciplines Career Path
Managerial and Specialist Track
41
ISSUES CURRENT SYSTEM OF DISCIPLINES IN ONGC
Description

• The current number of executive disciplines is 44
• Total 108 disciplines and sub-disciplines

• Technology and industry advancements have made
  some disciplines obsolete/ redundant.

Relative importance of disciplines

• There is no articulated strategy on the
  disciplines which require greater focus from the
  point of view of the companys business and
  strategy

• Disciplines are indicators of career domains and
  not just induction qualification
• Number of disciplines is limited (18-20)
• Broad-based discipline definitions to allow for
  flexibility in staffing resources

Disciplines in international EP companies
42
EFFORTS DONE IN THE PAST

• Through Modified Recruitment and Promotion
  Regulation 1980 (MRPR-80), it was decided to
• a) Stop induction in 11 Disciplines at E1 level
  w.e.f. 1.1.1997.
• Economics Statistics Work Study Shot Hole
  Drilling Photography
• Interpretation Translation
  Architecture Library Horticulture
• Organization Methods Palynology Map
  Drawing
• b) Restrict growth/promotion in some of the
  disciplines e.g.
• Cementing upto E4 Palynology upto E5 Transport
  upto E3

43
RECENT EFFORTS (1/2)

• The following issues were discussed at the 5th
  Key Executives Meet on July 10th, 2005 at
  Dehradun.
• Cadre review Abolition / Merger / Re-definition
  of discipline, relating to the number of
  disciplines to be followed in the company and
• Career Path Specialist Vs. Management Track,
  managing the assignment of responsibility over
  an executives tenure
• All key executives were requested to give
  written comments on these issues
• These were also presented
• during HR/ER meet at Mumbai on 23-7-05
• during the 5th ONGC Conclave on 12-8-05 by
  Director (HR)
• during meeting with ASTO on 24-08-05 by Chief ER
  and Chief HRD
• Also hosted on ongcreports.net
• Presented in the 283rd EC on 11-9-05.

44
RECENT EFFORTS (2/2)

• Presented in the 283rd EC on 11/9/05.
• EC desired that the recommendations
• Be made in phased manner, only for the executives
  at first
• After stabilization and learning, it should be
  done for the non-executives also.
• Do not affect the existing promotion scheme and
  the pay and allowances.
• Be made to manage the job assignments and
  responsibilities being assigned to executives
  over their tenure.
• Allow for best practices of international
  companies to be adopted

45
RECAP CADRE REVIEW

• To review the present set of disciplines in the
  organization
• which have evolved over a period of time and
• are organized around the lines of supply pool
  by the educational and technical institutes of
  the country
• In the current business scenario
• better availability of service providers in oil
  field services has resulted in certain
  disciplines becoming redundant
• in view of the strategic requirements of the oil
  industry some disciplines need more focused
  attention
• Therefore, to bring out new set of cadres which
• will be aligned with the companys objectives and
  
• are in line with practices of international EP
  companies
• In the international EP companies, the number of
  main disciplines is limited to 18-20 with focus
  on specialization in key disciplines

46
Available Academic Qualifications Vs. Oil
Industry Specific Requirements
Available Academic Qualifications
Oil Industry Specific Requirements
Vs.
Petroleum Engineering Chemical Engineering Civil
Engineering Mechanical Engineering Electrical
Engineering Electronics Engineering Instrumentatio
n Engg.
Production Engineer Drilling Engineer Cementing
Engineer Well Engineer Maintenance Engg.
Engineering
MSc(Geology) MSc(Geophysics) MSc(PhysicsElex.) M
Sc(BotanyGeology) MSc(Chemistry) MSc(Mathematics)
Petroleum Engineering Chemical Engineering
Geoscientist Petrophysicist Reservoir
Engineer Geo Chemist Field Chemist
Geosciences
47
DESIGN CHOICES FOR EACH DISCIPLINE (1/2)
Design element
Description

• Four categories of disciplines
• transformational
• distinctive advantage
• at parity with industry and
• legal minimum (mandatory)

• Three distinct cadres based on manning by
  executive/ non-executive personnel
• Disciplines which employ both executives and
  non-executives
• Disciplines which employ only executives
• Disciplines which employ only non-executives

48
DESIGN CHOICES FOR EACH DISCIPLINE (2/2)
Design element
Description

• Entry into the executive cadre based on
• fresh induction
• existing non-executive employees meeting
  induction criteria
• Non-executive disciplines will merge into related
  disciplines at supervisory level.

• Nature of discipline
• Non-porous disciplines Personnel from other
  disciplines cannot enter these disciplines
  laterally.
• Porous disciplines Personnel from other
  (specified) disciplines are allowed to enter
  these disciplines laterally

49
DIFFERENT DISCIPLINES REQUIRE DIFFERENT LEVELS OF
FUNCTIONAL PERFORMANCE
How to select required level of functional
performance
Potential exists to increase materially the
companys performance and its competitiveness
Knowledge Based (Transfor- mational)
Developing functional excellence requires
significant investments (funds, managerial
bandwidth) Most companies focus on key
disciplines for developing functional excellence
Specialised Services (Distinctive Advantage)
Potential exists to gain a distinctive
competitive advantage
Choice of key disciplines is driven by company
strategy and potential
Little or no distinctive competitive advantage
can be gained by through superior performance in
that area However, functional performance that is
at parity with industry is required
Basic Services
Impact is about risk mitigation and license to
operate, not a real source of competitive
advantage No additional benefit to be gained by
being at parity with industry
Mandatory
50
Methodology based on Compatible Discipline

• The current number of executive disciplines is
  44.
• This is still on the higher side as compared to
  international EP Companies.
• It is recommended to abolish and merge some of
  the existing disciplines

51
DISCIPLINES
Annexure II

• Geosciences
• Geology
• Geophysics (Surface)
• Geophysics (Wells)
• Geochemistry
• Reservoir

Proposed list of disciplines

• Geosciences
• Geology
• Geophysics (Surface)
• Geophysics (Wells)
• Geochemistry
• Reservoir
• Production
• Drilling
• Drilling
• Cementing
• Mud Chemistry
• Engineering Services
• Mechanical
• Electrical
• Civil
• CM
• ICT
• Electronics
• Communication

Transfor- mational

• Production
• Drilling
• Drilling
• Cementing
• Mud Chemistry
• Engineering Services
• Mechanical
• Electrical
• Civil
• CM

Distinc-tive advantage

• ICT
• Electronics
• Communication
• Programming
• Instrumentation
• MM
• Logistics
• FA
• HR
• PA
• IR
• Corporate Services
• Legal
• Marketing
• IE
• Official Language
• Medical
• Corp. Communication

At parity with industry (if above legal minimum)
Legal minimum

• Fire Security
• Security
• Fire

52
Cadre Review Abolition/ Merger /
Re-definition of Disciplines Career Path
Managerial and Specialist Track
53
CAREER PATH

• There are 10 levels of Executive cadres at
  present (i.e. E0-E9).
• The best practice companies manage with 5 to 6
  hierarchy levels.
• ONGC too can manage career growth path on
  similar lines.
• It is proposed by managing with four hierarchy
  levels (bands).
• Further separate management and specialist
  career track is
• proposed viz.,
• B0, B1/X1, B2/X2 and B3/X3, where
  
• B Management Track
• X Specialist Track
• Reduction in the hierarchy levels will enhance
  responsiveness
• and efficiency in decision-making
• Specialist track will create functional experts
  in the organization
• who would eventually become super specialists.

54
SEPARATE SPECIALIST TRACK FOR FOCUS DISCIPLINES
Management track
Specialist track
B3
X3

• Asset managers, Service group heads, line
  managers, institute heads etc.
• Vacancy based promotions
• Lean organisation for quick decision making

• Designated differently from the managerial track
  (e.g., reservoir engineer, senior reservoir
  engineer, reservoir engineer specialist etc.)
• Placed in Institutes, assets or services
• No managerial or line authority
• Skill and vacancy based promotions

Rigorous testing of merit, aptitude
B1
X1

• Time and merit based promotion
• Job rotation and transfers to give all round
  exposure

Common pool
B0
Induction

• Notes
• OTP recommended same graded (E4 to E8) for
  specialist track as well, but with different
  designations
• This is applicable to executive roles. For
  non-executive roles that require specialisation,
  the same concept can be applied with management
  track replaced by generalist track
• Source McKinsey OTP recommendations

55
ADVANCEMENT FROM B0 TO B1 IS TIME AND MERIT
BASED, FURTHER ADVANCEMENT IS VACANCY-BASED
Criteria
Top management
B3
Vacancy merit
Senior management
Specialist track
B2
Vacancy merit
Middle management
B1
Time merit
Junior management Induction pool
B0
Broadly consistent with current ONGC policies
on advancement
56
FOUR STEPS IN DESIGNING A SPECIALIST TRACK (1/2)

• For designing the Specialist track model the
  following will require concerted efforts
• Selection The criteria for the selection of
  executives needs to be formulated depending upon
  the minimum skills / qualification, aptitude and
  experience required. Also the process for
  selection needs to be formulated.
• Skill Development Methods for skill development
  of the selected executives need to be worked out
  in detail through job rotation, in-house or
  external training programs.
• Career Planning Career planning needs to be
  meticulously chalked out taking into
  consideration the advancement and job rotation /
  transfer policy.
• Retention Proper monetary and non-monetary
  compensation packages need to be worked out for
  the retention of these executives

57
FOUR STEPS IN DESIGNING A SPECIALIST TRACK (2/2)
Retention
Selection of individuals
Skill development
Career planning
58
Thank You