Coal miners log into PF and pension accounts
Coal miners and pensioners were at the mercy of babus and
the middlemen to get information about their PF and final pension settlements.
Post implementation of SAP ERP by CMPF they do it themselves and have online
access to their accounts says Akhtar Pasha
I took charge there were 45,000 pensions cases that were pending. There
was no transparency in the organization. The entire system was in jeopardy.
- Balakrushna Panda
Commissioner, Coal Mines Provident Fund Organization
Over six lakhs members (coal miners) and more than 2.5 lakhs
pensioners of Coal Mines Provident Fund Organization (CMPF) employed in 10 private
sector companies (their employers) are happy after CMPFs implementation
of mySAP ERP 5.0. Both members and pensioners are no longer at the mercy of
lethargic babus (employers) who delay endlessly to settle their dues (be it
their pension post retirement or provident fund, PF) nor do they have to bribe
middlemen to withdraw PF money from their own accounts. One man who dreamt of
streamlining the settlement of pension and PF money when a member retires is
Balakrushna Panda, Commissioner, CMPF. Thanks to his efforts, members and pensioners
are able to do so themselves and have up to date information about their PF
and their pensions are settled on the dot.
Panda recalled, When I took charge there were 45,000 pensions cases that
were pending. There was no transparency in the organization. The entire system
was in jeopardy. Getting basic information used to takes ages.
Established in 1948, CMPF is an autonomous body under the Ministry of Coal,
Government of India, headquartered in Dhanbad and consists of 13 regional offices
in 17 locations primarily in coal bearing areas. CMPF has the distinction of
having a computerized and networked centralized processing Social Security Organization
in the country. EPFO has yet to achieve this although it started six years back.
Manual processes posed greater challenge
We had mostly a paper-based system in place for all our business process.
For example information pertaining to coal workers used to reach CMPF from different
offices. Members used to fill in and submit forms to their employer and they,
in turn, raised the claim forms and submitted the same to the CMPF. These papers
moved from table to table. In the event of any clarification or mistakes, it
had to go back into the loop. Panda said, The entire process in pension
settlement used to take one to two years as it had to go through a series of
correspondence going back and forth and let us not forget the middlemen waiting
to exploit members. Additionally the amount sanctioned some times did not tally
with the actual. Banks used to play spoilsport stating that they had not received
any information about PF or pension or gave excuses such as checks had not come
to them from CMPF.
Even updation of a members personal data to include details of family
members, nominations and back accounts used to take three months. It was a tedious
task. This was because of lack of awareness among members and the fact that
we did not have proper systems to track it.
Even monthly contributions to PF were not known by members for a duration of
4-5 years until they retired or during occasions such as marriage in the family
when they withdrew part of their PF money. Additionally during transfer of a
member from one location to another, a lot of correspondence used to follow
which the regional commissioners, joint commissioners and commissioner monitored.
Many a times recalled Panda, Some of these commissioners were just not
interested in clearing all the paper work. The entire paper work used to take
three months to a year to complete. Even basic information about PF account
balance used to take 6-7 months time.
Worst of all, there were middlemen who paralyzed the entire system,
said Panda. He explained that there was an instance wherein a member thought
that he had only Rs 3 lakhs in his PF account and bribed middlemen for as high
as Rs 50,000 who in turn assured him that they would get him in excess of Rs
5 lakhs from his PF account. However the fact was that that member had more
than Rs 5 lakhs in his PF account. It was just that the member was unaware of
his latest PF account information. Had the latest PF account information available;
the member would not have bribed the middlemen to extract his own money. There
were many other cases of the same nature involving middlemen.
||CMPF is an autonomous body under the
Ministry of Coal, Government of India established in1948 through an Act
of parliament to look after the social security of coal miners.
||mySAP R/3 5.0 ERP
||There are two identical
IBM servers used for production and development. Each server is an IBM p550
series dual CPU deployed in clusters in active-active mode.
||AIX 5.3 version
|No of licenses
||650 user licenses
Making a choice
Panda said, We wanted to implement a solution that
would help us reduce the turnaround time in settling outstanding PF amounts
of our members and improve our standards of service delivered to them and their
family members. SAP being a proven leader in the industry became an obvious
choice. CPMPF evaluated SAP, Oracle and Microsofts ERP solution
in August 2005. A formal deal was signed with SAP in December 2005. To suit
its requirement, CMPF had to customize the ERP solution to make certain changes
to include retirement age, percentage of PF and pension and to accommodate several
PF and Pension Act of Government of India. mySAP R/3 5.0 ERP went live at the
CMPF headquarters in Dhanbad, 3 regional offices in Dhanbad, Deoghar and Kolkata
on 31st August 2007. Later in Nov 2007 SAP ERP was rolled out in other regionJabalpur,
Hyderabad, Nagpur, Bilaspur and Assansole. CMPF chose the following modules
for deploymentFACD (Financial Accounting Collection and Disbursement),
Payroll, XI (Exchange Infrastructure) and FICO. Panda said, To avoid third
party miscommunication that could have affected the end result of the ERP implementation
we asked SAP Consulting to undertake the implementation that we called NIDHINew
Initiative for Digitizing and Handling of Informationaimed at providing an end-to-end
solution on a single integrated platform for the management of PF, advances
and pension settlement, all integrated with centralized financial accounting.
Deploying SAP ERP has brought in complete transparency in the business processes
of employers and CMPF. Panda said, Now anyone can view their own PF account
information. They need not travel to the local office and ask their employer
about their account information. They can log into the portal we have created
and get the required details online. Further all the paper-based correspondence
involved in transfer cases has been done away with. This has eliminated the
inefficiencies of regional offices at CMPF and employers and has reduced errors
and mistakes that used to be seen. Paperwork is reduced and transfer cases are
Panda added that SAP ERP has further streamlined the life of members by integrating
the ERP with an IVRS (Interactive Voice Response System) and mobile networks.
Panda said, We have a toll free number wherein any member (literate/illiterate)
can access his PF account information in his local language through voice interaction.
It supports seven regional languages. Additionally some members who are mobile
(domestic and employed overseas) can also access the same information through
a mobile phone.
Centralized online information
Retrieval of data is now online. The centralized databases have made it easier
to track any details of members to the last stage individual level. For example,
a commissioner can see the progress of claims forms lying at the employer end
and the number of hours a member has worked in a week or month. The commissioner
can task the employer for not clearing an employees dues, he can view
the number of cases pending/cleared by employers, can identify problem areas
and take appropriate decisions immediately. In case of any mistake, it can be
tracked down to the individual responsible.
Panda said, Currently we send pension instructions to the bank by e-mail
to release pension to members on their retirement day and the settlement is
done instantly. Additionally our plan is to integrate the ERP with the
employer so that any dues unpaid to the member result in an alert and CMPF enforces
the settlement of dues. Since most coal companies are not ready, our plan is
to make this happen in the next six months.
Panda has also plans to integrate banks with the ERP system
so that settlement process can be further streamlined. Currently banks are wary
because of the security reasons and he is hopeful to achieve it shortly.