Transparency and efficiency at The Romanian Railways – through IT systems | SIVECO Romania

Transparency and efficiency at The Romanian Railways – through IT systems

Monday, September 13, 2004

As part of the Romanian Railways reorganization process, the need of having internal mechanisms was outlined to allow a better analysis of the railways activity by having at the disposal of the railway companies’ management performant decisional tools, useful in the curent activity with medim and long term impact:

  • Set up the business plans of the national railway freight and pasengers transport companies in order to get a 5 years projection of the needed resources and of the target results, corelated with the choerent commercial and rolling stock management policies,
  • Realization of an equilibrated TUI (fee for infrastructure utilisation) model,
  • Introduction of an integrated financial system.

At the end of 2001, as following of an open bid, The Ministry of Transports, Buildings and Turism signed the RO9910.03 contract "Assistence in Romanian Railways Restructuring", project that was achieved given of an important Phare founds investment.

This project had few components that togethr, envisaged the reorganization of the Romanian Railways, meeting al the previously identified major needs.

The main component of this project consisted in the implementation of an integrated financial system for the whole Romanian Railways.

Throught the creation of the integrated financial system built on  the principles stated in the Business Plans it was aimed the development of a tool to answer at the business requirments of the three railway companies: CFR Călători, CFR SA, CFR Marfă.

Also, the introduction of standardized work procedures and reporting means was needed, in order to allow real time consolidated reports regarding the profitability of the railway companies. It was aimed to obtain a survey of these reports on cost centers  (from the level of the working unit, station, up to the level of regional headquarter and company), on profit centers (on train ranks, comodities, etc.) but also having in view the specific activities of the railway system.

This type of analysis is very useful for such a complex system as the Romanian Railways.

The management of The Ministry of Transports, Buildings and Turism intends that, on medium term, the whole railway activity to be organised on this cost centers – profit centers principle, in the way that to have the results or each circulation section, an starting from these results, to take the most appropriate decisions regarding the future of these sections: to close it, to maintain it at the same parameters or more important investments justified by the increasing transport demand, on long term, on the specific circulation section.

In the same way, specifically for CFR Călători, it will be possible to determine between what hours and on what distances the transport is more favorable, adapting the offer at the market’s demand.

In paralel, in order to have the whole context in suport of achieving these objectives,  in the other components of the project the business plans of the companies were developed, together with tools for planning the maintenance costs and for the TUI.

It is for the first time when a TUI model was conceived, based on the fixed and variable needed maintenance costs for the railway system.

The implemented financial solution took into consideration the principles defined already for the other components, maps the main business processes in the railways and is adapted to the specific needs of the Romanian Railways.   

The project was initially started for implementation of the solution at one railway company,  Societatea de Management Feroviar (SMF SA) that used to assure the financial management and the management accounting services for the hole railway system.   After 1st of November 2002, the disparition of this company involved the distribution of the personel and of th whole organisationnal chart, splited, to CFR Călători SA, CFR Marfă SA şi CFR Infrastructură SA.

This change meant for the supplier  (the S&T Romania – SIVECO Romania  - Oracle Romania – HP Romania holding):

  • Redesigning the entire project plan, defining specific elements for each of the three companies,
  • Training or a three times bigger number of users,
  • Set up of unique values o the hart of accounts on segments, for each of the three entities.

All these difficulties were successfully depassed thanks of the consistent managerial support from the beneiciary companies, the involvment of the Ministry that created unitary principles for the three companies, and especially because of the constant solid involvment and  progress aim of all the end users expresed the whole project.

The most important achievement up to now is that in present two of the railway companies completely renounced at the manually data input, following that the third one to get to the same result in the firs half of the next year.

After completing this project, during March –July 2004 period, 8-18 months contracts were concluded with the three railway companies, in order to consolidate and to extend the system implementation at the lower organisational levels, to all of the own balance sheet subunits of CFR Călători, CFR Marfă and CFR SA, folowing that by the end of 2004 the system to be used from another 70 new units distributed at national level. In this way, not only that the railway companies judiciously used the allocated Phare funds, but furthermore, they continue to extend this project from own sources.

In perspective, on vertical structure it is possible the extention with other aplications/ modules (Stock Management, Supply Management, Fixed Assets, Contract Management), the integration with other IT systems (e.e. with the Ticketing  system, The consignment notes system, etc.) but also the implementation of a decisional support tool. It is intended that all these systems to be standardized for the entier Romanian Railways.

During this project The Romanian Railways were exposed to major structural changes and continued to consolidate theirs commercial vision. In this context, the first phase of the IT solution implementation is an important step to the achievement of the integrated system for the take over, management and consolidation of all the economico-financial information of all the three railway companies, critical information for the entire railway system.

The successful achievement of such a complex IT project was possible thanks of some big names companies in the IT market: S&T Romania, prime contractor and integrator of the project, SIVECO Romania that realised the implementation of the Oracle Applications system, Oracle Romania that provided Oracle E-Business Suite software and HP Romania who supplied the hardware infrastructure.

About suppliers

S&T România member of the S&T Systems Integration & Technology Distribution AG group of companies is one of the most important IT solutions and services of the Central and Eastern companies.

S&T, as prime contractor and integrator, assured the management of the whole project of implementation for the integrated financial system  at the Romanian Railways and coordinated the implementation of the three components of the project: the financial system, the Business Plans for CFR Călători SA and CFR Marfă SA and the Deciional model of planned maintenance for CFR SA. S&T had a specific role in the change management of the contract and of the solution implementation arrised after the disparition of  SMF SA.

SIVECO România SA is #1 on the business applications Romanian market that offers efficient solutions, adapted to the local legislation and gaining the most of the  total volum of the software products exports from Romania to contries from the European Community and from the USA. SIVECO Romania, specialied in the execution of large IT projects, as the implementation project for the precum proiectul implementat pentru Romanian Railways, implying accesible software Internet and Intranet solutions, the integration with other systems, geografical distribution of the access locations and a large number of en users.

With a turnover of more then 10,2 milliard USD, the Oracle company is today one of the international software leaders an the first ERP solutions provider. Oracle offers data base, applications, development tools and complete consultancy, education and technical support services in more then 87 countries. Oracle Romania stated itself as one of the most important technology and IT solutions providers for all the key areas, from central administration and financial services, to telecom, industries and utilities. 

Constant to its „Adaptive Enterprise” strategy, Hewlett-Packard offered to The Romanian Railways an open infrastructure, high performance and fiability solution, easily extendable with a minimum of costs.

Capitalizing the global partnership with Oracle, but also with solid local companies as S&T and SIVECO România, the proposed and implemented solution will definetly contribute to increase the efficiency  and to the higher competitivity of the railway companies on the Romanian transport market.