Pak Elektron Limited: Converting Systems to ERP
(10 pages of text)
Pak Elektron Limited was a prominent manufacturer of consumer home appliances, large distribution and power transformers, and switch gears for power companies in Pakistan. From 2007, the company had started the process of changing the information systems of the company. These systems had become outdated as Microsoft withdrew its support of Visual FoxPro, the platform on which all systems had been developed. The company decided that a Tier 1 ERP (enterprise resource planning) system with strength in manufacturing modules would be suitable. An ERP system was then selected and a firm was appointed as implementer in December 2009. The case describes the issues surrounding the implementation, including many unexpected events. It presents the situation as of the fourth quarter of 2011, after Phase 1 of the implementation had finished in December 2010 and the company had decided in March 2011 to dispense with the services of the consulting firm supporting the implementation. Pak Elektron Limited was facing a liquidity crisis and had to save costs even though there was insufficient corporate knowledge of ERP procedures. The staff was not comfortable with the ERP system and would not let go of the legacy systems and, as such, the project was in trouble.
- Identify factors to be considered to achieve value from an ERP system.
Evaluate the impact on department staff when a technology change is made.
Learn from the mistakes made by the company in handling the IT staff, including the training needs that were not met.
Understand the dynamic nature of the software industry.
Understand why ERP systems are difficult to implement.
Many companies invest in ERP systems, but the case shows that simply buying a Tier 1 ERP does not ensure success, as implementing ERP software can be difficult. The case provides information about changes that were needed in the IT systems and staff at Pak Elektron Limited, and explains how these changes would impact the organization. The sequence of implementing a large number of modules is discussed. The company faced an unexpected short-term cash flow crisis soon after the project started, which led to stressful conditions. The risk in ERP implementation was a factor, as the company faced problems after a heavy investment.
Pakistan, Large, 2010
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