Professional Documents
Culture Documents
ABSTRACT
It had been December 2001 and the management of ATLAM, a wholly
owned organisation of MICT Berhad, had been asked to upgrade
its accounting system with the PETRA group-wide SAP system.
The move was anticipated to be overwhelming. Zulkifli Osman, the
Finance Manager, had to critically assess the risks associated with
the decision. He remembered a conversation that he had had with the
Senior Finance Manager of PETRA where it had been mentioned that
the costs of implementing SAP in ATLAM was not actually the main
concern. It had been more of whether ATLAMs staff would be ready
to embrace the new system. With these in mind, he had to evaluate the
decision to upgrade ATLAMs current accounting system to the SAP
system. The existing economic crisis acted as an additional element to
the decision as Zulkifli had to ensure the best possible outcome for the
organisation. The proposed SAP system was scheduled to be phased in
by 1 April 2002 i.e. the start of the new financial year.
Keywords: Corporation Sector,
Information Technology/System
Management,
Accounting,
ABOUT ATLAM
The need to train and prepare Malaysians for the maritime industry had been
addressed with the establishment of Akademi Teknikal Laut Malaysia (ATLAM)
on 15 August 1981. It was then subsequently privatised on 1 January 1997. Its
vision was to be a leader in maritime education and training, while its mission
was to facilitate value added learning via a conducive environment and provide
excellent services to its clients. The academy, located in Melaka and Terengganu,
had 195 staff by 2001; 89 of them were in administration and the remaining 106
in training.
79
80
been the Finance and Accounts Manager since 1995. The Finance and Accounts
Department consisted of an Assistant Manager, a Senior Accounts Assistant, a
Finance Executive and three Accounts Assistants (Figure 2). If SAP was to be
implemented in ATLAM, a SAP executive had to be added to the department. This
was to ensure that there would be someone to guide the key users of the system,
who were to be the staff in Finance and Accounts, as well as related personnel
from other departments.
IT INFRASTRUCTURE
ATLAM overhauled its Information Technology (IT) facilities in 2000. Before
this, they had been in a very poor state. A study on ATLAM was conducted in
1997 by the World Maritime University and it had deemed ATLAM to be behind
its other compatriots in Europe and Japan in terms of IT infrastructure. The
1997 privatisation of ATLAM resulted in the introduction of new shareholders
and brought the academy into the fold of the PETRA Group of Companies. This
provided ATLAM with the access to better IT facilities. At the same time, it
was identified that all of PETRAs servers had to be consolidated to leverage its
group-wide PETRANET network system. The PETRA IT Centre, based in Kuala
Lumpur, hosted all of PETRAs applications in terms of network utilisation and
other related support resources. As far as ATLAM was concerned, applications
would be resided off-site at the subsidiaries when needed i.e. technology
constraints, insufficient bandwidth, etc.
In addition, ATLAM was to follow PETRAs IT infrastructure standards
where such functions were involved i.e. telecommunications (LAN and WAN),
81
network computing, server and desktop administration, and voice and video data
handling and maintenance. It was to use PETRAs standard desktop software
i.e. NADII 2000, SAP, OA, and all relevant intranet applications. ATLAMs IT
solutions were implemented in 2001, based on three objectives that were relevant
to the establishment of a campus-wide network, which had been classified as the
Projects Phase 1:
1. To link core buildings into the network: the Administration Buildings (No.
16 & 17), the Library (No. 27), the Office Block (No. 23), and the Academic
Office (No. 7)
2. To establish networked Office Automation (OA) tools, notes mail, and a
centralised softcopy filing facility for a maximum of 250 users (local area
networks (LAN) and applications), and
3. To link ATLAM to the PETRA Network (PETRANET) so as to allow the use
of group-wide applications such as the Digital Library and the SAP system
(wide area networks or WAN).
The total cost for the implementation of Phase 1, anticipated for completion
in 2002, had been RM1.3 million.
ACCOUNTING SYSTEM
Before 2001, ATLAM relied on a customised single-user system bought from
a vendor. The academys desktop computers (PCs) were solely used to enter
accounting entries. The system had not been functioned to produce financial
reports. In light of the circumstances, ATLAM needed to look for alternatives to
upgrade its accounting system. At that point, the ones available had been ACCPAC,
an accounting package, and PETRAs group-wide SAP system. Table 1 shows the
preliminary study conducted by the top management on the functionalities.
SAP stood for Systems, Applications and Products in data processing. It was
an integrated business applications package that covered most functions of an
organisation. SAP had been created by SAP AG, founded in Germany in 1972.
The SAP R/2 version was released in 1975. This was followed by SAP R/3 version
in 1992. The SAP R/3 core modules had the following: Financial Accounting (FI),
Controlling (CO), Asset Management (AM), Sales & Distribution (SD), Materials
Management (MM), Human Resources (HR), Plant Maintenance (PM), Project
Systems (PS), BASIS System. ATLAM had the alternative to implement all of
SAP R/3 or exclude the Plant Maintenance, Project System and BASIS System
modules. Table 2 shows costs analysis of implementing SAP.
82
SAP
Audit points raised during procurement process Audit points raised during
might not be resolved.
procurement process might be
resolved with the provision of the
Materials Management Module
(MMM).
Zulkifli believed that implementing SAP involved unique risks and challenges.
He knew that it was important to have a defined project scope. It made it necessary
to keep the entire project focused on delivering the implementation with the
identified functionalities. This would ensure that the new solution would fit with
the existing business model. A change in current business rules was anticipated to
be necessary to ensure a smoother transition to the SAP system.
83
400,000
500,000
900,000 1,200,000
1,5000
1,800,000
150,000
200,000
225,000
250,000
250,000
100,000
160,000
180,000
560,000
600,000
640,000
Cost of overheads
300,000
420,000
490,000
560,000
600,000
640,000
Cost of system
maintenance and
firewalls
60,000
120,000
130,000
140,000
150,000
160,000
260,000
300,000
340,000
380,000
400,000
500,000
800,000
Cost of hardware
expansion
Cost of training
Lim
Lim
Zulkifli : How can you say that? Ive been running one-toone SAP demos with some of our staff. They seemed
alright. All I know is that we need to make this SAP
project come alive and the only way to do that is to
ensure good project planning and scheduling.
Gopal : You make it seem all too easy. Look, you havent
even discussed about the SAP implementation
since the initial announcement last month!
Anyway, I agree with Lim. We just cant get the
users to use SAP now. They will not be able to see
how its going to help them within this short time.
Sani
Lim
Zulkifli : Lim, just so you know that this plan for the new
Information Technology (IT) infrastructure in
ATLAM started out in 2000. This need for SAP is
87
89
Sani
Sani
91
Zulkifli : No, not exactly. I regret that it had to end the way
it did. He was very upset about SAP. He raised too
many issues and asked too many questions into the
reliability of the system. I was afraid that he would
influence the others with his views.
Kamal : Wait a minute. I disagree. Hes very experienced
and he knew what he was doing. He was critical
but his ideas should have been taken into
consideration. There was no need to get him out
from the project team!
Kamals comments hit Zulkifli hard that he took another look at his action of
terminating Lim from the project team. Did he do the right thing?
92
APPENDIX A
Cash Flow As at 31 December 2001
Net cash inflow from operating activities
Return on Investment and servicing of finance
Income from endowments received
Other income from investments and interest received
Interest paid
Net cash inflow from return on investments and servicing of finance
Taxation
Capital expenditure and financial investment
Net acquisition or tangible fixed assets
Net acquisition of endowment asset investments
Endowment received
Net cash outflow from capital expenditure and financial investment
Net Cash inflow before use of liquid resources and financing
Management of liquid resources
Net disposal of short term investment
Financing
(Decrease)/Increase in cash
RM 196,000
386,000
114,000
(71,000)
431,000
(411,000)
(409,000)
766,000
(54,000)
573,000
(644,000)
(309,000)
(380,000)
(380,000)
644,000
309,000
573,000
(4,038,000)
(3,465,000)
93