Akademi Teknikal Laut Malaysia ( ATLAM ) was established on 15 August 1981 as to develop and fix Malaysians for the maritime industry which was located in Melaka and Terengganu. ATLAM was entirely owned organisation of MICT Berhad. Based on the survey conducted in 1997 by the World Maritime University. they found that ATLAM had a hapless IT substructure compared to Europe and Japan. This is because ATLAM was relied on a customized single-user system which was entirely for accounting entries. and it is non functioned to bring forth fiscal studies.
The 1997 denationalization of ATLAM to go a subordinate of PETRA Group of Company has provided it with an entree to break IT installations. In twelvemonth 2001. the direction had been asked to upgrade accounting system with the PETRA group-wide SAP system. SAP was an incorporate concern application bundle that covered most maps of an organisation. This system included comprehensive maps of fiscal accounting. commanding. plus direction. gross revenues and distribution. stuffs direction. human resources. works care. undertaking system. BASIS system and so forth.
Therefore. the Finance and Accounts Manager of ATLAM. Zulkifli Osman. has been asked to reexamine the program of execution the SAP in ATLAM and make up one’s mind whether they can upgrade their accounting system. He had to measure the hazard associated with the determination as the execution of SAP system seems to be giving large impact on the company’s fiscal position.
Issue 1: Sap or ACCPA for ATLAM
One of the of import issues we need to be discussed is doing the right pick by ATLAM between SAP and ACCPA to set up the campus-wide web. ATLAM demand to see their fund. installations and expertness in order to do good determination devising. The execution of SAP will make many challenges. hazards and higher cost said by Zulkifli and Lim in the article. Despite from that. there is deficiency of assets. such as Personal Computer for put in the SAP. Last. the cardinal forces of ATLAM involved in execution stage do non hold expertness in utilizing SAP. In order to success in execution stage expertness individual need to measure on issue might happen during the stage. Those three jobs should be considered by undertaking squad before proceed with the undertaking. In order to measure the sufficiency of execution of SAP system undertaking. we are advised that ATLAM could throughout feasibleness survey and capital budgeting analysis to measure and analysis the valuable and feasibleness of SAP system undertaking in organisation.
Issue 2: Termination of Lim
In the instance of SAP for ATLAM. Lim was holding struggle on sentiment with Zulkifli when discoursing the affair of SAP system in ATLAM. Lim was disagreed to implement the SAP system in ATLAM because he cognize there is utmost factors will confront such as low of fund. deficiency of expertness. and short of installations. He relies on his experience in ATLAM so suggests that demand to utilize ACCPAC system instead than SAP system. These contribute to the struggle when Zulkifli was really unsated with Lim’s behavior and intended to kick him out of the undertaking squad. Kamal advise him that the critical thoughts of Lim is good for organisation since he was really experient in such related industry. He. advised Zulkifli to reconsider on the expiration of Lim.
Issues 3: Resistance to Change
This opposition to alter issue refers to developing a new accounting system with the PETRA group-wide SAP system. Zulkifli as Finance Manger concern that whether ATLAM’s employee would be ready to encompass the new system. We found that there are several grounds the ATLAM is opposition to alter at that clip. Most grounds are their deficiency of information about SAP system and besides deficiency of cognition about this system. This is. making the misinterpretation between Lim and Zulkifli. Lim apprehension is SAP system is merely suited for fabricating industry and this system was dearly-won compared to ACCPAC. In other custodies. ATLAM is opposition to alter because they are confronting the deficiency of resource to implement SAP system which are need a tonss of financess. equipment’s. infinites. and intelligence resources.
The undertaking squad members were complaint they are non adequate Personal Computers in the sections to do this practical to them. Then they do non even have the infinite available to house the system. some of the employee in ATLAM have ne’er used a Personal Computer before and deficiency of the cognition about information engineering. Furthermore. employees are besides fear of loss power when alteration the system in ATLAM operation. For information. ATLAM is a PETRA subordinate and has to associate its system to PETRA’s to fit with their group coverage construction. Due to this ground. ATLAM’s employees are fear of loss of the power to command the system runing and their old occupation besides will be individually divided to each other’s. They are disquieted that may alter their function and duties.
First of wholly. we can establish that most of the information system undertaking has budgets and deadlines. For ATLAM. it is non exception. Measuring undertaking feasibleness is required for the implementing of new system. So. for implementing the new system that is SAP is requires a system analyst. measure a broad scope of factors. For implementing on SAP. our group decides choose several feasibleness factors that are of import toward the execution.
Economic feasibleness is required for baseline undertaking program. The intent for measuring economic feasibleness is to place fiscal benefits and costs associated with the implementing SAP. Economic feasibleness is frequently referred to as cost benefit analysis. During project induction and planning. it will be impossible to specify exactly all benefits and costs related to execution. Yet. it is of import that identify and quantify benefits and costs. or it will be impossible for behavior a sound economic analysis and find whether SAP is more executable than another. Next we review worksheets that can utilize to enter costs and benefits and techniques for doing cost benefit computation. These worksheets are used for decide whether the SAP is valuable for implementing. Meanwhile. for finding the execution benefits. we determine whether the SAP can supply benefit for ATLAM.
A new or renovated IS which is SAP allow complex segmental coverage. proviso for integrating of informations. system care and support were possible. audit points raised during procurement procedure might be resolved with proviso of Materials Management Module. Thus. SAP could better ATLAM to be more efficiency. velocity and flexibleness because can entree informations quicker and good for determination devising. Beside. the execution benefit has been spliting into touchable benefit and intangible benefit. Tangible benefits are benefit which can be measured in dollar. Tangible benefit can be seen for the implementing SAP is increase velocity of activity and decrease on mistake because there is a segmental coverage such divisional net income and loss. discrepancy analysis. For intangible benefit. it means that benefit can non easy measured in dollar.
The intangible benefit can acquire for ATLAM such betterment of employee morale. broader social deduction. promote of ATLAM acquisition and apprehension and more timely information. Other than find the benefit. we besides have to find SAP cost. The cost that include in the development of SAP such execution of SAP that cost RM5. 000. 000 ; new hardware that cost RM 1. 000. 000 ; preparation costs RM 1. 272. 550 ; and customization work RM 72. 840. Meanwhile. we can besides spliting out the cost into touchable cost and intangible cost. Tangible cost is hardware costs. labour cost. and operational costs from employee preparation. Intangible cost is loss of client good will. employee morale and operational inefficiency.
Operational feasibleness is a procedure of analyzing the likeliness that the undertaking will achieve its coveted aims. The end of this survey is to understand the grade to which the proposed system will probably work out the job or take advantage for the chances outlined in the system service petition or undertaking designation survey. For ATLAM. when SAP is implementing. it can suit the concern theoretical account in ATLAM. As ATLAM current is utilizing system that can non bring forth fiscal studies. Therefore. when ATLAM is implementing SAP. it can do the system be more efficient because SAP allow complex segmental coverage.
But. Gopel has said that the implementing SAP system is about non merely change on engineering. it besides about a alteration in work procedures. civilization and wonts. The alteration is work procedures and civilization is difficult because employee already familiar with the work range they do every twenty-four hours. In add-on. it is about alteration head in employee for employee occupation functions that has been in their head for few old ages. The bing operations and support substructure of ATLAM can non manage the SAP system. It has show that the implementing SAP system has high hazard in term of operational hazard and impact on ATLAM operation. So. the support from PETRA and appropriate preparation is of import in order to affected staff in ATLAM to do the execution be operationally executable.
Technical feasibleness understands the development organisations ability to build the proposed system. This analysis should include an appraisal of the development group apprehension of possible mark hardware package and operating environment to be used. every bit good as system size. complexness. and group experience with similar systems. As for ATLAM in execution of SAP system. it is a must for identify and measure whether SAP system will execute efficaciously. dependable and capableness of resources to use SAP system. In add-on. the hazard appraisal to entree proficient hazard degree of SAP system will be based on the followers:
a ) Undertaking size
For implementing SAP system. it is said that it is a big undertaking for ATLAM. As Zulkifli who is Finance Manager besides said that this is a alone and challenges on implementing SAP system. As the big the undertaking is. there will be a high hazard on the undertaking. The undertaking will hold an impact for ATLAM when implementing it. As the undertaking is big and left limited clip which is around 7 hebdomads for the undertaking squad member to pull off it. it will hold high emphasis on it. The undertaking squad member consists of five individuals which is Sani as Project Manager. Gopal as User Project Manager. Lim as User Representative. Kamal as Funtional Analyst and Zulkifli as Finance Manager.
B ) Undertaking construction
For the demand of SAP system undertaking. it is extremely construction and is good define have a lower hazard. When ATLAM is implementing SAP system. PETRA group will supply applicable system to ATLAM. Even the user representative. Lim whose is disagree and garbage for the execution of SAP system. it still necessitate follow what have been decide because it is under control as ATLAM direction have extremely commitment through the system.
degree Celsiuss ) Development group and User group
When ATLAM implement SAP system. it will hold two group of people related to it’s which is development group and user group. The undertaking will hold a high hazard on the development group meanwhile the user will hold low familiar with the SAP system because ne’er use it before. But. ATLAM can carry on preparation for employee to cut down the hazard of implement SAP system.
Schedule feasibleness is see the likeliness that all possible clip frames and completion day of the month agenda can be met and that run intoing these day of the month will be sufficient for covering with the demands of the organisation. For ATLAM. there should entree agenda feasibleness before implement SAP system. Agenda should with the continuance of SAP system before it is to the full implement at ATLAM. The gantt chart should be usage on agenda the activity that need complete within 7 hebdomads. Other than Gantt Chart. the user and support substructure should available for executable undertaking programming.
The most of import for them to cover with is the opposition of staff to alter. Other than Gantt Chart. a clip frame besides needed for implement of SAP system that involve in 7 hebdomad. The programming hazard should besides measure for the possibility of happen of improper map of SAP system since the undertaking is lack of clip. Since the cost is important. ATLAM staff should be prepared good to accept SAP system.
Political feasibleness is about understanding how cardinal stakeholders within the organisation view the proposed system. This is due to an information system may impact the distribution of information within the organisation. and therefore the distribution of power. the building of an IS can hold political branchings. Those stakeholders non back uping the undertaking may take stairss to or barricade disrupt or alter the undertaking intended focal point. For ATLAM. the cardinal stakeholder is their ain staff. The most of import thing is to get the better of the opposition alteration of ATLAM staffs. Because staff is the parties whose will make their occupation with SAP system. If they refuse to alter will interrupt the undertaking that implement.
Capital Budgeting Analysis
Execution of a new system is non a simple procedure. A company should hold proper planning before implementing a new system and see whether it is a desirable undertaking that can convey benefits to the company. In this instance. ATLAM program to upgrade its accounting system with the PETRA group-wide SAP system. So. ATLAM has to be after and analyse to guarantee that the execution of SAP is executable and can convey maximal benefits to the company. To find whether execution of SAP in ATLAM is a desirable undertaking. we decide to execute a feasibleness analysis in capital budgeting.
Capital budgeting is the procedure of be aftering for purchases of long-run assets. This technique focuses on hard currency flows instead than net incomes. This is means that it will place the hard currency influxs and hard currency escapes instead than grosss and disbursals fluxing from the investing.
In order to find whether ATLAM should implement SAP. we will make some capital budgeting analysis which is including:
1. Initial Investing
2. After-tax Cash Flows for Years 1 through 6
3. Payback Period
4. Net Present Value ( NPV )
5. Internal Rate of Return ( IRR )
In this analysis. we assume:
* Depreciation is 34 % for six old ages based on cut downing balance method.
* Required internal rate of return is 25 % .
* Discount rate is 10 % .
* Marginal revenue enhancement rate is 28 % .
Initial investing is the cost incurred to come in a undertaking. It is of import to understand how much it cost to get down and run a undertaking in order to find the feasibleness scope. Below show the computation of the initial investing that would incur by ATLAM in the execution of SAP:
The initial investing that need to pay for the execution of SAP is RM4. 344. 390 which is more expensive if compared to ACCPAC. Although the initial investing is immense and it is impossible for ATLAM to bear the SAP execution costs. but it gives a batch of cost economy in term of accountant clip and efficiency cost. proficient expertness cost economy and. procedure and procedures cost nest eggs every bit good for long-run period.
A gantt chart is a horizontal saloon chart developed as a production control tool in 1917 by Henry L. Gantt. an American applied scientist and societal scientist. Frequently used in project direction. a Gantt chart provides a graphical illustration of a agenda that helps to be after. organize. and path specific undertakings in a undertaking. Gantt charts may be simple versions created on graph paper or more complex automated versions created utilizing undertaking direction applications such as Microsoft Project or Excel. From this instance. we are utilizing excel as a tool to make ATLAM gantt chart. The ground we choose this tool since by utilizing excel it is more low-cost instead than utilize a package like smart sheet which will be dearly-won toward company.
Based on the above tabular array. we already show stairss that involve in guaranting the successful execution of SAP. The Gantt chart above constructed with a horizontal axis stand foring the entire clip span ( yearss ) of the SAP execution undertaking in each undertaking and a perpendicular axis stand foring the undertakings that make up the SAP execution undertaking. There is 8 measure involve in this undertaking which is first is they have to develop work program and budget. This undertaking take about 1-5 yearss to complete and following is follow by organizing SAP development squad and executive which will manage this undertaking and individual to mention to. This takes about merely 1-3 yearss and so they must execute feasibleness survey of SAP and capital budgeting analysis to acquire understanding sing SAP which takes 1-6 yearss.
After that they have to do a constellation of new SAP system to guarantee that the system able to give best benefit and suited with the current operation in the organisation. It takes 1-15 yearss to complete it. Next. the most of import undertaking that needs to be done is pilot proving to guarantee that this system can be run and able to increase top direction trust toward the determination. It merely takes 5 yearss and same with developing employee undertaking. This undertaking is needed. so all of these people will hold required SAP cognition and accomplishments or even SAP enfranchisements. Then. the system that already finish will be implement phases by phases within organisation which takes the longest period which is 1-30 yearss. This is to guarantee that the system can be implementing successfully. Last measure is fixing an Analysis Report to give feedback sing new system toward top direction which merely takes 1-7 yearss. The clip frame is from 22 January 2002 and must be finished before 1 April 2002.
Is Termination Lim is a Right Decision?
Zulkifli Osman is the Financial Manager in ATLAM since 1995 while Lim is User Representative in the treatment about the new system ascent. When holding the meeting for discuss the implement SAP as ATLAM new accounting system. Zulkifli and Lim have different sentiment. Zulkifli believed the execution of SAP is better than ACCPAC but Lim strongly disagree with this sentiment.
Lim thinks the SAP got a batch of failings while the ACCPAC can convey benefits to the company. Lim argues the implement of SAP costs the company a batch ( include the execution costs and attach toing operational costs ) . Company are unable to afford the costs due to the shortage in twelvemonth 2001. Besides that. Lim besides argues that the SAP is suited for fabricating industry but non education industry. Additional. deficiency of resources ( Personal computers ) in section and staff there are deficiency of PC’s cognition and accomplishments besides make the SAP impractical in ATLAM. However. Zulkifli strength with his sentiment and conclude the SAP will be implement in the company because even SAP involved alone hazards and challenges. it besides conveying benefits to the company.
In the instance SAP for ATLAM. Zulkifli was terminate Lim from the undertaking squad because Zulkifli thinks Lim is a clip wastrel and the clip wastrel can non be in the undertaking squad. Other than that. Zulkifli terminate Lim because Lim raised excessively many issues when holding the meeting and Lim was conveying excessively many inquiries that justify the dependability of the SAP system. Zulkifli was afraid that Lim would act upon the others with his positions.
Zulkifli terminate Lim is a incorrect determination because Lim was contributed a batch when holding the treatment. Lim is really experient and he brought the issues that are of import and should be take into consideration. Zulkifi can non merely end Lim because Lim has some specify cognition that other people don’t have. If Zulkifli terminate Lim because Lim disagree with his sentiment. the staff wouldn’t contribute their sentiment in the other meeting because they will scary the thing happen in Lim will go on for them besides. Zulkifli become bossy. so even determination by Zulkifli was incorrect. no people will talk out. This will give the serious consequence to the company.
How to Get the better of Staff Resistance
To guarantee that SAP system can be implementing in ATLAM. Zulkifli need to confident all the staffs that SAP system will assist them in the term of concern procedure and all dealing will be more effectual and efficient. This is because when a company wants to implement alterations in concern procedure and occupation responsibilities. the most opposition that need to get the better of is from the staffs or the users of SAP system. There are a few ways on how to get the better of the staff opposition.
I. Communicate Early
Before implementing the SAP system. Zulkifli foremost and first necessitate to pass on with the ATLAM’s staffs. This is because homo is the component has to be a cardinal portion of the SAP system undertaking be aftering. Directors have a inclination to undervalue how disconcerting this type of alteration can be. Zulkifli should get down fixing the staffs for a major alteration months before. non when it’s happening.
two. Communicate Often
Change is hard for people to accept particularly when it involves countries of expertness and privilege. That’s why Zulkifli and the other maneuvering commission need to do certain they are being every bit unfastened as possible and pass oning systematically about what’s go oning. Newsletters. town hall meetings and electronic mail updates are merely a few of the tactics they can utilize to do certain ATLAM’s staffs are good informed. and the rumour factory isn’t taking over. Other than that. Zulkifli besides need to seek their feedbacks.
three. Explain What’s in the SAP System For Them
It is of import to explicate why SAP system demand to be implemented and discourse how it will impact ATLAM’s staffs. Focus on how the alterations will better the company’s public presentation and aid ATLAM’s staffs perform their work. At the same clip. Zulkifli shouldn’t shy away from speaking about the bad and the ugly. If it will do things more hard for single ATLAM’s staffs. see offering inducements or extra support.
four. Ensure Management Buy-In
A successful engineering execution starts with the whole-hearted committedness of the maneuvering commission. Therefore. Zulkifli need to hold the motivations for implementing the SAP system. Then rally the support of your directors and the steering commission. This is because. during the execution. there will be tonss of room for interdepartmental strife. Therefore. Zulkifli need to do certain that everyone is all drawing in the same way and presenting the same message.
v. Provide Adequate Training
Not all ATLAM’s staffs are savvy about engineering. Therefore. to implement SAP system into ATLAM. it needs to hold effectual communications and high quality preparation. Training is a must for guaranting that ATLAM’s staffs cope good with the alterations and do a smooth passage to the new order.
six. Get Them Involved
Every system such as SAP has many users that will utilize the system. One of the ways to get the better of the opposition in ATLAM is by affecting the cardinal users in the guidance commission. Ask for their sentiments on the system demand and so affect them in system presentations. Not merely will you be profiting from their expertness. but you will be conveying them on the side. They can even be your title-holders. assisting fellow ATLAM’s staffs become comfy with the new engineering.
seven. Block the Exits
Once the undertaking manager of SAP system had communicated with the ATLAM’s staffs. sought their feedback. it’s clip to continue. This means that any demand petitions from the users will be vetoed. It is necessary to accomplish a successful execution of SAP system into ATLAM. Other than that. if there to be any alterations during the execution it will increase the continuance of clip and increase the cost.
After we do for the analysis and measure the utility of SAP system undertaking. we recommend that ATLAM should implement the SAP system every bit shortly as possible. The execution of SAP system would convey a batch of benefit for ALAM in the long term position.
From the treatment. we can reason that SAP should be implemented in ATLAM due to several positions. First of all. the computations of after-tax hard currency flow are positive in these 6 old ages show that this system will bring forth more hard currency than the cost of its initial investing. Besides that. the net nowadays value shows a positive value and the execution of SAP systems requires 3 old ages and 3 months merely retrieving the initial investing which is acceptable due to the utile life is 6 old ages. In add-on. the internal rate of return is 28. 86 % which is greater than the needed rate of return of 25 % shows that the company should accept this undertaking.
Therefore. we can reason that it is executable to transport on the execution of SAP system in ATLAM as the benefits of implementing the system exceed its cost. In the instance of SAP for ATLAM. issue Lim was holding struggle with Zulkifli in the SAP execution affair. In our group sentiment. when a squad has difference of sentiment to decide this struggle requires a batch of regard and forbearance from both side. We hereby urge that Zulkifli must do the best determination to keep the expertness in their organisation. Zulkifli need to decide the struggle in good mode. He needs to fix for the solution foremost by admiting the struggle and happen ways to pass on and discourse with Lim decently. Then Zulkifli need understanding the state of affairs by clarify Lim places. and besides need to do premise if they in Lim side.
Last but non least is in forestalling struggle. the squads can be used such accomplishment and behavior that really work on. such as covering with struggle instantly. being unfastened. practising clear communicating. practising active hearing. non allowing struggle get personal. promoting different points of position. non looking for incrimination. showing regard. every bit good as maintaining squad issues within the squad. Last. Lim is expertise individual in organisation and as a good plus to ATLAM. we are non proposing Zulkifli to kick Lim out from the undertaking squad. The cardinal stakeholder for ATLAM is it really ain staffs. therefore the undertaking squads cannotexcluded the user representatives and most of import is to get the better of the opposition of ATLAM’s staffs to alter. ( Hoffer. George. and Valarich. 2011 )