The Role of Information Systems

This section addresses the investment on the information systems before and during ERP implementation. It discusses how this investment correlates with the business growth and profitability of DiversCo.

5.2.2.1.1 Introducing E-mail Services

Most of the DiversCo task force had never worked in professional organisations that used modern business practices and tools, including the use of e-mail. Using e-mail as a communication tool at the time the GM had been hired was considered a very advanced step among organisations in the construction business. Once they activated their e-mail accounts and started using them, the task force found it a very effective tool to attract attention, as they can reach the GM, for example, without the traditional communication barriers. Shortly, the number of staff who started to actively use e- mail exponentially increased. The GM viewed the e-mail initiative not only as being able to speed up communication, to reduce the cost of unnecessarily paper distribution, but also to break the barriers between the task force and their use of technologies.

5.2.2.1.2 Development, Hiring, Promoting and Retaining IS Staff

IT has, as a department, in terms of staff, practices and skills, has developed through several phases until it reached an advanced maturity level. Building local IT capabilities was one of the early initiatives that was started before adopting and starting the ERP implementation. From the beginning, the decision was made to hire an in-house application consultant to maintain the ERP implementation and any potential existing and future enhancements. The analysis of how and why this position was opened indicates various goals from this initiative. First is to ease the communication process between the consulting implementer and DiversCo implementation members. Second, his involvement in the communication process represents an excellent educational opportunity at the business and the application level. Third, it was intended that he act as a first line support layer for DiversCo implementation matters. The GM approved the request and informed the supervisory consultant that his involvement is not only needed to achieve the project plan goals,

but also to sustain the ERP knowledge within DiversCo, so it can manage ERP support internally without depending on external consultants.

When the GM joined the organisation, there was only one member in the fashion business unit who voluntarily handled the limited and basic technical services that mostly relate to PC configurations, maintenance and accessories. Once the GM realised the potential and positive attitude towards IT self-learning by the fashion accountant, he made a decision to move him from fashion to the IT department. This was followed by continued allocation of budget for IT related matters, that included buying and upgrading PC‟s, laptop and the maintenance and upgrade of the computer network and the purchasing of software applications and tools. The GM hired new fresh graduate members who demonstrated very positive attitudes towards learning and supporting the development of IT systems and practices. Gradually the information systems skills became gradually an essential competence that one has to obtain in order to get promoted.

Promotion IT Achievements

1. Accountant in the fashion company.

2. Promoted as a prime accountant at the group level 3. Promotion plus extending role to support ERP

modules.

4. Promotion with official assignment to develop and supervise IS projects.

5. Extension with promotion to become audit member at the board level.

1. Successfully implements ERP in fashion. 2. Initiative of developing executive reports

from ERP.

3. More influence and support more ERP modules to reach go-live.

4. Initiative to motivate and supervise the quality of data entered to ERP.

Figure 5.1 Impact of developing IT skills on employee incentives – DiversCo

TIME Allocating IS Budget

Improving IS staff salaries and benefits

IS skills is part of the promotion competencies Implementing IS part of the executive Mgr‟s evaluation Bu sin ess Gro wth

Financial analysis indicates that from the ERP starting point until eight years later, DiversCo had seen exponential growth in terms of growth, profitability and diversity. The revenue has increased by 600% and the return on equity exceeds 30%. Various IS initiatives, projects and plans developed at the early stage of this success journey, where DiversCo was seen as one of the advanced organisations, in the contracting business, in terms of adopting modern technological practices, such as e-mail and ERP system. Despite the ERP difficulties in some areas, it can be seen that the progress in developing IS based resources and initiatives was always one step ahead of the progress made in the financial and financial growth and improvements. In the beginning, DiversCo announced three major IS initiatives at the beginning of the year; the organisation celebrated its first year of making profit after several years of generating losses. The go-live stage of the finance modules preceded a few months of generating 40% per cent profitability growth. Last but not least, within two years of the creation of the IS department, the company significantly achieved exponential growth in revenue, profitability and market share, after the go-live stage.