1. Synopsis
Akademi Teknikal Laut Malaysia (ATLAM) has been established on 15 August 1981 as to train and prepare Malaysian for maritime industry which was located in Melaka and Terengganu. Based on the study conducted by the World Maritime University, they found out that ATLAM had a poor IT infrastructure compared to Japan and Europe. It is due to ATLAM was using a customized single-user system which was merely for accounting entries and cannot provide financial reports. As ATLAM had become a subsidiary of PETRA Group of Company since 1997, they took this as an opportunity for them to enhance their IT facilities by implementing a new accounting system so called SAP (Systems, Application and Products).
Although it was very costly, it comprises various functions of an organization. As a result, the Finance and Accounts Manager of ATLAM, Zulkifli, has been asked to review the plan of implementation the SAP in ATLAM and decide whether they can upgrade their accounting system. 2. The Protagonist
The protagonist or the decision maker in this case is Zulkifli Osman, who is Finance and Accounts Manager of Akademi Teknikal Laut Malaysia (ATLAM) since 1995. 3. The Main Problem
ATLAM’s vision was to become a leader in maritime education and training. However, the accounting system used by ATLAM seems to be obsolete because the old single user system used by ATLAM before cannot produce the financial reports automatically and produce the decision efficiently. ATLAM was a wholly owned organization of MICT Berhad then had been asked to upgrade its accounting system with the PETRA group-wide SAP system. The decision to implement this proposal had to be critically assessed by Zulkifli since the decision involved many other issues. 4. The Major Issue
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The major issues related to the implementation of this new accounting system was the cost of upgrading to SAP accounting system is relatively high which is around 1.3 million . Other top management argued why ATLAM did not come out with other cheaper cost of accounting system such as ACCPAC system. The readiness of the staffs in using the new and sophisticated of this accounting system was another issue. The implementation of SAP accounting system needs a number of months to make it into realization. Many things must be changed in order to make the system is a success to the ATLAM organization. This huge changes was being questioned by the management, whether the staffs and the entire organization are ready or not.
From the table above, we can see that overall the SAP system will save more money in the long run. It is definitely a great idea to implement the SAP system in the long run although initially the benefit will not be seen as they will incur loss in the first year. However the move will need support from the MICT Berhad as a holding company because referring to ATLAM’s cash flow in Appendix A, ATLAM simply doesn’t have the money to implement SAP system on its own. They clearly have a big debt of RM 3,465,000 according to their cash flow at 31st December 2001. It is mentioned in the case that the cost of implementing the SAP system will not be a problem because the group will finance it for ATLAM. Therefore, ATLAM should not be worrying about their financial status. Furthermore, ATLAM can further cut down the cost as suggested by Mr. Zulkifli by limiting the user for the system. Overall, implementing SAP will not negatively impact ATLAM’s financially. Plus, according to table 1, ATLAM will benefit more by implementing SAP system rather than implementing ACCPAC as it accounting system, as SAP encompass more than just simple accounting transactions, synergies with the group’s system, and be ready for any complex reporting should the need arises.
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