Case Study
CASE STUDY
Aeronautica Civil: Achieving Competitive Advantage in a Noncompetitive Industry
As noted in the chapter, competitiveness in government agencies can sometimes be expressed as “competing against yourself.” Essentially, an organization sets goals that are significantly higher than current performance and puts processes and systems in place to meet those goals, thus effectively competing against its former performance. Aeronautica Civil (aerocivil.gov.co) is Colombia’s aircontrol agency. A divison of the Colombian Ministry of Transportation, Aeronautica Civil is responsible for overseeing and developing Colombia’s air transportation system, including 73 airports and 3,000 officers. The agency is responsible for efficiently managing the movement of more than 10 million passengers and 957,000 aircraft takeoffs and landings each year. In its review of computer systems for the Y2K problem, Aeronautica Civil became aware of significant deficiencies in the control of its financial operations. Billing was consistently in a three-month backlog, processing a customer statement took three days, bank accounts were being reconciled manually, and closing the monthly balance sheet was taking three months. Something needed to change, and the business drivers behind that change were:
_ Increase the company’s revenues and improve accounts receivable turnover.
_ Prevent economic losses from bad debts plus generate and control revenue from other sources.
_ Minimize resources wasted in responding to claims.
_ Allow for procurement controls and control of fixed assets.
After a three-month evaluation process of ERP vendors, Aeronautica Civil selected consultant J.D. Edwards to develop and implement a system that could address the problems in the agency’s financial operations and improve its performance. The system was successfully implemented in only nine months. Key fac tors in that implementation success were the full commitment of Aeronautica Civil’s
Aeronautica Civil: Achieving Competitive Advantage in a Noncompetitive Industry
As noted in the chapter, competitiveness in government agencies can sometimes be expressed as “competing against yourself.” Essentially, an organization sets goals that are significantly higher than current performance and puts processes and systems in place to meet those goals, thus effectively competing against its former performance. Aeronautica Civil (aerocivil.gov.co) is Colombia’s aircontrol agency. A divison of the Colombian Ministry of Transportation, Aeronautica Civil is responsible for overseeing and developing Colombia’s air transportation system, including 73 airports and 3,000 officers. The agency is responsible for efficiently managing the movement of more than 10 million passengers and 957,000 aircraft takeoffs and landings each year. In its review of computer systems for the Y2K problem, Aeronautica Civil became aware of significant deficiencies in the control of its financial operations. Billing was consistently in a three-month backlog, processing a customer statement took three days, bank accounts were being reconciled manually, and closing the monthly balance sheet was taking three months. Something needed to change, and the business drivers behind that change were:
_ Increase the company’s revenues and improve accounts receivable turnover.
_ Prevent economic losses from bad debts plus generate and control revenue from other sources.
_ Minimize resources wasted in responding to claims.
_ Allow for procurement controls and control of fixed assets.
After a three-month evaluation process of ERP vendors, Aeronautica Civil selected consultant J.D. Edwards to develop and implement a system that could address the problems in the agency’s financial operations and improve its performance. The system was successfully implemented in only nine months. Key fac tors in that implementation success were the full commitment of Aeronautica Civil’s