Case 1: IT at COSCO (#9-305-080)
1. What do you think of COSCO’s past IT/ERP strategy and IT (and/or SC) capabilities?
Until the 1990s COSCO did not establish any global IT / ERP strategy. With the investment in an IBM AS/400 mainframe computer in 1988 COSCO made the attempt to form a common and user-friendly IT platform. Nevertheless until 1993 every company of the COSCO group operated their own software in the following four business fields (1) scheduling, (2) finance, (3) container management and (4) business statistics.
Due to the fact that each company developed their software independently with own patches and interfaces no compatibility was given. The company’s structure and organization was not build to communicate a complex and global IT strategy. The focus of the top management team was not on IT so far. They haven’t recognized that right standardization of IT structure could increase the business performance.
During the mid-1990s COSCO started to think global regarding the structure of their IT system. In 1994 they bought Tradeware but the internal development failed. In 1996 the first central electronic data interchange center was set up to coordinate communication within the global company. In the late-1990s COSCO tried to stabilize their IT network with hiring more and more IT experts. The number of IT staff increased from 45 in the late-1990s to 349 employees in 2001. On the one hand COSCO benefited by the increased IT consideration but on the other hand COSCO still relied on the old IT-platform which was not up-to-date.
Around the turn of the century COSCO started to recognize that a unified and globally spread IT network could uphold or even increase the competitiveness. COSCO made investments in SAP Financial Management System and IRIS-2 Container Management System.
In conclusion it is to say that the development of COSCO’s IT strategy was conventional for the business community. After realizing that isolated IT applications...
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