Based in Ankara, Turkey, Aselsan is the largest military electronics manufacturer in Turkey. The company is divided into four divisions: Communications (HC), Radar, Electronic Warfare and Intelligence Systems (REHIS), Defense Systems Technologies (SST), and Microelectronics, Guidance & Electro-Optics Division (MGEO). Historically, Aselsan has been a production-focused business. It received orders from customers for particular electronics components and filled them. Recently, the company has taken on more responsibility. Aselsan customers are increasingly requiring Aselsan to provide project management services. The company now needs to extend its expertise into areas of design, system engineering, and the coordination of exchanges among third-party subcontractors. Aselsan's information systems were not originally designed to support project management activities. The company needed an ERP that could provide integrated views of finance and budgeting, supply planning and scheduling, and coordinate production centered on specific projects. "The information needed for effective project management is getting more and more complex, and we needed an integrated solution to support that," explained Fatih Bilgi, IT director at Aselsan. Aselsan evaluated ERP products from a number of vendors and identified the product and company that presented the best fit for its needs. The systems engineers had an additional challenge: The project needed to be completed within 18 months, before Turkey adopted a new currency. Aselsan's old systems could not accommodate the new currency, so if the new system wasn't in place, Aselsan would be out of business. As in many ERP installations, Aselsan had to overcome many obstacles along the way. Systems engineers had to adapt to changes within the business while designing the core business systems. For example, over the 18-month installment, Aselsan's revenue doubled-so the problem changed while the solution was being developed. Aselsan also formed a new subsidiary, Aselsan Net, that the new system needed to accommodate. The new financial systems were installed and running in enough time for the currency switch. In the months that followed, the company implemented a new planning and optimization component and a data warehousing component. Aselsan introduced parts of the new system over time. During the year after the initial installation, the user base grew from 1,300 to 2,150 across seven locations and continues to grow. Dramatic improvements in the way Aselsan does business are occurring gradually and steadily. The new integrated system has provided many benefits to Aselsan. The system has eliminated data redundancy in the organization, lowering administrative overhead. Many time consuming operations such as preparation of annual plans and month-end closure operations have been cut in half. Product design change approval time has been reduced by 40 percent. Data warehousing systems allow employees across the organization to access information and reports with a mouse click. Managers can compare and balance project budgets for optimum return on investment. In Aselsan's so-called Advanced Planning & Optimization system, suppliers can collaborate with Aselsan engineers on projects. The system provides a Web interface that allows all involved in a project to communicate and share documents and information. Aselsan is working hard to become a leading global player in the defense industry. Expanding into project management backed by a strong ERP system will give the company the organizational fuel to achieve its goals.
Discussion Questions
1. Why did Aselsan need to make the huge investment in an ERP system? Why was its old system insufficient?
2. What challenges did Aselsan face while developing its ERP system?
Critical Thinking Questions
1. How does the quality of an ERP system contribute to a business's ability to compete in the global market?
2. How do information systems support collaboration among companies involved in a project?