Development of a New Information System for Croatian Forestry

1. Development of a New Information System for Croatian Forestry Damir Kalpić University of Zagreb Faculty of Electrical Engineering and Computing, Croatia damir.kalpic@fer.hr Krešimir Fertalj University of Zagreb Faculty of Electrical Engineering and Computing, Croatia kresimir.fertalj@fer.hr

2. Introduction • Croatian Forestry • among the largest government-owned organizations • 16 regional departments • 170 outposts • 20,000 km2 of forests • natural reserve • game • wood • valuable plants • feeding the state budget • forest fires are the main danger in Mediterranean area

3. Woods in interior

4. Woods at the seaside

5. Information system status • Development since 1990 • PC based • FoxPro, VisualBasic, Delphi,..,MS Office • three developers • 70 employees in IT department • mostly “chiefs” of field offices • mostly better paid than developers • obsolete data processing organizational tasks • good functionality for end users • lack of integration • obsolete platform

6. Current IS status • Managerial support. Production planning is fully supported. Planning and analysis of development and sales & purchase planning are partly supported. • Forests maintenance. Construction of maps, forest economy and monitoring are fully supported, purchase of goods and services, partially. • Production. Forest growing, exploitation, and stocks management are fully supported, while transportation and forest paths building, partially. • Ecology. Forest protection and auctions are partially supported. • Hunting. Only sales are supported.

7. Computing infrastructure in Croatian Forests(ask Prof. Fertalj!) • On the central location: computer network with servers. • The primary domain controller (PDC) with corresponding network services: • Domain Name System (DNS), Windows Internet Naming Services (WINS), Dynamic Host Configuration Protocol (DHCP) server and the central database (MS SQL Server). • Public servers (Web, Mail, IMS). • Terminal Server. • Access via terminals must be left out in future applications. • A central active directory of all users in Croatian Forestry. • In regional offices and in outpost with more users • A LAN is to be established with an own domain controller. • It has to be replicated like the application server in the Central Office. • The security and protection system (active directory) in regional offices and outposts has to be replicated to the central active directory. • VPN or a private network? • Remote users connect to the Virtual Private Network (VPN) in two ways: • dial-up to any Internet service provider, and afterwards to the VPN system. • mobile users through the GPRS protocol.

8. Microsoft TechNet (2006), the recommended pattern for physical implementation

9. Critique of Deloitte findings(1) A highly professional Analysis of current status..., but SWOT (correct) • Threat: Standard industry solutions lack the specific required functionality • Strength: High satisfaction of end users with the current solution SUGGESTION (contradictory) • Buy an industry standard solution because... • “overall cost of proprietary development compared to an industry standard solution is higher by a factor from 1.57 to 2.05” Said Massachusetts based consultants! • Croatian salaries 3-5 lower than in US, ERP license fees (were) up to 1.5 times higher.

10. Critique of Deloitte findings (2) • “Application development phases should be clearly separated and assigned to different team members” • on the contrary, holistic approach has lead to relatively high success, achieved with modest means • Main threat, experienced by well off Croatian ERP buyers was not mentioned!

11. Experience with well off Croatian ERP (read: SAP) buyers • Bought licenses at 150% of normal rate • Engaged ignorant consultants at 1,000 US$/day rate • ignorant regarding the software they implement • ignorant about the user company organization • inexperienced in IS implementation • Declare it as success because too much money has been invested! • “Investment in our ERP is of no cost for us because the valueof our shares has grown more due to SAP”

12. Insource or outsource? • In 80% of cases outsourcing had not diminished the costs (Gartner). • In Croatian Forestry the Information System is part of the core business. • Computerization of Croatian Forestry is a continuous, demanding, complex and partly non-standard job. • No outsourcer can do it alone, without insiders’ support. • Current IT team should be strengthened • IS development is a sustainable reengineering tool

13. Possible compromise • Buy standard (accounting, payroll, general ledger, ...) • Develop forestry specific applications. • Change in the meantime: • Local SAP lowered the license fees for state owned organizations, • Local SAP expertise has increased, • Local SAP developers stopped charging consultants, now they accept payments according to end-user acceptance & satisfaction.

14. Applications design(ask Prof. Fertalj!)

15. Platform • MS.NET Framework • C# • SQL Server • Microsoft Visio

16. Development model • Selection of the development platform (completed), • Forming of teams (80% completed), • Testing of team members, • Final teams forming, • Snapshot of current status (completed), • Education for conceptual data modeling, • Training for system administrators, • Establishment of application development standards, • Application data models, • Training for SQL, • Training for the development platform, • Models of processes in applications, • Common data model, • Common model of business rules.

17. Expected main Project risks • Too strong resistance to restructuring, • Inadequate salaries, • Too demanding IT staff, • Lack of continuous support by the Management, • Radical changes in legislation, • Radical changes in Management, • Insisting on quick fix solutions, • Critical mass of competence not reached, • Loss of momentum, • Loss of motivation and confidence due to some difficulties.

18. Opposition from Trade union • Trade Union strongly objected the restructuring! • They wish to remain local IT chiefs and data processing organizers, • They don’t want to be tested, • They don’t want (any) change, • The authors had to defend the concept.

19. Simplified models • Opera: • Soprano & Tenor are willing, but Baritone would not allow. • Trade Unions: • Management to workers: We ask from you everything, we give you nothing • Trade Unions to Management: We want it all, but we do not give from us anything • Solution: A compromise to live happily ever after

20. Development under Trade Union obstruction Repeat until Croatian Forestry does not go private Management proposes restructuring Criticize the former Management Trade Union objects until Gvmnt changes the Mngmnt Firing staff, cutting woods....

21. Development in co-operation with Trade Union Management proposes restructuring Trade Union asks for modifications until agreement Education of staff New development cycle Higher salaries & social security ...but primarily for those who are willing and capable to work!

22. Open problems • How to properly organize the IT Department • to be motivating for staff • to be acceptable to Management • to be acceptable for Trade Union • to avoid IT staff fluctuation after training • to avoid unnecessary spending • to be simple and understandable • to be acceptable to the rest of the organization • to be acceptable under legal regulations in state-owned enterprise • etc. • Stalemate – 2 years have passed and nothing (visible) happens except repeated expressed dedication to proceed accordingly! • Any suggestion/experience to be shared are welcome!

23. Conclusion • You should not outsource your core business • Any change in a large (especially when state-owned) company is extremely difficult • Trade unions too often protect the ignorant and lazy (that is probably their duty?) • Computing staff undervalued

24. Conclusion cont. • Any improvement of computer staff status induces envy and resistance among others • Are they faring towards their destruction (the way they were and would like to remain) • Is there any remedy?