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Journal of Information Technology Teaching Cases (2014) 4, 27–33

© 2014 JITTC Palgrave Macmillan All rights reserved 2043-8869/14


palgrave-journals.com/jittc/

Teaching case

Pegaso Peru: an overdue project (A)


and (B)
Peter Yamakawa Tsuja1, Gareth H Rees1, Julio Quispe Tuesta2, José Carrión Marengo3,
Kenny Luis Escobar4, Julio Guevara Aquije5
1
ESAN University, Lima, Peru;
2
Celeritech Solutions, Lima, Peru;
3
Fortel Contact Center, Lima, Peru;
4
Indra S.A., Lima, Peru;
5
HSBC Bank Perú S.A., Lima, Peru

Correspondence:
P Y Tsuja, Alonso de Molina 1652, Monterrico, Surco, Lima, Perú.
Tel: +(511) 317-7200;
Fax: +(511) 345-1328;
E-mail: pyamakawa@esan.edu.pe

Abstract
Brunella Noli, General Manager of a Peruvian consulting firm (Pegaso Peru), reviews the
history of a troubled IT project for client Casa Master Center (CMC). The project is 11 months
overdue, and CMC is an increasingly unhappy client. Noli’s review, which starts with the sale
and recounts the project’s scope, contract and implementation, uncovers a series of
problems. Noli seeks to resolve these issues without incurring additional costs. She worries
that the relationship with the client is rapidly deteriorating and she fears that this will damage
Pegaso’s reputation. A second one-page Case B recounts what happened next. This case
is based on actual events in real organizations. The identities of the parties involved have
been changed, along with other key information, to preserve anonymity.
Journal of Information Technology Teaching Cases (2014) 4, 27–33. doi:10.1057/jittc.2014.3;
published online 11 March 2014
Keywords: project management; closing project; human resource management

Introduction

V
ery early on Monday, 22 February 2010, Brunella Noli, the United States). A sales office in Sao Paulo, Brazil serviced
Pegaso Peru’s General Manager, thought about the Casa its exclusive contract with a multinational company. Pegaso
Master Center (CMC) project, which had gone badly. Its offered SAP technology solutions, leveraging SAP’s reputa-
project manager, Ana Perez, had recently resigned. Noli, an tion and acceptance in many industries. Approximately
experienced computer engineer, had been tempted to take over 500 companies had implemented SAP technology in Latin
the foundering project herself, but instead asked Pegaso’s America, yet many underutilized SAP products. This left
Operations Manager, Rafael León, to take it on. Now, in a niche for Pegaso to target small- and medium-sized
preparation for a meeting with León to review the work plan, companies.
Noli was reviewing the project file. She had two main concerns: Pegaso specialized in Business Intelligence (BI) applica-
tions. The firm used SAP’s Business Objects tool to develop
(1) Noli needed to understand what had gone wrong so that planning tools such as dashboards, balanced scorecards and
she could salvage the relationship with CMC. reports. The firm adapts SAP’s Business One tool to develop
(2) CMC owed Pegaso a substantial amount – final payment applications for automation, process integration and manage-
on the delayed project. ment of distributor, dealer or subsidiary networks. Pegaso also
As of 22 February, only the testing phase needed to be com- built Customer Relationship Management (CRM) solutions
pleted. However, completing this phase would require the and basic CRM services for managing marketing campaigns
cooperation of a currently uncooperative client. and sales contacts
Brunella Noli had previously worked as a consultant with
Arthur Andersen in Peru, including a spell on an SAP
Pegaso and Pegaso Peru integration project with system consultants from Pegaso
Pegaso, a 4-year old Uruguayan company, employed 170 Uruguay. Handpicked to lead Pegaso Peru as its General
people in five countries (Uruguay, Argentina, Chile, Peru and Manager and given a stake as a partner in Pegaso, Noli had
Pegaso Peru: an overdue project PY Tsuja et al
28

Figure 1 Organization chart for Pegaso Peru.

set up the Peru organization. She considered this as a major Casa Master Center (CMC)
accomplishment in a career built on a series of successful CMC was a retailer of building and home improvement
projects. As a competent multi-tasker, she undertook opera- materials, whose internal processes became more complex as
tional as well as governance roles, while her competitive it grew. Budgeting, in particular, required greater accuracy,
personality drove her ambition to develop Pegaso Peru into given the large number of items it stocked across a growing
Peru’s largest domestic IT consulting business. number of stores. Thus, CMC’s budgeting process was becom-
Pegaso Peru now had 25 full-time employees and had built ing unwieldy and inefficient, and its forward projections were
a sizeable list of approved sub-contractors. The Operations often unreliable. High turnover among the administrative staff
Department consisted of BI, CRM and Enterprise Resource (in whom CMC invested significant time and training) meant
Planning (ERP) service units. Administration and Finance that most of the workers responsible for preparing budgets
oversaw Human Resources, Accounting and Finance, and the were young and inexperienced.
Sales Department was responsible for Sales, Resource Manage- Each September, CMC departments set their budgets for
ment and Marketing. Pegaso Peru’s organization chart is the coming year. Budgets were calculated based on previous
presented in Figure 1. year’s results, with projections developed using statistical
Pegaso’s customer base consisted of firms in industries such growth calculations. Each of CMC’s nine stores and its sales
as retail, gas supply, transportation, insurance and local area planning analysts (some of whom were new to the job)
government (see Appendix A). Most projects lasted for 4 or 5 used individual Excel spreadsheets to compile historical
months, but Pegaso had taken on and completed some bigger records and generate projections. The finance department
projects, and aimed to do more of these lucrative projects. manually compiled these departmental budgets into a com-
Pegaso charged about 400–500 Nuevo Soles (US$140–175) per plete annual budget document. The rapidly growing company
day per person, assigning consultants as they were available definitely needed an IT tool to streamline this process.
and filling expertise gaps from the list of approved contractors. In December 2008, CMC sought to change their plann-
Several senior in-house consultants, who were very experi- ing processes in time for the next year’s budget round. The
enced, commanded considerably more than the average company now grouped its nine stores by establishment date:
charge-out rate. Group 1 consisted of stores more than 2 years old, Group 2
Pegaso received orders through referrals, re-engagement stores were 1–2 years old and Group 3 stores were those with
and competitive bidding. Sales consultants met with clients to less than a year in operation. A Planning and Business Intelli-
learn their needs, then outlined how Pegaso could implement gence unit was established, headed by Janet Sam. This unit was
off-the-shelf or customized solutions. System engineers and now responsible for CMC’s forecasting process and business
implementation staff clarified the project scope and planned planning, including setting sales targets, estimating margins,
and implemented the projects. Usually the technical people turnover and disaggregated projections at each point on the
were brought in after an initial contract was signed. Pegaso stores’ value chains. Sam led and coordinated the expenditure
contracts were in two parts. The first part specified time planning processes of departments and stores, and was also
needed to scope the work that would culminate in a Business responsible for designing and implementing the annual mar-
Blue Print (BBP) which would include a detailed work keting of all categories of goods sold, import analysis and
schedule for the implementation. A second contract was customer surveys for the company. Janet Sam would thus
signed when the client agreed with the BBP schedule and key become the key point of contact between CMC and Pegaso
milestones. Key details of the Pegaso Peru BBP for CMC are Peru. Key relationships in CMC’s organizational structure are
contained in Appendix B. presented in Figure 2.
Pegaso Peru: an overdue project PY Tsuja et al
29

collection to the assigned project manager. She did not feel


this would compromise the overall quality and progress of the
project. Noli scheduled Cubas to join the project full time at
the start of the project implementation phase, and she asked
Ana Perez to lead the project. Perez had taken on the role with
enthusiasm. Coming from sales, she did not have much
experience in SAP BI projects, but she had sold Pegaso’s SAP
solutions. Noli had felt confident that Perez would run the
project smoothly.
Now Brunella Noli looked at the contract that was signed in
February 2009. There was little she could do about this – what
was signed was signed. As was typical for Pegaso, the sales
consultant (Ana Perez) had worked closely with the client.
However, the CMC contract differed from Pegaso’s usual
practice, in that its BBP included a provision that work would
be delivered as required, for a final fixed price. The contract
also contained standard penalty and non-performance clauses,
Figure 2 Organization chart for CMC. allowing for the client to withhold payments and for delay
costs to be borne by the responsible party.
Now Noli turned to the project monitoring reports. As she
read, she felt a sense of unease; she should have taken more
Brunella Noli reviews the CMC project file notice of them when they had been submitted.
Brunella Noli returned to the file to read the notes from the Since Cubas was not available, another SAP specialist,
Sales Department. Priscilla Ugaz, joined the team to undertake the scoping work
Ana Perez, a representative in Pegaso’s Sales unit, had been and recording of client requirements. This was a significant
recommended to CMC’s Commercial Manager, Jose Barrantes, promotion for Ugaz, who previously worked as an intern in
through a college friend. Perez noted that Barrantes had a different department, with Jorge Cubas. Ugaz was new to
understood the need for planning and budgeting software, budgeting and planning, but it was hoped that Ugaz would
but did not know which tool would best suit the new budget- bring some of Cuba’s specialized SAP knowledge into the
ing process that CMC planned to institute. Perez recom- initial phases. Thus, Ana Perez and Priscilla Ugaz had under-
mended Pegaso’s modified SAP tools. Her report succinctly taken most of the opening work.
outlined CMC’s needs and her proposed solution: the SAP CMC appointed Janet Sam to lead the SAP BIP Module
R/3 Business Integration & Planning (BIP) sub-module (see Implementation Project. Both Janet Sam and Jose Barrantes
Appendix C). This software would enable integrated budget (the project sponsor) consulted with Eddie Tortuga on hard-
planning for up to 5 years ahead. Perez’s note also emphasized ware matters.
why CMC was a potentially important new client for Pegaso. Soon after the contract was signed, Ana Perez and Priscilla
Reading this, Noli nodded. Indeed, CMC was just the type of Ugaz toured the CMC facilities, collecting the required
firm that Pegaso was targeting: small today, big tomorrow information to, in SAP parlance, ‘build’ the BBP. The BBP
(and in great need of Pegaso’s services) and success with this detailed all of the work to be performed, based on the
client would greatly enhance their reputation in the Peruvian customer requirements that Ugaz gathered. Ugaz was unfami-
IT consulting industry. liar with some of the necessary terminology, and did not know
Reading on, Noli saw that soon after the sales contact how to confirm client requirements. She also did not ask many
meeting in December 2008, Jose Barrantes met with CMC’s additional questions, and thus produced some incorrect or
IT manager, Eddie Tortuga, to learn his views on implement- incomplete documentation. This requirements’ definition
ing BIP in light of CMC’s current and future IT requirements. phase had taken her 2 months, yet the project plan specified
This was Pegaso Peru’s first SAP BIP project. Indeed, this step should have been completed in 1 month. By April
few companies in Peru had implemented BIP for budgeting. 2009, the project had already slipped 15%. Noli wondered why
Some multinational companies had inherited this module she had not noticed this important fact when she first
from their parent companies, and a few domestic companies reviewed the progress reports.
had hired expensive international consultants to implement Now, Noli noticed that Jorge Cubas had rejected Ugaz’s
BIP. Noli had felt confident about the project because the team BBP, saying that the data projections were not what he had
would include an experienced senior consultant, Jorge Cubas, expected. Reading on, Noli surmised that Priscilla Ugaz had
who had extensive experience in budget applications in gene- reworked the entire BBP, not just the critical points that Cubas
ral, and several years’ experience with SAP R/3. Cubas was indicated needed to be addressed. The new document took 3
extremely busy on other Pegaso contracts at the time, and more months to complete. By July 2009, the data was now
was thus not available for the initial phases of this project. compiled as Cubas wanted it, but the project had moved well
Taking him off the other work would have compromised their into the time reserved for implementation.
ongoing business, and besides he was one of the most Curiously, the report revealed no indication that CMC had
expensive consultants that Pegaso used. Noli had decided that ever complained. Noli wondered why, since the contract
in the early planning phase of work Cubas would play an specified firm deadlines. Instead, after 6 months had elapsed,
oversight-only role, whereby he would review the work Jose Barrantes received and approved the BBP on behalf
output leaving the day-to-day project management and data of CMC, with apparently no complaint about the project
Pegaso Peru: an overdue project PY Tsuja et al
30

overrun, even though the work was supposed to be completed required for any of the additional reports, should they be
by August 2009. requested. Leon added an alarming comment:
Next, Noli quickly reviewed the implementation moni-
toring reports to verify the periods of project suspension. If they keep asking for new reports, we’ll never finish the pro-
Normally, Noli would only approve a project suspension if ject. How do we tell them that we will not accept require-
she determined that the client could not meet their commit- ments which were not originally committed to in the BBP?
ments. However, the CMC project had been suspended several
times. Brunella Noli’s reply to Leon was abrupt:
In October 2009, during the final implementation phase,
Ana Perez requested maternity leave. Noli appointed a To finish depends on how many more people we assign. But
temporary project manager to take over for Perez during CMC is not required to pay any more, because we’re so far
her leave. The new project manager was urged to keep the over schedule. We must close this as soon as possible!
project on track to meet the new estimated completion date
of December 2009. However, much to her disappointment,
Brunella Noli had to approve a project suspension less than
2 months later, when notification came from CMC that several Acknowledgements
staff would be on vacation from mid-December 2009 until The author would like to acknowledge the recommendations of three
anonymous referees and the journal editor in the process of finalizing
well into January 2010. The vacationers included Janet Sam this case, along with Omar Sumarriva Lezama, who assisted with
and Eddie Tortuga. Now, reading the notes, Noli recalled that taking the case from its original Spanish into the English language.
she had believed that little progress could be made if CMC’s
project leaders were not there to support it in person. She
suspended the project until March 2010.
Now it was 22 February 2010. In recent weeks, things Reference
had really begun to unravel. In early February, Ana Perez
Hernández, J.A., Keogh, J. and Martinez, F. (2006). SAP R/3 Handbook, 3rd edn,
returned from maternity leave, but soon after she submitted New York: McGraw Hill.
her resignation. With a view to close the project as quickly
as possible, Noli appointed Rafael León, an operations specia-
list, to take over. Noli explained to a colleague: ‘As Pegaso’s
Manager of Operations, León carries the authority to close the About the Authors
project.’
Soon, Leon reported that CMC had requested new report- Peter Yamakawa Tsuja is the Vice President for Research at
ing capabilities, for which Pegaso had not planned. Unfortu- ESAN University in Peru where he also serves as Director for
nately, the contract had specified that CMC could request such consulting projects, quality and accreditation. He has worked
enhancements and that Pegaso Peru would do the work at no in the telecommunications industry of Peru, and has a wide
extra charge. After assessing these requests and evaluating the consulting experience in project management. He has pub-
time needed for their completion, Leon asked Noli to add lished papers in Telecommunications Policy, Business Process
more resources to the project before it resumed. An agreement Management Journal and International Journal of Information
was reached with CMC that June 2010 would be the new and Communication Technology Education. His teaching and
project completion date (11 months past the original August research interests include information technology project
2009 deadline). management and telecommunications. He holds a Ph.D.
How was it that the contract gave the client so much power? degree in Engineering from Osaka University.
Thinking it over, Brunella Noli now understood that while
Priscilla Ugaz had believed that the majority of the work Gareth H Rees is a Service Operations Manager who has
on report development and finalization had been detailed in worked in the education and health sectors of New Zealand,
the BBP, there was uncertainty regarding the client’s overall The Pacific and Peru. He recently served as an Accreditation
reporting needs. Therefore, final specifications for the report and Research Advisor to ESAN University, where he also
function were deliberately deferred until the actual number of teaches Quality and Operations Management. He has had
reports could be known. Noli had discussed this issue with work published in Telecommunications Policy and forthcom-
Ana Perez, and they had agreed to allow the provision in the ing in Health Services Management Research. He is a co-
BBP that entitled CMC to request further reports during the author of a book chapter on performance management in
project’s implementation phase. This clause was now the Peru. He is currently studying for his Ph.D. at Otago
trigger for the new report requests. CMC had had plenty of University, New Zealand, from where he has M.B.A. and M.
time to consider its reporting needs, since the project had Com degrees.
lasted nearly a year more than planned. Perhaps over time,
CMC’s expectations for the system had grown beyond what Julio Quispe Tuesta works as a senior consultant in Business
was initially envisaged in the BBP. Intelligence and SAP Business Objects. He has lead several
A knock on her door caused Noli to look up; it was Rafael business intelligence projects for large companies in Peru. He
Leon. He got right to the point, stating that he and others on has also worked as sales executive for SAP systems. His main
the implementation team suspected that CMC was trying to research interests are related to the alignment of business and
leverage more from the contract than had been intended and information technology strategies. He holds a bachelor’s
informally agreed between Ana Perez and Jose Barrantes. degree in Systems Engineering from the University of Lima
There had been no prior assessment of time and resources in Peru.
Pegaso Peru: an overdue project PY Tsuja et al
31

José Carrión Marengo is the Chief Information Officer at create a model of analysis, a conversion processes, an outline
Fortel Contact Center in Peru and has a strong experience in of the extraction and loading for required data, a design of a
the information technology industry. His research interests conceptual model that supports the business information
include strategic management, process improvement and needs of Marketing and Operations and surveys the reporting
innovation management. He holds a bachelor’s degree in needs with and functionality dashboards using the SAP
Electronic Engineering from the Pontifical Catholic University Business Objects software.
in Peru. To compile this document, sessions were held with the
project’s sponsors and users who were selected from the key
Kenny Luis Escobar works as a consultant and manager in areas of Marketing, Operations and Finance. These sessions
Java implementation projects for companies in the financial had the aims of:
sector in Peru. He holds a bachelor’s degree in Systems
Engineering from Los Andes University in Peru. ● Assisting with issues concerning the processes of each
module and the overall organization in order to obtain a
Julio Guevara Aquije works as a consultant in information comprehensive view of CMC and its information require-
technology projects and has experience in the construction ments and to establish a comprehensive model.
sector. He holds a bachelor’s degree in Electronic Engineering ● Ascertaining from project sponsors and users reporting
from the National University of Engineering in Peru. requirements and processes involved.
● Developing a data definition model of the information
needs for each module’s users.
● Assisting to indentify the functional details and business
Appendix A cases for each module.
The approval of this document indicates the start of the
Summary of Pegaso Peru’s client portfolio construction phase of the project. This phase will consist of
Pegaso Peru bills approximately $1 million per annum, made the implementation of the platform, the implementation of
up of large and small projects across a range of industries. The the model that meets the information requirements and all of
CMC project was considered large by Pegaso Peru’s standards. the data loading processes. However, at the end of this
Table A1 provides data of a typical large project for each document there is provision for a number of further reports
sector, in comparison with the CMC project. and data tables that may be defined in the third part of the
CMC was considered a large project and was important Construction phase when more accurate needs can be ascer-
because: tained. These reports and table definitions are covered by the
● it was a new and potentially large client, information contained in this document.
● the SAP module (Business Planning and Consolidation) is
not requested frequently, Initial time frames and requirements
● success with this project would bring Pegaso Peru industry To continue, the SAP Business Objects BI project requires:
prestige.
1. Access to the CMC Network.
The time frame for this type of project is generally 3–4 months 2. Availability of CMC’s functional business knowledge to
with clients usually requesting additions to performance and validate the conceptual model, functional design decisions
functionality following the initial installation and user and to address specific questions that may arise during the
experience. construction stage.
3. Availability of and access to the CMC technology platform,
Database Servers for Repository and Data Mart Staging
Appendix B
Business Application Servers and Business Objects Tools,
SAP Data Services and SAP Business Objects BI Platform.
Key clauses from the Pegaso Peru/CMC BBP
April 2009: CMC technical resources and advanced knowl-
Executive summary edge of data sources required for the Commercial Data Mart
validation of the data model. Decision-making powers to
The BBP phase/design is a survey of the requirements outlined
address specific questions that may arise during the construc-
in the project scope and statement document. Its purpose is to
tion stage are also required.
May 2009: Availability of and access to CMC’s technical
and functional resources for comprehensive testing of the
Table A1 Pegaso Peru’s Large Projects Per Sector
solution. This requires the participation of two full-time
Industry Average time Value (in Personnel functional users for the validation of reports, dashboards,
frame dollars) assigned to confirm the accuracy of information and one full-time
technical resource for a review of Extract, Transform and Load
Retail 18 weeks 52,500 5 processes and query execution times.
Oil/Gas 14 weeks 60,000 5
Cosmetics 15 weeks 50,000 3
Insurance 18 weeks 56,000 4 Payments
CMC 18 weeks 42,000 4 25% of the price will be paid on the acceptance of this BBP by
CMC.
Pegaso Peru: an overdue project PY Tsuja et al
32

75% of the price will be paid on the completion of all of the ● Deadline times for CMC approvals to stop the onset of
key milestones and full implementation of the project solution. some stage.
● Data sources are not available.
Report exclusions and contingency ● Inability to have technical users with advanced knowledge
The detailed project scope is found in Annex 1 – Statement of of the data sources involved
Scope for CMC. This document had been reviewed and
approved by CMC and Pegaso.
However, for those specific issues for which no source data
has been identified within the transactional systems are not to Appendix C
be included in the business processes and will now fall outside
of the project’s goals. Basics of SAP’s R/3 modules
In addition to the project’s functional scope are the deve- SAP AG started operations in 1972 and became successful in
lopment of 15 Web Intelligence reports and 2 SAP Business the 1980s with their SAP R/2 Enterprise Planning solution.
Objects Dashboards. To review the details of the requested The company name, SAP, stands for Systems, Applications
reports and dashboards see the attachments in ‘Appendix 4 – and Products in Data Processing.
Definition of Reporting and Dashboards.’ Important: To date, In the mid-1990s, SAP had two main products in the
CMC could only define 10 reports and 1 data table: Other business software market: mainframe system R/2 and client/
reports and data tables provisioned for in the latter parts of server R/3 (The ‘R’ was for ‘Real-time data processing’ and ‘3’
this document must be defined and sent to Pegaso in the third was for ‘3-tier’). This new architecture is compatible with
part of the Construction phase. multiple platforms and operating systems, such as Microsoft
Windows or UNIX. SAP R/3 was officially launched on 6 July
Key milestones and responsibilities 1992 and version 3.1 became the company’s first ERP inter-
net-enabled software on the market.
1. CMC is to deliver to Pegaso’s consultants the reports that ERP software is a concept that started in the 1970s and was
contain currently valid basic indicators (sales, objectives meant to provide computerized solutions for integrating and
and inventory) to the minimum level of detail for the data automating business processes across companies’ back offices,
loading process, its validation and reporting definition. such as the financial, logistics or Human Resources Depart-
This information must be submitted no later than 20 April ments. For SAP, a business process is the complete functional
2009. The data source that allows replication of these chain involved in business practices, whatever module, appli-
reports must be contained in the repository so the Pegaso cation, system or Web Service that has to deal with it. This
team can load the BI solution. means, specifically for the SAP R/3 systems, that the process
2. CMC must provide a reasonable data set (3 months for all chain might run across different modules.
stores) in the Staging environment when application devel- SAP R/3 is arranged into distinct functional modules,
opment tasks start (5 May 2009) for testing and Pegaso can covering the typical functions in place in an organization.
validate the quality of loading processes. The most widely used modules were Financial and Control-
3. CMC must provide Pegaso the Comprehensive Test Script ling, Human Resources, Materials Management, Sales &
no later than 2 June 2009. Distribution, and Production Planning. Each module handles
specific business tasks on its own, but is linked to the others
April: CMC and Pegasus supported the fact that the scheme
must define user security before 16 May 2009. where applicable. As R/3 operates in real time, when new
input is made into the system, the logical application links
May: The technical documentation solution is built using
will concurrently update related modules so that the business
standard SAP Business Objects tools. Pegaso is responsible for
can react to immediate information and changes. This type
submitting this documentation on 9 March 2012.
of updating reduces the overhead of manual processing and
communication and enables companies to react quickly,
Restrictions and risks which makes SAP R/3 software and the SAP Business Intelli-
RESTRICTIONS are factors that the project team has no gence solutions very valuable tools for executive planning and
authority to change, and if not planned for and included in decision making.
the time frame can severely impact the project’s success: Around the end of the 1990s, SAP was developing addi-
● Resource Systems change of structure. tional modules and some of the requested functionalities for
● changes in the technological platform. these modules were common to different industry sectors.
● rotation of CMC personnel on project activities. Thus, SAP introduced a range of modules arranged by
● availability of CMC staff. business units, one of which was SAP BI that includes the
● staff turnover at Pegaso. SAP Business Information Warehouse and the SAP Knowl-
● Pegaso staff availability. edge Warehouse – a solution that captures, combines and
organizes data from a variety of internal and external sources
RISKS are factors that can have a negative impact on the and makes it available for decision-making processes.
project: By 2004, SAP had repositioned its product strategy and
● inability to have access to CMC systems. solutions, with the SAP R/3 module underpinning a wider
● Failure to have the technology platform available when web-based integrated solution portfolio that includes the
needed. SAP Business Suite – a common name now being used for
● Inability to coordinate meetings with functional users, the SAP R/3 solutions across businesses. See Figure C1 for the
which would delay the project. SAP 2002 product portfolio.
Pegaso Peru: an overdue project PY Tsuja et al
33

SAP for <Industry> SAP for Aerospace and Defense ...


SAP for Automotive

SAP packaged Service Management for <Industry> mySAP ERP is a


solutions solution within the
Financial Insights for <Industry> mySAP Business Suite

SAP xApps mySAP Business Suite SAP Smart


Business Solutions
SAP xAPP Resource mySAP ERP mySAP Financials
and Program
mySAP CRP mySAP HCM mySAP SAP
Management
All-in-One Business
SAP xAPP Product mySAP SCM mySAP Enterprise
Portal One
Definition mySAP SRM
SAP xAPP Mergers mySAP Business
And Acquisitions mySAP PLM Intelligence
… mySAP Marketplace

SAP NetWeaver SAP


Business
SAP Enterprise Portal SAP Business Intelligence ... One
SAP Master Data Management SAP Exchange Infrastructure ... Server

Figure C1 SAP product portfolio 2004.


Source: Hernández et al (2006).

Pegaso Peru: an overdue project (B) problems introducing the test data into the module, and no
Brunella Noli, as a partner of Pegaso and the General Manager debugging or user reports had been compiled. Brunella Noli
of Pegaso Peru, had the sole responsibility for any project immediately took over the project and held a tense meeting
cancellation or recovery decision concerning the Peruvian with Janet Sam. Noli had rebuked Sam over CMC’s resource
operations. On 22 February 2010 she had met with Rafael allocations. As tension built, Noli stated: ‘I won’t talk about
Leon to decide how to complete the CMC project so that this with you. I think I need to talk to your boss about it.’ Janet
Pegaso could collect its final payment. However, in the weeks firmly replied: ‘I am in charge of the planning unit and if you
and days that followed, work progressed slowly. CMC kept get my boss involved in this issue, I’ll be leaving.’
requesting new reports, and as a result the revised deadline of Noli did go to Sam’s boss, Jose Barrantes, as she felt
June 2010 was not met; another extension was allowed. By completing the project to maintain Pegaso’s reputation was
October 2010, requests for new reports had stopped, and the becoming increasingly important. They agreed on a new date
system was ready for testing. Rafael Leon asked CMC to to end the project: May 2011. Soon after this agreement, CMC
allocate the necessary time and resources to allow a complete announced that Janet Sam had resigned and a replacement
and uninterrupted test. Leon felt that CMC’s project leader, had been appointed: a person who had little expertise with IT
Janet Sam, would be the ideal person to train CMC’s users. Sam or planning and budgeting, who could not train other system
had substantial knowledge of the project and was authorized to users and who was unable to oversee the test of the new system
approve the project closure on behalf of CMC. Leon requested and procedures.
that the testing be completed by early December 2010. In March 2011, Brunella Noli allocated additional resources
In an email, Janet Sam argued that they did not have to train CMC’s staff, enabling a system test for final approval.
enough people to operate a test, because their internal budget At the last minute, however, CMC argued that they could not
cycle and processes were underway. That was the unit’s test the system because the Pegaso-trained test supervisor had
current priority, taking up all available staff time. Rafael resigned. CMC further claimed that they had no staff capable
immediately forwarded this reply to Brunella Noli. Once to run the system test.
more, Noli decided to suspend the project until CMC staff The Pegaso trainers reported other alarming news: CMC
could have the time to complete tests, report bugs and endorse now seemed to be operating a different system for budgeting
the new system. and forecasting. Possibly, they had developed it in-house
In December, a Peruvian private equity fund invested in during times when the Pegaso project had been suspended.
CMC, becoming its largest shareholder. The recapitalized Late one evening in mid-April 2011, as she pulled her car
company announced that in March 2011 they would begin a out of the park, Brunella Noli wondered if Pegaso would ever
15-store expansion. At the same time, it changed its trading receive a final payment from CMC. At 75% of the project’s
name to become the Casa Peru chain. value, it was a substantial sum being approximately 3% of
In February 2011, Janet Sam informed Pegaso that no Pegaso’s annual turnover – but it was the reputational cost and
system testing had been undertaken. The CMC staff had had potential for a personal defeat that concerned her most.

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