Harvard Case - Pegaso Peru: An Overdue Project (A) and (B)
"Pegaso Peru: An Overdue Project (A) and (B)" Harvard business case study is written by Peter Yamakawa Tsuja, Gareth H Rees, Julio Quispe Tuesta, Jose Carrion Marengo, Kenny Luis Escobar, Julio Guevara Aquije. It deals with the challenges in the field of Information Technology. The case study is 7 page(s) long and it was first published on : Mar 11, 2014
At Fern Fort University, we recommend that Pegaso Peru implement a comprehensive digital transformation strategy to address the project delays and enhance their overall operations. This strategy should focus on leveraging technology and analytics to improve project management, supply chain management, and customer relationship management. We suggest a phased approach, starting with a digital audit to identify key areas for improvement, followed by the implementation of cloud computing, data analytics, and enterprise resource planning (ERP) solutions. This will enable Pegaso Peru to achieve greater efficiency, transparency, and responsiveness, ultimately leading to improved project delivery and customer satisfaction.
2. Background
Pegaso Peru is a Peruvian company specializing in the production and distribution of high-quality, natural, and organic food products. The company faces significant challenges due to an overdue project, causing delays in product delivery and impacting customer satisfaction. These delays stem from inefficiencies in their existing information systems, lack of data-driven decision making, and limited project management capabilities.
The case study highlights the key protagonists:
- Juan Carlos 'JC' Diaz, the project manager, is responsible for overseeing the delayed project.
- Ricardo 'Ricky' Perez, the company's CEO, is concerned about the project's impact on the company's reputation and profitability.
- The team of engineers and technicians are responsible for executing the project and face challenges related to communication, coordination, and access to critical information.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Project Management, Operations Strategy, and Digital Transformation.
Project Management:
- Lack of Clear Project Scope and Timeline: The project lacks a defined scope, clear objectives, and a realistic timeline, leading to ambiguity and delays.
- Ineffective Communication and Coordination: Poor communication and coordination between team members, departments, and external stakeholders result in miscommunication, missed deadlines, and rework.
- Limited Project Management Tools and Techniques: The company relies on outdated methods and lacks robust project management tools to track progress, manage risks, and facilitate collaboration.
Operations Strategy:
- Inefficient Supply Chain Management: The company's supply chain is fragmented, with limited visibility into inventory levels, supplier performance, and logistics operations.
- Limited Data and Analytics Capabilities: The company lacks a centralized data repository and sophisticated analytics tools to make informed decisions about resource allocation, production planning, and customer demand.
- Outdated Information Systems: The company's legacy systems are not integrated, hindering real-time data access and hampering decision-making processes.
Digital Transformation:
- Opportunity for Improved Efficiency and Transparency: Implementing a digital transformation strategy can streamline operations, enhance communication, and improve data visibility across the organization.
- Leveraging Technology for Competitive Advantage: By embracing cloud computing, data analytics, and AI and machine learning, Pegaso Peru can gain a competitive edge by optimizing resource allocation, improving product quality, and enhancing customer service.
- Addressing the Challenges of Change Management: The company needs to address the potential resistance to change and develop a comprehensive change management plan to ensure successful implementation of the digital transformation strategy.
4. Recommendations
To overcome the challenges and achieve project success, Pegaso Peru should implement the following recommendations:
Phase 1: Digital Audit and Strategy Development
- Conduct a Digital Audit: A comprehensive digital audit should be conducted to assess the company's current IT infrastructure, data management practices, and existing business processes. This audit should identify key areas for improvement and define the scope of the digital transformation project.
- Develop a Digital Transformation Strategy: Based on the audit findings, Pegaso Peru should develop a clear and actionable digital transformation strategy that outlines the company's vision, objectives, and key initiatives. This strategy should align with the company's overall business goals and address specific challenges related to project management, supply chain management, and customer relationship management.
Phase 2: Technology Implementation and Integration
- Implement Cloud Computing Solutions: Transitioning to a cloud-based platform will provide Pegaso Peru with access to scalable and flexible IT resources, enabling them to improve IT management and optimize costs. Cloud solutions can also facilitate collaboration and data sharing across the organization.
- Deploy Data Analytics and Business Intelligence Tools: Investing in data analytics tools will enable Pegaso Peru to gain insights from their data, improve decision-making, and optimize operations. This includes implementing data warehousing, data visualization, and predictive analytics capabilities.
- Implement an Enterprise Resource Planning (ERP) System: An integrated ERP system will streamline business processes, improve data accuracy, and enhance visibility across the organization. This will provide real-time insights into inventory levels, production schedules, and customer orders, enabling Pegaso Peru to make informed decisions and improve project execution.
Phase 3: Change Management and Continuous Improvement
- Develop a Comprehensive Change Management Plan: The company needs to address the potential resistance to change and develop a comprehensive change management plan that includes communication, training, and support for employees. This plan should address concerns, build buy-in, and ensure a smooth transition to the new digital environment.
- Establish a Continuous Improvement Culture: Pegaso Peru should foster a culture of continuous improvement, encouraging employees to identify opportunities for process optimization, technology adoption, and data-driven decision making.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Pegaso Peru's core competencies in food production and distribution and support its mission to provide high-quality, natural, and organic products.
- External Customers and Internal Clients: The proposed digital transformation strategy will improve customer satisfaction by ensuring timely product delivery and enhancing communication. It will also improve internal client satisfaction by providing employees with better tools, resources, and information.
- Competitors: By embracing digital transformation, Pegaso Peru can gain a competitive advantage by becoming more efficient, responsive, and data-driven. This will allow them to compete effectively in the increasingly competitive food industry.
- Attractiveness ' Quantitative Measures: The implementation of cloud computing, data analytics, and ERP systems will lead to significant cost savings, improved efficiency, and increased revenue. These benefits can be quantified through metrics such as ROI, NPV, and payback period.
Assumptions:
- The company has the financial resources to invest in the proposed digital transformation project.
- The company has a dedicated team of IT professionals to oversee the implementation and integration of new technologies.
- The company has a strong commitment to change management and is willing to invest in training and support for employees.
6. Conclusion
By embracing digital transformation, Pegaso Peru can overcome the challenges of project delays, improve operational efficiency, and enhance customer satisfaction. The proposed strategy will enable the company to leverage technology and analytics to optimize its operations, gain a competitive advantage, and achieve sustainable growth in the competitive food industry.
7. Discussion
Alternatives not selected:
- Outsourcing Project Management: While outsourcing project management could provide access to specialized expertise, it may not be the most cost-effective solution for Pegaso Peru in the long term.
- Investing in a New ERP System without Cloud Computing: Implementing a new ERP system without migrating to the cloud could limit scalability and flexibility, potentially leading to future challenges.
Risks and Key Assumptions:
- Resistance to Change: The company needs to address potential resistance to change among employees and ensure effective communication and training to gain buy-in.
- Data Security and Cybersecurity: The company needs to implement robust data security measures and cybersecurity protocols to protect sensitive data and ensure compliance with industry regulations.
- Integration Challenges: Integrating new technologies with existing systems can be complex and time-consuming. The company needs to ensure seamless integration to avoid disruptions and ensure data consistency.
8. Next Steps
Timeline with Key Milestones:
- Month 1-3: Conduct a digital audit, develop a digital transformation strategy, and secure necessary resources.
- Month 3-6: Implement cloud computing solutions, deploy data analytics tools, and select an ERP system.
- Month 6-9: Begin integration of new technologies, develop a change management plan, and conduct employee training.
- Month 9-12: Complete system integration, monitor performance metrics, and refine the digital transformation strategy based on initial results.
By following these recommendations and implementing a phased approach, Pegaso Peru can successfully overcome the challenges of the overdue project, improve its overall operations, and achieve sustainable growth in the food industry.
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Case Description
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.
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