ACKNOWLEDGEMENT

‘‘In the name of Allah most merciful and beneficent’’

“We raise in degree of rank whom so ever we pleased; and our every pressure of knowledge is one, most knowing”.

(Al-Quran)

we are very thankful to ALLAH Almighty who gave us the opportunity,

courage and confidence to explore more knowledge to complete this

project and for His (ALLAH) blessings that have brightened every part

of our life, and our parents whose prayers always supported us in

every task of our life. While working on this project, we were guided by

our experience, knowledge and interest in the subject ‘‘corporate

information system”. Beyond of all the material available I am very

thankful to my respected and honorable resource person “MR

NAUMAN ALI” for giving us such knowledge about the subject that

make ‘‘corporate information system ’’ a very motivating subject. This

become possible only due to his very unique style of teaching we ever

experienced during our academics life. And through his motivational

behavior we are able to complete this complex task.

Besides this we would like to thank our senior who showed their kind

concern toward the completion of this final project of “corporate

information system’’.

WAQAS BIN ILYAS

NOOR-UL-WADOOD FAZLI

RAZA AKBAR

SHAHZADA KAMRAN

1

EXECUTIVE SUMMARY

Today is the era of Information System and it is playing a vital role in a

good organization. It helps organizations to create a competitive

advantage with a unique feature that gain attraction of customers. It

helps to reduce time and risk factor.

This project is about analysis and development strategy of Kohinoor

Textile Mills. We analyze their current IT strategy that is use in

different functional areas. Each of these functional areas plays a role at

different levels like as operational, managerial and executive levels.

We discuss the information needs of Kohinoor at these different levels.

After analysis needs of each functional area we suggest the new idea

of new IT strategy and option that are very necessary for them to

reduce time and risk factors and create a competitive advantage and

give the suggestion to implement and manage the change for the new

IT strategy.

The system which we have proposed “ERP” will satisfy the

requirements and needs of the company. It enabled all departments to

coordinate with each other (financial, marketing, production, sales and

advertisement departments, services). By using this new proposed

system Kohinoor will gain the leadership and can over come on the

threats and weaknesses. This information system will enhance the

efficiency and quality of work of Kohinoor. The executives of the

company can easily get the information to prioritize the important

projects. This information system will provide a good coordination with

suppliers and customers.

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Problem statement

Kohinoor is already using an information system named as K-NET.

Kohinoor use its internal network K-NET to best utilize its

manufacturing resources. For this purpose production planning

and control department directly linked with marketing

department and store department. They can only see the

information available on the links of departments and receive or

send order specification manually. They use K-NET as their

financial information system to check out expenses of each

department of the factory and then set budget for each

department. But they don’t consider projects requirements when

they make decision of budgeting. Kohinoor textile mill use its

information system to meet the internal needs and they just

improve local performance. Their suppliers and customers can

not interact with them directly.

BUSINESS PURPOSE OF THE COMPANY

Mission Statement

At Kohinoor we aim to serve the needs of our customers and

build value for our stake holders by continuing to remain an

efficient and profitable company. At the same time we hope we

are creating an environment where talented and exceptional

people want to work. We are committed to providing our

employees with opportunities for personal and professional

growth that they can find nowhere else. We are dedicated to

operating our facilities with the utmost respect for the

communities and environment in which we live and work.

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Brief History

Founded in the early 1950s in Pakistan, Kohinoor is a dynamic

and efficient manufacturing company. We aim to be the preferred

partner of business in all of the markets we serve by anticipating

the needs of our customers and building value for our

stakeholders.

KTML was established in 1953 at Rawalpindi and is one of the

oldest companies of Pakistan with over 50 years experience in

textile manufacturing. It was initially set up as a spinning and

weaving project with 25,000 spindles and 600 looms. However,

after decades of aggressive expansion and modernization KTML

has emerged into a fully vertically integrated home textiles

company with state of the art capabilities for spinning, weaving,

dyeing, printing and stitching. The company has a diverse

customer base with sales in both the local and export markets.

The main international markets include Asia, Europe, USA and

Australia.

Past and present performance

When they started the business they have only spinning and

weaving project with 25,000 spindles and 600 looms. Today they

are a pioneer of the textile industry and their buyers are Levi’s,

Gap and Dockers .Kohinoor textile mills dye cloth exports account

for roughly 20% of Pakistani dye cloth exports. The Firm has been

exporting to the USA, Europe and Asian countries for many years,

and has only recently started to export to India. Last year annual

report shows the 9 month total sale is Rs4, 584,952 (in 000). And

the share price of Kohinoor textile mills is Rs30.65. the total

share holders of Kohinoor textile mill are 5,120. Kohinoor profit

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and loss account shows the export of the company increase day

by day.

Structure analysis

Management of Kohinoor Maple Leaf group

Kohinoor maple leaf group structure starts with the Tariq Sayeed

Saigol chairman of the Kohinoor Maple Leaf Group. After the

chairman Taufique Sayeed Saigol is the CEO Kohinoor Textiles

Mills (KTML). After CEO, Mr Usman Said Director of Finance for

the Kohinoor Maple Leaf Group than Sayeed Saigol is the Chief

Executive of Maple Leaf Cement. Sayeed Saigol is the Chief

Executive of Maple Leaf Cement, Waleed Saigol is the Managing

Director of Kohinoor Raiwind Mills, and Jahanara Saigol is the

Director for Corporate Strategy. Zamiruddin Azar has been

actively involved in various corporate activities of the Kohinoor

Maple Leaf group. As a non-executive director, he heads the

Internal Audit Committees of the group companies, after the top

level management director of the each department, Then GM of

all departments.

After the GM level than comes the middle level management of

each department. Then comes the managers of each department,

and then comes first line managers (foreman) and at the end of

the labors.

Strategic Vision

We at Kohinoor Maple Leaf group manufacture and market

different types of high quality of product according to the

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demanding requirement of the customer’s national and

international level. Our strategy is to be competitive in the

market through quality and efficient operation. As a responsible

member of the community, we are committed to save the

interest of all stakeholders and contribute towards the prosperity

of the country.

INFORMATION NEEDS OF THE COMPANY

Operational Needs

Employee attendance system

Kohinoor textile has used digitalized attendance system.

Employee has their own attendance card. They can used them

when they enter or exit in the factory, and their working time

automatically counted by this system. This system can help in

payroll and HRM system to evaluate the employee’s

performance.

Payroll processing

Kohinoor has a digital payroll processing system with

collaboration of union bank. Employee has a special account for

their salary and they can take their salary through ATM cards that

are issued by the organization.

Employee’s skill inventory

Kohinoor used its internal network system called K-NET to assess

their employees according to their work interest. On one side

especially first line manager directly link with employees to

evaluate the motivation and interest in work; on the other side

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HRM information system has a complete information on K-NET.

First line mangers directly put information to whom they want to

train and educate regarding in work into the K-NET.

Manufacturing resource utilization

Kohinoor use its internal network K-NET to best utilize its

manufacturing resources. For this purpose production planning

and control department directly linked with marketing

department and store department. They can only see the

information available on the links of departments and receive or

send order specification manually.

Pricing and sales analysis

Take an order and requirements of the customer and use the K-

NET system for pricing, forecasting, distribution of product. They

put information like order size, order processing time and per unit

cost, it will give best option of prices offered to customer.

Managerial Needs

Order processing

Marketing department place complete information of new orders

and accounts department obtain this information using K-NET to

make decision by using accounting techniques like job cost sheet

about order.

Financial forecasting

It’s very important for Kohinoor to forecast each its department

on semiannually or annually basis. They use K-NET as their

financial information system to check out expenses of each

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department of the factory and then set budget for each

department. But they don’t consider projects requirements when

they make decision of budgeting.

Compensation analysis

HRM department uses K-NET to keep information about every

employee of the organization regarding their benefits, salary

package current work level and job description. And use this

information when make decisions about any employee.

Inventory management

Managers can use ORACALE based K-NET system that provided

the facilities to managers to control manage and analyze the

inventory in stock, work in process and finished goods. They just

put information in the software but there is no option for other

department to update information automatically according to

their requirements.

Strategic Needs

Ratio analysis

Kohinoor accounts department use K-NET to make monthly

quarterly and annual financial reports that helps executives to

analyze how much liabilities are covered by assets. K-NET gives

only reports they calculate ratios through manual system.

Portfolio analysis

Kohinoor financial department take only reports from each

department and units of Kohinoor Textile Mills Limited and make

8

decision on the basis of their Return on Investment. K-NET cannot

provide any option that shows any alarming situation to

executives to prioritize the projects.

Personal forecasting

Kohinoor use its K-NET for personal forecasting like recruiting,

hiring, education and training, benefits management, employees’

termination and work force planning.

Advertising and promotion planning

Kohinoor marketing department use its K-NET for their internal

use and can not help them to make decision of market research

analysis and promotional planning on the basis K-NET results.

Manufacturing resource planning

Managers produce monthly reports for strategic planning of

manufacturing through K-NET. It gives only information for their

planning; there is need of software that shows the complete

requirements and best utilization of resources of orders.

APPENDIX 1 shows the structure functional area

needs.

ANALYSIS

Industry analysis

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External environment

Political environment

Political environment has a strong influence on Kohinoor textile

mills. In Pakistan no political stability, the government it self and

the laws changes day after day. Another factor Pakistan is a

Muslim country and little activity of terrorism can affect the

customer’s interest to give orders or invest in the Pakistan. The

customers feel risk in placing orders. That’s why they shift their

orders to another countries like as India, Bangladesh.

Economical factors

Due to political and economical instability, the country is

suffering in inflationary condition. This can affect the sales of the

products. The economic conditions of Pakistan have worsened

from past few years. Economical environment also influence the

Kohinoor textile mills. The increasing inflation rate can cause the

increase in per unit cost of product. That’s why other countries

have edge because stable economic policies. And they attract

customers because of low cost and same quality. Pakistan is a

developing country and unemployment is a major issue of the

country that’s why labor and material for production is costly

competitively with other countries.

Social- Culture

Social culture is changing day by day in Pakistan as well as in the

whole world. Pakistan is a developing country and Kohinoor

Textiles target market is foreign countries, the perception of

people of these countries is Pakistani’s can not adopt the health

10

or other quality standards creates a negative impact on Pakistan

made products. Life style patterns and fashion are indirectly

effect the Kohinoor but it directly affects the brands.

Technology environment

Technology is the important part for every organization for their

competitive advantage. Kohinoor textile mills use a new

technology compare as competitors. Kohinoor reduce the cost by

using new technology and make quality products. Kohinoor

technology offer a new way to communicate with consumers e.g.

banners, Customer Relationship Management (CRM), etc.

COMPETITIVE FORCES ANALYSIS

Threats of new entrance

There is always a barrier for Kohinoor Textiles if new company

enters in the market with new technology.

Threats of substitute

There is no threat of substitute because other textile mills offer

the same products.

Bargaining power of buyers

The bargaining power of buyers is very high because there are so

many textile mills that provide the same products and services,

like sapphire, Denim jeans, Nishat choonian and Gullastan.

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Bargaining power of suppliers

The bargaining power of suppliers is very low because there are

so many suppliers are available in the market to take raw

material for production and other equipment.

Competitive intensity

The competitive intensity is very high because there are so many

competitors are in the market like sapphire, Denim jeans, Nashat

choonian and Gullastan.

Opportunities and Threats

Kohinoor have its own energy setup for their textile mills. Also

they provide electricity to WAPDA. Kohinoor avail the opportunity

of getting orders of Levis top brands banana republic and meet

the needs of their standers.

Kohinoor had a threat from international market like India,

Bangladesh and Srilanka. The textile industry of these countries

have a edge of low labor and material cost, and flexible

Government policies that’s why they offered low prices for the

same products.

COMPANY ANALYSIS

Strengths and Weaknesses

Kohinoor use latest technology with respect to their competitors.

And have a qualified staff. Kohinoor have strength to take big

orders from the top brands all around the world. With the

increase of their production level Kohinoor Energy can not meet

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the needs of Kohinoor Textile mills. They have no expert system

to make effective decision in difficult situations

Environmental factors

Strategic Grid Matrix

Kohinoor textile mill use its information system to meet the

internal needs and they just improve local performance. Their

suppliers and customers can not interact with them directly. This

situation shows the use IT and their each functional level. But IT

has a low impact on strategic decision making

Value Chain Analysis

The value chain analysis is a systematic approach to examine the

development of competitor advantage. This chain comprises of a

series of activities that create and build value. The organization is

divided into primary activities and support activities. The value

chain analysis of Kohinoor Textile Mills is as follows.

Primary activities

SuppliersSuppliers Organization

Marketing departmentOther departmentsEmployees

OrganizationMarketing departmentOther departmentsEmployees

SuppliersSuppliers

Economic Macroeconomic conditions

Consumer income

Economic Macroeconomic conditions

Consumer income

Technological Changing technology Technology impact on customer value

Technological Changing technology Technology impact on customer value

Competitive Alternative forms of competitionComponents of competition

Competitive Alternative forms of competitionComponents of competition

SocialDemographics shifts

Culture changes

SocialDemographics shifts

Culture changes

Regulatory Laws protecting competitionLaws affecting marketing mixSelf regulation

Regulatory Laws protecting competitionLaws affecting marketing mixSelf regulation

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Inbound logistic

They purchase a raw material from different sites of the country.

The store department checks inventory level through K- Net to

determine how much raw material is required for production.

Kohinoor suppliers have no online ordering system that’s why

Kohinoor use telecommunication for placing orders. Kohinoor

textile mills have own a few number of truck. If they purchase a

raw material in huge capacity then they used the rental good

transport.

Operations

The development operations of Kohinoor are carried out in a

systematic manner. Initially the customer’s requirements are

received at Kohinoor and a contract is made with the customer

through marketing department. The production planning and

control (PPC) team makes a comprehensive plan that includes

cost & time estimation, resource allocation and risk analysis.

After the approval of this plan, the production is started

Quality assurance activities are performed before delivering the

product to the customer.

Outbound Logistics

After complete the production, finished goods are transferred to

store department or directly to the customer. Complete

information of finished goods is available at K-NET and

assessable by each department of the organization.

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Marketing and Sales

However, in the growing market where competition has increased

the importance of marketing has also increased. So Kohinoor

textiles market its products and take orders mostly from foreign

countries by participating in the national exhibition of these

countries. And also advertise their products through internet and

take orders.

Services

After sale services are clearly defined at the time when Kohinoor

take orders from the customers. If after sale services are decided

at that time than Kohinoor provide these services other wise

Kohinoor is not liable for any loss or damage of the product. The

customers and the agreements clear that the organization is

liable

Supporting activities

Procurement is very important at Kohinoor because customers

want product delivery at decided time, if the order is late due to

procurement than it is necessary to courier it through air that is

very costly for the organization. It must be purchased as possible

as low price with high quality. Technology is important source of

competitive advantage. Kohinoor use latest technology in the

operations of each department. They use intranet called K-NET

with in the organization and it cover all the areas of the

organization. Human resource management is one of the main

supporting activities in any organization. Human resource

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management system at Kohinoor is very sound and they have

complete information about their employees and have

compensation and benefit policies.

DEVELOPING THE IT STRATEGY AND OPTIONS

(Proposing system)

Kohinoor use the IT in the functional areas of Production,

Marketing, HRM, Finance and Accounts department. They use

Oracle base application called K-Net that links each department

with another. But they have some limitation with this K-Net

software.

We develop a new strategy for them by adding more value in this

existing strategy.

In Kohinoor textile mill actual work start from the marketing

department and marketing department use K-Net for their

internal use at operational level for pricing and sale analysis, if

they develop another application that is assessable by the

customers and this application shows a variety of options and

customers are able to choose the best option and place orders

according their own requirements. They just put data and analyze

their self is it beneficial for them or not with respect to other

organization. These options helps to Kohinoor for new product

development, and the web hosting that helps Kohinoor textile

mills for product location analysis and to choose their target

customers.

Behind the marketing department production planning and

control department, also require Application that helps them how

much inventory they require for production for orders and best

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utilization of resources that minimize the risk of time and

wastage of resources. Also guide them for cost and quality

tracking, customer’s problems and services tracking. It helps to

reduce the production time and give accurate result.

There is another area for improvement is to directly link

Production department link with store department through IT. In

the existing system they can only see the inventory in store

department. When they receive a new order then they tells more

material or inventory. If marketing production and store

department are directly links together through Application that

automatically determines how much raw material is required

when order is placed by customer and automatically check the

inventory level if it is not sufficient for production of order then

generates a report of items that are not available in the inventory

for production. It helps production department to make the

products with in the time limit.

Another functional area is Finance department. Its role is very

important when marketing department accepts the orders from

customers. Kohinoor textile mills use its K-Net only for cash

management and can not use in financial forecasting and

portfolio management at the time when they take orders. There

is gap between time of taking orders and start working. Here is

need of application just help them to determine how much capital

is required for each department for specific order from customer

and automatically manage the cash for all departments.

Specifically it helps to managers to set budget for each

department at the time when they take orders from the

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customers. And help full for executives which type of order is

more feasible for them or not. And which order they prefer.

Kohinoor textile mills used its K- Net at account department for

payroll processing and orders processing but they need ratio

analysis system at executive level. This application is very simple

but gives very accurate results, which are very valuables for

decision making.

The other strategy is very important for Kohinoor textile mill is

Customer Relation Management because Kohinoor have a strong

competition at national and international level. Customer relation

management is a very important for Kohinoor to create a strong

relation with their customers and also helps the marketing

department to search the new markets, customers and helpful for

new product development.

In true meaning of IT strategy for Kohinoor textile mills is that,

they need enterprise recourse planning software. It attempts

to integrate all departments and functions across Kohinoor textile

mills onto a single computer system that can serve all those

different departments particulars needs. It takes a customers

orders at marketing departments and check the information

necessary to complete the orders, (customers credits rating and

order history from the finance department, the company

inventory levels from the warehouse module, production capacity

from production planning and control department, and then the

shipping trucking schedule from the logistic module.

COMPETITIVE ANALYSIS OF THE ALTERNATIVE AND

OPTION

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We develop the IT strategy of Kohinoor textile mills according to

their functional areas and it is necessary for each department to

create links within departments. And the options describe in the

above section are an addition in the existing system and is very

important for the organization.

Enterprise resource planning is flexible enough that they install

some modules without buying the whole package. ERP is very

simple and efficient way to control and manage each department

comparatively implemented the information system separately in

the each department.

In ERP finance did its job, the where house did its job marketing

and production and planning department did there jobs. It started

with the customers credits rating from the finance department,

and then check product inventory level from the where house.

And examine will the customers pay on time, will they able to

ship the orders on time? These types of decision are helpful for

customer’s services representatives. Different departments see

all the information and can up date it. When one department

finishes the order, it is automatically routed via the ERP system

to the next department. Each department uses the same

software and solves the problems related to their departments.

ERP helps the marketing department to integrate customers

order information. It tells where the order lives from the time

customer’s services representative receive it until the loading

dock ships the merchandise and finance sends an invoice. It

keeps track of orders more easily and coordinate manufacturing,

inventory and shipping among many different locations at the

same time.

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It also boosts up manufacturing process. ERP system came with

standers methods for automating some of the steps of a

manufacturing process. By using a single integrated. Computer

systems can save time and increase productivity. It can lead to

reduce the inventories of the material used in production and it

can better plan deliveries to the customers.

Customer Relation Management

Comparatively a customer’s relation management is best way of

competitive advantage and Kohinoor has a strong competition at

national and international level. The use of Customer Relation

Management software helps to make a strong relation with

customers and their satisfaction through their feedback at

Kohinoor Textiles. It a part of enterprises resource planning that

handle the up front selling process.

STRATEGIC IMPLEMENTATION AND CONTROL

MECHANISMS (AN ACTION PLAN)

Tactical plan

Kohinoor textile mill tactical plan are implemented in its each

functional area. Tactical plans at production and operation are to

manage and control the inventory level of production, cost and

quality tracking material and resource planning at least for three

month. System used for market research and analysis, product

location analysis and promoting advertisements in these specific

locations. System use for recruiting, hiring, employee training

and benefit management according to the organizational needs.

System use for managing, controlling and auditing the

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customer’s credit rating and budgeting of future six months for

each department.

Operational Plans

Operational plans are managing day-to-day operations. It means

the best utilizations of manufacturing resources at production

module daily analysis of the sale and pricing at marketing

departments, managing employee skills inventory and their

attitude at work, their personal requirements, allocations and

management of cash in each departments and the payroll

processing system at accounting and finance department.

Portfolio Management

Enterprise Resource Planning software activity manages the

portfolio of the Kohinoor Textile. It is very critical situation for

Kohinoor Textile to drop a project or order in the middle stage.

ERP helps them when they make a deal with customers, it check

the customers past history and credit rating and on the other side

check; will they have production capacity to meet the needs and

the standers of the customers, and will they be able to ship the

order on time? Will the order beneficial for them or not? All this

information helps to make a decision, which project or order is

reliable and beneficial for them. When working starts ERP involve

in monitoring projects at frequent interval by making monthly

reports, and the general managers get these monthly financial

and work process report from their departments and then

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analyze the project status, and make a decision to prioritize their

projects to satisfy their customer needs and create a competitive

edge among the competitors.

Change Management

It is too hard to manage the change in any organization, but now

its era of information system and it is necessary for every

organization to change themselves according to the new

standers, and IT is playing an important role for competitive

advantage.

The Kohinoor Textile Mills is an old and popular organization in

the textile industry they use the latest technology and have an

educated staff. The implementation of a new information system

is not a big problem for them but they need training for their

employees for accurate use of this software.

To manage the change the training of employees who uses this

new system is must. During the implementation of this system

minimum two software engineers are necessary for each

department who guide employees for the accurate use of new

system.

Requirements for Enterprise Resource Planner

(Hardware and Software)

Hardware Requirements Server Coaxial cable LAN Cards

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Hard discs Combo drives Hubs Monitors RAM 1GB UPS speakers Printers Scanners Key board Mouse Modem

Software Requirements

Operating system (Windows XP professional 2006) Internet explorer 6.1 or higher Oracle

Budget

Hardware components UnitsCost/unit

(RS.)Cost(RS )

Server 1 25000 25000

Scanner 1 4000 4000

MonitorLG 505G 17” 1 6000 6000

Hard disk1 4500 4500

RAM 1 GB 1 2000 2000

Combo drive 1 2500 2500

PrinterHp LaserJet 1015

1 7000 7000

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Coaxial cable100 feet

45/ foot 4500

Keyboard 1 200 200

Mouse 1 100 100

UPS 1 5500 5500

Modem 56K

1 1500 1500

LAN card 1 1200 1200

Speakers56K

1 2600 2600

Total RS 66,600

Software

Software Components Units Cost/unit RS

Cost RS

Oracle 1 3000 3000

Window XP Advance Server

1 3500 3500

Internet Explorer 6.1 1 500 500

Total RS.7000

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CONCLUSION

Kohinoor used its information system software K-Net to improve

their local performance. It just helps them to gain and maintain

information at each functional area.

Each department only sees the information of other departments

but can not integrate with others departments through K-Net

software. That’s why every month they ship their 2 or 3 orders

through air, which is very costly for them. It is because of the

time management and it increases the risk factors.

If Kohinoor textile mills use the enterprise resource planning

software, then it helps them to combine all functional are

together into a single integrated software program that runs of a

single database. So that the various departments can more easily

share information and communicate with each other. It also helps

to prioritize the project and also play a role to handle the upfront

selling process.

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Post mortem:

In this project of corporate information system we have learned a lot

about the needs and requirements of the corporate sector in latest

technology and competitive edge. The course was so much beneficial

for us to build our concepts in regards of corporate information system.

The project was a very nice experience for us all because it showed us

how to respond the trend of latest technology being adopted these

days in the corporate sector in Pakistan. Last and not the least, we are

updated about information system, after learning this subject and after

doing this project of Kohinoor limited.

REFRENCES

www.kmlg.com

www.lse.com

www.google.com

BOOK: information systems today

By Leonard Jessup

Joseph valacich

26

APPENDIX 1