After a long period of response time failure in the application of the SAP type ERP solution, supplied to Mul-T-Lock by IBM, and following frequent computer crashes and malfunctions, Mul-T-Lock has decided to try out solutions offered by other suppliers. If the company approves them, they will replace the IBM hardware.
Mul-T-Lock so notified the Tel Aviv Stock Exchange yesterday - not without reason. "The malfunctions in the hardware supplied by IBM have caused, and continue to cause Mul-T-Lock a great deal of damage", the company reports in its notice.
SAP Enterprise Resource Planning is a computerised solution designed to link the organisation’s various systems and provide its managers with a highly powerful information and analysis tool. In theory, that is. In practise, things were different, and when Mul-T-Lock says "a great deal of damage", it means just that. The company, giant of the domestic doors market, with twenty-five branches and an overseas distribution network (a third of its sales go to export), posted NIS 85 million sales in Q1 1999, while reporting a NIS 3.6 million loss.
The exact amount of damage occasioned to the company as a result of the failed assimilation of the ERP software is not clear. Estimates mention more than NIS 12 million in current expenses, in addition to NIS 10 million invested in the acquisition of the ERP system, and its application to date. The fact that the company’s $27 million market value is significantly lower than equity ($45 million), speaks volumes as to the company’s pessimistic outlook concerning its future.
Mul-T-Lock now reports that it intends replace the system installed for it by IBM with Compaq hardware consisting of an NT operating system and an Oracle data base, to be supplied to the company by Team Computers.
Published by Israel's Business Arena June 7, 1999