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BWRR3093 / Group A / Case Study 1

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Introduction
Engro Chemicals Pakistan Limited (Engro) was a very large manufacturer and marketer of fertilizer in Pakistan. The company was listed on the Karachi Stock Exchange (KSE) and was among the top companies as ranked by the KSE. Engro Pakistan limited had been corporate in 1965 as Esso fertilizer Pakistan company ltd. The core business of Engro was the manufacturing and marketing of the fertilizer and it was a second largest of urea in the country which produced at the plant site in Daharki. During 2007, Engros business grew rapidly. The principle business of the company remained in the manufacturing and marketing of fertilizers.

Its joint ventures and subsidiary companies were engage in a variety of business such as chemicals and terminal storage, PVC resin manufacturing and marketing, control and automation, foods and energy business. Currently Engro Corporations portfolio consists of seven businesses which include chemical fertilizers, PVC resin, a bulk liquid chemical terminal, industrial automation, foods, power generation and commodity trade.

Besides providing the long term vision for the company and overseeing performance of the subsidiaries and affiliates, Engro Corporation Limited is also responsible for allocation of capital, management of talent, leadership development, HR guiding policies, leadership role in public relations and CSR activities, control structures, legal and IT support. From its inception as Esso Pakistan Fertilizer Limited in 1965 to Engro Corporation Limited in 2010, Engro has come a long way and will continue working towards its vision of becoming a premier Pakistani company with a global reach.

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However, a critical item on the agenda was that on 19, 2007 which is the fire was happen to PNSC building and damage to a lot of property and equipment. Due to this situation, Engro encounter many consequential losses.

2.0 The risk faced by Engro Chemical Pakistan Limited


The risk Engro Chemical Pakistan Limited faces is pure risk whereby a fire occurred on August 19, 2007 and burnt down the PNSC building, where the head office of Engro located. Under pure risk, Engro faces property risk whereby persons owning property are exposed to the risk of having their property damaged or lost from numerous causes. In property risk, a building or other real estate can be damaged or destroyed because of fire, tornado, windstorm and more.

Thus, in this case, the property which is owned by the Engro Pakistan limited was destroyed by fire. Many documents had been destroyed such as hard copy records relating to financial year 2004/2005 and 2005/2006 as well as 2007. Due to this case, the Engro chemical Pakistan limited company unable to publish annual financial report.

Many properties that had been destroyed due to the fire that had spread quickly including all desktop computer and high performance servers that contained daily business transaction data. The daily backup also was destroyed as it was kept in the head office building.

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3.0 Purpose of Disaster Recovery Plan and Features


The main purpose of disaster recovery plan is to reduce the overall risk to the company and minimize downtime and data loss. It is also to maintain the minimum level of service while restoring the organization to business as usual. Besides, it is also to provide step-by-step procedures for recovering disrupted systems and networks, and help the organization resume business as normal. Provide for smooth and rapid restoration of service is also one of the purpose of disaster recovering plan.

This plan is actually depending on variables such as the type of business, the processes involved, and the level of security needed. Disaster recovery planning may be developed within an organization or purchased as a software application or a service. There are three basic strategies that encompass a disaster recovery plan which is preventive measures, detective measures, and corrective measures.

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Preventive measures will try to prevent a disaster from occurring. These measures seek to identify and reduce risks. They are designed to mitigate or prevent an event from happening. These measures may include keeping data backed up and off site, using surge protectors, installing generators and conducting routine inspections.

Detective measures are taken to discover the presence of any unwanted events within the IT infrastructure. Their aim is to uncover new potential threats. They may detect or uncover unwanted events. These measures include installing fire alarms, using up-to-date antivirus software, holding employee training sessions, and installing server and network monitoring software. Corrective measures are aimed to restore a system after a disaster or otherwise unwanted event takes place. These measures focus on fixing or restoring the systems after a disaster.

4.0 Critical Thinking


The systems were not integrated and this made it simpler for Engro to recover from the disaster: does this negate the concept of enterprise resource planning? Why in your opinion did Engro deviate from DRP?

The fire that occur in Karachi and destroyed all the Engros equipment and the hardcopies of their accounting record, had allowed the information technology (IT) department in Engro to develop a disaster recovery plan (DRP) that was exclusively related to reestablishing the IT facilities after that unexpected event occur. The company invoked the DRP as soon as the news of the complete destruction of the office facilities was received. The IT and finance staff had to use the backup equipment and data files to
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restart the transaction processing. In accordance to the development of the DRP, various business systems has been used by Engro and the data security processes enabled the company to restore the accounting and other systems needed at its head office.

The three reinstalled system that was used, MIDAS, MAXIMO and SAP, were not fully integrated and it allowed Engro to encounter a speedy recover than if all the systems had been integrated. This has definitely negated the concept of enterprise resource planning. Enterprise resource planning (ERP) is business management software that allows an organization to use a system of integrated applications to manage the business. ERP software integrates all facades of an operation, including development, manufacturing, sales and marketing. Besides, it is also systems that integrate internal and external management information across an entire organization to facilitate the flow of information between all business functions. In contradict to this, Engro doesnt uses the system that integrate with each other. However, Engro only focus on those three systems that allowed them to reestablished electronic links, e-mail and internet in the Bahria building.

This implementation had definitely deviated the original purpose of DRP. As we know, a disaster recovery plan (DRP) is a documented process or set of procedures to recover and protect a business IT infrastructure in the event of a disaster or man-made disasters. In order to make sure the DRP is implanted correctly, it should involves more than off-site storage or backup processing.

Engro should also develop written, comprehensive disaster recovery plans that address all the critical operations and functions of the business. The plan should include documented and tested procedures, which, if followed, will ensure the ongoing availability of critical resources and continuity of operations. Instead, Engro complains that the process of generating document records was too tedious and time consuming as
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they only needed the current years data in order to complete their financial statement, thus they decided to skip on this step. Moreover, Engro feel that there is no need to consume high cost in regenerating the physical document when the data will be safer in electronic form.

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5.0 Evaluation of the overall plan and Implementation.


Engro launched its Disaster Recovery Plan (DPR) due to the fire that broke out in PNSC building, Karachi, where the head office and registered office of the office was located. The company launched an initiative to recreate significant loss records and was successful in gathering the same in respect of the current reported financial year. Engro uses corrective measure disaster plan to overcome their problem. Corrective measures are aimed to restore a system after a disaster or unwanted event takes place. These measures focus on fixing or restoring the systems after a disaster. Corrective measures may include keeping critical documents in the Disaster Recovery Plan.

In order for Engro to restore back their lost record for the period of 1 st January 2007 onwards, they use these three systems which is the SAP, MIDAS and MAXIMO. At first they decide to run the server with a SAP Setup. SAP was used by the finance and human resource sections at the head office and by the Industrial Relations Department at the plant to facilitate their operation needs. With this solution, Engro can use the integrated backup service to make sure their files can be recovered in the event of fire or any other disaster. Employees in Engro can automatically install the operating systems on servers easily.

Meanwhile, MAXIMO, a computerized maintenance management software system used by a various organization and was installed at the Engro plant. Setup was done to keep a detailed record of the companys assets, controlled the use of the stores and spares inventories and assists in purchasing function. Despite those two system, MIDAS was an in-house application developed using Oracle Developer, linking to the back-end Oracle database. This setup uses two servers in the head office which is application server and database server. The head officers accessed the database server
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through the Oracle client directly while other users accessed MIDAS through application server via internet. Once those systems has been implied, one leading public accounting firm was hired in order to provide temporary staff who have more than 5 years experiences in this field. The staff was asked to reconciling duplicate invoices that they receive from various vendors. Once the veracity had been checked, the information will be passed to the Engro employees for entry into the SAP modules. Not only have that, the payment recorded for the lost data were obtained from the bank and after going through a thorough check up, the payment were entered into that system. Following are the Disaster Recovering steps that Engro encountered in order to restore back all the loss data. 1. Obtain Top Management Commitment Top management must support and be involved in the development of the disaster recovery planning process. Management should be responsible for coordinating the disaster recovery plan and ensuring its effectiveness within the organization. The committee members were scheduled in Exhibit 3. 2. Establish a planning committee A planning committee should be appointed to oversee the development and implementation of the plan. The planning committee should include representatives from all functional areas of the organization. Key committee members should include the operations manager and the data processing manager. There were 2 IT authorization involved in this plan which is the Chief Executive Officer of Engro and Engros GM Finance and IT. 3. Perform a risk assessment The planning committee should prepare a risk analysis and business impact analysis that includes a range of possible disasters, including natural, technical and human threats. Each functional area of the organization should be analyzed to determine the potential
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consequence and impact associated with several disaster scenarios. The risk assessment process should also evaluate the safety of critical documents and vital records. After the incident occur, a major review of the financial and operating risk facing the company was undertaken by the management committee. 4. Establish priorities for processing and operations The critical needs of each department within the organization should be carefully evaluated whereby the management decided that they only need to recover the current years data as it was necessary for the years audit. 5. Determine Recovery Strategies The most practical alternatives for processing in case of a disaster should be researched and evaluated. As in exhibit 6, three recoveries have been taken place which is the IT recovery, MIDAS recovery and the SAP recovery. 6. Approve the plan Once the disaster recovery plan has been planned and tested, the plan should be approved by top management.

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6.0 Conclusion
The world is changing and organizations need to prepare for natural or manmade disasters that could disrupt business processes. Based on the Engro Chemical Pakistan limited, Mohammed assessed the situation and started writing his report for the meeting. It began all computers and the data on them in the head office was destroyed and the company has had to rely on backup copies of the data.

The organization should always prepare and always take and follow the steps to avoid risk or reduce the severity of risk. The personnel from each committee of the business unit also should be included as members of the team and part of all disaster recovery planning activities. These people need to understand the business processes, technology behind those processes, networks, and systems in order to create the disaster recovery plan.

After gone through the Disaster Recovery Plan, Engro can manage the IT infrastructure more effectively. If there is any similar incident occurs again, Engro could handle it wisely. Among the benefits that are faced by Engro are:a) IT management is simpler b) Disaster recovery is faster c) Troubleshooting is easier d) Less user training is required e) Downtime is reduced f) Expensive consultants are not required.
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Contents
1.0Introduction........................................................................................................... 1 2.0 The risk faced by Engro Chemical Pakistan Limited.............................................2 3.0 Purpose of Disaster Recovery Plan and Features.................................................3 4.0 Critical Thinking.................................................................................................... 4 5.0 Evaluation of the overall plan and Implementation..............................................7 6.0 Conclusion.......................................................................................................... 10 Contents................................................................................................................... 11

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