Managing Information Technology

654 Part IV • The Information Management System

While BAT Colombia experienced the same high fail-
ure rate with the Jornadas as Chiletabacos, they had lower
support costs. CIO Navas claimed that this arrangement
saved BAT Colombia $150,000 over 3 years compared to
working with a local vendor. Eventually HP decided to pro-
vide newer Jornadas to BAT Colombia free of charge in order
to reduce their support costs. Despite this beneficial leasing
arrangement, the handhelds were a major obstacle for
MaxFli in Colombia. Mauricio Leon described the problem:

I think that the most important challenge was the hand-

held. Because the server we [could] manage. There

were many new things in the server. Oracle was new

for the company. All the processes that MaxFli runs

were new... we understood what the process does,

and there was no problem with that. There was some

problem but they fix it. So for us, Oracle was new but it

was not a problem. We had experience in databases so

the operating system of the MaxFli was not a problem,

we knew it. We had to change the communication

links; we had to double [our bandwidth].... That was

not a problem. We put in remote access services (RAS)

in order to support some salespeople who work in very

far away small cities. So they just dial in. That was not

a problem. But the handheld has been a continuous

challenge. And we spent a lot of money in the hand-

helds. At the beginning, we had many problems with

the handhelds. A lot of problems. So I think that is the

challenge, to find a powerful device and stable device

is the main challenge.

MaxFli in Central America

The next test for MaxFli was BAT Central America

(BATCA). BATCA is as different from Chiletabacos as

BAT Colombia is similar. BATCA is unique in organiza-

tional structure, market conditions, IT capabilities, and

business processes.

BATCA operates as a “cluster market,” meaning

that the six countries of Central America (Costa Rica,

Honduras, Nicaragua, Guatemala, El Salvador, and

Panama) form a single operating unit. The markets oper-

ated independently prior to 1995. In 1995 BATCA man-

agement was centralized in San Jose, Costa Rica, and

production was centralized in Honduras. Each country

maintained independent marketing and sales operations.

By combining resources into a cluster, BATCA was able

to centralize production and create efficiencies of scale in

their operations. The larger size of the cluster allowed

BATCA to implement larger, more expensive IT systems

like MaxFli, although none of the independent countries

of Central America would have been able to.

Market Forces in Central America

Coordinating six sets of business processes in one

organization created many complications for BATCA. The

six countries of Central America share a common language

and religion but little else. Each country differs in terms of

competitive environment, taxes, regulation, currency, mar-

ket share, and business strategy. (See Exhibit 5.)

Volume (rank) Country Market Share World Bank Income Classification *

1 Nicaragua 95 % Low income, severely indebted

2 Honduras 90 % Low-middle income, moderately indebted

3 Panama 75 %

Upper-middle income, moderately

indebted

4 Costa Rica 50 % Upper-middle income, less indebted

5 Guatemala 30 % Low-middle income, less indebted

6 El Salvador 75 % Low-middle income, less indebted

*Based on the World Bank's Country Classification Table (n.d.) accessed from Web site 9/18/01:

http://www.worldbank.org/data/databytopic/CLASS.XLS.

EXHIBIT 5 Breakdown of BAT Central America by Country