Caterpillar Tunneling Corporation Harvard Case Solution & Analysis

Caterpillar Tunneling Corporation Case Study Solution

Executive Summary

The case introduces Caterpillar Tunneling Canada Company, a subsidiary of United States-based Caterpillar Inc. engaged in providing Tunneling services to its prospective clients. The company was established in 1972, under the name Lovat Inc. It specializes in providing tunneling technologies for soft ground and hard rock geographic conditions. It also provided custom design and manufacture of tunnel boring machines (TBM). Along with this, the company also offered refurbishment, technical support, spare parts fulfillment and reselling services of TBMs. The equipment manufactured by the company could be used to construct transportation and utility tunnels ranging from 2 to 12 meters in diameter. Although, being one of the world’s largest heavy equipment manufacturer, the company has still seen some significant growth since its establishment. However, it can be assessed that the company was facing tremendous problems with its IT system and infrastructure. This compromised its ability to convert raw business data into business insight, so that the management could effectively generate financial reports and evaluate the performance of the company in the market. Furthermore, it decided to upgrade its outdated ERP system with SAP, an enterprise resource planning system, to be fully implemented in Caterpillar Inc. Due to budget allocation problems,the management decided to cancel the new ERP implementation and instead deployed a business intelligence platform, locally, as an intermediary solution to make an effective business decision. However, it was assessed that the BI platform had raised the need for new ERP and IT management system, as it complemented the already troubled ERP system. Thus implementing a new ERP was important if the management was to effectively manage its IT resources.


Caterpillar Tunneling Canada Corporation was established in 1972, under the name Lovat Inc., which was later converted to Caterpillar Tunneling Canada Corporation, with its headquarters established in Toronto, Canada. The company employed a staff of 330 people, which included sales agents stationed across the world.

Which, in turn, enabled the company to expand its reach on a global scale and give its potential clients the accessibility to engage with the company through its sales agents. The company was a subsidiary of Caterpillar Inc., through which, they acquired Lovat Inc. After implementing the plan to enter into the tunnel boring business.

Lovat Inc. was later named Caterpillar Tunneling Canada Corporation. Moreover, Caterpillar Inc. was formed through the merger of Holts Manufacturing Company and C. L. Best Tractor in 1925,which, in turn, enabled them to be recognized as the world’s largest manufacturer of heavy equipment. Additionally, the company was already engaged in many other industries, which included mining, construction, forestry and agriculture.

They provided a range of diversified products to its prospective clients.More so, between the years 2005 to 2006, the company decided to transform its business through the implementation of SAP in its business model.This enabled the company to enhance its share in the market and gain a competitive edge over its competitors in the highly diverse and competitive market.


After analyzing the case, it can be determined that, the company was in dire need of an effective IT infrastructure and ERP management system. This would ensure that the management could produce timely and accurate financial reports to help them evaluate the performance of the company, compared to the budgets allocated and with respect to other organizations operating in the same market.

On the other hand, it was assessed that the company was facing significant issues due to its outdated ERP system, regarding data inconsistency, poorly defined production, business processes and ineffective reporting.  Furthermore, it was evaluated that, the company decided to implement SAP in its business model just like its parent company.

However, due to budget allocation problems, it was canceled and instead a Business Intelligence platform was implemented, locally to make effective decisions. Information technology department was not regarded as a strategic business unit in CTCC, and it provided a supportive function in the company.

Their IT manager, Simon Swiss was responsible for the supervision of global information services of its parent company in Toronto,which also supported some Caterpillar facilities outside of Toronto. This could have compromised his ability to effectively manage CTCC’s IT services and its GIS integration with the parent company, leading to inefficient IT resource allocation and management.

This could also compromise the company’s ability to convert its raw data into actionable business insight, which could then be used to make effective business decisions to increase their share and profitability in the market through increased sales. Parent company’s GIS system had exposed CTCC’s IT department to vast IT resources, which could be used to adopt stranded operating procedure that has benefited their parent company since its implementation.

The GIS system also secured the inflow and outflow of data from CTCC, attributed to its corporate firewall. But despite this, CTCC would not be able to take advantages of these opportunities, if the IT manager was preoccupied in traveling to and managing other facilities. Therefore, the management needs to consider that, the IT manager has sufficient time available to perform his duties effectively.

Furthermore, CTCC’s ERP department was small and operated under the same roof of its IT department. It was evaluated that, the ERP department consisted of two ERP analysts responsible for managing the ERP database structure queries for its custom information. Mc Ewan supervised the ERP department, due to the inability of its parent company to guide the future management of CTCC’s system.

Caterpillar Tunneling Corporation Harvard Case Solution & Analysis


Furthermore, its ERP system was not integrated with the GIS system of its parent company, as its IT counterpart. Therefore, it can be determined that the management of the company should consider the implementation of an upgraded ERP system (SAP), to mitigate the risk of ineffective allocation of data and using this data effectively to drive relevant information from them.................

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