Enterprise IT at Cisco - Essay Example

Teacher: Table of Contents Table of Contents Enterprise IT at Cisco (2004) 2 Introduction 2 IT Governance Styles at Different Levels 3 Problems with Cisco 4 Business Process Operating Committee’s (BPOC) Role 4 Conclusion 6 Works Cited 7 Enterprise IT at Cisco (2004) Introduction Having founded in 1984, the company Cisco was able to gain a reputed status because of hard work and efforts by the company’s workers. The company was able to generate a revenue that was commendable and because of its increasing revenue, financial status and expansion internationally, the function of technology gained value in the eyes of the administration of the company. Before the year 1993, the company gave little importance to IT and considered it an overhead (McAfee, McFarlan and Wagonfeld 3). In 1993, Peter Solvik joined Cisco and made IT the central functionality of the company. He showed interest in starting many projects for the upgrading of IT in the company. He brought many changes and supported the company in adopting IT successfully. However, when Peter Solvik left the company and Boston joined as the new CEO, there were many problems revealed with the current IT adopted by the company (McAfee, McFarlan and Wagonfeld 4). ERP was introduced by Peter Solvik in the company and was installed for handling inventory and manufacturing functions but with the passage of time, other functions was also added to the ERP system due to which, problems were there (McAfee, McFarlan and Wagonfeld 3-4). Boston after becoming the CEO identified these problems and showed interest in three main projects, which were to upgrade the ERP, to develop enterprise reporting and business information solution and to develop a single database (McAfee, McFarlan and Wagonfeld 5). This paper will discuss all the relevant details of the case in depth. IT Governance Styles at Different Levels Peter Solvik after joining Cisco changed the company’s consideration of IT as an overhead. He made sure that IT performed the role of central functionality of the company. According to his opinion, without using latest technology, the company was not able to progress. Under his governance, ERP system was implemented, which was to handle manufacturing and inventory tasks at the start. In his tenure, the company created its own internet and intranet, due to which not only the data transfer procedures were eased out but also many customers were added to the company’s profile due to which, the company was able to generate more revenue. Peter Solvik’s IT governance style was profitable and commendable for the company as it was due to this style that the company gained reputation and enhanced profits in the market. The organization was made an IT centralized organization (McAfee, McFarlan and Wagonfeld 3). At network/infrastructure level, internet and intranet were developed to control all network related functions such as sales, manufacturing and others. A website was developed with the name Cisco.com. At data level, intranet was used for data transferring while at application level, the ERP was developed to handle the manufacturing and inventory applications of the company. Problems with Cisco There were many problems with the company’s IT by 2001, which were discovered after Boston’s joining the company. Many customized tools were there to handle different functionalities for which, extra costs were paid. The investment for the customized tools was too much and information retrieval was problem. In addition, there was no central decision making for the IT functions as every department made its own decisions due to which, there were problems related to upgrading ERP system of the company as a whole. There was lack of centralized planning, which was again problematic for the company (McAfee, McFarlan and Wagonfeld 5). Many old custom interfaces were required to be put out of action in order to install a newer version of ERP, which will be problematic for the users of ERP. In addition, ERP was designed mainly to handle inventory and manufacturing functions but with passage of time, other functions such as sales, marketing and human resources were also added to it due to which, ERP system was unable to meet the needs of the other functions (McAfee, McFarlan and Wagonfeld 5). All these problems were required to be solved. Business Process Operating Committee’s (BPOC) Role In 2002, BPOC was set up by the company and its role was to ensure higher degree of centralized IT planning. It was a decision making group and its function was to “set and drive corporate priorities for the company” (McAfee, McFarlan and Wagonfeld 7). The group also made recommendations for the expenditure related to IT. It also worked as a high level advisory committee for the company (McAfee, McFarlan and Wagonfeld 7). The group enjoyed real authority because it consisted of many influential personalities of the company and was considered quite well formed in giving any kind of opinions related to decision making for company’s functions and IT operations. Projects at Cisco Boston planned to start three projects for the company, which were to upgrade the ERP, to develop enterprise reporting and business information solution and to develop a single database (McAfee, McFarlan and Wagonfeld 5). His decision to upgrade the ERP system was there because he wanted to bring improvements in the current system so that the staff did not face any problem in using the system. Also he wanted to save extra expenditure on the new system. He found faults with the old system as initially ERP was developed for some applications but after sometime, other applications were also added to it due to which, problems were created. According to Boston’s consideration, the new applications instead of ERP would be waste of time and money if infrastructure and data were not fixed properly (McAfee, McFarlan and Wagonfeld 5). Secondly, the project of enterprise reporting and business information solution was also important as it was to be there for the ease of all personnel as they would be able to use every kind of information with its support. The third project was the development of a single database that was again compulsory for the company as the data was required to be collected in a format that was similar for everyone. Due to multiple locations, the users faced problem in information retrieval so a single database was required (McAfee, McFarlan and Wagonfeld 6). Shadow IT projects were the projects that were not fully revealed to the administration of the company and they were undercover due to which, the administration of the company was unaware about them. Boston wanted to disclose those projects as he wanted to implement a centralized planning and decision system for the company due to which, all the projects should be fully known to the company’s administration. These projects were grand projects and developers were hired to handle these projects. Conclusion Cisco as an international company has gone through many phases of development. There was less importance given to IT before Peter Solvik but after his arrival, IT was made the centralized functionality of the company. Initially some applications were there on the ERP system but later on, other applications were also added. There were problems with the system such as over expenditure on customized tools, inability of ERP, problems with data retrieval and lack of centralized decision making. All these problems along with others made the company face challenges related to IT handling. Boston as the new CEO of the company brought many transformations and introduced projects that were supportive for the company’s reputation. Peter Solvik also supported the company in gaining a profitable status but after his leaving, Boston found many faults with the current operative ERP system, which were required to be solved to support the company and its functions. Works Cited McAfee, Andrew; McFarlan, F. Warren and Wagonfeld, Alison Berkley. Enterprise IT at Cisco (2004). Boston: Harvard Business School Publishing, 2007: 1-13. Read More