Cisco Systems and Growth Tools - Essay Example

? (Assignment) Business: Case Study Peter Solvik was the Chief Information Officer (CIO) at Cisco Systems for the period 1993-2001. He gave greater emphasis on a decentralized IT organization. Solvik reallocated major part of the IT budget among various departments with intent to authorize each section to deal with specific IT operations. He did not like to cluster together all IT spending under general and administration expenses. Solvik also brought considerable changes into the reporting relationship of department also, by which he transferred IT organization out of finance group and into the customer advocacy group. In addition, he terminated a central IT steering committee and replaced it with another new structure that pushed IT investment decisions to the line organizations. However, these operations were coordinated by the centralized IT organization. A web based service system (Cisco.com) was the primary style in use at the network level so as to spread company’s operations all across the globe. At the data level, the company employed a client-funded-project (CFP) system. This system mainly strengthened each function to control its own IT budgets. The company’s IT department enabled easy integration with acquired business organizations. To conclude, Cisco spent whatever needed on IT aiming at the operational efficiency of the organization. 2. Cisco faced many difficulties with its internal IT by 2001. The September 11 terrorist attacks and resultant internet bubble burst greatly added to the technology failure in Cisco. Lack of common order-status tool was the man issue that caused severe issues with Cisco’s internal IT. Although, the company had nine different order-status tools at the end of 2001, none of them were providing the desired outcomes. Therefore, the company pumped more and more money toward the development of such customized tools. However, it was necessary to have some efficient customized tools so as to instantaneously check the order-status while interacting with the customers. Therefore, each company business leader separately paid to get some efficient tools that looked up data about customer orders. “As a result, each of the tools pulled data from different sources that used different definitions for key terms” (Mac Fee et al, 4). This situation caused some confusion in the organization since the multiple databases created conflicts in order-status reports. It was also observed that IT decisions were made without practicing centralized group checking for conflicts and redundancies. Similarly, lack of centralized planning was another major problem that had intensified Cisco’s internal IT difficulties. In the case of ERP system also, many groups had built specialized tools. Hence, the Cisco faced many difficulties to upgrade a newer version of the ERP system as it necessitated the disablement of a number of custom interfaces. As a result, the ERP system did not help more in this situation. 3. The Business Process Operating Committee (BPOC) was a cross functional decision making group established by Cisco in late 2002. This committee included major persons at the helm of affairs of the Cisco. The major objective of this group was to set and drive corporate priorities for the company. The BPOC management team mainly focused on its enterprise-wide productivity. As stated in the given case (7), so as to facilitate this function, the BPOC’s leadership dealt with formulation of key operational policy decisions, alignment of similar initiatives across the company, development of Cisco’s corporate business process framework, and enforcement of decisions with attention to execution and accountability. It must be noted that the BPOC was not established for funding the economic operations of Cisco. On the other hand, its main intention was to provide effective recommendations for the Cisco’s management regarding the company’s IT spending. The BPOC had a precise authority over the company operations since it dealt with projects that were associated with the entire company. This group constituted different functional supervisors who met twice a month and tackled with different organizational issues that cut across all divisions. 4. In mid 2003, Boston selected and completed three larger enterprise projects that he had prioritized. During the period, the company was struggling with less profitability resulted from lack of IT sector organization. He believed that the outcomes of the projects would enable the company to take advantages of the updated systems architecture and it might add to the economic goals of Cisco. Since the Cisco had struggled with unintegrated IT functions, they faced large difficulties in exploring a potential market. Boston conceptualized that an efficient IT network would assist the organization to discover a market where they could find adequate potential customers. As discussed earlier, prior to the implementation of three big projects, the company’s IT group was further subcategorized, which led to a situation of fund fragmentation. In order to restructure the company in a global context, Boston wanted to reorganize the regional orientation of the firm. Similarly, the company’s position in United States was not satisfactory that time since it could not meet consistency in its operations. He assumed that the three big project and thereby proposed changes would adequately contribute to these strategic reorganizations. The proper distribution of engineers at different organizational levels was also a key objective that had been added to the selection of these three big projects. 5. Boston and BPOC address three governance focus areas such as strategic alignment, value delivery, and resource management. Strategic alignment refers to linking business with IT in order to take advantages of improved communication and customer service. So as to identify the degree of coincidence of business and IT, he assessed the extent to which the customers are well served. Although, it was difficult to change the existing system immediately, Boston’s thoughtful actions could assist the company to implement these modifications effectively. The value delivery process ensured that the IT department could provide the promised benefits to every project or investment. So as to accomplish this goal, he brought considerable changes in the distribution structure of engineers. He inspected the implemented projects directly so that he could evaluate its degree of effectiveness. He also made management level arrangements for getting up-to-date information regarding the IT department and its services to projects or investments. He restructured the decentralized IT operations and fragmented funding with intent to perform the resource management more effectively. He completed three big projects in order to conduct this amalgamation process successfully. Boston took adequate preventive measures to save the company from the adverse impacts associated with the organization’s structural change. 6. Over the past several years, it is observed that the Cisco had too much depended on contractors for acquiring effective growth tools. This increased dependence on contractors made a considerable rise in company’s number of IT contractors and IT employees by the end of 2003. However, they were referred to as a Shadow IT department since they could not manage their activities adequately. Since these contractors were not familiar with the company affairs, they could not comply with the company directives that had set for the employees and other managerial professionals. Even after the implementation of the restructuring process, employees had to communicate with middle level managers. Since the Cisco is a global company, it was very difficult to apply the organizational changes as it required more solid foundation. Although, the implemented project assisted the organization to pool large volume of funds, the management faced difficulties to deal with managers’ individual project needs. The implementation of new program and thereby increased emphasis on the process and productivity adversely affected the entrepreneurial nature of the company; and in addition, some were skeptical of the effectiveness of the proposed programs. Works Cited Mac A Fee, Andrew., Mac Farlan, F Warren and Wagonfeld, Alison, Berkley. Enterprise IT at Cisco (2004). Harvard Business School. Read More