Cisco Systems: Implementing Customized ERP in Nine Months and within Budget - Case Study Example

The case starts with explaining problems at Cisco – information systems are failing, yet Cisco is initially reluctant to implement ERP (until the eventual failure of systems for 2 days). Why weren't they keen on an ERP project initially? The direct reason behind Cisco’s reluctance toward establishing a novel ERP system in the company had two focal points. Number one, the company was not willing to replace its legacy systems in one go possibly because of a potential down time for at least a few days.

Number two, the top IT managers in the organization were reflecting on the possibilities of cost overruns. The combined result of these two aspects of Cisco’s vision over its enterprise resources resulted into decentralization of the different IT maintenance issues. Each and every department had the autonomy of selecting its software solution as per its discretion. This culture on the part of the different departments in the company to “make its own decision” (Datta 57) regarding software upgrade and maintenances culminated at chronic loss of synchronicity.

However, mere the IT policy of the organization was not responsible for this situation. The very philosophy of the company’s working style depended on a centralized administrative structure. This centralized administrative structure of the company had been established by CEO Morgridge, who led Cisco through the early 1990s. It should be mentioned here that under the auspices of a centralized management paradigm, the underlying IT policies went contradictory. Due to great emphasis on the company’s core operations, the IT department simply ignored the fact that the company’s internal software management infrastructure was required to be integrated along the lines of the main managerial philosophy of centralization.

This did not happen, and each department of the organization continued its software management and updating policies almost independently. 2. ERP was a great success at Cisco. What are the factors for this success? In your opinion, what were the important things that Cisco did correctly? The most important factor behind Cisco’s successful ERP implementation was the practical and realistic work culture of the top managers. In January 1994, the company encountered a system failure and could not function normally for almost two days.

This problem could have been shown as a temporary downtime or something very unusual and most unlikely to happen in future. But the top managers took the issues very seriously and acknowledged that the contemporary legacy systems could not be depended on anymore. The process of systems reorganization began when the managers acknowledged that a singular ERP solution was necessary which would provide the company with a common database architecture and management system. This would set the standards and parameters of the organization’s software systems on a common platform across the various departments of the company.

Cisco selected an Oracle based ERP system. Now, the whole concentration could be focused around software deployment and related functions. However, the company correctly adopted a balanced approach. Along with the deployment of a vast ERP project infrastructure, the company also took care of its hardware requirements. As such, additional and quality hardware products were purchased whenever required. Moreover, the managers stressed the importance of stabilization. Hence, real-time testing and troubleshooting continued for several months during the ERP deployment project.

Last but not least, Cisco applied a correct theoretical approach too. Instead of total dependence on the technology vendors and the support engineers, the company identified its ERP project as an example of “business process reengineering” (Datta 65) and emphasized the need of continuous monitoring, staff training, and expert consultation. 3. Do you consider Cisco to be smart or lucky with its ERP implementation? Provide examples to support your arguments. Further, did Cisco do anything wrong on this project?

Provide details. Although Cisco took a number of intelligent and smart decisions while initiating its large-scale ERP project, it took an unnecessary risk as well. It decided to implement a single ERP solution and bought all the major ERP components from a single provider. This was not wise. If a system that is being run with the help of a singular vendor technology is damaged even by chance, there are no alternative mechanisms available. Also, there are serious safety concerns if only one database architecture and management system is implemented throughout an organization.

However, Cisco predominantly depended on Oracle technologies; and the company was lucky enough because no intrusion or major failure took place in the initial stages of the project. Another point of luck was that most project tasks did not take more time than expected. For example, Cisco had dubbed the task of process engineering as a “short term project” (Datta 60), and this tactic was aimed to prevent any frustration among the career-oriented engineers. The company was lucky because there were no significant number of schedule overruns.

The biggest fault that Cisco did was a direct miscalculation of its transaction volumes. The hardware architecture of the new ERP system was incoherent. This lack of smooth operability arose due to a wrong testing paradigm. During trial runs, Cisco tested the new ERP solution part by part. However, significant numbers of trial run were not utilized to check whether or not the database architecture was workable under full load. Therefore, when the ERP system was put to work, tremendous instability took place.

However, the company had deployed highly skilled technicians who overcame the repercussions of this fault. Work Cited Datta, Avimanyu. “Cisco Systems: Implementing customized ERP in nine months and within budget.” Journal of Cases on Information Technology 11.2 (2009): 56-70