Approaches to IT Governance - Case Study Example

Cisco Table of Contents Pete Solviks Approach to IT Governance 3 Primary Governance Styles Used at the Network Level, Data Level and Application Level 3 What problems did Cisco have with its internal IT by 2001? Why didnt the ERP system help more? 4 What is BPOCs role? How much real authority does it have? 5 Why did Boston select the three big projects that he did? 5 Boston’s Approach to IT Governance 7 Which of the five areas focus of IT governance was addressed by Boston and BPOC? 7 Issues related to "Shadow IT" at Cisco 8 Reference 9 Bibliography 9 Pete Solviks Approach to IT Governance It was in the year of 1993 when Peter Solvik connected himself with CISCO. After he joined, he altered many things in the organization. The finance department and the IT department were separated and the IT department was put into the customer advocacy group that helped the departments to improve the reporting relationships. Secondly reallocation of the budget was done so that the departments have proper control in the money rather then locating budget in a clustered way with the general and administrative expenses. He separated the IT steering committee that was centralized and restored it with such arrangement which enabled the investment decisions to be pushed out to the line organizations. Primary Governance Styles Used at the Network Level, Data Level and Application Level Customer interaction network was established at the network level that would be using Cisco’s technology to route and to escalate calls in an effective manner. This was demanded by the customer advocacy group. Moreover, intranet network was established by Mr. Solvik for the employees and for the customers, Cisco.com was established which was a comprehensive Web-based online resources. The governance style that was used at the data level can be pinpointed from the fact that Mr. Boston stressed on the administration for the data that existed and stopped all the small projects. In order to enhance the customer database, Boston took three projects that were big enough. Solvik introduced the concept of Enterprise Resource Planning system so as to manage the manufacturing process as well as inventories at Cisco. Later the ERP was upgraded in order to coordinate the functional units by Boston. What problems did Cisco have with its internal IT by 2001? Why didnt the ERP system help more? The end of the year i.e. 2001 was the turning point for the Cisco as the sales growth slowed down in an increasing rate. The burst of internet bubble was another problem for the company. Moreover the terrorist attack of September 11 represented to be another major threat for Cisco in that particular year. The ERP system did not help as because in the late 1990s different parts of the organization interfaced with the ERP system in order to obtain data. Specialized tools were build that used raw data in different ways. So as to upgrade to the newer version of the ERP system, the custom interface needed to be disabled. This situation was not working well with the employees as they had grown too much dependent on these tools i.e. ERP system. Therefore, Boston learned that in spite of Cisco having a standard ERP system any addition or extension were anything but standard. Moreover the main motive of the implementation of the ERP was to standardize the information system but the functional areas programmed the nonstandard functional applications in their own ways so that they can interact with the ERP system. It was not at all possible to make any up gradation to the ERP system as that would add to the extra cost that was to be incurred by the company. Therefore, ERP couldn’t deliver anything worth the investment (The Pennsylvania State University. “Personal PSU”). What is BPOCs role? How much real authority does it have? BPOC was set up in the year of 2002 by Cisco. It emphasized on the importance of the higher degree of centralized IT planning. It was a cross functional group that was set up to take decisions in order to set and drive the set priorities for the company. The role of BPOC’s leadership team was to drive enterprise wise productivity. The role of it was to make recommendation for the IT spending. It was not an IT steering committee; however it was important for the company in a great way. It acted like a high level advisory committee which had senior representatives from each functional department. Why did Boston select the three big projects that he did? Boston selected upgrading the Oracle ERP system, establishing an enterprise reporting and business intelligence solution, and developing a “single source of truth” customer database (“e-customer”) projects because there was lack of centralized planned data management system. The data management and infrastructure to support the data structuring were not fixed. Every employee had customized tools for the operations. These projects were the priority ones and in implementation it will acquire cost and time. Boston stopped all the current projects and other smaller projects to minimize the cost. This would help in reduction on cost and on time that can be allocated to the three new projects. A proper integration system solution was planned to be made to connect all the units of CISCO operating in diversified area of operations. It aimed to integrate them so a centralized data management is possible with proper authority to control and modify the data. Different departments and teams like European sales team and finance department used customized tools for operations. The approach was to integrate the data management system for maximizing and standardizing the system of ERP. For different projects, diversified budgeting plan is required. To manage the funds a centralized budget management systematic approach was the need. So Boston planned to integrate the budgeting decision process for control and effective management of overall projects. Boston’s Approach to IT Governance Boston’s approach was to minimize the cost and to increase the efficiency with an enhanced administration system to achieve higher productivity. The approach was to develop an integrated system that will control and administer the whole data base system in an appropriate way. The integration will increase the level of data storage, maintenance and control system. Boston’s approach was to create a system or model that connects IT with all business strategic decisions. Boston upgraded the ERP system for the integration to achieve the desired objectives. IT projects’ budgetary system was vital and so it required to be integrated to achieve a centralized system of fund management. The overall approach was done to allocate resource in an effective way and to keep those properly monitored. This way the controlling of system as a whole would be easier and information would not be manipulated. Which of the five areas focus of IT governance was addressed by Boston and BPOC? BPOC’s focus was upon a superior degree of centralized IT planning. This was possible through integration of all the units which Boston have suggested and planned for. BPOC wanted to focus upon the high priority projects or corporate priority. Boston had focused upon the integration of all the systems as a priority to gain maximum advantage with higher level of effectiveness. BPOC team focused upon the operational decision making policies with connection to all it units. Boston wanted to make the system integrated to enhance the decision making process. He planned for operational decision regarding the projects and funds to be managed effectively and for that a centralized data management integration system was given importance. Through enterprise resource planning system and risk management system, BPOC team helped in allocation process of resources to be effective enough to manage risk. Issues related to "Shadow IT" at Cisco Shadow IT is generally referred when IT solutions built inside the organization operates without the organizational approval. In CISCO, the employee had customized tools for IT and they were operating under the customized IT tolls as per their convenience which was not a proper measure to manage IT projects. Shadow IT solutions are mostly not under the control, security, documentation and reliable. In CISCO, there was the application of Shadow IT which was not a standard application and the control over all was very difficult. It also increases the cost with improper data management system. So Boston had identified it and prepared plan to centralize the system through integration of all the units to control and manage the over all system planning. Reference The Pennsylvania State University. “Personal PSU”. October 30, 2010. User, 2010. Bibliography CISCO. “Corporate Overview”. October 30, 2010. Corporate Information, 2010. Shields, M. G. 2001. E-Business And ERP: Rapid Implementation and Project Planning . John Wiley and Sons. Read More