Cisco Organizational Structure - Case Study Example

Running Head: Cisco Case Study Introduction Sysco is a food distribution company with autonomous working divisions. Sysco’s IT infrastructure was outdated because a very high level of technical enterprise was required to extract meaningful data and predict future demands and happenings. This caused considerable delay in meaningful actions which was a major impediment. A lot of configuration and development work had to be done on the new software as both the Enterprise Resource program system and the data warehousing which Sysco was using in the pat was unable to handle the fast pace of growth and increasing data load. This paper analyses Sysco’s need for a Business Intelligence Software, its development with software vendor, Business Objects and the implementation and integration decisions. It also looks at the three basic license buying structures available to the company and discusses the most important decision of all which is the quantity of licenses to buy. Organizational structure Sysco is a highly decentralized business system with different regional operations and specialty’s which are independent from each other. All these independent business systems have some form of Business Intelligence systems which had to be replaced. Having a common Business intelligence system would mean that the different operations of the company will have to pay their part of the cost which might reduce their net profits and replace a system which was working properly. Therefore the different operations might resist implementing the new system all over the company. A Business Intelligence system would take care of Sysco’s data mining and extraction needs. It would also help in producing reports and analysis and help in data distribution. Sysco initially decided that it would use the Business Intelligence software to answer only two questions. They were ‘Which additional products would we be selling to each of our customers?’ and ‘Which of our current customers are we most likely to lose?’ The two questions that Sysco decided to address were forward looking and predictive. Answering these questions manually was very time consuming and cumbersome. Automated, quick and constant answers to these questions would be extremely helpful to Sysco as they were integral to the company’s business and would generate a rapid return on investment. By partially implementing the Business intelligence system, the company would become familiar with its scope. Business Objects recommended this approach as it utilized its main competitive advantages of adhoc querying, caching and connecting. The job demanded by Sysco was also synchronous with its internal success factors. It helped Business objects meet its business goals, satisfy users and deliver a manageable solution. Focus on a single business project for initial rollout result in better quality. A smaller project and development plan would make data access easier and ensure Executive sponsorship easily. As a result risks will be minimized and implementation success maximized. The main disadvantage of limiting Business Intelligence to two questions is obviously the cost. Sysco will need a complete business intelligence system in near future. This would mean that a different system would have to be either developed or integrated with the current one. This will increase costs in the long run. Even though the Sysco worker will be familiar with the Business Intelligence system, they will have to reorient themselves with it again. The impact of technology on an organization’s environment can never be denied. It is profound and big. For instance, the replacement of type writers and black/white TVs. It compels managers to come up with new ideas and ways to satiate customer needs and wants. Technological forces can open up a whole lot of opportunities for managers for designing, making, and distributing new products, and services. . For instance the development of microprocessors spurred the demand for PCs and hence a technological revolution in the process. This led to the remarkable success of companies like Dell and Compaq. At the same time, companies like IBM suffered post development of PCs. This is because IBM mastered the development of main frame computers. When PCs emerged in the mainstream market, the demand for main frame computers dipped simultaneously. IBM thus experienced a decline in its sales. Technology as can be seen in this example is powerful enough to shape the market and to divert its altogether. It can turn stars into dogs and dogs into cash cows. That is how powerful technology can be. Managers would face a lot of challenges in implementing Business Intelligence systems. They would include data integration, business need analysis and management, data quality, culture change, education, training and time required to implement the Business Intelligence system. Among these challenges, the most important challenge for a non IT manager would be training and education. This is because a non IT manager is not acquainted with the working of a Business Intelligence system. He will have to orient himself with the system and familiarize him with it. The rest of the challenges associated with the system might be similar to those encountered without the system. For e.g. a non-IT manager takes care of data quality and integration and business need analysis and management on a regular basis too. For the IT manager though, the learning and training challenge will be non existence but he will have to deal with issues like management of user expectations and ROI justifications. Sysco was presented with three software module buying options. Software module structures Bare bones. according to this structure, Sysco buys the least number of licenses required. It takes care of the Business Intelligence system temporally but Sysco would need to buy more licenses within the next six months. The advantage is that the upfront payment is low as the total cost is low. Middle of the road: It provides broader access for the next nine to twelve months but Sysco will have to buy more licenses after a year if the system is to be fully implemented. The costs are also intermediate. Volume discount: It is the most costly but Sysco buys licenses which cover it for the next two years. Though the upfront payment is higher, Sysco saves in licenses because it gets them in a bulk. In my opinions Sysco should follow the third scenario, which is the volume discount perspective. This means that Linda should buy licenses for around 2000 people. It requires a high upfront investment but Sysco with current profits soaring above $7 million can afford a system which cost $3.5 million. Despite the high cost it is the most sensible from the cost perspective. Not only does it gets licenses at a discount but reduces the total investment made by the company in the long run. It also reduces the hassle of re-buying the licenses in near future. Apart from that whenever Sysco plans to expand its operations it would have to hire Business objects again and pay the consulting fees again. If it does so, after 9 months that would be another $1 million or so in consulting fee. If Sysco buys licenses in bulk we can assume that Sysco saves on future consulting fees as well as license costs are considerably reduced. Business intelligence would prove to be a competitive differentiator for Sysco. This is so because it would maximize revenue, reduce costs, minimize risks and help it achieve competitive advantage. The business intelligence system could not be acquired by its competitors maybe because of its added cost or the long development and integration process. Therefore, it will make Sysco’s business activities more efficient and effective without threat of competitors. Conclusion Sysco being a large company should integrate the Business Intelligence system despite obstacles. As Business Objects is the market leader and one of the best Business solutions providers, Sysco would have access to the most competitive business system. It would increase revenues and make it more productive. This would happen as it will be able to anticipate future events and its management would make decisions accordingly. The easy access would mean that managers at all levels would be able to use dashboards, generate reports and distribute data. Other competitors would not have access to such an advanced system and thus, Sysco will become a legacy in its niche. References: Burgeois, L.J. Strategy and Environment: A conceptual study. 1985. Jones, G.R. Organizational Theory . M.A Addison Wesley, 1995. Jones, Gareth R. Contemporary Management. Mc Graw Hill, 2003. Read More