ISM Case Analysis (Cisco Systems)

Group 13 Section A
Adhit S. Shetty Akashdeep Goldy Debjani Dey Manish Kumar Bansal Rishabh Singh 2012PGP012 2012PGP021 2012PGP099 2012PGP195 2012PGP306

1. What was the model for IT Management in Cisco prior to January, 1994? What were the weaknesses of that model?
Legacy model: 1.UNIX based software package supporting core transaction processing 2. Covered the functional areas like financial, manufacturing and order entry system 3. No common architecture and database across the functional areas Weaknesses : 1. Application lacked the appropriate degree of redundancy , reliability and maintainability as required by the business process. 2. They werent able to make changes to the application to meet their business needs- Software vendor offered a package for a $300 million company whereas Cisco was a $1 billion company 3. The application was saturated with customization to such an extent that no further changes could be incorporated to meet business needs. 4. Frequent system outages as the database grew in size with companys annual sustained growth rate of 80% . 5. Product shortcomings exacerbated the difficulties of recovering from outages. 6. Final shut down due to failure in Jan 1994 corrupting Ciscos central database .

2. Why did Pete Solvik initially want to avoid an ERP solution? What was done to address the concerns of Solvik and Redfield regarding ERP projects?
ERP implementation often becomes a mega project consuming a lot of time & financial resources Solvik felt that each functional area should make budgetary decisions on IT expenditures themselves It will have a business impact as key business people will be required to contribute to the project The concerns were addressed by the following steps: Completing the project in one- go rather than a phased implementation Not allowing a lot of customization to reduce costs and time required Making a doable schedule and assigning the highest priority to the project Selecting a strong integration partner with industry expertise(KPMG) to assist in both selection & implementation of ERP

3. Why do many general / functional managers resist Information Systems such as ERP? Why wasn't anyone willing to volunteer to lead the ERP project?
Reluctance to move away from legacy systems in place Disruption to normal course of business due to major change in mode of operation Prohibitively high investment for a single functional area Apprehension of presenting such a major expenditure project to the senior management High involvement of business community with possibility of sub-standard results Excessively long timeline for project implementation

4. What are the advantages and disadvantages of 'bigbang' ERP implementation approach?
Advantages Disadvantages Testing of individual modules Shorter implementation time is difficult as all changes are Costs are much lower than made in one go phased implementation Employees may get less time to adapt to new system Employees need to adapt to Failure in one part affects the new system only once other parts as well Single date of implementation Fall-back scenarios are difficult Large scale of the project Details may be overlooked ensures that it is prioritized due to large scope of the appropriately project Entire cost is incurred in onego

5. Was Cisco smart or lucky with the ERP implementation project? Why was there a performance dip after cutting over to the ERP system?
Cisco was smart in making decisions: Contracts negotiated with the hardware vendors were based on capability, thus safeguarding the company from extra expenditure Bringing in industry experts like KPMG & Oracle Hand picked the best people from all functional areas Cisco also got lucky in some aspects: Testing was not performed at full capacity before going live, but got lucky because the problems which came up were manageable Not enough due diligence to arrive at the 9 month time frame, only based on quarter consideration Assumed that no modifications will be needed in Oracle package Performance dip after cutover was observed because: Huge volume of database compared to test environment Deficiency in hardware architecture and sizing User not acquainted with the new system Stabilization issues with the new changes Testing was done by running individual processes sequentially rather than simultaneously