Cisco System Inc - Q&As

Cisco System Inc.
Implementing ERP: Questions & answers
Question 1: What was the model for IT Management in Cisco prior to January, 1994? What
were the weaknesses of that model?
Answer:
Cisco was running a centralized UNIX-based software package to support its core transaction
processing. Package included financial, manufacturing and order entry systems. The package was
implemented using common architecture and database for each of the modules.
• Weakness of the model:-
– Redundancy, lack of reliability and maintainability required
– Multiple customization has made the package complex and slow
– Not possible to make changes to the application to meet the changing business
needs
– Was ideal only for organizations with turnover of around $300 million
–
Question 2: Why did Pete Solvik initially want to avoid an ERP solution? What was done to
address concerns of Solvik and Redfield regarding ERP projects?
Answer:
Solvik initially wanted to avoid an ERP solution because:
• He planned to let each functional make its own decision regarding the application and
timing of the move
• He was concerned about the types of mega-projects ERP implementations often became.
• He strongly felt that budgetary decisions be made by each functional areas.
To address these concerns Cisco took following decisions:
• They would implement ERP in one go rather than in a phased manner
• Not to allow a lot of customization, instead retrain the people to do things the way ERP
system intended them
• Create a schedule that was doable and make it a priority in the company
Question 3: Why do many general / functional managers resist Information Systems such as
ERP? Why wasn't anyone willing to lead the ERP project?
Answer:
• Implementing ERP solutions would engage huge amount of resources and costs and time.
• project like ERP might spin out of control and deliver sub standard results
• Risky approach; implementing ERP would mean institutionalizing a business model for the
organization.
• All the other business processes(eg: accessing database) would be dependent on
ERP(centralized). If the system crashes accidentally, the overall efficiency would be
negatively affected.
Anyone wasn’t willing to volunteer to lead the ERP project because:
• Risky: a single person would be responsible for any discrepancies occurring upon the
implementation of ERP high probability of losing the job.
• Implementing ERP is a complex, time consuming and difficult process; requires a skilled
team to operate rather than an individual person.
• Any difficulties emerging out while dealing with the project would require skilled personnel
with a pool of different expertise and prior experiences to handle them responsibility to
be shared among the team members and not on individual level.
• More energy, time and resources (on individual basis) would be spent. It is also tough and
stressful. Failure in the project would lead to losing the job as well as wastage of these.
Question 4: What are the advantages and disadvantages of 'big-bang' ERP implementation
approach?
Answer:
Advantages:
a) Lesser time required for implementation
b) Clarity of changeover date to everyone
c) Comparatively less costlier than long drawn out implementation.
d) Relatively lesser implementation difficulties and pains
e) Training is needed only on new system and not changeover period.
f) No special interfaces needed to be able to get used to the new system
Disadvantages:
a) Details may be overlooked in the rush to change
b) Lesser time for employees to learn new system
c) Full testing is difficult to be done prior to implementation
d) A failure in one part of the system could affect others
e) Users struggle in initial period of implementation hence causes dip in organizational
performance
f) No time for addition of extra features
g) The completeness and validity of the converted data is not completely proved
Question 5: Was Cisco smart or lucky with the ERP implementation project? Why was there a
performance dip after cutting over to ERP system?
Answer:
• Cisco was smart with the ERP implementation project due to the following reasons
– Cisco deployed a very strong and able team for this project consisting of the best
people from each business area.
– The initial planning and study of project scope, vendors, partners etc was
meticulous. Cisco team along with KPMG, diligently followed a structured process in
the selection of the ERP product which suited their requirements (manufacturing
oriented)
– Diligent vendor/consultant selection – The vendor selection was done in a
structured manner. Also, hardware was purchased on promised capability rather
than specific configuration due to which the onus of fixing the errors was on the
vendor.
– Cisco also made ERP implementation the top priority across the organization and it
was projected as an opportunity for career advancement of the employees, hence
motivating them.
– The implementation team was headed by the high level executives from Cisco,
Oracle and KPMG. This sent out a signaling effect regarding the seriousness of the
project
• There was a performance dip after cutting over to the ERP system because of the following
factors
– Database lacked capacity to process the required transaction load/volume within
the Cisco environment.
– The faulty design of application exacerbated hardware problems, by inefficiently
processing common tasks
– The hardware architecture and sizing was insufficient to handle such large volumes

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Implementing ERP: Questions & answers

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