Cisco Erp Case Study

The first issue is that Cisco has outgrown its legacy software and the company’s  future growth is hamstrung by reliability, capacity, and instability caused by the load size and many patches and workaround added to the legacy software.  The straw that breaks the camel’s back occurrs in January of 1994.  An unauthorized method for accessing the code database caused a corruption on Cisco’s central database and shut down operations for two days.  The company’s systems are on the brink of total failure.

For this first problem, there is every sign that Cisco needs to move away from their legacy systems and move onto the ERP project.  The vision CIO Pete Solvik’s vision is that Cisco can grow to be a company with $5 billion in revenue.  This desire coupled with ongoing system failures demonstrates an immediate need and is sufficient motivation to make the investment to move to an ERP solution so that Cisco can continue to be a market leader.  

The second problem is one of culture shock, especially considering that Cisco has historically maintained a centralized organizational structure.  Both CEO John Morgridge and CIO Pete Solvik are committed to Cisco’s strong tradition of standardization.  They both are inclined to allow IT budgets and decisions to be made by the individual areas, and they both have trepidation about the “megaprojects” that ERP implementations are known to be.

For this problem, Cisco needs to make the ERP implementation the most important priority and strategy in the company.  Cisco should construct an implementation of the best and the brightest staff and incentivize them.  The ERP implementation project needs to be viewed as the way of growth for both the organization and it’s top flight employees.  Cisco crystallized the importance of the project by creating a project management structure that was comprised of Vice Presidents from Manufacturing, Customer Advocacy, Controlling, and top executives from both Oracle and KPMG.

The third problem is the size, scope, and cost to this project is unprecedented for Cisco.   Cisco had long outgrown is $500 million UNIX-based software package to process its transactions.  Most of the companies using this software were between one-tenth and one-half the size of Cisco, but Cisco’s board needed to approve a $15 million dollar project with a time-bound completion date.  Cisco’s executives were aided in their project pitch by the fact the legacy systems crashed the very day they made their pitch to the board.  Cisco decided to embark in its largest capital project ever approved by the company.

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