Enterprise It At Cisco 2004 Case Study Solution
Answer Number 2:
The main characteristic of the governance model of Cisco is the fragmentation of the IT department. All the individual units had given the autonomy to decide the IT budget they needed.If the departments of the company are fragmented, it results in the various advantages and disadvantages. Same is the case for Cisco;however, the fact that Cisco had benefited from the fragmentation more than the losses is a matter of great debate.
Due to autonomy that given by Peter Solve, Cisco had taken many advantages; Cisco had grown in the time of freedom. When Peter Solvent charge of Chief Information Officer the total market capitalization of Cisco was $100 billion, and at the time of his retirement, the total market capitalization reached to almost $500 billion.Also, the managers were more motivated to grow the business of Cisco because their rewards are linked to the performance of their departments. Due to the fragmentation, Cisco was in a better position to successfully plan the succession of its senior personals and also the communication between the different department sis enhanced and boosted due to this fragmentation.
On the other hand, there were many discrepancies due to this fragmentation, firstly, there were many inconsistencies in implementing the ERP system which proved to be very dangerous for Cisco, and secondly the autonomy that was given to the heads will result in the culture of lack of accountability. The senior management relied heavily on the heads of the departments; some managers did not have enough competency to deal with the systems,which increased the inefficiency throughout the organization which ultimately resulted in the decline in sales and profits.
Fragmentation primarily affected the performance of Cisco, and also the fragmentation slows down the process of implementation of ERP software. The efficiency in the implementation of the Oracle was also lost due to the fragmentation characteristic of the governance model used by Peter Solve. Peter Solve failed to take into account the considerations that should have to be given to mostly fragmented companies like Cisco, and eventually, his model failed due to lack of oversight and failed to scope out the implementation of Oracle properly. Successful businesses are required to ascertain clear guidelines on how to utilize the work of outside IT consultants. Because of the independent decisions of the each department regarding the IT system, usage of different tools for similar data and a different definition for particular requirements from various departments there were many inconsistencies and faults in the implementation of ERP Oracle.These differences and uniformity the reports were less accurate and many conflicts arose due to this error and failure of the ERP software.
Answer Number 3:
The three big enterprise projects affected the existing IT governance model of Cisco in many ways. The three big enterprise projects are Upgrading the ERP Oracle IT system, establishing and maintaining an enterprise reporting and business intelligence solution and the third one is “developing the single source of truth” customer database (E-customers).
Implementing these initiatives requires major drainage of resources, it is estimated that the three big projects will need three years to achieve, it needs almost $300 million, and hundreds of employees will have to spend their time in carrying out these projects.All these projects require detailed planning and formal plan for implementation.
Due to the lack of understanding and concentration the recent implementation of ERP Oracle contains severe complaints and faults, to cope with these difficulties, it was decided that the Oracle will be updated. The new system will be free from any inconsistency because of the change in governance model of Cisco.
Uniform Enterprise reporting and the business solution are needed because the different departments of Cisco are currently using various intelligence tools and reporting styles that were not linked. The implementation of this project will allow every department to use the same the same data instruments to standardize and centralize the reporting formats. Previously every manager or head of the respective department can use any business intelligence tool in analyzing the performance of its department which is also responsible for the various inconsistencies.
Lastly, the single customer database will also be implemented to resolve the problems which occurred due to the failure of the previous governance model. Maintaining the unique customer database will allow Cisco to retain the accuracy of reports and also accuracy in retrieving the data.Due to the autonomy and lack of scrutiny in the previous governance model, the managers are getting the data from different data sources which are resulting in the increasing conflicts between the departments…………..
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